Most Common Types of Companies in Malta
When you decide to open a company in Malta, choosing the right type of entity is crucial. The limited liability company (LLC) and the Maltese holding company are the most popular choices for foreign investors. These structures are preferred due to their low maintenance costs and Malta’s efficient corporate tax system, which significantly reduces the tax burden on companies. Moreover, Malta’s extensive network of double taxation treaties can sometimes result in a zero percent tax rate in specific scenarios. Other available business structures in Malta include sole proprietorships and partnerships, which can be either general or limited.
Hiring Employees in Malta
An essential step to open a company in Malta is hiring employees. This process must comply with the Employment Law, ensuring that all employer-employee relationships are governed by appropriate labor contracts. Malta has a competent workforce fluent in English, including both local and foreign workers. For non-EU citizens, companies must obtain work permits to hire foreign employees.
FAQs on Opening a Company in Malta in 2024
How long does it take to open a company in Malta?
It takes about two weeks to register a company in Malta.
Do I need to be present in Malta to register the business? No, you do not need to be present if you have a local representative who can handle the registration process. Our attorneys in Malta can represent clients with a power of attorney.
Is it necessary to deposit share capital to open a company in Malta? Not all business forms require a minimum capital. However, the popular limited liability company requires approximately 1,200 euros.
Does the company need a local address in Malta? Yes, having a local address in Malta is a legal requirement.
Are there alternatives if I don’t want to wait for a new company to be registered? Yes, you can purchase ready-made or shelf companies, usually in the form of limited liability companies.
What are the main costs associated with opening a company in Malta? Malta attracts foreign investors due to its low taxes and reduced startup costs. The main costs include:
- Business name reservation fee (completable online).
- Preparation of registration documents (drafting and notarization).
- Share capital depending on the business structure.
- Registration fee with the Trade Register.
- Bank account opening fees.
- Licensing fees depending on the business activity.
- Data protection registration fees in line with GDPR compliance.
Costs Related to the Preparation of Company Documents
One of the significant startup costs involves preparing the company’s statutory documents, such as the Memorandum and Articles of Association. These must be drafted and notarized by a public notary in Malta. Foreign shareholders must also have their identification documents translated and notarized. Here’s what you need to know:
- Drafting and notarization can be completed in one day.
- Legal assistance is available for document preparation.
- Notarization costs range between 500 and 1,000 euros, depending on the number of pages.
- A power of attorney can help reduce travel expenses.
- Translation fees apply to foreign documents filed with the Trade Register.
Company in Malta Registration Fee in 2024
The Trade Register’s registration fee depends on the company’s share capital. For share capital below 100,000 euros, the fee is minimal. Tax registration, obtaining a VAT number, and registration for employment and social security contributions are free of charge. The data protection registration fee, now mandatory due to GDPR compliance, is approximately 24 euros.
Special Licenses and Permits for a Company in Malta
Depending on your business activities, you might need additional licenses and permits:
- Education: Regulated by the Ministry of Education.
- Energy and Water Sectors: Includes utilities, service providers, retailers, and operators.
- Employment Agencies: License issued by the Director of Industrial and Employment Relations.
- Trading Activities: Licenses approved by the Commerce Department.
- Health, Welfare, and Beauty: Regulated by the Healthcare Standards Directorate.
- Qualified Professionals: Lawyers, accountants, and engineers require licenses or warrants.
- Real Estate and Development: Activities include buying, selling, and leasing properties.
- Transport Industry: Licenses ensure compliance with safety standards.
Taxation for Companies in Malta
Once you open a company in Malta, you must fulfill your tax obligations to avoid penalties. Companies in Malta are taxed on their worldwide income. The effective corporate tax rate is 5% after refunds, reduced from an initial 35%. If your business provides taxable goods or services, you must register for VAT. Malta’s standard VAT rate is 18%, with reduced rates of 5%, 7%, and a new 12% rate starting January 1, 2024.
If your company imports goods, you must pay customs duties. Excise duties apply to specific products, such as energy, alcoholic beverages, tobacco, and mobile telephony services. Employers must also pay social security contributions for their employees, based on set rates and maximum weekly amounts.
Get ready to open a company in Malta in 2024
In conclusion, establishing a company in Malta offers numerous advantages for foreign investors, particularly with the limited liability company (LLC) and Maltese holding company structures. These entities benefit from low maintenance costs, an efficient corporate tax system, and favorable double taxation treaties that can significantly reduce or even eliminate the tax burden. Additionally, Malta provides flexibility with other business structures such as sole proprietorships and partnerships, catering to diverse business needs and goals. With its strategic advantages, Malta is an attractive destination for international business ventures.
For any doubts or assistance, CONNECTICLUB, a consulting agency in Malta, can guide you through the company opening process and help ensure your business remains compliant with all regulations.
