Incorporation

Certain professionals may find self-employment to be the best way of operating in Malta. Sole traders will need a Maltese home or office address, a bank account and a social security number. They must also register with the tax authorities and VAT department. Non-EEA/Switzerland nationals will also need a residence permit. As like any other company, sole traders must obtain the necessary licence if working in regulated sectors, but do not need to sign up to the Registry of Companies.

Individual operators who decide to work together can draw up a deed specifying the terms of the partnership. Maltese law allows for limited liability on some (but not all) members of a partnership. A dedicated bank account and tax number are required.

Whether you are looking for an effective asset-holding structure like a holding company, an operational trading company, a ship-owning company, a vehicle for investment, a captive insurance company, or for any other use, the private limited liability company is likely to be your go-to solution. It should be noted that although the tax code contains special provisions for some types, like holding companies or fiscal, company registration is effectively uniform all across. Private companies have a distinct legal personality and their assets and liabilities are separate from those of their owners, with the up to 50 shareholders’ liability being limited to the unpaid capital amounts on the shares they each hold.

Private companies can also be of the following types:

• Small Company

Maltese company law allows small private companies to submit audited abridged accounts if they do not exceed two of these criteria: (a) a balance sheet total of €4m, (b) turnover of €8m, and (c) an average of 50 employees during the accounting period.

• Private Exempt Company

Account audits are not required if a company meets certain criteria. First, the Memorandum of Association must restrict the number of persons holding bonds or any other form of debenture to no more than 50, prohibits body corporates from taking on directorship of the company, and prohibits any arrangement whereby the policy of the company is capable of being determined by anyone other than the directors, members, or debenture holders. Secondly, the company must also satisfy at least two of the following criteria: (a) a balance sheet total of €46,600 or less, (b) an annual turnover of €93,000 or less, and (c) an average of two employees or fewer over the accounting period. Although these companies are exempt from audit requirements, the profit and loss account, abridged balance sheet, and notes must still be delivered to the Registrar.

Only those companies registered as private exempt may be single-member companies, where the sole shareholder is also the sole director and company secretary.

Companies constituted outside of Malta that wish to open a branch in the country must submit basic information like the company’s constitutive documents (translated, if required, into English) and particulars of the company’s representatives both locally and abroad. Branches are only taxed on income arising in Malta and have no separate legal personality from their foreign head office, which is bound to uphold any contract signed by the branch. This option is typically chosen when the presence in Malta is expected to be temporary, as incorporating a private company carries comparable compliance requirements, with the additional benefits of a global tax net and easier access to local finance.

Large businesses may be better served by opening a public company. These companies have no limit on the number of shareholders, although they must have at least two upon registration. They are also required to have at least two directors (which may be corporate bodies) and have a higher minimum share capital. While these companies may offer shares or bonds to the public, these issues must take place through the Malta Stock Exchange and be accompanied by a prospectus for potential investors.