Setting up a company is a very straightforward process and it usually takes two working days to incorporate a company in Malta.
The minimum required share capital is of Euro one thousand, one hundred and sixty five (€1,165), whereby shares can be 20% paid up i.e. approximately Euro two hundred and fifty (€250). The share capital can be denominated in any currency.
Taxation of Maltese companies
Malta operates a full imputation system of taxation whereby the tax paid by the company is available as credit to the shareholders when dividend distributions are made to them. When dividends are paid by the trading company to the shareholders, the same become entitled to claim a refund of 6/7ths of the 35% tax paid by the company. This results in an effective rate of corporate tax of 5%. Maltese companies can benefit from Malta’s comprehensive double taxation treaty network and other unilateral provisions for the avoidance of double taxation found in the Maltese Income Tax Act.
The minimum number of shareholders is two, although it is also possible to register single member companies where one shareholder owns all the shares in the company, provided certain conditions are satisfied. Body private individuals, companies and other entities having a separate distinct personality can hold shares in a Maltese company. There are no restrictions on the nationality and residence of the shareholders.
The minimum number of directors is one and there are no restrictions on the nationality and residence of the directors. We strongly recommend that for tax reasons, the majority of the directors on the board are persons who are residents of Malta. Body corporate, both Maltese residents and foreign residents can be appointed directors of a Maltese limited liability company.
Every company must have at least one company secretary. There are no restrictions on the nationality and residence of the company secretary. A company secretary must be a physical person, thus a body corporate cannot act as a company secretary.
Taxation of shareholders of Maltese companies
No tax is withheld upon the distribution of profits to the shareholders of Maltese companies, irrespective of the residence and nationality of the shareholders. In view of the imputation system applicable in Malta, no further tax is due in Malta by the shareholder on receipt of a dividend from a Maltese company. Refunds of tax are due to the shareholders upon receipt of a dividend.
Maltese companies may hold bank accounts in Malta or anywhere in the world. We can assist you to set up both a corporate and a private bank account with one of the main banks in Malta. Such banks offer different services including cheque books, debit/credit cards, internet, telephone and mobile banking, bank accounts in a wide choice of currencies and other traditional banking services. Such banks also offer international commercial and trading finance services.
Every company must have a registered office in Malta. ACT Consultus can provide its own address as the company’s registered address. From a purely Maltese tax and legal perspective, no physical presence in Malta is required, however, this may be required from an international tax perspective.
All company documents are public. However confidentiality can be maintained through the services of a fiduciary in which the name of the shareholder will not be disclosed on the company documents. In this case, submission of details of the ultimate beneficial owner is not required to be submitted to the Maltese Registry of Companies.
All limited liability companies in Malta must have their annual financial statements audited by a Certified Public Accountant who has a practicing certificate to audit financial statements of Maltese companies. Audited financial statements must be submitted on an annual basis to the Maltese Registry of Companies.
All companies must submit, on a yearly basis, an annual return which includes details of the shareholders, directors and company secretary and any changes that might have been effected during the year.
No exchange control rules and regulations exist in Malta since they have been abolished in view of Malta’s EU membership. Thus funds can be transferred in and out of Malta without any restrictions. Banks may require supporting evidence for payments and receipts. Business can be conducted in any currency.
At least one Annual General Meeting is required in which the directors and shareholders are required to meet to approve the annual accounts. Meetings need not be held in Malta but it is highly recommended from an international tax perspective.
Records to be kept
All companies must keep records of all personal details of all shareholders, directors and company secretary together with dates of resignations, appointments and share transfers. All companies must present a share certificate to each shareholder and provide such shareholders with a dividend warrant on payment of a dividend. Maltese income tax legislation provides for the details and information that such a dividend warrant must include.
A Maltese company may operate an office in Malta and employ both skilled and professional expatriates in Malta. All employees working in Malta are subject to the payment of Maltese tax and national insurance contributions. The highest rate of tax on employment income is 35%, however, there are certain sectors in which certain highly qualified expatriates pay a reduced rate of tax of 15%, provided certain conditions are satisfied. Currently, the sectors included are Gaming, Aviation and Financial Services. EU nationals do not require a working permit to work in Malta, while this is required for third country nationals.