Malta - Establishing an OfficeMalta - Establishing an Office
To establish an office in Malta, businesses must obtain an operating license from the appropriate government department. The fee depends on the nature of the business and its location. The process of developing a premises for a commercial use requires a license from the Malta Planning Authority (www.pa.org.mt), while financial services companies need a license from the Malta Financial Services Authority (MFSA) (registry.mfsa.com.mt). Every business must also register with the VAT Department and the Inland Revenue Department. Malta is a tax-efficient jurisdiction for holding and trading companies and Formation expenses in Malta are relatively low.
Malta offers two types of companies for foreign investors: International Holding Companies (IHC) and International Trading Companies (ITC), both of which are permit businesses to take advantage of favorable tax treaties. An IHC company’s activities are limited to foreign shareholders and other similar passive, income-generating activities. An advantageous tax regime applies to income generated from participating holdings by such entities. An ITC is an onshore Maltese company, whose trading activities are carried out from but not in Malta. An ITC may not hold foreign investments or equity.
Shareholders
Establishing an office requires a minimum of two shareholders, and shareholder details will appear on public filings. Shareholders may be corporate entities or individuals. To retain anonymity, Malta permits nominee shareholders.
Directors
Malta requires only one Director—either corporate or individual—whose details appear on public filings in Malta. To gain tax treaty benefits, a company must establish that it is tax resident in Malta. Therefore, the majority of the company’s board of directors should be based in Malta.
Local Requirements
Every Maltese company must maintain a registered office in Malta and appoint a licensed Maltese nominee company as a company secretary or sole director.
Registration of Companies
A limited liability company is the most common form of business in Malta. To constitute a valid limited liability company in accordance with the Maltese Companies Act, at least two persons must enter into a memorandum of association and the Registrar of Companies must then issue a certificate of registration confirming that association.
Memorandum and Articles of Association
The Memorandum of Association must specify the objectives for which the company is incorporated, including the following:
- Whether the company is a public or a private company;
- The name and residence of each of the subscribers thereto;
- The company name;
- The company's registered office address in Malta;
- The objects of the company;
- The number of shares (or amount of authorized) capital with which the company proposes to register, the division thereof into shares of a fixed amount, the number of shares taken up by each of the subscribers, the amount paid up in respect of each share, and where the share capital is divided into different classes of shares the rights attaching to the shares of each class;
- The number of the directors, the name and residence of the first directors, and where any of the directors is a corporate body the name and registered or principal office address of the corporate body, the manner in which the representation of the company is to be exercised, and the name of the first person or persons vested with such representation;
- The name and residence of the first company secretary or secretaries;
- The period, if any, fixed for the duration of the company;
- The number of an official identification for each shareholder, director, and company secretary;
- The total amount or an estimate of all the costs payable by the company or chargeable to it by reason of its formation up to the time it is authorized to commence business, and of all the costs relating to transactions leading to such authorization; and
- A description of any special advantage granted, prior to the time the company is authorized to commence business, to anyone who has taken part in the formation of the company or in transactions leading to such authorization.
A company can adopt the model articles of association found in the First Schedule to the Companies Act. If a company does not register articles of association, the law will presume that the company intended to adopt the model articles.
The person incorporating the company must deliver the memorandum and articles to the Registrar of Companies to register them. Prior to registration, the registrar confirms that the memorandum of articles complies with the requirements of law. A company comes into existence from the date of registration indicated in its Certificate of Registration.
Who May Incorporate
Subscribers may be individuals or corporate entities. A trustee, a duly authorized person in accordance with Maltese Law, may also hold the shares of a company.
Time Required for Incorporation
The length of time to incorporate a company depends on the type of company and whether all information and documentation is available and in order. Once the Registrar has all necessary documentation and information, the process may take as little as 2-3 working days.
Registered Office
Every company registered in Malta must also have a registered office in Malta. A law firm or other corporate services provider can establish a registered office on behalf of an individual. The company needs to inform the Registrar of Companies of any changes to the company's registered office.
Private Company Formation
A private company’s memorandum or articles must:
- Restrict the right to transfer its shares;
- Limit the number of shareholders to fifty; and
- Prohibit any invitation to the public to subscribe for any shares or debentures of the company
Share Capital
A private company needs a minimum authorized share capital of €1,165. The authorized share capital must be subscribed by at least two persons, where the authorized share capital is equal to the minimum stipulated by law, and must be fully subscribed in the memorandum. Where it exceeds such a minimum, at least that minimum must be subscribed in the memorandum.
Private Exempt Companies
A private company may have the status of an exempt company and qualify for certain advantages if the following conditions are contained in its memorandum or articles of association:
(a) The number of persons holding debentures of the company is not more than 50; and
(b) No corporate body is the holder of or has any interest in any shares or debentures of the company; no corporate body is a director of the company; and neither the company nor any of the directors is party to an arrangement whereby persons other than the directors, shareholders, or debenture holders thereof are capable of determining company policy.
Shareholders
The maximum number of shareholders for a private company is fifty. The minimum number of shareholders is normally two; however, the Companies Act allows registration of a single-member company. A single-member company is a private limited liability company, which qualifies as an exempt company and is incorporated with one member. The Memorandum of Association for a single-member company should indicate the main trading activity of the company.
Directors and Company Secretary
Every private company must have at least one director, and every company must have a company secretary. No company may have its sole director as its company secretary, unless the company is a private exempt company. A corporate body whose sole director is company secretary cannot be the sole director of the company.
It is the duty of the directors of a company to take all reasonable steps to ensure that the company secretary is an individual who appears to them to have the requisite knowledge and experience to discharge the functions of company secretary. The law does not require the company secretary to be resident in Malta.