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Malta Company Formation




As a location to transact business in the EU Malta is hard to beat because the government does all it can to attract business to the island offering a variety of incentives but the other plus is an extensive network of double taxation agreements the countries and jurisdictions which have signed double tax treaties with Malta are the following: Albania, Australia, Austria, Bahrain, Barbados, Belgium, Bulgaria, Canada, China, Croatia, Cyprus, Czech Republic, Denmark, Egypt, Estonia, Finland, France, Georgia, Germany, Greece, Hong Kong, Hungary, Iceland, India, Ireland, Isle of Man, Italy, Jersey, Jordan, Korea, Kuwait, Latvia, Lebanon, Libya, Lithuania, Luxembourg, Malaysia, Montenegro, Morocco, Netherlands, Norway, Pakistan, Poland, Portugal, Qatar, Romania, San Marino, Serbia, Singapore, Slovakia, Slovenia, South Africa, Spain, Sweden, Switzerland, Syria, Thailand, Tunisia, Turkey, United Arab Emirates, United Kingdom, United States of America.


The process of company formation and incorporation in Malta is set out by The Malta Companies Act which is modelled on its UK counterpart. The setup procedure is very quick and the company can be registered two or three days of receiving all required Maltese company documentation etc.


The most common company type which we form in Malta is the Maltese private limited company which can be setup by just one member and must have at least one director. The minimum share capital to form a private limited company is approximately €1,200. The full minimum share capital must be deposited at the beginning of the incorporation process. The capital is divided into non-transferable shares. The advantage of a Maltese private limited company company is that the liability of its members is strictly limited by their contribution to the capital.


After the registration is complete the company must apply for a license for the specific type of business in which the company will be involved. This license is usually received in under 14 days from the date the application was filed.

Once the company is registered we also need to apply for the VAT registration and file an application for the unique tax identification number. The VAT registration is only required if the company has an annual turnover that exceeds €10,000 but the application for the unique tax ID number is mandatory for all companies.


ORCA can help you with all aspects of setting up your Malta company. Our services do not just consist of registering the company in Malta because through a wide networks of contacts and our partner in Malta we can also arrange facilities such as:

  1. Nominee Shareholders
  2. Maltese Company Directors
  3. Maltese Company Secretary
  4. Bookkeeping and Secretarial Serices
  5. Accountancy and Auditing Services via our associates
  6. Registered Office facility
  7. Maltese Telephone Numbers with worldwide diversion (€175 per annum plus calls)
  8. Maltese Mailbox facilities (€350 per annum)
  9. Maltese Domain Registration and Hosting
  10. VAT Registration
  11. Banking Facilities
  12. Order Fulfillment and Packaging

The formation procedure is very straightforward and the requirements are outlined below.


These are the requirements for the Formation of a Malta Limited Company


1. Certified Copy of Passport(s) for each Beneficial Owner / shareholder and director;


2. In the case of corporate shareholders and directors, a copy of the constitutive documents (Memoranda and Articles of Association, deed of partnership etc;) together with a certificate of good standing / extracts from the registry or any other document attesting the company and/or partnership registration number shall be required. Any corporate entity which has separate legal personality from its members, such as foundations, may be a shareholder or partake the office of director in a Maltese Company so you could use an LLC etc to hide ownership if needed.


3. Bank reference for each beneficiary, shareholder and director and proof of address (utility bill etc.);


Signed Company Formation Instruction Form;


Below is a summary of the primary benefits.


MALTA COMPANY BENEFITS

  • Generous Tax exemptions (5% Tax on profits from trading activities of the Malta Company. Full exemption on participating holdings)
  • No withholding taxes, stamp duties or exchange control restrictions apply on distribution of profits from the Maltese Company to non resident shareholders, and these dividends can be expatriated without any restrictions.
  • Anonymity (Nominee services offered)
  • Highest level of privacy protection
  • Limited liability with minimal paid up capital requirement for the Maltese Company(as little as € 250)
  • Business can be conducted internationally, and with minimal changes through the Malta Company
  • The Malta Company will be incorporated using your desired name (subject to approval by the Registrar of Companies).
  • Companies registered in Malta are considered resident in Malta, wherever ownership or management exists or business is carried out.
  • Non-residents are freely entitled to hold shares or office in a Malta Company
  • Annual and general meetings of the Maltese Company may be held outside Malta
  • Malta Companies may hold funds in banks outside Malta.
  • Companies can be redomiciled to Malta

How the company and tax reclaim operates.


Some people find the whole ideal of operating a Malta company tax efficiently rather daunting because companies incorporated in Malta are subject to a flat rate of Malta income tax of 35% on their profits and the way this is reduced to 5% takes a bit of getting your head around.


The way it works is that when companies are taxed at the standard rate of 35%, following the distribution of dividends, shareholders are entitled to a refund of part or of all the tax paid by the Malta company. Generally speaking, tax refunds are available to all shareholders in respect of the distribution of all profits other than those derived from immovable property situated in Malta and those which have already suffered a final tax (such as bank interest on which a 15% final withholding tax at source has been imposed).


Therefore, though corporate taxation in Malta is relatively high (35%), shareholders are entitled to claim back part or even the whole of the tax paid by the Malta company. This is what makes the Malta taxation system attractive, ingenious and unique.


The amount of the Malta tax refund is set at 6/7th of the Malta tax paid by the Malta company. Hence the Malta company would be subject to taxation at 35%, but the shareholders would be entitled to claim 6/7 of this tax back.


In such a scenario, the effective tax liability is of 5% [6/7 * 35 = 5].


E.g. If gross profits amount to €150,000, the company would pay €52,500 in tax, but the shareholder would typically be entitled to claim back €45,000 in tax refunds. In the case of a smaller business with gross profits of €75,000, the company would pay €26,250 but claim back €22,500 meaning the actual tax payment is only €3,750. This arrangement as you can see is extremely beneficial if you want to run an EU company in a respectable and reliable jurisdiction with good infrastructure and reliable banks and other facilities.


The cost to form the company including assistance with arranging the banking and Fedex delivery of the company is €1295.


UK / Ireland020 7175 0041
(International +44 20 7175 0041)
US / Canada1 954 866 5986
(INTERNATIONAL +1 954 866 5986)
Australia and New Zealand+61 2 9191 7472
(INTERNATIONAL +61 2 9191 7472)
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