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Company Incorporation in Malta. Service offer

The most commonly used structure in Malta is a private limited liability company.
A private company can have any name, but it must end with the word ‘limited’ or its abbreviated form ‘ltd’. The name must also be checked for its availability

The share capital of a private limited liability company can be denominated in any convertible currency. The minimum authorized and issued share capital is EUR 1.165, not less than 20% of which shall be paid up on the signing of the company’s memorandum – to a local bank account (or a specialized account of a local lawyer).

A company cannot issue bearer shares or no par value shares

Maltese companies normally require two shareholders, individuals or corporations of any nationality or residence. A private exempt company may have just one shareholder. Such single member company must specify in the objects clause of its memorandum the activity which will constitute its main trading activity, and the company’s business must consist principally of that activity.

An individual shareholder can be a secretary and director at the same time

Shareholders’ details are disclosed to the local agent and appear on the public file.

Technically, the incorporation of a new Maltese company in the register takes 1 business day. But in practice, together with bank account opening, share capital depositing, tax registration of the company and shipment of documents, the whole process takes about 1 month.

Incorporation Procedure

In order to proceed with Maltese company formation, we require the following documents for each director, shareholder/UBO:

  • Two reference letters: one from a bank, the other from an independent professional practitioner (attorney at law, lawyer, auditor, or notary);
  • Proof of address (utility bill);
  • Clean criminal record certificate. The Russian Ministry of Internal Affairs has a special form for it. We require the original certificate + its notarized translation. We can do the translation and arrange for notarial certification, the costs - 60$;
  • Questionnaire completed by the UBO;
  • Copy of international passport; and
  • CV.

After all the above documents have been provided and the fees for the services paid, incorporation begins.

The process includes the following stages:

  1. Reserve the company name on the website of the Companies Registry;
  2. Draft the memorandum and articles of association;
  3. Deposit the paid-in share capital;
  4. Register the company at the Companies Registry – The following documents are submitted to the Companies Registry in order to incorporate a company: 1. Confirmation of name reservation; 2. Signed memorandum and articles of association; 3. Confirmation of deposit of share capital; 4. Copy of the passport/ID of each shareholder, director and company secretary;
  5. Obtain a trade license – 15 days: all businesses need to apply for a Trade License from the Trade Licensing Directorate;
  6. Obtain a company’s Tax Identification Number (TIN) – 7 days: the company’s certificate of incorporation is needed in order to obtain the TIN; and
  7. Register for VAT (if necessary).

Upon completion, the client receives the following set of documents:

  • Certificate of incorporation (original and an apostilled copy);
  • Memorandum and articles of association (original and an apostilled copy);
  • Share certificates.
We also provide a company seal (though there are no statutory requirements for a Maltese company to have one). If the company has a nominee director, it would be necessary to additionally agree whether he will issue a special power of attorney

Taxation and Accounts

A Maltese company is subject to tax on its profits at the rate of 35%.

When the company pays a dividend to its shareholder, no withholding tax or further tax is due on the dividend. Moreover, under the new tax refund system introduced in January 2007, a tax refund is applicable upon the distribution of profits where the tax thereon has not been reduced by double taxation relief.

Therefore the shareholders of a Maltese company may claim a refund of part of the tax (and in some cases all of the tax) paid by the company. The extent of the refund depends on the nature and source of profits. The law provides for 4 types of refunds depending on the nature and source of the profits:

  • 6/7ths refund – refund of 30% of 35% tax producing an effective tax liability of 5%. This is the typical refund due on trading profits;
  • 5/7ths refunds (refund of 25%) due in respect of passive interest and royalties;
  • 2/3rds refund due where the company has claimed double taxation relief; and
  • 100% refund due where the profits derive from a Participating Holding (profits received from equity shares held by a Maltese company in a foreign company).
In practice, upon distribution of profits, a company will pay an advance company income tax which satisfies the company’s tax liability and thereafter will be eligible for a refund to the shareholders. In order to claim tax refunds, the shareholders are to be registered with Commissioner of Inland Revenue (CIR) in accordance with the appropriate procedures laid down by the CIR

Every Maltese company must prepare and submit to the Registrar its annual accounts. The accounts must be laid for approval before the general meeting of the company within 10 months after the end of the relevant accounting reference period and then, accompanied by the auditors’ report and the directors’ report, be delivered to the Registrar within 42 days from the end of the 10-month period for laying of annual accounts.

Exemption from audit is granted to private companies which in their balance sheet dates do not exceed the limits of two of the three following criteria:

  • a balance sheet total is EUR 46 587.47;
  • turnover is EUR 93 174.94;
  • average number of employees is 2.

Such companies may draw up abridged balance sheets, abridged layout of profit and loss account and abridged notes to the accounts.

Companies are required to make advance payments of tax during the accounting period (although exemptions from paying provisional tax may apply), and must typically file a tax return together with financial statements within 9 months from the end of the accounting period. A final tax payment is due by the date the tax return is submitted.

In addition to income tax, account should be taken of VAT related matters. VAT is imposed on the supply of goods and services in Malta, the acquisition in Malta of EU goods and the import of goods into Malta from outside the EU. A company is required to register for VAT if the turnover of goods and services exceeds EUR 7 000 in a calendar year.

The standard VAT rate is 18%; VAT returns are filed with the tax office every three months (quarterly)

Fees[1]

Services
Fees (EUR)
Total cost of a Maltese company incorporation, including name reservation at the Companies Registry, drafting of constitutive documents, payment of government fees, tax registration of the company, company seal, courier delivery, and compliance fee for one UBO / officer in the structure
6050
Registered office for the 1st year
3000
Annual maintenance of a Maltese company, including provision of registered office, payment of government fees, and preparation of Annual Return (starting from 1st year)
4050
Share capital, minimum
1165
Apostilled set of documents
from 840
Local bank account opening
1820
Malta resident director for holding companies / year
5060
Malta resident director for trading companies / year
7810
Nominee shareholder – a Maltese trust company / year (for one UBO)
3850
Secretary (optional)
2200
VAT registration
1050
Preparing and filing quarterly VAT returns
100-250 per hour, but at least 450
Preparing and filing monthly VIES statements
100-250 per hour, but at least 250
Preparing and filing annual accounts and tax return[2]
100-250 per hour, but at least 900
Auditing the company’s business activity
from 1600
Communicating and liaising with Inland Revenue Department during the accounting period (including the tax refund claim, but not including dealing with tax officials in the case of tax inspections)
350/hour
Residence certificate (original)
720
Courier delivery from Malta
from 110
Postal service (for 12 months)[3]
880
Creating substance(physical presence):
(i) Finding an office space
from 5000
(ii) Renting anpartment
from 1200 / month
(iii) Renting an office space
from 2000 / month + VAT
(iv) Paperwork for / registration of employment of a foreign employee
from 1200
Compliance fee. Payable in the cases of:
1. a) company incorporation with more than one UBO / officer; b) change of directorshareholderUBO, except the change to a nominee directorshareholder; c) issue of a power of attorney to a new attorney
750 per individual
2. a) renewal of the company; b) liquidation of the company; c) transfer out of a company
250 (standard rate – includes the check of 1 individual) + 50 for each additional individual (director, shareholder, or UBO) or legal entity (director or shareholder) if such legal entity is administered by GSL; + 100 for each additional legal entity (director or shareholder) if such legal entity is not administered by GSL. 350 (check for High Risk companies, including the check of 1 individual)

[1] The fees are valid as of September 2021.

[2] The fees for preparing annual accounts, income tax return and quarterly VAT returns depend on the volume of business, number of documents, type and complexity of transactions and are determined based on the time spent according to the type of work and qualification of a GSL Law & Consulting specialist involved.

[3] The postal address is in Hong Kong.

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