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.
Although you may feel you could do this yourself, if you have some experience, it is best to hire a local lawyer or accountant to start a company in Malta.
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.