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Among the various types of business entities that can be established in Malta, the Single Member Company (SMC) stands out for its simplicity and flexibility.
 


 

Single Member Company in Malta


 
Malta, the archipelago in the central Mediterranean, is renowned for its strategic location, favorable tax regime, and robust legal framework, making it an attractive destination for business formation. Among the various types of business entities that can be established in Malta, the Single Member Company (SMC) stands out for its simplicity and flexibility. This article delves into the intricacies of forming and operating a Single Member Company in Malta.

Compliance Requirements for Single Member Companies in Malta


Operating a Single Member Company (SMC) in Malta comes with specific compliance obligations designed to ensure transparency, accountability, and adherence to legal standards. Here are the key compliance requirements that SMCs must fulfill:


Annual Returns


1. Submission of Annual Returns: Every SMC is required to file an annual return with the Malta Business Registry (MBR). The return must include:

- Details of the company’s shareholders and their shareholdings.

- Information on the company’s directors and secretary.

- The registered office address.

- A declaration that the company has complied with all relevant requirements.


2. Deadline: The annual return must be submitted within 42 days from the anniversary of the company’s incorporation.


3. Fee: The filing of the annual return incurs a fee, which varies based on the company’s authorized share capital.


Financial Statements


1. Preparation of Financial Statements: SMCs must prepare annual financial statements that include:

- A balance sheet.

- A profit and loss account.

- Notes to the accounts.

- A directors’ report.


2. Audit Requirement: The financial statements must be audited by a certified public accountant to ensure accuracy and compliance with International Financial Reporting Standards (IFRS) or General Accounting Principles for Smaller Entities (GAPSE).


3. Filing with MBR: The audited financial statements must be filed with the MBR within 10 months from the end of the financial year.

Tax Compliance


1. Corporate Tax Returns: SMCs must file an annual corporate tax return with the Commissioner for Revenue. The return should include:

- Details of the company’s income and expenses.

- Calculations of tax payable.

- Claims for any tax refunds or credits.


2. Payment of Corporate Tax: Any corporate tax due must be paid by the deadline specified by the Commissioner for Revenue, typically nine months after the end of the financial year.


3. VAT Returns: If the company is registered for VAT, it must file periodic VAT returns, usually on a quarterly basis, detailing the VAT charged on sales and the VAT paid on purchases.


Record-Keeping


1. Accounting Records: SMCs must maintain accurate and up-to-date accounting records that reflect the company’s financial position and transactions. These records should be kept for at least ten years.


2. Statutory Records: The company must maintain statutory records, including:

- A register of members (shareholders).

- A register of directors and company secretary.

- Minutes of general meetings and board meetings.


Compliance with Employment Laws


1. Social Security Contributions: If the company has employees, it must register as an employer with Jobsplus and make regular social security contributions on behalf of the employees.


2. Employment Contracts: Ensure that all employees have written contracts that comply with Maltese employment laws.


3. Payroll Reporting: File monthly payroll reports with the Commissioner for Revenue, detailing salaries paid and tax withheld.


Regulatory Compliance


1. Licensing and Permits: Depending on the nature of the business, the SMC may need to obtain specific licenses and permits from relevant authorities.


2. Data Protection: Comply with the General Data Protection Regulation (GDPR) and the Data Protection Act, ensuring the protection of personal data handled by the company.


3. Anti-Money Laundering (AML) Compliance: Implement adequate AML policies and procedures if the company operates in sectors subject to AML regulations.


Changes and Notifications


1. Changes to Company Details: Any changes to the company’s registered office, directors, company secretary, or share capital must be promptly notified to the MBR through the appropriate forms.


2. Resolutions and Minutes: Maintain records of all resolutions passed by the company’s sole shareholder, as well as minutes of any meetings held.


Advantages of a Single Member Company


- Ease of Management: With only one shareholder, decision-making is streamlined, allowing for swift and efficient management.

- Flexibility: The sole shareholder can adapt and modify the company’s structure and operations as needed without the need for consensus.

- Tax Efficiency: Benefiting from Malta’s competitive tax regime, including potential access to double taxation treaties.


Conclusion


The Malta Companies Act is modelled on its UK counterpart. Maltese company law imposes no restrictions on the nationality and residence of the shareholders, directors and the company secretary of a Malta company. A Single Member Company in Malta offers a viable and attractive option for entrepreneurs looking to establish a business with limited liability and full control. The straightforward formation process, combined with Malta’s favorable business environment, makes it an ideal choice for small business owners and solo entrepreneurs.


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