Setting up a Business in Malta

The primary legal framework governing company formation in Malta is the Companies Act (Chapter 386 of the Laws of Malta). Partnerships are regulated under both the Companies Act and the Commercial Code (Chapter 13), while sector-specific activities (such as gaming, pharmaceutical or financial services) may be subject to additional regulatory legislation.

All companies incorporated in Malta are registered with the Malta Business Registry (MBR), which acts as the official registrar of companies, partnerships, commercial entities and beneficial ownership information.

Malta company law is closely aligned with EU company law directives, providing familiarity and predictability for international investors.

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Private Limited Liability Company (Ltd)

The private limited liability company is the most commonly used vehicle for doing business in Malta.

Key legal features include:

• Separate legal personality
• Limited liability of shareholders
• A minimum issued share capital of €1,164.69, of which at least 20% must be paid up on incorporation
• A minimum of one director and one company secretary

Private companies are suitable for trading, holding, investment and operational activities and may be owned by individuals or corporate shareholders.

Public Limited Liability Company (Plc)

A public limited company may be appropriate for larger operations or where capital raising from the public is contemplated.

Legal requirements include:

• Higher minimum share capital
• More stringent disclosure and governance obligations
• Mandatory board structures and increased reporting

In practice, Plcs are less frequently used for privately held international structures.

Partnerships

Malta recognises:

• Partnerships en nom collectif (general partnerships), and
• Partnerships en commandite (limited partnerships)

A limited partnership may elect to have separate legal personality, allowing it to function similarly to a corporate entity while retaining partnership tax and governance characteristics where appropriate.

Branch of a Foreign Company

A foreign company may establish a branch in Malta without incorporating a separate Maltese legal entity. The branch must be registered with the Malta Business Registry and is legally treated as an extension of the overseas company.

Name Reservation and Constitutional Documents

The incorporation process begins with the reservation of a company name and the preparation of the Memorandum and Articles of Association, which must specify:

• Company objects
• Share capital and shareholding
• Directors and company secretary
• Registered office in Malta

Registration with the Malta Business Registry

The following must be filed with the MBR:

• Constitutional documents
• Details of directors, shareholders and beneficial owners
• Evidence of paid-up share capital
• Statutory declarations confirming compliance with Maltese law

Upon registration, the MBR issues a Certificate of Registration, at which point the company becomes a legal person under Maltese law.

Beneficial Ownership and Transparency

Maltese companies are subject to beneficial ownership disclosure obligations, in line with EU anti-money laundering directives. Information must be filed with the MBR and kept up to date on an ongoing basis.

Corporate Income Tax

Companies incorporated in Malta are subject to corporate income tax at a standard rate of 35% on chargeable income.

However, Malta operates a full imputation system, under which tax paid by the company is attributed to shareholders upon distribution. In many international structures, shareholders may be entitled to claim tax refunds, reducing the effective tax leakage significantly, subject to the nature of the income and the structure used.

VAT Registration

Companies carrying out taxable supplies in Malta or within the EU may be required to register for Value Added Tax under the VAT Act (Chapter 406).

The standard VAT rate in Malta is 18%, with reduced rates and exemptions applicable in specific circumstances.

Double Tax Treaties

Malta has an extensive network of double taxation agreements, supporting cross-border operations and mitigating international tax exposure.

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