Malta Company Formation - Everything You Need to Know

Malta Company formation refers to legally registering a business in Malta, making it a recognized corporate entity. Malta is a popular jurisdiction for company incorporation due to its attractive tax benefits, EU membership, and business-friendly regulations.

Many business owners also explore residency or citizenship options to strengthen their ties to Malta. Programs like the Malta Residency by Investment and Malta Citizenship by Investment offer additional benefits for long-term stability in the EU.

In this guide, we will discuss the benefits and processes involved in opening a company in Malta.

You will learn:

Benefits of Setting Up a Company in Malta
Step-by-Step Process for Company Formation in Malta
Regulatory and Compliance Requirements

Why choose Malta for company formation?

Malta is a destination for entrepreneurs, foreign investors, and startups looking to establish a business in a tax-efficient, business-friendly jurisdiction. The country offers low corporate tax rates, strong financial regulations, and access to the EU market, making it an attractive choice for company formation.

Benefits of company formation in Malta

EU and Schengen Membership – Companies gain access to European markets and have seamless trade opportunities.
Double Taxation Agreements – Malta has double tax treaties with 70 countries, preventing double taxation.
Stable Legal Framework – Based on Maltese law, offering strong investor protections and a transparent business environment.
Skilled Workforce – Malta has a multilingual, highly skilled workforce, especially in financial services, gaming, and tech industries.
Gateway to Europe, North Africa, and the Middle East – Ideal for companies targeting international expansion.
Digital and Financial Hub – Malta is a leader in the blockchain, fintech, and iGaming sectors.
Flexible Corporate Structures – Businesses can set up a private limited liability company, public limited liability company, or single-member company depending on their needs.
Efficient Company Registration – A company in Malta can be incorporated within 2 to 5 working days.
Corporate Tax Refund System – Non-resident shareholders can benefit from a 6/7 tax refund, reducing tax to 5%.
No Withholding Tax – On dividends, interest, or royalties paid to non-residents.
Exemptions on Capital Gains in Malta – In certain cases, capital gains from share transfers are tax-exempt.
Malta’s VAT System – Standard VAT rate is 18%, with lower rates for specific industries.

Investors who establish a company in Malta may also qualify for residency programs like the Malta MRVP, which provides a pathway to live and work in the country while benefiting from its tax-efficient system.

Taxation & Double Tax Treaties in Malta

Malta can take advantage of some intriguing opportunities as a signatory to nearly 70 Double Taxation Treaties.

Depending on your company’s audited financial accounts, corporate tax in Malta is computed at a flat rate of 35% on gross profits. However, a tax rebate scheme for shareholders of Malta-registered businesses might lower the overall net effective tax rate to 5% for trading corporations and 0% for holding company structures.

Regardless of the situation, shareholders cannot get these tax returns unless certain legal conditions are met.

Licensed shipping companies that own or run tonnage tax ships are not required to pay taxes in Malta.

Requirements for Setting Up a Company in Malta

Establishing a company in Malta requires compliance with specific legal, financial, and regulatory obligations. Below are the key requirements to ensure a smooth company formation process.

Director and shareholder obligations

A Private Limited Liability Company (Ltd) must have at least one director and one shareholder (they can be the same person).
A Public Limited Liability Company (Plc) requires at least two directors and a minimum of two shareholders.
Companies must appoint a company secretary, responsible for maintaining statutory records.
Shareholders can be foreign investors, individuals, or corporate entities.

Local registered office requirement

A company in Malta must have a registered office address in Malta.
The registered office address is where official correspondence is sent and must be maintained throughout the business’s operations.
Companies can use corporate service providers for a registered office if they do not have a physical location.

Step-by-Step Process for Company Formation in Malta

1. Choose a Company Structure

Decide on the type of company that best suits your business objectives:

Private Limited Liability Company (Ltd): Ideal for small to medium-sized enterprises.
Public Limited Liability Company (Plc): Suitable for larger businesses aiming to offer shares to the public.

2. Select and Reserve a Company Name

Ensure your chosen company name is unique and complies with Maltese regulations. Submit the proposed name to the Malta Business Registry (MBR) for approval and reservation.

3. Draft the Memorandum and Articles of Association

Prepare these foundational documents, detailing the company’s structure, purpose, and internal governance. Essential information includes:

Company name and registered office address.
Objectives and business activities.
Details of shareholders, directors, and the company secretary.
Share capital structure.

4. Deposit Share Capital

Open a bank account in Malta and deposit the required minimum share capital:

Private Ltd: €1,165, with at least 20% paid up.
Public Plc: €46,588, with at least 25% paid up.

5. Submit Incorporation Documents to the MBR

The Memorandum, Articles of Association, and other required documents should be filed with the MBR. The company will be officially registered upon approval and payment of the registration fee.

6. Obtain Necessary Licenses and Permits

Depending on your business activities, apply for any required licenses or permits from relevant Maltese authorities.

7. Register for Taxation and Social Security

Register your company with the Maltese tax authorities to obtain a Tax Identification Number (TIN) and VAT number, if applicable. Also, enroll for social security contributions for employees.

8. Maintain Compliance

Ensure ongoing compliance by:

Filing annual returns and financial statements.
Holding annual general meetings.
Adhering to tax obligations and deadlines.

Regulatory and Compliance Requirements for Companies in Malta

Annual returns and financial statements

All Maltese companies must file annual returns with the Malta Business Registry (MBR) to update company details.
Companies must prepare financial statements in accordance with International Financial Reporting Standards (IFRS) or General Accounting Principles for Small- and Medium-Sized Entities (GAPSME).
Financial statements audited are required for companies exceeding certain turnover thresholds.
Profit and loss accounts must be submitted along with an income tax return to the Maltese tax authorities.

Licensing requirements for certain industries

Some industries require specific licenses from regulatory bodies such as the Malta Financial Services Authority (MFSA) or the Malta Gaming Authority (MGA).
Businesses involved in financial services, gaming, pharmaceuticals, and investment firms must obtain approvals before starting operations.
Non-compliance with licensing rules can lead to penalties, revocation of business licenses, and legal action.

Anti-Money Laundering (AML) and KYC regulations

Companies must comply with Anti-Money Laundering (AML) laws and implement Know Your Customer (KYC) procedures to prevent fraud and illicit activities.
The Malta Financial Services Authority (MFSA) and the Financial Intelligence Analysis Unit (FIAU) monitor compliance.
Businesses must conduct due diligence on clients, report suspicious transactions, and maintain records to prevent financial crime.

Cost of Company Formation in Malta

The company’s authorized share capital determines the registration charge that must be paid to the Registrar in Malta. The starting cost is €245; if the approved share capital exceeds €2,500,000, the maximum price is €2,250.

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FAQs About Company Formation in Malta

Why do companies register in Malta?

Companies register in Malta due to its low corporate tax rate (effective 5% with refunds), EU membership, strong financial sector, and double tax treaties making it ideal for international business.

How much is the VAT in Malta?

The standard VAT rate in Malta is 18%, with reduced rates of 7% for accommodation services and 5% for certain goods and services.

Is Malta tax-free?

No, but Malta offers a tax refund system that significantly lowers the corporate tax rate for businesses, making it one of the most tax-efficient jurisdictions in Europe.

How long does it take to register a company in Malta?

Company registration in Malta typically takes 2 to 5 working days, provided all documents are correctly submitted.

Do I need to have a physical address?

Yes, every company in Malta must have a registered office address within the country for official correspondence and legal purposes.

What capital does a Maltese company need?

A Private Limited Company (Ltd) requires a minimum share capital of €1,165, with at least 20% paid-up before registration. A Public Limited Company (Plc) needs at least €46,588, with 25% paid-up.

Is Malta offshore?

No, Malta is not an offshore jurisdiction. It is a fully regulated EU member state with a transparent tax system and strict compliance with OECD, EU, and FATF regulations.

Malta Company Formation – Everything You Need to Know