Start Business Malta:
Top Reasons Why Your Business Should Be Based In Malta
To start a business, one of the best places is Malta in the Mediterranean. Here are the reasons why it would be a good idea to start a business in Malta.
- Malta’s membership to the EU:
This includes free trade between members, a vast potential market, and the currency and competition laws.
- A stable economy with great potential for development:
Over the years, the Maltese business environment has smoothly transitioned from an agro-based economy to a diversified one. In fact, at the moment, Maltese economy is the fastest-growing economy in the EU. The Island has invested in next-generation industries that look set to grow exponentially over the coming decades. As a good example, in 2018, Malta passed three bills as part of the ‘Blockchain Island’ plan to turn the country into a hub for crypto innovation.
Also, the robustness and potential of the Maltese economy perfectly demonstrated by Malta’s 2021 GDP, which amounted to around $17.2 billion.
- Malta’s strategic location:
Located on one of the busiest logistics routes in the world, the crossroads between Europe, Africa and the Middle East, the Malta Freeport is one of Europe’s most important shipping lanes. Malta Freeport possesses a state-of-the-art facility and handles the world’s largest shipping vessels.
- Multicultural and multilingual:
Malta is a bilingual country, the official languages are Maltese and English. Most government and legal documents are available in English. It shows that Malta is one of the countries with the most foreign-friendly economies as using English eliminates the language barrier for those who are setting up a business in Malta as a foreigner. Aside from this, the Maltese people share common western values and have a great respect for the culture and religion of others.
- Favourable business climate:
There is minimal bureaucracy, low incorporation and maintenance costs, investors will enjoy a super-fast and easy registration process as the conditions for company formation in Malta are quite relaxed.
- Competitive tax system which is designed to attract investors and entrepreneurs:
Malta pursues a preferential tax policy (Malta operates a full imputation system; Business owners looking to open business Malta can enjoy incentives on investments under the Business Promotion Act, Malta Enterprise Act, and Business Promotion Regulations), but as Maltese tax system is strictly monitored by the EU, it is extremely safe and legal.
- Malta is a safe country:
The crime rate is so low that Malta is considered one of the safest places in the EU.
- Stunning weather and tropical climate:
Malta is one of the sunniest countries in Europe, it has 161 hours of sunshine, more than twice as many European cities. The summers are hot, sunny, and dry while the winter is warm.
Opening A Business In Malta: Tax Benefits
First of all, Malta tax system is recognised compliant with EU non-discrimination principles by the European Commission, and also gained approval from the OECD.
Second, Malta has extensive network of Double Taxation Agreements and offers a highly efficient fiscal regime that eliminates double taxation on taxed company profits distributed as dividends.
In most EU countries, the corporate tax system is a classical tax system which leads to double taxation on company profits. Fortunately, Malta is one of the few countries that operate the unique Full Imputation System. It means that the corporate tax in Malta is 35%, however it can be reduced down to an effective tax rate of 5-7% by distributing all the profits to the holding company in Malta.
Third, Malta offers incentives on investment under the Malta Enterprise Act, Business Promotion Act, and Business Promotion Regulations.
Local companies – startups, small businesses and companies that operate in certain target sectors – may qualify for a number of investment tax credits.
Fourth, besides the double tax relief, refunds and exemptions, the tax system in Malta offers more benefits to businesses:
- fair capitalisation rules
- flexible transfer pricing rules
- no withholding taxes on remittances of dividends, interest and royalties to non-residents, and
- no capital duties.
Step-by-Step Guide "How to start a business in Malta 2023"
If you are looking to set up your new business in Malta, there are important steps you need to complete to get to the point where you can start making money.
We have put together an easy to follow step by step guide to help you get started.
Step 1: Are You Self-Employed Or Limited Liability?
When you start a business in Malta you need to decide whether your business is self-employed or is going to be a limited liability company.
The biggest distinction between the two is that you are better protected and your company will have a more trusted identity.
However, there are a greater number of government-related steps to take to establish this kind of company. This includes the likes of having your company audited annually.
So, when you start a business in Malta you need to make sure you have a viable business before you register it as a limited liability. It is also worth noting that you will need 2 shareholders to successfully register your business.
On the other hand, it is a lot simpler to start a company as a self-employed person in Malta. However, there is a bigger risk to the individual if things don’t pan out.
This may include lawsuits and defective products. If you are set to establish yourself as self-employed – skip to the 5th step.
Step 2: Prepare Documentation For Registration
The next step in establishing a limited liability company is drafting the articles of association and memorandum.
As well as being crucial, these documents outline exactly what your company, the directors and shareholders are able to do and not do.
Step 3: Make The Minimum Share Capital Deposit
The right minimum share capital deposit will be determined by you or your accountant and this needs to be included with your articles of association and memorandum.
In the beginning, even the smallest company, needs capital.
The minimum that is allowed to start a business in Malta is 1,200 euros. You do not need to deposit this much though – just 20% of your business value.
As part of this step then, you also need to open an account with a bank for your business.
Speak to a bank teller about your capital share deposit and then the money will be put into that account until you have registered your business.
You will get a receipt and it is vital you keep this safe in your records.
Step 4: Take Your Share Capital Deposit Slip And Documentation To The MFSA
Next, you need to take the deposit slip and your documentation to the MFSA or Malta Financial Services Authority.
This is the governing body that oversees all businesses that are registered locally.
Registration can take anything between 2 and 3 days and you need to pay a registration charge, which depends on the business size.
Step 5: Obtain Appropriate Licensing
You need, at times, a trading licence to operate as a company when starting a business in Malta.
This is generally a simple process, involving the filling out of a form.
However, if your business is a large manufacturer, related to beauticians or involved in preparing food, you need to apply for additional licences.
Step 6: Obtain A Tax ID Number
Maltese businesses need a tax ID number.
This involves filling out a form and does not cost anything – though you will need to fill out a tax return annually.
The specific form you need is determined by whether you are a self-employed individual or limited liability business.
Step 7: Tell The VAT Department About Your New Business
The next step is that you need to tell the VAT department about your new business when this calls for registration.
You need to keep in mind 3 crucial thresholds.
If your predicted turnover is either 12,000 or less over the course of a year, you are not liable to pay VAT, but registration is still required.
However, if your predicted turnover is more than 20,000, the VAT charges will vary from business to business.
You can find out the most up-to-date rulings from the VAT department.
Step 8: PE Number
If you are operating as a self-employed person or are not going to hire any other workers, you can skip this step.
However, owners of limited liability companies, are considered to be working for their company and therefore regarded as an employee and need to get a PE number.
This can be done by filling out a form from Inland Revenue, for free, and it only takes about 3 days to complete.
Step 9: Register Your Company At Jobsplus
Jobsplus (formerly ETC) is the body responsible for Maltese employment registration.
You need to fill out this form for every employee your company has, regardless of whether you are a limited liability business or self-employed.
This form needs to be filled when you registered and when an employee leaves. This is also a quick procedure and is free.
Step 10: Register For Data Protection
If you are collecting information about your existing or potential customers, you need to complete this step.
Malta has recently caught up with other parts of Europe to provide greater security for personal information.
When you start a business in Malta, it is vital that you establish procedures to ensure your customer’s sensitive information can’t be intercepted and used by third parties.
Best Locations to Set up a Business in Malta
Location always plays a key role in the business success, maximum exposure and constant footfall are important factors to consider. The locations we have highlighted below offer great potential as a business.
Valletta is the Capital City of Malta and the major commercial and financial centre of the island. From here many financial institutions, law firms and maritime businesses operate. It is also one of the best places to have a business from hospitality industry and definitely for those who want an instantly-recognisable global address.
Located across from Valletta, Sliema is highly sought-after as an area. Business Centres in Sliema are preferred by operators in the travel, igaming, aviation, financial, and technology sectors. Business Centres are designed to cater for the requirements of 21st century business and finished throughout to very high specifications. If it is glamour and style with a perfect address that you are after, Sliema is it.
- St. Julians
Located on the Maltese coast, north of Valletta, St. Julians is the most prestigious business district. St. Julians business centres offer high spec serviced offices, spacious meeting rooms and open and private coworking areas. In addition, the buildings is accessible 24-hours a day, allowing employees to work whenever suits them. Other useful amenities include on-site parking, cafe, shower facilities telecoms and wi-fi.
Gzira is an evolving town, full of potential and perfect for startups located in central Malta, bordered by Sliema, Msida and Ta’ Xbiex. Whether you are looking to rent a retail outlet, or to rent a bar or to restaurant in Malta, Gzira should definitely be one of the top locations on your list.
Mriehel is known as the industrial area in Malta, filled with showrooms and factories and it is at top the list for financial institutions’ business locations. It is home to the MFSA, the Bank of Valletta, HSBC Malta and four auditing giants amongst which one will find PWC, KPMG and Deloitte.
Various very flexible office rental solutions are available, from conventional offices to offices for business which requires a production area or storage facilities.
Buy A Business In Malta: Advantages of Shelf Companies
If you want to start the production process quickly, then buying a shelf company might be the best option for you.
As incorporating a new company involves a series of activities that might prolong the waiting process, such as, the company formation, opening a bank account, applying for licenses, etc.
At the same time, a shelf company is a well-established company that has been registered with the authorities.
This means that the company is already compliant, which is already a significant advantage.
So, all you have to do is to transfer the ownership of the company into your name and erect a new management team. This is a main reason why some investors prefer buying an existing company – this saves time and enables to start operating right away.
And another reason is for the business to look like it has existed for a longer time. This improves both consumer and investor confidence.
If you would like to start the process of buying a shelf company in Malta, contact us by filling out our contact form.
Malta Business Registration Services | Griffiths + Associates:
As a licensed company formation agent, Griffiths + Associates assists clients through the whole process of setting up a company in Malta:
- We collect, check and submit all the necessary paperwork to get your company up and running;
- We draft the Memorandum and Articles of Association of the company;
- We deposit the share capital and register your Malta company for tax and VAT with the relevant authorities;
- We propose various bank account solutions;
- We ensure your Maltese company adheres to all relevant regulatory and anti-money laundering requirements.
HOW WE WORK:
- Initial consultation:
You will complete a company application form. This will enable us to understand what type of Malta Company is required, what it will be used for, its intended structure and what annual services are required from our end.
- Send Proposal:
We will offer a step-by-step plan on all the requirements in order to achieve the required structure and send you a personalized proposal with the company formation fees.
- Complete KYC documentation:
We will start the onboarding requirements set by local laws that govern all company service providers.
- Company registration:
Once the due diligence – onboarding procedure is finalized we will proceed with drafting all the necessary legal documents that you would need to sign for the incorporation of the entity. The new company will be formed within a few days following receipt of all the signed documents, due diligence documents, share capital transfer and fee payments in Malta.
- Advisory and full range of support services:
We provide the full range of financial services to ensure your company remains financially and legally compliant – our team takes care of monthly accounting, payroll, VAT returns, Malta auditing, financial statements, Malta tax services, etc.
Frequently Asked Questions
how to register business malta
How To Open A Business In Malta?
Here is a step-by-step guide on what you can expect when you decided to open a business in Malta:
1 Step: Choose the company type
2 Step: Reserve the company name with the Registry of Companies
3 Step: Obtain full due diligence documentation on the parties involved in the corporate structure
4 Step: Prepare the necessary documentation for the commercial register as required by the Maltese Companies Act
5 Step: Proof of paid-up share capital
6 Step: Initiate the process to open a bank account for the company
7 Step: Obtain a Certificate of registration
8 Step: Get a license for your business (if applicable)
9 Step: Register with the Income Tax Authorities
10 Step: Register for VAT in Malta
11 Step: Register for a PE number (if applicable)
12 Step: Report to Jobs Plus (if applicable)
13 Step: Register a company for data protection (if applicable)
14 Step: Annual obligations: starting a business in Malta also means, upon official incorporation, having to provide Accounts and Annual Returns every year.
Register Business In Malta: Where To Begin?
- Write a business plan:
This your first step is to ensure you have a clear vision in mind – what you plan to do and how you’ll get there. Your business plan must include your goals, strategy, potential problems you may face and how to address them, the organization’s structure and sources to fund the business. It’s important to have a clear understanding of how you’re going to cover initial monthly expenses such as office rental, utility bills, communication bills, stationery, accounting & auditing fees, wage cost etc.Your business plan will set the foundation for your brand. Having a clear picture of what your business is and why it exists will enable you to build a strong brand that will stand out from your competition.
- Next step is to choose a legal format for the business and your company name.
- After that, prepare the necessary documentation and gain a Certificate of Registration.
- Then, obtain the necessary licenses.
- The penultimate step is to register for Income Tax and VAT.
- And the last step is to register for data protection, for a PE number and report to Jobs Plus.
Setting Up A Business In Malta: Main Costs Related With Opening A Company
Corporate services fees, which an entrepreneur must consider when setting up a business in Malta, are:
- the business name reservation fee;
- drafting and notarization of the documents for the company registration;
- the share capital;
- the registration of the company with the Trade Register;
- the opening of a corporate bank account;
- the license fee (if applicable); and
- the registration for data protection.
Starting A Business In Malta: Top Business Opportunities
Malta is a unique place to foster a new business. Being part of the EU, the island has embraced an encouraging approach to business elevation, expansion and standard of living, which is reflected in a tax-efficient system which permits business owners based in Malta to offer their goods and services throughout the EU and incentives schemes from the National Development Agency Malta Enterprise.
These advantages extend to diverse sectors for starting a business in Malta, including the following and these are the business opportunities with really great potential that one can capture in Malta:
- Advanced Manufacturing
- Maritime & Aviation
- ITC & Shared Services
- Life Sciences, and
- Visual Arts
Read more on incentive schemes here: Business Grants and other incentives for startup 2020-2023
Expert Publications about business in Malta:
Guidelines on the VAT treatment for pleasure yacht leasing in Malta 2022. It opens the possibility for the yacht owners to benefit from VAT optimization.16.08.2023
Let’s find out more about Malta UK double tax treaty as part relating directly to the competitive tax regime.08.05.2023
Through our proficiency in EU funding we can support you to identify the right funding source for project ideas and apply on your behalf for business grants and other incentives.09.04.2023
Tax system in Malta: take a dive into Malta taxation for individuals and businesses: tax benefits, Indirect taxes and Direct taxes in Malta. Expert Tax Advice.24.02.2023
Ship Registration Procedure in Malta is very simple and straight forward provided all documentation is in order: commercial ships, yacht, superyacht and vessel.10.02.2023
By working with us, your family office gets a robust platform for managing the family’s foundation without hiring additional staff or building infrastructure.01.12.2022
The corporate tax rate in Malta is set at 35% and companies incorporated in Malta are subjected to tax in Malta on their worldwide income. However, Malta offers a highly efficient fiscal regime that eliminates double taxation on taxed company profits distributed as dividends.18.06.2022
Need help with your Malta VAT compliance? Griffiths + Associates has a range of solutions that can help your business depending on where and how you trade.09.05.2022
The transfer of immovable property in Malta is subject to the Property Transfer Tax instead of capital gains tax. We have a team of tax advisors who are capable of deftly handling all the complexities of capital gains tax in Malta and property transfer tax Malta.14.04.2022
How will the new Budget 2022 measures impact you and your business? Our comprehensive summary offers a look into the salient points of the new Budget document01.01.2022
Let’s talk frankly about company registration in Malta. We are going to look at the current state of affairs, important issues that merit attention and mistakes that should definitely not be made.
It’s all over the Internet advertising such “Do you want to register your company in Malta?”, “Start your business with the one of the best tax-rates in Europe and little paperwork” or “Malta company formation – Register a business in 5 days” – most of such content is about hypothetical possibilities, half-truths, and questionable tax tricks.
So let us begin discussing “Company formation in Malta”, with what’s most important.29.09.2021