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Open a Business in Malta

Open a Business in Malta

Updated on Tuesday 12th May 2020

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Malta has a sound legislation for company registration and one of the most attractive taxation systems in the European Union which are the main reasons foreign investors find it very easy to set up businesses there.
 
Most entrepreneurs are inclined to open businesses in the financial services and the online gaming industries because of the advantageous conditions the Government offers, but other sectors are also sought. Boasting a skilled workforce and cheap labor costs, Malta is one of the best countries to do business in Europe.
 
Our lawyers in Malta will guide you through the steps required for starting a business in this country. 

 

Types of companies which can be set up in Malta

 

The Company Law provides for several types of structures which can be registered in Malta. Among these, the simplest one is the sole proprietorship which is subject to the fewest requirements as it only needs an individual who will act as the sole owner of the business. Partnerships are also simple business structures, which compared to the sole trader will require at least two members who can be individuals or companies and who can have full or limited control over the business, depending on the type of partnerships established. From this point of view, it is possible to create general and limited partnerships.
 
The most complex business forms are the private and the public limited liability companies, however, these also offer important benefits, among which limited liability in relation to the business’ debts and obligations.
 
The requirements for opening a Maltese business under the form of a private or public company are more extensive than in the case of the other available types of structures. These requirements imply a larger number of shareholders and a minimum share capital.
 
In the case of a private company, the minimum number of shareholders is two, while the share capital which needs to be deposited for setting up such structure is close to 1,200 euros, out of which 20% must be deposited upon the registration of the company.
 
In the case of a public company, the same number of shareholders is required, however, the minimum share capital is a little over 46,000 euros and at least 25% of the amount must be deposited in the bank account upon incorporation.
 
Foreign companies are also allowed to operate in Malta through branch offices and subsidiaries.
 
Our Maltese lawyers can guide foreign investors interested in setting up businesses here. Below, they will detail every requirement related to opening a company in Malta.
 
We invite you to read about the procedure of  starting a business in Malta in the scheme below:
 

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Choose a trade name before starting a business in Malta

 

The company or trade name is the first step which needs to be completed when opening a business in Malta. The reservation is made with the Companies Register and is free of charge.
 
Those who want to open companies in Malta must know that the trade name must be unique, for which case it is advisable to select at least 3 names. A certificate granting the right to use that name will be issued by the Trade Registrar.

 

Having a registered address when opening a company in Malta

 

One of the most important requirements for having a Maltese local business is choosing and registering a legal address with the Trade Register. This address will be used by the authorities for official notifications, but it can also be used by clients and business partners. It is possible for a Maltese company to have a registered address while also having a different location in which its activities are completed.
 
The legal address of the company must be established prior to the registration of the business and must appear on all the official documents issued by the Maltese company.
 
Our law firm in Malta can assist with virtual office services which are quick and efficient solutions for having a legal address for the business registration procedure. We invite you to contact us and ask about these services.

 

Opening a corporate bank account in Malta

 

Another important requirement which needs to be complied with before registering the company with the local authorities is opening a bank account in which the share capital will be deposited. There are plenty of local banks which offer such services, and our lawyers can guide you in choosing one. The opening of a corporate bank account takes less than in other EU countries and thus reducing significantly the business registration procedure.
 
Once the company name is reserved, the legal address is chosen and the bank account is created, the registration procedure can begin.
 
We remind foreign investors that they can benefit from full business registration services through our Maltese law firm. Remote registration is also possible through a power of attorney.

 

Steps for setting up a business in Malta

 

It is quite simple to open a business in Malta considering there are only a few steps to be completed and the fact that usually no special permits or licenses are required. The Government requires only companies in the financial, insurance, medical and pharmaceutical sectors to obtain licenses with the competent authorities. Our Maltese lawyers can explain what the steps for obtaining a business license are.
 
When opening a company in Malta, a businessman must follow the next steps:
  •  reserve a unique company name with the Maltese Commercial Register,
  •  have the memorandum and articles of association drafted and notarized by a public notary,
  •  deposit the minimum share capital depending on the type of company,
  •  register the company with the Trade Register by submitting the documents mentioned above,
  •  apply for a trade license or other special licenses issued by the authorities,
  •  register for VAT and obtain a tax identification number with the Maltese tax authorities,
  •  open a corporate bank account which will be used by for the current financial operations of the company.

 

When hiring employees, the company must register with the Employment Training Corporation. Our law firm in Malta can assist you with the company formation process. We can also help in obtaining EORI numbers in Malta.

 

The most employed types of companies in Malta

 

One of the most important aspects when setting up a business in Malta is to know what the suitable type of vehicle is. The limited liability company and the Maltese holding company are the most advantageous types of structures a foreign investor can open in the country because of the low maintenance costs and the effective corporate tax system which reduces the tax burden on companies significantly. Malta also has an extended network of double taxation treaties which can sometimes result in a zero percent tax rate in certain cases.
 
The other types of companies which can be established in Malta are the sole proprietorship and the partnership which can be general or limited.
 
We invite you to watch a short video about how you can set up a company in Malta:

 

 

Hiring employees in Malta

 

One of the important procedures related to opening a business in Malta is hiring employees. This procedure must respect the provisions of the Employment Law and all relations between employer and workers must be secured through various types of labor contracts. Both local and foreign workers who have a good command of the English language can be found in Malta.
 
It is also possible to hire foreign workers, provided that the company applies for work permits for non-EU citizens. 

 

FAQ on opening a business in Malta

 

Foreign investors interested in opening businesses in Malta can find below a few questions and their answers:
  1. How long does it take to start a business in Malta?
It takes about 2 weeks to register a company in Malta.
  1. Do I need to be present in Malta in order to register the company?
The future owner’s presence is not a requirement if they have a local representative who can handle the registration procedure. Our attorneys in Malta can represent clients based on a power of attorney.
  1. Is it necessary to deposit a share capital in order to open a business in Malta?
Not all types of business forms require a minimum amount of money imposed by the law, however, the limited liability company which is the most popular does. Investors will need approximately 1,200 euros to register such company.
  1. Does the company need to have a local address in Malta?
Yes, this is one of the requirements imposed by the law.
  1. Do I have any other alternatives if I don’t want to wait for a new company to be registered?
Yes, there is also the option of buying shelf or ready-made companies in Malta. These will usually take the form of limited liability companies.

 

What are the main costs associated with opening a Maltese company?

 
Most foreign investors interested in doing business in Malta are attracted by it because of the low taxes imposed by the authorities, however, Malta is also appealing because of the reduced business start-up costs.
 
The main costs an entrepreneur must consider when opening a company in Malta are:
 
  1. the business name reservation fee (the procedure can be completed online with the Trade Register);
  2. the preparation of the documents for company registration which implies their drafting and notarization;
  3. the share capital which depends on the type of structure selected (limited liability companies have fixed amounts of money to consider as share capital);
  4. the registration of the company with the Trade Register which is subject to a specific fee;
  5. the opening of a corporate bank account can also be subject to fees, depending on the chosen bank;
  6. the licensing procedure can also imply certain fees, depending on the authorities issuing them;
  7. the registration for data protection which is a new procedure linked to the company registration procedure.
 
If you decide to open a company here and need assistance, our law firm in Malta can guide you.
 

Business name reservation fee in Malta

 
The first step related to starting a business in Malta is to choose and reserve a trade name. As mentioned above, the procedure is completed online and is subject to a 10-euro fee. The procedure is completed the same day the name is submitted for approval by the Trade Register which will issue a certificate in this sense.
 
Our Maltese lawyers can help you select a unique name for your company. We remind representatives of foreign companies interested in setting up branch offices in Malta, that the name of the branch must be the same as that of the parent company. The costs for the name reservation in this case is the same.
 

Costs related to the preparation of the Maltese business’ statutory documents

 
One of the most important business start-up costs in Malta is related to the preparation of the company’s statutory documents. These are the Memorandum and Articles of Association and imply having them drafted and notarized by a public notary in Malta. Foreign shareholders in Maltese companies must also consider having their identification papers translated and notarized.
 
Foreign companies opening branches or subsidiaries in Malta must have their statutory documents translated and notarized.
 
Here is what you need to know about the business start-up costs of a Maltese company when it comes to the preparation of the statutory documents:
 
  • it takes approximately one day to have the documents drafted and notarized in Malta;
  • the documents can also be drafted by a lawyer or law firm in Malta (our attorneys can help in this sense);
  • the cost of the notarization and drafting of the Memorandum and Articles of Association depend on the number of pages and ranges between 500 and 1,000 euros;
  • in order to lower the costs of the preparation of these documents, a power of attorney can be granted to a representative and thus avoid travel expenses;
  • foreign citizens must also include the translation fees for the foreign documents to be filed with the Trade Register in Malta.
 
You can rely on our attorneys in Malta for representation during the whole business registration procedure.
 

The company registration fee

 
The business start-up costs in Malta are also influenced by the registration fee imposed by the Trade Register. This fee usually depends on the share capital of the company. Where the share capital is below 100,000 euros, the fee to consider is quite small.
 
Tax registration, obtaining the VAT number, the registration for employment purposes and social security contributions are free of charge.
 
We mentioned above the registration for data protection which came into effect not long ago as a consequence of the implementation of the GDPR. The fee for registering for data protection is approximately 24 euros.
 
Considering all the investment incentives the Government offers to foreign entrepreneurs, we invite you to contact our lawyers in Malta to find out why you should open a business there.