Located at the intersection between Europe, Africa and the Middle East, Malta is situated on one of the world’s best shipping routes. Apart from that, Malta has numerous benefits such as its taxation system and double taxation treaties. Hence, it is ideal setting up a company in malta. In this article, our team at Tetra Consultants has highlighted an ultimate guide on malta offshore company formation before you register company in Malta.
Types of companies in Malta:
Limited Liability Company (LLC)
Limited liability company is the most popular option for offshore companies and companies are able to enjoy tax incentives and if properly structured, the corporate tax rate can be reduced from 35% to 10%.
As a separate legal entity, the shareholder is not liable for debts, losses or legal action was taken against the business.
There is a requirement of 2 shareholders and 1 director of any nationality. In addition, there is a Maltese company secretary and a registered office address is required. The paid-up capital requirement is low as well.
Malta Freeport company
Malta freeport company is suitable for businesses in logistics or other export-oriented industries. It allows a reduced corporate income tax rate, lower VAT rate and investment tax credits. It is similar to Limited Liability Company but within the Malta Freeport. Hence, the registration process will be rather similar to a Limited Liability Company.
Public Limited Liability Company
Similarly, the public limited liability company is a separate legal entity where the shareholder is not liable for debts, losses or legal action was taken against the business. The main difference would be that it is listed on the stock exchange. Hence, it is easier to raise capital through shares issuance.
There is a requirement of 2 shareholders and 2 directors of any nationalities. A Maltese legal representative or company secretary and a legal registered office address is also required. There is a minimum issued share capital of €46,600 and at least 25% must be paid up before the registration of the company.
A branch office is an extension of a foreign parent company abroad and can only conduct businesses similar to the parent company.
The parent company is liable for the debts incurred by the Malta branch office.
A representative office is only allowed to conduct market research and marketing for the parent company in Malta. It is popular if foreign investors are looking to promote their presence before starting a business in Malta.
Annual return filing requirement:
It is required to file the annual return where it includes a summary document of the directors, secretary, shareholders and share capital at a point in time. The annual returns should be submitted within 42 days from the date of incorporation of the firm.
Corporate Tax Rate:
Malta’s attractive corporate tax attracts many foreign investors to start a business in Malta.
The standard corporate tax rate is 35%. In addition, there is the ‘full-imputation tax system in Malta, where companies are entitled to a tax credit equivalent to the tax paid by the company upon a distribution of profits. With such tax incentives, the effective tax rate decreases to about 10%.
As a ‘participatory holding’ company in Malta, the company will be entitled to a full tax refund that was paid by the company, It would be received by the shareholders of the company.
Whereas trading companies trading with the EU, are subject to a value-added tax of 18%.
Tax benefits where companies in malta are able to enjoy are exemption of inheritance tax, wealth tax, annual property tax, interest tax, dividends tan and withholding tax on dividends.
It is required to file an Income Tax Return with the International Tax Unit (ITU) or Inland Revenue Department (IRD). Companies are required to file the income tax return by 31st March of the following year if their accounting year-end is from January to June. Whereas the rest will have to file income tax returns within 9 months after their accounting reference date.
Steps to set up a limited liability company in Malta:
After you have decided to register business in malta, you may proceed with the process of malta offshore company formation:
Step 1: Planning of your business idea
Step 2: Choosing a suitable corporate entity
- After accessing your business goals and activities, you can choose the most suitable corporate entity for your business.
Step 3: Reserving of the company name
- You may register your business name with the Malta Business Registry and submit the application form online. Upon approval of the Malta Business Registry, the name can only be reserved for up to three months.
Step 4: Registration of the company
- In the process of registration, you would have to submit the company’s Memorandum and Articles of Association and required documents to the Malta Business Registry
Step 5: Application of business license
- Specific licenses are required for businesses in the field of financial services, gambling or cryptocurrency.
- Additional requirements such as higher capital requirements or local economic substances are required depending on the license required.
Step 6: Corporate bank account opening
- All registered companies in Ireland are required to have a corporate bank account.
Step 7: Staying compliant
- This includes the annual filings and tax obligations.
The information of what you need to know before malta offshore company formation may seem intimidating. With Tetra Consultants by your side, the registration process of your business in Malta will be smooth and hassle-free. Our comprehensive service package includes planning and strategizing with our clients to select a suitable business entity, completing the registration process, obtaining required licenses, opening a corporate bank account, and ensuring your compliance with the government regulations.
Contact us to find out more on how to register a company name in Malta and our dedicated and experienced team will revert within the next 24 hours.