The Maltese legal framework provides for various types of companies, including public companies, partnership en commandite (“limited partnership”) or partnership en nom collectif (“general partnership”), association en participation, Societas Europaea (the “European Company”), the European Economic Interest Grouping (“EEIG”) and the most popular form, the private limited liability company.
The registration of public and private companies in Malta is a relatively quick procedure – usually the registration of the company is completed by the issuance of a “certificate of incorporation” by the Malta Business Registry within one week of the proper filing of all required documents with the Malta Business Registry.
Documents required for incorporation – Für die Gründung erforderliche Unterlagen
The only essential documentation required for the incorporation of a Maltese company is a Memorandum of Association, which contains the most important information – such as the name of the company, the objects, the share capital, the subscribers, the directors and the company secretary. In practice, however, a set of tailor-made articles of association is filed together with the memorandum of association, which regulates the internal administration of a company, e.g. the relationship between the shareholders and the directors and the rights of the shareholders.
The content of the memorandum and articles of association may vary depending on the type of company. For example, the memorandum and articles of association of a limited liability company must restrict the transfer of shares, limit the number of members to 50 and prohibit any invitation to the public to subscribe to shares or debentures of the company.
It is worth noting that a Maltese company may be incorporated with only one member, and such a single-member company must specify, in its memorandum or articles of association:
Few additional requirements apply to public companies and special vehicles such as SICAVs.
The Registry must also receive evidence that the subscribed share capital has been paid up, such as a bank deposit slip, as well as records of a company’s subscribers and directors.
Official Authorisation – Behördliche Genemigung
No regulatory approval is required for the incorporation of a company in Malta as the Maltese company does not carry on any activity, business or service which requires a licence or is otherwise regulated by the Gambling Act, the Banking Act, the Financial Institutions Act, the Securities Services Act, the Financial Markets Act, the Insurance Businesses Act, the Insurance Intermediaries Act, the Retirement Provisions Act or the Trusts and Fiduciaries Act, the Special Funds Regulation Act and the Corporate Services Providers Act.
It should be noted that a public limited company in Malta requires an authorisation to commence business before it can lawfully commence business. Any such company requires an authorisation from the Malta Business Registry to actually commence its business. This usually follows immediately after the issue of the certificate of registration.
Company name – Firmenname
When deciding on a company name, a reservation is made which is valid for three months. Generally, any name requires the approval of the Malta Business Registry, who may refuse registration in certain cases, e.g. if the name is offensive. The name of a private company must end with the words “private limited company”, “limited” or the abbreviation “ltd.”, while the name of a public company must end with the words “public limited company” or the abbreviation “plc.”.
Minimum capital – Mindestkapital
The minimum capital for a private company in Malta is €1,164.69 and that of a public limited company is €46,587.47. In the case of a public company, at least 25% of the issued share capital and in the case of a private company, at least 20% of the issued share capital must be paid up when the memorandum and articles of association are signed.
Shareholders – Gesellschafter
The number of members in a Maltese company varies according to the type of company. A single-member limited liability company has at least one shareholder, while a minimum number of two shareholders is specified for private companies and public limited companies. A limited liability company has a maximum number of fifty shareholders.
It is worth noting that under Maltese law there are no legal requirements relating to the nationality or residence of a shareholder in a company and both the holding of shares by a nominee and the holding of shares by a trustee are allowed.
Managing Director and Secretary (Management) – Geschäftsführer und Sekretär (Management)
The Memorandum must appoint the first director (either an individual or a legal entity) of the company, at least one in the case of limited companies and two in the case of public limited companies.
The proposed director of the company must consent in writing to the nomination for both type of companies. This consent must be filed with the Malta Business Registry together with the incorporation documents.
A Maltese company is managed by the directors, who are authorised to exercise all the powers of the company, although they have very wide discretionary powers. In addition, the Memorandum of Association must also specify the first secretary of the company, who must be a natural person. The role of the company secretary is that of an administrative officer who has functions and responsibilities according to the law.
Once incorporated, a Maltese company has certain minimum obligations, including keeping registers of members and directors and filing an annual return with the Malta Business Registry. Should any changes be made to the name of the company, the parties involved or the particulars of the members, the Malta Business Registry must be notified in order for these changes to take effect and appear on its website. Failure to notify within the statutory time limits may result in sanctions being imposed on the company.
Fees – Gebührem
The registration fee payable to the Registrar of Companies in Malta depends on the authorised share capital of the company. The fee starts at €245 and is a maximum of €2,250 if the authorised share capital exceeds €2,500,000. In addition, an annual fee is payable to the Malta Companies Registry, based on the company’s share capital, with a minimum of €100 and a maximum of €1,400.
Taxation of Limited Liability Companies in Malta – Besteuerung von Gesellschaften mit beschränkter Haftung in Malta
Companies incorporated in Malta are both resident and domiciled in Malta, whether the management and control of the company is exercised in Malta or outside. Companies in Malta are subject to a standard tax rate of 35% on their worldwide income and may apply for tax relief in the form of a tax credit of the foreign taxes paid on such income against the applicable Maltese taxes.
If a Maltese company distributes the taxed profits to its shareholder(s), they can claim a partial tax refund, reducing the effective tax rate to between zero and 6.25%. The amount of the refund depends on the nature of the income earned by the Maltese company and whether the Maltese company has claimed relief for foreign tax paid; however, as a general rule, the refund is 6/7 of the Maltese tax charge before deduction of the foreign tax credit, limited to the amount of Maltese tax paid.
A Maltese holding company deriving its profits from a shareholding may claim a 100% tax refund provided it meets certain conditions set out in the Act.