Malta Company Formation in 2024

Why to Register a Company in Malta?

English is one of the two primary languages. Malta’s geographic position makes it the perfect logistics hub for trade links to Europe, North Africa and the Mediterranean. The Maltese Government is pro-business and in fact, is always proposing incentives for attracting FDI (Foreign Direct Investment). However, the National Foreign Direct Investment Screening Office has been set up in order to implement the provisions of Regulation (EU) 2019/452 establishing a framework for the screening of foreign direct investments into the Union.

The said shall be responsible for screening new FDI projects, joint ventures with a foreign component and the transfer of any shares and/or controlling interests in existing companies where the owner, titleholder or ultimate beneficial owner originates from third countries, means: any country which is not a member of the European Union. Foreign Direct Investment in Malta increased by 20840.40 EUR Million in the fourth quarter of 2023. Foreign Direct Investment in Malta averaged 4507.69 EUR Million from 2003 until 2023, reaching an all time high of 20840.40 EUR Million in the fourth quarter of 2023 and a record low of -1288.40 EUR Million in the fourth quarter of 2013.

Reasonable rental rate for industrial premises. Maltese companies are regulated by the Companies Act, which was enacted in 1995 and originally based on the structure of the UK Companies Act. The legislative framework for a Company Formation in Malta is in line with the main EU directives which makes it sufficiently flexible and easy to relate to different legal systems especially those within the EU.

Maltese regulatory framework provides everything for the different types of entities including public companies, limited partnership or general partnership, european company and the most common, the private limited liability company. A limited liability company is the most common form of business entity in Malta, and it has a separate legal personality from that of its shareholders. In such a company, the liability of the shareholders is limited to the amount, if any, of the unpaid shares respectively held by each of them.

Registration of a public and private company is a relatively quick process. If the companies legal documents with all supporting documentation complete in good order delivered to the Registrar, within a week of delivery the certificate of incorporation will be issued. A Malta Company provides an effective, EU-based solution.

No clearance is required by public authority for a Malta Company Formation on the basis that the Maltese company carries no activity, business or service which requires a licence or is otherwise regulated under:
- the Gaming Act
- the Banking Act
- the Financial Institutions Act
- the Investments Services Act
- the Financial Markets Act
- the Insurance Business Act
- the Insurance Intermediaries Act
- the Retirement Pensions Act
- the Trusts and Trustees Act
- the Special Funds Regulation Act
- the Company Services Providers Act.

Registration of Companies for VAT purposes

All companies registered in Malta must also register for VAT. VAT obligations include several compliance and payment obligations. Companies can be registered for VAT under any of the following Articles:

Article 10: Companies that undertake, supply of taxable or exempt with credit goods or services in Malta, export of goods from Malta to third countries (outside the EU), make intra-community supplies or provide services taking place in EU member states other than Malta are required to register under Article 10 of the VAT Act. A company taxable under Article 10 is eligible to claim input tax for purchases made which are attributable to its supplies.

Article 11: Only companies that qualify as a small undertaking in terms of the provisions of the Part 1, of the 6th schedule, of the VAT Act 1998 can register under Article 11. These companies cannot charge VAT to their customers nor can they claim input VAT on their purchases and expenses and are therefore considered as exempt from VAT.

Article 12: Companies that which are not registered under Article 10 and who make intra-community acquisitions of goods in Malta whose value exceeds €10,000 in a calendar year are required to register under Article 12 of the VAT Act. Article 12 registration is also required where a company purchases services from suppliers established outside Malta (both EU and non-EU) and the place of taxation of such service is deemed to be Malta and where the liability of payment of the tax lies with the customer.

Taxation of an Incorporated Company in Malta

Malta Corporate Tax

Several Malta tax benefits can help reduce the company income tax through the full imputation and tax credits available when distributing profits to the shareholders. Malta operates a full imputation tax system which completely eliminates the economic double taxation of company profits. While the corporate tax rate stands at 35%, upon a distribution of dividends, the shareholders can get a refund of the Malta tax charged (generally 6/7ths). A full 100% tax refund can be claimed by a Maltese holding company which derives its profits from a participating holding, provided that it satisfies certain conditions set out in the law.

On the International Taxation front, Malta announced in the budget 2023 that they would be opting to delay its implementation of the European Directive establishing a minimum global tax rate on companies that form part of multinational groups earning over €750 million or more every year. This means that Malta will not be introducing a top-up tax that would bring the effective tax rate up to the Organisation for Economic Co-operation and Development (OECD) mandated rate of 15%.

The reason for this is to allow Malta to take any actions necessitated by global developments. The current corporate taxation system, known as the full imputation system, whereby corporate profits are taxed at the rate of 35%, but which up to 30% can be reclaimed, is to remain in force. Malta company registration is a simple-enough and straightforward procedure, set out by The Malta Companies Act 1995 which is modeled on its UK counterpart. Malta is a natural choice for many to establish a new company in Malta or to redomicile an existing operation from other jurisdiction. Read more about Malta Corporate Tax: Malta Ranks Third in EU for Corporate Tax Revenue

Who may incorporate?

A Malta Company Limited may be registered either by the shareholders themselves or by their authorised representatives namely "subject persons" licensed to act as corporate services providers such as lawyers or accountants.

IMEX Malta is specialized in document filing, malta company formation, tax advisory, tax consultancy in Malta with a variety of International Corporate, Advisory & Tax Solutions with a focus on international business. Our service team is composed of corporate lawyers, company managers, tax advisors and accountants (CSP and MIFSP) and is specialised in business solutions and financial services with years of experience and a comprehensive range of services.

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Connect your business to the world with a Company Formation in Malta. Get in touch for a expert advice and reach your goals.