Information on Maltese Company Formation

General Characteristics of Maltese companies
Malta’s Companies Act is largely based on English Law and EU directives and defines the type of Maltese corporate entities or commercial partnerships that may be established which are as follows:
 
 
 
  1. A limited liability company
  2. A partnership en nom collectif
  3. A partnership en commandite
 
Malta is a tax efficient jurisdiction for holding and trading companies. Company formation expenses in Malta are relatively low, thus making Malta a cost effective jurisdiction, not only or large corporation's tax planning, but also for small and medium sized businesses.
 
The incorporation of a Maltese private limited liability company will typically require a week from the time the appropriate documentation is presented to the Maltese Registrar of Companies to be processed and finalized.
 
Maltese company law imposes no restrictions on the nationality and residence of the shareholders, directors and the company secretary of a Malta company. Furthermore, there are no restrictions on the types of activities that companies in Malta may carry out, although the activities of certain Malta businesses may be regulated by local regulatory authorities such as the Malta Financial Services Authority (MFSA) and the Malta Lotteries and Gaming Authority (LGA).
 
In terms of the Maltese Companies Act, the minimum share capital of Maltese registered companies is €1165, of which at least 20% must be paid up upon subscription and deposited in a bank account in the name of the company being registered in Malta.
 
A Malta Company must have at least one director, who in certain cases may also act as company secretary. In the Malta Company you can occupy both the office of director and be a shareholder of the company. The director can also be a body corporate; however the company secretary must be an individual. The company secretary must be an individual, but need not be a Maltese national.
 
Although Maltese company law generally requires that a Malta company has at least two shareholders, it is possible to register a company in Malta with one shareholder if certain conditions are satisfied. Shareholders can be either individuals or corporate bodies. At least one members’ general meeting must be held annually.
 
It is possible for the shares in the Malta Company to be held by an authorized fiduciary, thereby keeping confidential the identity of the beneficial owners.
 
A registered Malta Company is bound to submit an annual return to the Registrar of Companies as well as to have its annual financial statements audited.
 
A Malta registered company can benefit from Malta’s very attractive tax system.
 
Registration of a Maltese company
 
Due to legal and professional requirements, the following information and documentation is typically required:
 

1) A description of the object and purpose of the company to be incorporated

2) For each ultimate beneficial owner of the company holding an interest, whether direct or on the ultimate beneficial owners/individual directors/parties to the fiduciary agreement; (please advise if listed/SEC if applicable).

a) A true copy of passport certified to be a true copy by a lawyer/notary/accountant or bank manager

b) Original utility bill (not older than three months) or certified true copy of driving license/ identity card (or similar) confirming residential address

c) Two original bank reference letters, one addressed to bank (where a bank account will be opened, if applicable), and another addressed to the Malta Registry of Companies, confirming a relationship of at least two years

d) Original professional reference letter – Law firm/ Accounting Firm/ Auditing Firm / Tax Advisor

e) Brief description of previous business history or Curriculum Vitae

 
3. On corporate shareholders or intermediaries, and on corporate directors:

a) Original or certified true copy of the Memorandum and Articles of Association

b) Original or certified true copy of a recent (not older than three months) Certificate of Good Standing issued by the Registry of Companies/Companies House showing the shareholders of the corporate shareholder or intermediary, also specifying their respective shareholding, and all the officers of the company including directors and company secretary, if any.

c) Two original bank reference letters, one addressed to bank (where a bank account will be opened, if applicable), and another addressed to the Malta Registry of Companies, confirming a relationship of at least two years

d) Most recent audited financial statements of corporate shareholders

e) Certified copy of the full group structure showing the whole structure up to the ultimate beneficial owner of corporate shareholder.

 
4. In the case of a Trustee arrangement:

a) Certified true copy of the Trust Deed

b) Disclosure of the identity of the beneficial owners, the trustee and the trust settler Country where the trustee is domiciled and licensed

c) Proof of license (we may be able to search this ourselves, depending on the jurisdiction and information available)

 
5. For each secretary of the company the following documentation and information is required:

a) A certified clear photocopy of that part of the passport (or alternative valid identification document) which indicates the personal details, specimen signature and photograph; and

b) A declaration of residential address.

 
Costs of incorporating and maintaining a Maltese company
 
1. The costs of incorporating and maintaining a Maltese company are, amongst other things, dependent on the amount of authorized share capital, the level of activities of the company and on the level of professional assistance required. Please contact us for a specific estimate.
 
2. If the corporation is listed on a recognized stock exchange alternative procedures would apply.
 
Tax benefits of Maltese companies
 
Malta’s status as a member of the European Union, as well as the adoption of the Euro as Malta’s currency in 2008, have made the country a jurisdiction of choice with investors, many of whom decide to locate their businesses in Malta due to an advantageous corporation tax system.
 
Malta is the only EU member state with a full imputation system of taxation in force. Shareholders are entitled to a credit for the company tax paid on distributed profits and will qualify for a refund when the credit exceeds their tax liability. Malta grants relief from double taxation under the credit method and includes not only treaty relief but also unilateral relief and the flat rate foreign tax credit, thereby ensuring that income arising from overseas is not subject to double taxation, even if there is no double taxation agreement in existence.
 
Malta's double taxation treaty network extends to over 45 countries.
 
Other key features of the Maltese tax system:
  • No withholding taxes on the distribution of dividends, interest and royalties paid to a non-resident provided the recipient is the beneficial owner of the income
  • Access to the Parent-Subsidiary, Interest & Royalties and Mergers Directive
  • Participation exemptions
  • An exemption from tax on income derived by collective investment schemes
  • Possibility of Advance Revenue Rulings on international transactions (guaranteeing a tax position for a minimum of five years)
  • Absence of 'thin capitalization' rules and no anti-controlled foreign corporation legislation
  • No capital duty on share issues and exemption from duty on transfers of shares in, by or to companies having the majority of their business interests outside Malta
  • The possibility for companies to denominate their share capital and their accounts in any convertible currency
  • The possibility of migrating companies to and from Malta
  • Relative ease of incorporation for non-regulated entities
  • Low registration and maintenance costs
  • A taxation scheme for groups of companies allowing the offset of losses between group companies.
For further information with regards to the above mentioned services please do not hesitate to contact us by tel: 25830830, by fax: 25830759 or by email: info@multilysis.com.
Office Address: 5 Amathountos street,
Pirilides Building, 4th-5th Floor,
3105 Limassol-Cyprus 51252, 3503