Learn the answers to your inquiries regarding forming a business in Malta.
Creation of a company: Initial choices
Shareholders or members must agree to form a company or other type of business partnership. The Malta Business Registry (MBR) offices are located at AM Business Centre, Triq il-Labour, Zejtun, and are home to the Registry of Companies, where these must be registered.
One may opt to operate their business as a limited liability corporation, as a sole proprietor, or alternatively, through the formation of a partnership with at least one other person.
Because the obligation of the shareholders is restricted to unpaid sums on calls on share capital, the limited liability corporation has a significant advantage over the other strategies outlined above.
A corporation is a legal person independent from its shareholders, and as with other types of partnerships, the assets and liabilities of the business are distinct from those of its shareholders. A single shareholder (a single-member corporation) may establish a business, and that person may also serve as the business’s lone director and company secretary.
The Memorandum of a firm serves as its charter. This has to contain:
- The brand of the business
- Its standing (Private or public)
- Where it will be registered – Address
- Information about its shareholders
- The company’s objectives clause, which lists its business lines
- Capitalization of authorized and issued shares
- The number of shares each shareholder has purchased and the price paid each share
- The rights associated with each class of shares when shares are divided into several classes
- Information about the company secretary and the directors
- Information on the individuals authorized to represent the business legally and in court Lease agreement and copies of the directors’ and shareholders’ identification cards and passports
- The Articles of Association, a document that specifies how the firm will operate internally, must be submitted with the memorandum.
Naming your business
Any company name may be chosen, provided it is distinct from or strikingly similar to the name of an already-existing or reserved company. However, if a name is deemed derogatory or otherwise unpleasant, the Registrar of Companies has the right to refuse to register it.
During the incorporation process, the promoters may also hold a company name reservation for a duration of three months.
Private company: €1,165 is the required minimum share capital, of which at least 20% must be paid up.
Public company: a minimum share capital of €44,588 must be paid up in full at least 25% of the time
The necessary sum needs to be put in a bank account with the name of the newly formed company. Following that, the deposit slip should be provided to the Registry of Companies as documentation of the capital deposit made during the incorporation process.
In a private firm, one director is the bare minimum. There is no cap on the quantity. A public business must have two directors at a minimum. Once more, there is no upper limit.
A private corporation may have up to fifty shareholders, with a minimum of one shareholder (single member company). However, there must be at least two shareholders for public corporations.
In the case of public enterprises, there is no cap on the number of stockholders.
Every corporation is required to name a company secretary, who must be a person. Unless the firm is set up as a private exempt company, the company secretary cannot be the only director.
Among other things, the company secretary’s job is to make sure that the board, management, and service providers of the firm have open lines of communication. The company secretary, who serves as the board’s main point of contact, should be the corporate governance specialist who the chairman and board can turn to for advice on business-related issues.
Every business that registers in Malta is required to establish a registered office there.
Upon each anniversary of their registration, companies are required to produce an annual return in the approved format. Within 42 days of the registration date, this return must be sent to the Registrar of Companies. Depending on the applicable authorised capital, a payment of between € 100 and € 1,400 must be included with the return.
Companies must also submit a signed copy of their yearly financial statements. A copy of the relevant auditors’ report and a directors’ report must be submitted with these. The annual accounts must be reviewed and approved within 10 months after the year’s end and then submitted 42 days later.
The required accounting format is determined by the company’s size. Small businesses are permitted to create streamlined profit and loss accounts and streamlined balance sheets.
A “small firm” is one that, as of the balance sheet date, does not meet two out of the following three requirements:
- 4 million euros on the balance sheet,
- 8 million euros in revenue,
- and an average of 50 employees per accounting period.
Private businesses that, as of the balance sheet date, did not exceed the upper bounds of any two of the three following standards
- Total balance sheet: 46,600 euros
- Turnover: 93,000 Euros
- 2 average employees during the course of the accounting period;
Exempt from the obligations pertaining to the auditing of accounts. The balance sheet, notes, and profit & loss statement must still be delivered to the Registrar.