DOING BUSINESS IN MALTA IN 2023
Since 2003, Healy Consultants Group has assisted our Clients with business registration in Malta. Our services include i) Malta company registration ii) business licensing iii) Malta corporate bank account opening and overseas iv) visa options and staff recruitment and v) office space rental solutions.
|Compare different Malta entities||LLC||Free zone LLC||Public limited company||Representative office||Branch office|
|Also known as||Ltd||Ltd||PLC||Rep Office||Branch|
|Best use of company?||All products/ svcs||Manuf/ export trading||To get pub. funding||Marketing/ research||Specific projects|
|How soon to invoice Clients?||3 weeks||3 weeks||5 weeks||5 weeks||5 weeks|
|How soon can you hire staff?||3 weeks||3 weeks||5 weeks||5 weeks||5 weeks|
|How soon can you sign a lease agreement?||1 week||1 week||1 week||1 week||1 week|
|How long to supply corporate bank a/c?||8 weeks||8 weeks||10 weeks||10 weeks||10 weeks|
|How long to supply co. reg / tax numbers?||3 weeks||3 weeks||5 weeks||5 weeks||5 weeks|
|Corporate tax rate on annual net profits?||35%||35%||35%||0%||35%|
|Limited liability entity?||Yes||Yes||Yes||No||No|
|Government grants available?||Yes||Yes||Yes||No||No|
|Foreign investors need govt approval?||Yes||Yes||Yes||Yes||Yes|
|Res. director/partner/ legal rep. required?||No||No||No||Yes||Yes|
|Min. paid up share capital?||€1,165||€1,165||€46,588||None||None|
|Can bid for Government contracts?||Yes||Yes||Yes||No||Yes|
|Corporate bank account location?||HSBC||FCM Bank||Medbank||APS Bank||Lombard Bank|
|Can secure trade finance?||Yes||Yes||Yes||No||Yes|
|VAT payable on sales to local customers?||18%||18%||18%||None||18%|
|Average total business set up costs?||€11,675||€11,725||€13,125||€12,275||€12,275|
|Average total engagement period?||9 weeks||9 weeks||11 weeks||11 weeks||11 weeks|
Malta business setup summary
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Advantages and disadvantages
Advantages of Malta company registration
- Registering a company in Malta is easy because:
- A Malta LLC only requires one shareholder and one director, whom can be of any nationality and do not need to reside in the country;
- The company can be registered with a minimum capital of €233;
- Malta company formation only takes two weeks.
- If properly-structured, registering a company in Malta is an ideal, tax-efficient way to conduct international business, because:
- Having a company in Malta allows entrepreneurs to register for EU VAT and gain access to a network of double taxation treaties with countries, some of which include Australia, France, Germany, Singapore, South Africa, US and UK;
- A company registered in Malta can be a tax efficient entity when used as the headquarters of an international group. Learn more about Malta’s holding company regime on our Healy Consultants blog;
- A Maltese Investment Services license can be used to provide investment services or to act as funds custodians in Malta or in all European Union countries as this license is transferable to EU without a permit needed in other member states;
- A Maltese company is unlikely to be considered a tax-avoidance vehicle as it is required to submit annual audited accounts.
- Malta offers many advantages for international Clients, such as:
- English is an official language in Malta. It is spoken by 88% of the population. Therefore, foreign investors will easily be able to communicate with employees, customers and suppliers;
- Malta is located in the heart of the Mediterranean near mainland Europe, North Africa and the Middle East. Moreover, Malta has an excellent port infrastructure that, together with its membership of the European Union, makes it an ideal location for businesses entrepreneurs interested in Malta business;
- Crypto-currency trading platforms follow the recent example of Binance and began relocation of their head offices to Malta.
- Malta offers several tax advantages to its investors, including:
- The nation has signed double taxation avoidance agreements with over 50 countries;
- No thin capitalization rules;
- No exit taxes, wealth taxes, taxes on trade or payroll.
- Malta offers its investors world-class advanced telecommunications network as well as a pool of highly skilled workers.
Disadvantages of Malta company registration
- Local companies are required to comply with the following regulations:
- Following registration, shareholders and directors’ details are available for public viewing at the Registry of Companies;
- Annual accounts must be prepared and submitted to the Maltese government;
- Malta cooperates with the Organisation for Economic Co-operation and Development (OECD) and Financial Action Task Force (FATF) on money laundering by sharing customer information with other countries.
- The country imposes high taxes on local companies, such as:
- Corporate tax rate is high at 35% and personal income tax rates are progressive from 0%-35%;
- In order for a Maltese company to receive an EU VAT number for company registration, the management and control of the company must be in Malta. The company is required to register for VAT if the total value of goods acquired in a calendar year from a VAT-registered EU company exceeds €10,000 (US$13,150). VAT rate is 18%.
- Malta does not perform highly in relation to the following:
- The country is negatively ranked as the world’s 41st freest economy according to the Heritage Foundation’s 2019 Index of Economic Freedom, a measure of freedom enjoyed in business, trade, monetary, financial, investment and labor markets;
- Malta is negatively ranked as the 51st least corrupt country in the 2018 Corruption Perceptions Index by Transparency International, a global measure of corruption amongst public officials and politicians.
- Malta is endowed with poor and non-significant quantum of natural resources of its own. As a result, it suffers from these problems:
- Investors prefer to start businesses in manufacturing, tourism and financial services industries. As a result, there is not much growth of the other sectors of the economy;
- Most of the raw materials and industrial supplies need to be imported into Malta, making many manufacturing and other related sectors heavily dependent on imports;
- Due to its poor natural resource endowment coupled with the limited market size of the economy, many industries are not able to reap enough profits.
- In October 2020, the Maltese authorities introduced a mandatory FDI approval requirement for all non-EU investors. The National Foreign Direct Investment Screening Office must be notified of all investments from non-EU companies/ individuals.
- Registering a company in Malta is easy because:
Best uses of a Malta company
Malta companies are good options as holding companies, as they can benefit from the following:
- Exemption from payment of withholding tax in Malta on dividends distributed to foreign individuals or companies;
- Access to EU double tax treaties to reduce withholding tax;
- Can be exempted from paying dividend income and capital gains from participating holdings.
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Useful links for Malta