A Complete Guide for Expats on Setting Up a Business in Malta

setting up business in malta

For many years, Malta has had an impressive track record as a world-class destination for global investors. Not only has it succeeded in attracting new investors to set up a business in Malta, it has also retained reinvestment from existing clients who are happy to continue making use of the Maltese Islands as their base.

Why Choose Malta?

Part of Malta’s success was having the foresight to shift from a labour-intensive culture to that of one making knowledge-based business its core focus. With aggressive marketing and ambitious programmes promoting itself as a financial hub, Malta became a serious competitor in the pharmaceutical, maritime, IT and iGaming, banking and tourism sectors. This has attracted investment from powerhouses such as Germany, the UK, Spain, France and the United States, putting Malta firmly on the world economic stage. Malta’s GDP for 2018 was at €12.3 billion and its property industry has not only withstood the global financial crisis of 2008, but also that of Covid-19 currently which has had no effect on sales and construction whatsoever. In fact, record numbers of applications for registration of sales are received month after month for the period 2020 to 2021.

1. Malta's Ideal Location

Due to its location, Malta is at a perfect position being at the crossroads between Europe, Africa and the Middle East. Located on one of the world’s best shipping routes, Malta Freeport is one of the busiest in the whole of Europe and has more than 30 years of experience in dealing with all things related to the shipping industry. It was privatised in 2004 and has since undergone an upgrade of more than €300,000,000 resulting in a state-of-the-art facility. It can also handle some of the world’s largest shipping vessels.

With top exports listed as electrical machinery, seafood, pharmaceuticals, print materials and mechanical equipment, Malta’s primary partner countries such as the United States, France, Germany, Italy, Russia, Turkey, South Korea and the UK can be counted. Due to the long established relationships forged with all of these countries, all avenues of communication, documentation, customs and legal are well-established and super-efficient: good news for anyone setting up business in Malta who wants to trade with the rest of the world. Malta also welcomes established companies from all over the world that want to be re-domiciled to its shores.

2. Ease of Transport

Malta freeport

With one of the best IT infrastructures for new technology and incredibly fast internet speeds, Malta has seen the establishment of many on-line businesses setting up business in the country. Malta also has a deep and safe harbour with excellent air and sea links, plus one of the biggest shipping registries in the world. Malta is also used as a hub by major airlines who work in partnership with Air Malta, serving the whole of Europe and the Middle East. Public transport covers the entire country and is cheap and reliable.

3. Better Lifestyle

With millions of visitors coming to Malta each year, tourism and all its complementary services are an important part of the economy. People are drawn to the culture and heritage spanning more than 5000 years, the ease of travel, the warm weather and azure seas. Cost of living in Malta is cheaper than that of neighbouring Italy, but a little bit more expensive than Spain and a bargain when compared to the UK, Germany and France.

4. Strong Economy

With extremely good ratings by credit rating agencies, being such a compact but powerful economy has counted in Malta’s favour: any setbacks such as Covid-19 are quickly overcome as opposed to that of larger countries. Malta is also one of the safest places in the world when it comes to being left unscathed by any disasters, man-made or natural. This helps to provide a safe, robust economic and political climate guarded by regularised industry, stringent anti-money laundering measures and a history of being old-world but extremely progressive and welcoming to positive change.

5. Highly Qualified Workforce

Workforce in Malta

Malta’s workforce is highly regarded and described by many as its most valuable asset. Most people are highly educated, extremely diligent and speak a variety of languages. It is not uncommon for most of its citizens to speak at least three languages namely English, Maltese and Italian, although many others also speak French and German. Many school leavers carry on with their education and this figure stands at more than sixty percent. Malta has more than 85 institutions to choose from where people further their studies before joining the workforce.

6. Malta is an English speaking country

One of the biggest advantages of doing business in Malta is the fact that English is an official language along with Maltese and generally used in all business transactions. This makes it very easy for the global investor to set up a business in Malta, manage and train staff and communicate effectively on a daily basis. In most other European countries English is not an officially recognised language and not taught in schools, as is the case in Malta.

7. Low setup and operational costs

Malta is well-known for the low cost associated with setting up a company or business, but keep in mind that this goes for smaller, simplified setups. The bigger the operation, the more it will cost. Here are some costs you can expect:

  • Anywhere from €245 to €1,750 to the Registrar of Companies depending on the initial capitalisation fee.
  • Filing the application on-line will save you around 50%.
  • Renewal of registration costs €100.
  • If you are making use of the services of an agent specialising in the formation of companies, expect to shell out just under €1,000 for an uncomplicated registration.
  • The minimum amount for share capital is €1,165 for a private limited liability company (LTD) and €46,600 for a public company (LLC)
  • It will take 2-3 days for the process to be completed, given all the paperwork submitted is sufficient.

8. Good tax system

Since the 1950’s Malta has seen the potential and benefits derived from attracting affluent individuals, investors, entrepreneurs and highly skilled persons from all over the world. Part of its incentives were the introduction of excellent tax structures aimed at not only people but business as well. As the gateway to the rest of Europe and the Middle East, Malta has proven to be the best place to set up a company for trade due to its many favourable advantages when it comes to tax benefits.

Malta’s tax system offers many rebates and incentives to companies managed, incorporated and controlled from Malta such as a general corporate tax rate of 35% on a worldwide basis with even further reductions applicable on top of this in certain cases.

Malta has all the hallmarks of an offshore jurisdiction, but the plus side is that Malta’s entire tax structure is not only monitored but also regulated by very high and stringent EU standards, making it one of the safest and most compliant jurisdictions anywhere in the world.

9. Double Taxation Treaties

EU Flags

Malta has double tax treaties with over 70 countries in order to encourage and stimulate international trade. The goal is to avoid being taxed double on the same income, to facilitate lower withholding taxes applicable to dividends, royalties and patents for foreign companies that are non-resident but who actively promote any kind of business activities in Malta. The treaties also aim to encourage company formation by foreign investors as a result of a variety of tax protection methods offered by Malta. Below are the countries, listed alphabetically and in no preference):

Albania, Australia, Austria, Bahrain, Barbados, Belgium, Bulgaria, Canada, China, Croatia, Cyprus, Czech Republic, Denmark, Egypt, Estonia, Finland, France, Georgia, Germany, Greece, Guernsey, Hong Kong, Hungary, Iceland, India, Ireland, Isle of Man, Italy, Jersey, Jordan, Korea, Kuwait, Latvia, Lebanon, Libya, Liechtenstein, Lithuania, Luxembourg, Malaysia, Mauritius, Montenegro, Morocco, Netherlands, Norway, Pakistan, Poland, Portugal, Qatar, Romania, Russia, San Marino, Saudi Arabia, Serbia, Singapore, Slovakia, Slovenia, South Africa, Spain, Sweden, Switzerland, Syria, Tunisia, Turkey, United Arab Emirates, United Kingdom, United States of America and Uruguay. 

Opening a Business in Malta vs Other Countries

Many describe the islands as “the best place to be” when setting up a business. Not only is it easy, affordable and simple but finding premises is a breeze and there are many options to choose from on both Malta and Gozo. The best way to go about this is to appoint a reputable commercial property agent to assist you with the process of finding business premises, whether you are in the market to buy or to rent.

Malta vs. Other Countries

Nowadays, the competition is fierce to find the best location to start or set up a business, especially when it is IT driven, as in this case one can literally operate from anywhere on the globe. This said, the prestige and credibility that comes from a reputable business address is paramount and can add enormous value and contribute immensely to a company’s overall success. It must be noted however that having the right address does not necessarily mean you get the best legal and tax benefits with it, so it is very important to look at the whole picture and this is where setting up a business in Malta wins when compared to other European countries. For this comparison, we have taken into account several factors such as ease of digital access and communication, opening a bank account, taxes, language, registration costs and time to open a business, share capital required and more.


CountryProsCons
Malta- Popular for opening of digital businesses, advertising companies and gaming
- 10 000 new businesses opened over 2 years
- Low cost of living
- High quality of life
- Extremely popular with freelancers and digital nomads
- Quick, cheap and easy to open a business account with a digital provider
- English is the second official language
- Ease of access to the EU, Africa and the Middle East
Difficult to get credit
UK- Incorporating a business can take as little as 1hr
- 200 000 business opened per annum on average
- An ease of doing business
- Complex tax administration
- Complications due to Brexit continue to emerge
Sweden- Mature start-up scene
- English fairly widely spoken
- Uncomplicated tax system
High tax rates
Portugal- 100 000 new businesses opened annually
- Positive geographical and political positions
- Ease of access to US and Africa
- Popular with digital nomads and pioneers
English is not widely spoken
Estonia- One of the first to register e-residency
- Pro digital
- Online banking
- Online tax system
English is not widely spoken

Types of Businesses You Can Setup in Malta

Besides being a leading, proactive European financial centre Malta is also one of the most cost-effective when forming a company. Having a beneficial, low and effective corporate tax rate, strict regulatory and legal systems and overseen by the EU, you will be in good hands when you decide to form a company or open a business here. Limited liability companies, partnerships and public companies are the most popular to register in Malta.

opening a business

1. Private or Public Companies

Whether established as a private or public company, the shareholders’ liability is limited to the amount they contribute to the formation of either.  Malta’s Companies Act of 1995 encompasses the governing law for the country and every company that is formed by means of being registered with the Malta Registry of Companies is supervised by Malta’s Financial Services Authority or the MFSA as it is known.

a. The Private Limited Liability Company (LTD)

It is the most popular and frequently used type of company by investors and requires a minimum of 2 and not more than 50 shareholders. The share capital minimum is €1,164 and of this amount, 20% needs to be paid upfront. With only 1 shareholder it is labelled as a “Single Member Company”.

In the latter case it may qualify as a private exempt company given certain conditions such as:

  • Having a specific trading activity
    Having restrictions regarding the number of persons with debentures of the company
    Nobody corporate can be appointed as directors
    A sole director and company secretary of a single member company can be the same individual
    Private exempt companies must be capable of producing abridged balance sheets, profit and loss accounts
    Private exempt companies are not required to have audited accounts  and are thus exempted from producing auditors’ reports
    Directors of the private exempt company may deliver abridged annual accounts to the Registry of Companies Relating to a specific accounting period
    Shares may be held by a licenced Trustee & Fiduciary as appointed nominee shareholders
    Alternatively the shareholder’s information needs to be registered with the Registry of Companies
    There must be minimum of one director which can either be a natural person or a corporation licensed as Corporate Director
    A minimum of one company secretary must be a natural person; directors may or may not be shareholders
    No restrictions apply regarding nationality, residence or domicile of its directors
    No restrictions apply regarding the company secretary and no restrictions apply regarding the shareholders of a Maltese-registered company, but it is strongly advised to include local directors

b. Public Limited Liability Company

 It is also known as a Joint Stock Company elsewhere in the world and big foreign investors choose this type of company in Malta to gain access to Europe’s capital markets. When  registered as a PLC in Malta,  investors need to comply with every requirement and  a memorandum and articles of association must be prepared. This must be notarised by a public notary and  it needs to be filed with the Companies Registrar of Malta. At the time when documentation is submitted for the public limited liability company, it will then be issued with a certificate of registration.  PLCs are best suited for those seeking to establish a large-scale business. 

A PLC has access to trade on Malta’s stock exchange and at least two shareholders are needed for registration, plus at least two directors and a secretary is required. The share capital required is €46,600 of which  25% must be paid up front/deposited. The company name must have the PLC abbreviation at all times.

2. Holding Company Or Trading Company

It is very important to ascertain aside from formalities applying to the private limited or public company whether that company will be set up as a holding or trading company.

a. Holding Company

This is formed in mind with the holding company having shares or assets in other companies. This can be in the form of cash, real estate, moveable property, securities or even intellectual property. This can be in or outside of Malta. The benefit of having a holding company in Malta is that it can be utilised for a myriad of fiscal or non-fiscal objectives, some being:

  • distribute income generated to its shareholders at a beneficial tax rate
  • separate earmarked assets from trading operations
  • implement repatriation strategies
  • minimise double taxation
  • be eligible itself for incentives regarding exemption

b. Trading Company

  • A trading company can undertake business globally:
    • this may include the buying and selling of commodities
    •  it can act as an agent or as a representative
    •  it can provide consultancy or advisory services
    •  can engage in ecommerce*, Igaming*, financial services*
    •  can engage in investments services*

    *NOTE:  Some of these activities are/may be regulated and licensable by the Malta Financial Services Authority (MFSA) or Malta Gaming Authority (MGA).

3. General Partnerships

Business Partnership

General partnerships are defined in Maltese law as a group of traders collaborating. Persons belonging to a general partnership are  – as stipulated by law – collectively and personally liable and this liability is unlimited. It also bear its own legal responsibility;   can own or hold property;  can be sued as an entity and cease existing upon death, insolvency or retirement of any partner. Agreements must be drawn up before registration and the General Partnership  must have a local office if registered in Malta. The General partnership  must also declare the partner’s share of profit in personal tax returns as the partners will be taxed as per the personal tax rate.

4. Limited Partnerships

Limited Partnerships require a minimum of two partners and one person needs to be listed as general partner. The general partner has the same liability as a sole trader. Limited liability partner’s liabilities are limited to any assets belonging to that partnership and  are not allowed to participate in business trading activities of the partnership arrangement. A Limited Partnership  can also be established with variable share capital and Limited Partnerships  are taxed as companies. The rate for tax is 5% on direct trading income and 10% on passive income. The  capital can also be divided into shares and a Limited Partnership can reserve a name for a maximum of  three months prior to the date of registration. The name must include a suffix of “LP” or have “Limited Partnership”  as part of the name and  should the setup contain variable share capital the suffix “with variable share capital” or “VC” needs to be included. For local registration a deed needs to be included with all applicable documentation to Malta’s Companies Registry and  depending on contributions, the registration fees vary from €245 to €2,250.

5. Sole Proprietorships

Registration is easy, especially for locals but foreign investors will need a social security number prior to commencing business undertakings. Here are some of the steps you will need to undertake: Choose a name for the business and get the necessary licenses and permits required. Thereafter open a separate bank account for your new business, register for VAT and if you are a third country national, you will need to get a work permit before commencing business.

6. European Economic Interest Grouping (EEIG)

Besides the typical company, small to medium businesses can take advantage of opportunities through a European Economic Interest Grouping (EEIG). This will grant the business easier access to the European Single Market. This way SMEs can combine their resources, expertise and capital by means of an EEIG to approach a bigger amount of potential customers and spread risk.

Key features of the EEIG:

It is considered a separate legal personality and can operate anywhere in a EU member state. Formation requirements are contract information and registration with the recognised authority of the member state. The registration requires no deposit of share capital and an EEIG can redomicile with ease to any other EU Member State and must include cross-border elements with activity in different Member States. The cost of formation is €425 and payable to the MFSA. The EEIG is comparable to a partnership and members face unlimited joint and several liability for debts and other liabilities. As members may be individuals or legal entities (or both) the use of for instance a limited liability company between the EEIG and individuals can reduce risk. With only natural persons as members, they need to provide a service or carry out activities in different EU member states.

 The EEIG is regulated in Malta by the Malta Financial Services Authority: Subsidiary Legislation 386.08 Companies Act (European Economic Interest Grouping) Regulations (2004) and enables businesses to operate throughout Europe via a legal contract through Council Regulation (EEC) No 2137/85.

Redomiciling an EEIG to another Member State provides a big advantage as it is quick. This allows the EEIG to capitalise on economic opportunities elsewhere in the EU when they occur. For this reason interest in EEIGs are on the increase.

Acquiring a ready-made or shelf company

Also called a “ready-made” company, this type of business is up to the point of selling it, no business activity. Such companies must be guaranteed by the service provider or seller of such as having had no activity, no debt or liabilities that can be transferred to the new owner.

Although some shelf companies can be incorporated, kept and sold on with some maintenance by its seller, there must be no debt or liability that is carried forward and this needs to be guaranteed by the seller of such a company. Shelf companies are a minority in Malta.

Business for sale

▪️ Benefits of a shelf company

A shelf company comes with ready-made history and the older the more expensive a shelf company is, the shorter time to incorporate and get going. The process is fast and simple and you will have to consider costs, the history and legal structure and also investigate additional services and benefits. Shelf companies are sold with an incorporation certificate, articles of association, memorandum, a registered address and with a VAT number.

▪️ Acquisition process

Shares will be transferred to the new owner. Documentation will be provided and the process facilitated by the seller of the shelf company. As the new owner you will just sign that you accept the share transfer agreement. Post this you will be able to modify the name and appoint new directors. Note that proof of previous activities may be asked for to allow the company to now operate in Malta and depending on activities, some special licenses may be required before business commences. This is simply due to the fact that the past activities of the company may now completely differ to what you have in mind for its future operations.

▪️ Purchasing a Shelf Company vs Registering a Company in Malta

With very few differences actually, the advantage of a shelf company is that you will be able to start sooner than later with business activities. This is because it does away with the processes of formation of the company, registering for social participation, opening bank accounts and acquiring licenses and permits (given you are not going to need new ones for different business activities to that of the shelf company).

Things to Consider Before Setting Up a Company in Malta

1. Exemption from duty on documents

Duty exemption applies to international trading companies carrying out business in foreign interests on condition that all the necessary documentation is submitted. This is good news for shareholders who benefit from this regarding the transfer and increase of share capital from its Maltese company, however it should be noted that for instance, the company needs to conduct more than 90% of their business outside Malta and the exemption also applies to companies that have more than half of its shareholder capital held by non-residents of Malta. The rules are very favourable but complex and it is best to make use of the services of a tax specialist to clarify matters and highlight the benefits to anyone who wants to set up an international trading business in Malta.

2. Consider the location before setting up a company in Malta

Valetta

Location is key for any business’s success. Depending on the type of business you are opening, some locations are better than others plus you also have to take into account who your neighbours are. For instance, you may rely on a closely situated business for some services to complement yours, or if they are too similar they may even be in competition to you.

Malta is well-known for its financial services sector, iGaming and for the manufacturing of pharmaceuticals. Then there is information technology and construction plus all the other industries that are related to Malta’s booming building industry.

Being located in the right place can mean more walk-ins, better access to tourism routes, your slice of the hospitality trade’s ancillary services, success in the manufacturing of cosmetics, easy access to harbours and therefore shipping for the export of goods. For example: if being close to the airport plays a crucial role in your business activities, setting up shop on Gozo is not the best idea, although premises will generally be cheaper to buy or rent there.

As certain types of businesses cluster around specific areas in Malta for a good reason, make sure you speak to one of Frank Salt Real Estate’s Commercial Division experts as they have all the knowledge about business areas in Malta and their related core industries.

a. Business Centres in Malta

Business centres in Malta are very popular for many reasons: they are perfectly suited to digitally-based companies such as financing and i-Gaming. They offer the best high-speed internet infrastructure, communal meeting rooms, modern reception areas and more thus lending credibility and value to any brand or business who decides to set up shop in them. This is further enhanced when you have anchor tenants who are global brands that share the same premises with you.

Business Centres often let tenants choose their own layouts, designs and finishes that are conducive to their core business. This for example can be open-plan, cubicle-style or even flexible layouts, as a client’s needs may vary or change over time.

Services offered range from what is referred to as drop-in or hot desk, co-working, private offices with access to boardrooms and even event rooms. In some Business Centres you can lounge and work on roof terraces, have your own personal desk or host meetings in extremely professional surroundings with access to a myriad of add-ons such as video conferencing, catering and more. Other optional extras can include cleaning and maintenance.

📍 Valletta Business Centre

Here you will find the Palazzo Business Centre, Grand Central, Malta Office Services and Forni Business Centres.

Valletta is historic, a hive of activity and on the Grand Harbour. From here many financial and banking institutions, lawyers and immigration experts operate. It is Malta’s capital city and was also the EU’s Capital of Culture for 2018. It is one of the best places to have a business that focuses on tourism, walk-ins and definitely for those who want an instantly-recognisable global address.

📍 Sliema Business Centre

Here you will find the Piazzetta Business Plaza, The Ferries,Central and Sliema Business Centres amongst others.

Highly sought-after as an area, Sliema is popular, accessible and prestigious. Business Centres can include parking, open green spaces and stunningly beautiful sea views. If it is glamour and style with a perfect address you are after, Sliema is it.

📍 St. Julian's Business Centre

St. Julian’s Business Center, The Regus, Swieqi Junction and The Dragonara Business Centres can all be found in St. Julians.      

St. Julian’s is Malta’s most prestigious business district. It is upmarket, glitzy and glamorous and right next to Sliema with easy access to all major highways and arteries. It sports designer shops, diamond dealers, 5-Star Hotels, casinos and the breathtakingly beautiful yacht basin of Portomaso. This is where the well-heeled come to be seen, shop and sip on lattes.            

Popular Business Industries in Malta

1. iGaming

iGaming

With Malta as the hub of European iGaming companies, more than 250 companies already call the islands home and more are on the way to settle or locate here with their employees. Malta decided some years ago to promote itself as an i-Gaming service provider destination and now has the advantage that it has been declared a watertight jurisdiction with invaluable experience built up over many years. This has resulted in Malta becoming the authority in the EU when it comes to mature legislation and regulatory procedures that are respected globally. In addition to this the Maltese government offers preferential tax rates, licensing fees and taxes applicable to i-Gaming companies, one of the main reasons that attract these businesses to settle in Malta.

2. Information Technology

The University of Malta offers a degree in Software Development, providing skills aiding in the creation of software solutions for commerce and more. Graduates are taught to be skilled in analysing bespoke business requirements and will create custom software for your business needs. This also covers web application development that allows one to access for instance one’s business software from anywhere in the world, easily and securely. Another very popular avenue are software solutions that will through custom development facilitate complete integration with any third party software systems. Due to  its success, this course has produced many talented programmers and developers that are employed in various sectors of the industry.

3. Pharmaceutical

Malta has an extremely well developed division of commerce dedicated to the production of generic pharmaceuticals. Annual exports were in excess of €360 million for 2020. As a EU member being located in Malta means having access to the rest of the EU and may market all its products throughout all member states. Malta also allows for early vetting and the storing of reserves for a generic product and are thus among the first to release it to market upon the expiration of the patent rights. Malta also prides itself in being a popular destination for cosmetic procedures due to its very high healthcare standards, competitive rates and the fact that English is widely spoken by almost all the workers in the pharmaceutical and healthcare industries.

4. Fintech

With solid legislation regarding virtual financial assets, Blockchain and Cryptocurrencies, Malta has become highly sought-after as a Fintech hub in Europe. Start-ups also find the islands one of the best places to test products and systems and Malta is leading the way when it comes to innovation in processes that cover industries such as insurance, payment of any kind, investment and more. With long-time experience in the Fintech field, Malta is a widely respected and recognised jurisdiction and establishing a company here yields many added benefits and credibility on a global scale.

5. Blockchain

Blockchain

Malta has for some time promoted itself world-wide as the first “Blockchain Island” and introduced legislation regarding this already in 2018.  The intention of this was to introduce formal regulatory parameters, make sure all processes and transactions were of a transparent nature and to solidify and ensure legitimacy of all transactions for Fintech companies or anyone who used Distributed Ledger Technology (DLT). Malta’s focus has mainly been on Blockchain up to now rather than cryptocurrencies and this has successfully been applied and implemented to enhance Malta’s public transport sector, with education being next. Due to the successful outcome of this venture, the islands have now established a well-deserved place amongst global leaders in Blockchain technology. Looking to the future, the sector has significant potential for Malta’s financial services industry and once again Malta is preparing to lead the way for other EU nations to follow.

6. Maritime

The maritime industry in Malta accounts for more than 23,000 jobs and is a huge contributor to the country’s economy, accounting for about 15% of the GDP. Competition is fierce in the whole Mediterranean area and Malta’s registry for ships is the 7th largest in the world and the largest in the EU. With a mature maritime history and located on one of the world’s busiest shipping lanes, Malta’s Freeport underwent an extensive upgrade and can now accommodate some of the world’s largest ships. The next step is to address boat leasing structures applicable to pleasure yachts, as the islands are hugely popular with the world’s wealthy for registration and berthing year-round, with more than 575 superyachts registered under the Maltese flag. Malta’s famous Grand Harbour and the whole surrounding area is also heading for extensive regeneration which will require workers and specialists from around the world for the entire project during the next few years.

Malta has the 3rd largest transhipment port globally and this is underwritten by world-class support services, experience and knowledge gained over many decades. The country is also well on the way to becoming recognised  as a centre for maritime litigation with its own court and devoted arbitration services. The country also provides a full-rounded service with ship building and repair services besides its numerous yacht marinas and legendary cargo port handling facilities.

7. Advanced Manufacturing

Malta offers a huge variety when it comes to the advanced manufacturing sector. Whether it is clothing, transport accessories, education or even medicine, many people have bought or made use of products that at some stage had part of its origination or manufacturing in Malta.

With English as one of the official languages of business, located in the Central European Time Zone and with access to the whole of the EU market, Malta is one of the best locations when it comes to establishing a business operating in the Advanced Manufacturing Sector.

Key Steps on How to Register a Business

Step 1: Establish business type or category

Before you start, you have to establish what type or category your business will fall under as there are many options available to suit the size, formation, number of employees (if any) and more. For example: will it be a Limited Liability Company or will you be self-employed?

To just point out just one example, with a limited liability company you as a shareholder will be better protected legally. Being self-employed is a simpler process but you will be legally liable if anything goes wrong. Our best advice is to speak to a specialist once you have decided on the type of business that is right for you.

Step 2: Prepare documentation

For example, in the case where your choice of company is a Limited Liability Company you will have to draft the memorandum and articles of association and this will outline what the company, shareholders and directors can and cannot do. See our previous detailed section dealing with “Types of Businesses You Can Setup in Malta” for more detailed information on what documentation will be required for each.

All documentation needs to be submitted to the Malta Business Registry (MBR) and registration will be completed within a few days. A registration fee will be required. 

Step 3: Deposit minimum share capital

A specialist such as an accountant can advise you on the right amount applicable to the type of company you are establishing, as amounts differ. You will need at least a 20% deposit. In order to do this you will also need a bank account for the company into which the shareholding amount will go and make sure you get a receipt for this. Your accountant can also be the recipient for the deposit and in this case you will not need a bank account yet.

Step 4: Get the necessary licenses

You will need a trading license and it is a simple process to obtain one. Specific criteria will apply to your type of business and you will have to deal with the right government departments for this. Fees are levied annually. 

Step 5: Get a tax number

This is a legal requirement and without a tax number you cannot operate. You need the certificate of incorporation for this step and you will need to collect it in person from the Malta Business RegistryForms for this are available online, there are no fees and hence forward you will need to submit an annual tax return. 

Step 6: Notify the VAT department

You have to obtain a VAT number and need to register no matter what your turnover is. Rules and legislation are constantly updated so make sure you are always informed. All forms and services applicable to VAT are available online.

Step 7: Get a PE number

Being self-employed with no employees does not require a PE number. In all other cases where you are employing people on a fixed contractual salary (employees), this is a must as the business will have to contribute towards/pay National Insurance. Online forms are available from the Inland Revenue Department.

Step 8: Register with JobsPlus

As the government’s appointed agency, JobsPlus is responsible for all employment documentation and registration in Malta. This apples to every single employee. All forms are available online. 

Step 9: Register for Data Protection

If your business in any way or form requires the capturing of information of entities, businesses or individuals, you are obliged to protect this information at all times. Information on how to go about it and what the rules are go to the data protection in Malta website.

Final Thoughts...

With its friendly and welcoming culture to encourage international business, big or small, Malta has been on the forefront of global trade for decades. The ease and speed at which a company can re-domicile itself or open up from scratch is transparent and straight-forward. Rules change and are updated on a regular basis, so it will be money well spent if you employ the services of a specialist to help you get off the ground.

At Frank Salt Real Estate you will find Malta’s best and most knowledgeable professionals when it comes to setting up your business in Malta. With in-depth market knowledge, absolute discretion and professional guidance from day one, you will be guaranteed not only the accumulated knowledge of over 50 years of experience in the business, you will be introduced to and advised on the best places that can be home to your global empire. Frank Salt Real Estate’s professionals can also introduce you to Malta Enterprise, the officially sanctioned organisation with a specialised division called Business First who assists newcomers through the whole process of setting up business in Malta. Business First acts as the single point of contact for investors, dealing with all government departments, applications, licensing and much more.  To read more about Business First, click here.

The Frank Salt Real Estate Group’s Commercial Division can be contacted on +356 2540 9000 or click here.