The Malta Independent 24 January 2022, Monday

Company Setup In Malta: Everything Foreigners Need To Know

Thursday, 2 December 2021, 08:30 Last update: about 3 months ago

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While current economic growth in several European countries has slowed since the end of the third quarter in 2021, Malta, the smallest of all EU-member states, has seen a substantial increase in inflation, around 0.7%, a low margin compared to Estonia and Lithuania who had the highest estimated annual inflation.

The short-term data analysis captured by Eurostatistics has revealed that the second quarter of 2021 has been quite challenging for some EU countries, but a road to recovery for many industries has been paved with hopeful prospects, as the Maltese government looks to bring innovation and enterprise growth back to the island. 

Although Malta covers a small geographical area, small and medium-sized enterprises (SMEs) employ a substantial number of inhabitants, spanning more than 26,059 enterprises, with more than 137,000 employees.

Now with most restrictions eased in the country, and a tourism industry back on track - Malta is starting to offer promising business ventures for many entrepreneurs from various countries around the world.

We took a deeper dive into what it takes to set up a business on the island nation, and what you should know. 


Can foreigners set up a company in Malta? 

Malta offers a diverse economic climate, with niche markets and industries - ranging from the most popular such as tourism, hospitality, and customer service, to smaller tech and software development opportunities. 

Foreigners looking to set up a company in Malta will need to complete a filing and formation process with the appropriate legal and governmental agencies.

For those reigning from European nations within the EU, setting up a company is a lot easier, but although foreigners can set up a new business, this process may be a bit more complex. This LLC formation resource can also offer better insight. 


How can a foreigner start a company in Malta? 

As there are various legal procedures involved, foreigners can work with a business formation company, and some steps include:

Step One: Pay business registration fees with local authorities. These fees are roughly €245, but depending on the size of the share capital of the business or company these fees may vary. 

Step Two: Open a Maltese business bank account, clearly stating the capital share that will be used for the business.

Step Three: You can either choose to register and pay for virtual office space, or physical office space. There is a monthly fee and can range from anything between €125 to €400 per month depending on the type of business you will register. 

Step Four: Set up the business shareholder and authorized capital for the company. With this, the Maltese government requires entrepreneurs to state all shareholders and investors involved in the new company. There is a minimum share capital fee payable of roughly

€1,200. For this to be successful, it’s required by law that two shareholders of the business should be authorized to share capital. 


How long does it take to set up a company in Malta? 

Various factors can influence the time which it takes to set up a company in Malta. Herewith follows a breakdown:

1-3 hours: Registering a business name 

1 day: Filing incorporation documents

1-4 days: Tax registration with local authorities

1 day: Share capital deposits finalization 

3-6 days: EIN registration and finalization

2-8 days: Registering for VAT 


How are companies taxed in Malta? 

The current corporation tax rate in Malta stands at 35%, although in recent years business owners have found a small loophole in the taxation system that can significantly reduce the amount. 

If an offshore company or business is created in a nearby country that still owns all the shares of the Maltese company - corporate taxes may be lowered to nearly 5% as refunds can lower the tax amount by almost 80%.

This is a bit tricky to get right, as there are other legalities involved, but can be beneficial for the business and its shareholders. 


The takeaway

Starting a company in Malta can be an easy task for those looking to adapt and infiltrate untapped markets offered by the small island nation.

Although the process may be a bit challenging for those not coming from EU countries, the opportunities offered are endless and it boasts long-term financial success for many entrepreneurs. 



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