The most commonly registered type of companies in Malta is limited liability company (LLC). The minimum share capital is 1165 euro and at least 20% of it shall be paid immediately.
At least one Director should be appointed to manage the company in Malta (natural or legal person, resident of any country). The Secretary of a company can only be a natural person and there is no requirement for her/his residency.
The minimum number of shareholders for Maltese company is two. Shareholders can be natural or legal persons of any residence. In case of a sole shareholder, the prior approval of the Registry of Companies should be received.
Bearer shares are not allowed.
When registering a company name, one of the following should be included: “private limited liability company“, “limited” or the abbreviation “ltd“.
Limited liability companies are obliged to provide information on the real beneficial owner of the company.
It takes approximately one month to incorporate a company in Malta.
Taxation of Maltese companies
Standard corporate tax rate in Malta is 35%. However, this rate is usually used in conjunction with the return of a tax paid on a pro rata basis (6/7 or 5/7 or 2/3) of the paid tax.
• 6/7 returns from 35% tax paid to the Shareholders of the companies in Malta receiving the income from trading activities;
• 5/7 returns from 35% tax paid to the Shareholders of the companies in Malta receiving the income from the passive interest and royalties;
• 2/3 returns from 35% tax paid to the Shareholders of the companies in Malta receiving the income from privileges of Agreement for avoidance of the double taxation.
When applying the tax refund effective tax rate will be approximately 5%. The refund of overpaid tax would be transferred on the account of shareholders within one month.
Malta does not levy withholding tax on the outbound dividends.
The standard rate is 18%; reduced rates of 7%, 5% and 0% are applied in the certain cases; some transactions are completely tax-exempt (e.g. banking and insurance services and the sale and leasing of immovable property).
Holding companies are completely exempt from tax on income earned as dividends if they meet the following requirements:
• hold at least 10% of the share capital of a legal entity;
• own voting shares, which gives the right to make decisions on property management of the company;
• own voting shares, which gives the right to participate in the Board of Directors of the company or to appoint for individuals to the Board of Directors;
• own voting shares of a company with investment value of not less than 1 164 000 euros and hold the shares in the company for at least 183 days.
Malta has the Agreement for the avoidance of double taxation with more than 60 countries.
Accounting and auditing of Malta companies
Every company incorporated in Malta is required to appoint independent auditors that are registered with the local Accountancy Board. Companies are required to file with the Registrar of Companies a copy of the annual financial statements presented at the annual general meeting and of the directors’ and auditors’ reports thereon within 42 days from the end of the period for submitting annual financial statements to the general meeting. Such periods are normally ten months after the end of the relevant accounting reference period for private companies, and seven months after the end of that period for public companies. Financial reporting periods start on the 31st of December.
Financial statements and audit reports shall be made in accordance with the requirements of Companies Act of Malta.
For companies in Malta it is allowed to appoint nominee directors, shareholders and a secretary.
Opening a bank account
For a company registered in Malta it is possible to open a bank account in any of our partner banks.
It is important to keep in mind that every bank account opening procedure is individual and depends on the accuracy and timeliness of information and documents provided by the client.