How to set up a company in Malta

The picturesque Republic of Malta is a favored destination for setting up a company with a strategic base in Europe.

With its stable economy, business-friendly regulations and favorable tax incentives, this country provides an attractive environment for business start-ups.

Next, we explore how to set up a company in Malta.

What are the first steps to setting up a company in Malta?

Setting up a company in Malta involves careful planning, compliance with legal requirements, and a good understanding of the Maltese business landscape.

Whenever necessary, you should seek professional advice from a local partner such as NEWCO.

Choosing the type of company in Malta

Malta offers the possibility of creating several types of companies, each with its own set of advantages and requirements. The most common types of companies are:

• Private Limited Company (Ltd): This is the most popular choice, providing limited liability to shareholders.
• Public Limited Company (PLC): Suitable for larger companies.
• Partnership: Limited or general partnerships

Selecting the type of company in Malta depends on factors such as the nature of your business, the number of owners, and liability considerations.

What is the procedure for setting up a company in Malta?

Having chosen the type of company you want to set up in Malta, the next step is to register it.

A company is formed by means of a document called a memorandum of association. There are certain details that must be included in this document. For example:

• The company name;
• The location of its headquarters (which have to be in Malta);
• Its business purpose;
• Whether it is private (Ltd) or public (PLC);
• Term;
• Shareholder details and how much capital they have invested;
• Amount of capital and any information about this (split, paid-up, preferred shares etc.);
• Secretary’s details;
• How the company is represented;
• Managers’ or Directors’ details.

Name reservation

When setting up a company in Malta, you can adopt any company name that is accepted by the Commercial Registry. In principle, the Registry will not object to the name chosen, as long as it is not already being used by another company, cannot be mistaken for that of another company and is not offensive or undesirable in any way.

Memorandum and Articles of Association: The shareholders may simultaneously agree to the articles of association, which govern the company’s internal workings. The law will apply to anything that is not covered by the articles which must also be registered.

Share Capital

The company share capital must be deposited in a local Maltese bank account under the name of the company being formed, and before registering it. Proof of deposit will be required at the time of registration. The minimum amount of share capital is €1,165 for a limited company and €46,587.47 for a PLC.

Company registration

The registration certificate is issued within a few days after the papers have been submitted. The company can begin trading as soon as it is registered.

Registration fees are subject to a rate that varies according to the share capital. If the share capital is later increased, fees will be levied on the rate difference.

If the company is a Public Limited Company (PLC), as well as the memorandum of association, an additional document is required when registering, which (a) gives an estimate of all the costs to be borne by the company until it is authorized to begin its activity, and (b) describes any special advantage granted to anyone who has taken part in the formation of the company or in the process to gain authorization, before the company is authorized to begin its activity.

Other important aspects regarding setting up a company in Malta

There are some other important aspects to consider if you are planning on setting up a company in Malta.

Appointment of managers and directors - companies in Malta

When setting up a company in Malta you will need to appoint a manager or director.

Private limited companies are managed and represented by at least one manager or director. Public limited companies are managed and represented by two or more managers/director. They must be named in the articles of association or appointed (and dismissed) later by shareholder deliberation.

If the articles allow it, some of the board’s responsibilities or duties can be delegated to one or more people appointed as company agents or representatives.

The managers/directors may or may not be shareholders and may or may not be paid. They have powers to conduct all the acts of management and representation needed to comply with the company’s purpose, pursuant to shareholders’ deliberations and the respective articles of association.

The managers/directors do not need to be resident in Malta, although, for many reasons, it is advisable that they do.

Appointment of a company secretary in Malta

Commercial companies in Malta must appoint a company secretary, who may be a natural person of any nationality or a legal person, provided that they are licensed as a company services provider under the Company Services Providers Act.

This is another of the obligations you should take into account when setting up a company in Malta. The law does not require the Secretary to be a Maltese resident, but it is advisable, given their duties and responsibilities.

Obtaining a tax identification number (TIN) in Malta

The Maltese tax identification number (TIN) is mandatory for anyone who resides in Malta for tax purposes or carries out income-generating activities in the country. When setting up a company in Malta, this is one of the most important steps.

The TIN serves as identification for income tax, wage tax and withholding tax purposes. 

Opening a business bank account in Malta

To set up a company in Malta you need to open a bank account.

Banks usually request a variety of documentation and information, including KYC (Know Your Customer) forms, copies of statutory documents, and identification of managers, directors, partners, and beneficial owners, among others.

VAT registration in Malta

Like other countries, Malta has value-added tax (VAT) applicable to the sale of goods, the provision of services, imports, and transactions carried out within the European Union (EU). However, unlike other countries, registration for VAT purposes is not compulsory in Malta, nor does it automatically follow from the registration of a company.

Company licensing in Malta

When setting up a company in Malta, it may sometimes be necessary to obtain a license. Most industrial activities need to be licensed for a variety of different reasons such as public health and safety, or to reduce the risk of pollution.

The local government is the only body that currently issues licenses for commercial activities. Building licenses and user licenses for private works are governed by legislation, specifically legislation on regional planning and urban construction.

Some activities that require licensing:

• Banking;
• Insurance;
• Trust & Trustee;
• Cryptocurrencies.