The most commonly used type of company in Malta is the limited liability company. This type of company may be one of the following:
- Private limited company
- Public limited company
The main distinction between the two is that the public limited company may offer its shares to the public and there is no limitation on the number of members it has. While a private limited company limits its members to 50 and may not carry out any offering of its shares to the general public. There are also certain constraints on the transferring of shares in a private limited company.
Companies incorporated in Malta must present annual financial statements to the Malta Financial Services Authority (MFSA). Such statements must be signed by an auditor holding a practising certificate, who gives an independent opinion on the financial statements being presented. The form of the financial statements depends on the size of the company. Companies which qualify as being small undertakings may present abridged financial statements, whilst all other entities must present a full set. The results included in the financial statements must also be represented in the company annual tax return which is to be filed with the Inland Revenue Department (IRD) within specific dates.
Companies incorporated in Malta may also take the form of a Holding Company, which is a company that holds shares in other companies or holds any other assets including movable and immovable property, cash and intellectual property both in and outside of Malta
The benefits of registering a company in Malta:
- Tax benefits – Malta is the only EU state that applies the full imputation system. When shareholders receive dividends from the Malta company they will be entitled to claim a refund of the Malta tax paid by the company on those profits out of which the distributions have been made;
- Relatively simple and fast process – the incorporation of a new Malta company can take as little as 24 hours;
- Cost effective fee structure – from as little as €245 for registration fees and annual fees from €100;
Beneficial owners who wish to remain anonymous may use the services of individuals or companies such as ARQ who are licensed to act as nominees by the Malta Financial Services Authority (MFSA).
Redomiciliation of Companies
The redomiciliation of companies in Malta is governed by the Continuation of Companies Regulations, 2002. These regulations allow companies incorporated in other jurisdictions to continue their operations here in Malta, without the need of having to wind up their operations abroad.
The Regulations are divided into two parts. The first part of the regulations lists the criteria necessary for companies who are incorporated in foreign jurisdictions to redomicile to Malta, while the second part of the regulations lists the criteria that must be adhered to for companies incorporated in Malta to continue their operations in other foreign jurisdictions without the need of having to wind up their operations locally.
Corporation tax in Malta is at a rate of 35% on the company’s profits. Shareholders of a Malta Company are entitled to claim a refund of the tax paid by the company whenever a dividend is being distributed.
Shareholders who receive dividends from companies incorporated in Malta may claim a number of refunds on the tax payable depending on the nature of the income received by the company. The refunds available are:
- 6/7ths refund on income derived from trading activates (resulting in a net tax leakage of 5%);
- 5/7ths refund on income derived from passive interest or royalties (resulting in a net tax leakage of 10%);
- 2/3rds refund if the company has claimed double tax relief;
- Full refund in the case of profits derived from a participating holding
How We Do It
ARQ’s corporate team are able to guide you on all the necessary steps that you will need to take in order to incorporate your company in Malta. The process is quite straight forward, however, it may be time consuming if the necessary documentation is not presented to the Malta Financial Services Authority (MFSA) in the correct manner. We are here to ensure a smooth incorporation process.
The first step in incorporating a company in Malta is to obtain the necessary due diligence on the directors and shareholders of the company. Once we complete all the necessary due diligence documentation, we draft the Company’s Memorandum and Articles of Association. Once the Memorandum and Articles of Association of the company are signed by the shareholders and the issued share capital deposited into a company in-formation account at one of the local banks, we will send the necessary documents to the MFSA so that the company will be incorporated.
Once the Malta Company is incorporated and the Company number is issued we will apply for an Income Tax Number, which will be the company reference number for tax purposes. Depending on the nature of the company’s activities we will then proceed with applying for Value Added Tax (VAT) number and PE number for companies engaged in employment activities.
Other related services from ARQ Group include:
- Opening a bank account in Malta;
- Provision of Directorship services;
- Tax advisory;
- Accounting & payroll services;
- Auditing services through our partner audit firm, Capstone Group;
- Legal advisory services through our partner legal firm, FFF-legal that may include:
- Mergers & Acquisitions
- Real Estate
- Regulatory Compliance
- Corporate & Commercial services
- Setting up of Trusts in Malta;
- Malta & other EU jurisdiction Residence and Citizenship schemes;
- Malta yacht, Ship and Aircraft registration;
- Resource outsourcing – marketing services, website development, property & staffing solutions
The economy of Malta continues to grow from strength to strength and the ARQ Group continues to expand and adapt to the needs of our clients. The work that we do is versatile, complex and truly international in terms of both our reputation and our reach.
Please make contact with us below and we will gladly assist you with the best advice and solutions for your needs