Starting a business in Malta

Over the past two decades Malta embarked on a very ambitious programme to establish itself as an International Finance and Industrial Centre. Its strategic location makes this island nation an ideal stepping-stone for anybody wishing to tap the markets of Europe, North Africa and the Middle East. With its year-round sunshine and pool of professional workers, this small island is a great place to register a company with much more ease than it is in many other countries.

Follow these 7 steps on how to register a business:

1.   Limited Liability Company

Having a limited liability company protects the owner by separating the business assets from their personal ones. It also projects a more formal and official images which most often helps to attract better level of clientele.

2.   The Memorandum and Articles of Association

A limited liability company, needs to file two important documents with the Registry of Companies. The first of these is the MEMORANDUM which basically is an agreement between the shareholders and the world. It specifies everything that a third party would need to know about the company such as:

  • Name
  • Address
  • Objects
  • Ownership
  • Directors

 

The second document is the ARTICLES OF ASSOCIATION which basically relates to internal matters such as how to transfer shares, powers of the directors and rights of the shareholders.

3.   Deposit the Minimum Share Capital

The amount of investment of the owners in a company is normally referred to as SHARE CAPITAL. Most shareholders will normally pay this in liquid funds. Although it is permissible to deposit other assets (both tangible and intangible) as one’s contribution to capital. The minimum AUTHORISED share capital must be at least €1,200, of which, at least 20% of the must be PAID UP CAPITAL on the registration date.

4.   Register the new business

This step is only needed for limited liability companies and involves sending documents to the Malta Business Registry. Every company registered in Malta must have a registered office in the Maltese Islands. This may be at your own business premises, the office of a firm of lawyers, accountants or other providers of corporate services. There is a registration fee to pay but the process is quick and only takes a couple of days.

5.   Obtain a Tax Identification Number

This process is done as part of , and just after, the incorporation of the limited liability company. With the TIN the company is able to register for other services , such as vat number, as an employer and for EORI which facilitates import and export of goods.

 

6.   Registering for VAT

If the company will be performing an economic activity, whatever the result or scope of that activity, then it will be considered as a taxable person for VAT purposes and thus required to register for VAT.

In Malta, goods and services are generally taxable at a standard VAT rate of 18%. However, certain goods and services have a reduced rate of 7%, 5% or 0%.

 

7.   Registering for a Private Employer number

 

A Private Employer (PE) Number is required for Limited Liability companies if it intends to have employees on its books.

It typically takes around three days to obtain this number.

 

Jean Paul Busuttil

Head of Accounts

4th September 2019

 

MGI Malta is a professional services firm providing tax, fiduciary, accounting and auditing services to businesses and private clients worldwide. With an experience for the past 30 year in the financial sector, MGI Malta has since established itself as a solid name in the financial services industry in Malta and in the use of Malta in the tax structuring and administration of international business and personal affairs.

 

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