Malta, a stable Mediterranean nation, has been an EU member since 2004. The English language is widely used here, and the country has a reputable and well-developed financial services industry.
The regulatory system managed by the Financial Services Authority (FSA) that controls the banking and investment sector agrees with internationally recognized standards. The legal system based on civil law is influenced by the Common Law of England, while the corporate laws rely on UK Company Law and EU Directives. Malta has an independent judicial system modelled after the UK judicial system.
Malta – Private limited company
|§ Type of business: Private limited company.
§ Type of law: Civil law (influenced by common law).
§ Shelf companies: Unavailable.
§ Time required for incorporation: 2-3 days.
§ Fees of the Malta Financial Services Authority: €245 onwards depending on the authorized share capital
|§ Corporate taxes: possible 35% refund depending on the type of activity
§ Access to double taxation agreements: Yes
§ Languages: English
Authorized share capital or equivalent
|§ Standard currency: €
§ Authorized share capital: € 233 (20%)
|§ Authorized currencies: Any
§ Minimum amount: € 1,165
|§ Minimum number: One
§ Publicly available accounts: Yes
§ An individual or a corporation: Both are allowed
§ Local: No, but consideration should be given for the purpose of efficient management
|§ Venue of meetings: Anywhere, but most meetings must be held in Malta.
§ Any nationality: Yes
|§ Minimum requirement: Two. Company shareholders are allowed. One company shareholder is allowed under certain circumstances, see the text.||§ Publicly available accounts: Yes
§ Venue of meetings: Meetings and general annual meetings must be held in Malta
|Disclosure of beneficial ownership information to authorities
The identity of the beneficial owner may remain confidential subject to a duly authorized Maltese trust company featuring as a shareholder on behalf of the beneficial owner in publicly available accounts. On 1 January 2018, Malta introduced a Beneficial Ownership Register granting the authorities a wider access to corporate beneficial ownership information. If a company applies for a tax refund, the beneficial owner’s identity is likely to be disclosed to Malta’s tax authorities.
|§ Required: Yes||§ Registered office required: Yes|
|§ Required to be prepared: Yes
§ Publicly available accounts: Yes
|§ Audit requirements: Yes
§ Requirement to submit accounts: Yes (audited)
|§ Requirement to submit annual reports: Yes.
§ Change of registered address allowed: Yes.
|§ Storage of registers and corporate documents: most documents are kept in the registered office|
Maltese companies – attractive advantages
Malta is a popular jurisdiction with an efficient legal and administrative system. Its legal system is based on civil law, but all current tax, corporate and marine laws rely on the UK legislation and are governed by applicable EU Directives.
Shelf companies are unavailable, but the incorporation procedure is relatively simple and fast. Corporate documents are submitted to the Company Registrar with a confirmation of payment of the original capital stock and signing of the memorandum and the articles of association. Due diligence and disclosure of know your customer information are required; shareholders, who are not EU / EEA residents, must submit a bank reference. The beneficial owner’s identity may remain confidential subject to a trust company authorized by Malta’s Financial Services Authority acting as an authorized shareholder on behalf of the beneficial owner.
Directors and officers
The minimum number of directors is one, who may be an individual or a corporation, plus a separate company secretary. Separate director and secretary must not necessarily be Maltese residents; however, it is always advisable for the purpose of efficient management. With a view to avoiding tax requirements from other jurisdictions, Board meetings should be held in Malta, and the directors should come to Malta.
Shareholders and authorized share capital
Two shareholders are a minimum requirement; however, it is quite possible to incorporate a company with one participant. A corporate shareholder may be admitted in a company with one participant, who conducts only one main commercial activity. Participants have limited liability. A private limited company may be registered with a minimum authorized share capital of € 1,165, with at least € 233 paid by contributions.
A company’s name must include the approved suffix to designate its limited liability. Use of certain names is restricted.
Requirements prescribed by law
A Maltese company is a legal person, and its powers are similar to those of an individual. Company activities are not restricted provided that they are authorized by constituent documents.
Corporate registers must be continuously updated. Defaulted obligations are penalized.
Obligation to prepare audited accounts reflecting the company’s actual financial standing. Audited accounts are submitted to Malta’s Financial Services Authority. Maltese companies may relocate their registered office from Malta, while foreign companies may move over to Malta if allowed by their current jurisdiction.
Registered Maltese companies are deemed residents, have a registered office in Malta and thus are globally taxed. The standard rate of the corporate tax on taxable income is 35%; however, it is reduced to 5% subject to tax incentives granted to nonresident shareholders in the distribution of dividends by Maltese companies. There is an efficient tax refund system entitling shareholders to a refund of paid taxes equivalent to up to 6/7 of their income from commercial activities. Holding companies may apply for partial exemption from taxes on dividend income or capital gain. As an alternative, a tax can be paid, and the shareholder may demand full refund of the tax paid by the company, when profits are distributed. Substance may be required in Malta to be able to avail oneself of the advantages of double taxation agreements. Malta has 70 double taxation agreements.
If you need more information or want to discuss some matters related to the foregoing, feel free to contact us.
Cofrance SARL provides a full range of services to individuals and their families. The company enjoys strategic partnership contacts and can offer integrated services covering areas of key interest for its customers, including international tax planning, international property planning, continuity planning and business planning.
Cofrance SARL in Malta
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