Background
Establishing a company in Malta is a relatively straightforward process, provided that all statutory requirements under the Companies Act (Chapter 386 Laws of Malta) as well as the requirements of the Malta Business Registry (MBR) are fulfilled.
Choosing and Reserving a Company Name
A starting point for any entity intending on incorporating a Company in Malta would be selecting an appropriate name.
Article 69 requires the Memorandum of Association to state the company's name, making it one of the company's essential constitutional particulars. The chosen name forms part of the company's legal identity and will appear on the Certificate of Registration issued by the Malta Business Registry.
Article 70 sets out the rules governing company names. A private company must end its name with the words "Private Limited Company", "Limited", or the abbreviation "Ltd.", thereby indicating its limited liability status.
The Registrar will refuse to register a name that is identical or confusingly similar to that of an existing commercial partnership, has already been reserved by another applicant, or is considered offensive or otherwise undesirable.
Additionally, certain regulated terms, such as "fiduciary", "nominee", and "trustee", may only be used where the company is appropriately authorised under Maltese law or permitted by the relevant competent authority.
Drafting the Memorandum and Articles of Association
The constitutional documents of a Maltese company consist of the Memorandum of Association and the Articles of Association.
The Memorandum of Association
Article 69 of the Companies Act prescribes the information which must be included in the Memorandum of Association, including:
- whether the company is being incorporated as a private company or a public company;
- the name and residence of each subscriber to the shareholder;
- the company name;
- the registered office address;
- email address of the company;
- the objects for which the company is being incorporated;
- company’s share capital;
- the number of directors, the names and residences of the first director(s)
- the name and residence of the first company secretary
- the duration of the company, where it is established for a fixed period.
The Memorandum must be signed by each shareholder or an authorised person.
The Articles of Association
The Articles of Association regulate the internal management and governance of the company. In regard to the manner in which articles are to be adopted the choice given to the shareholders are threefold.
The founders may either choose to:
- Adopt in toto those Articles provided in the First Schedule of the Companies Act.
- Adopt those Articles provided for in the First Schedule of the Companies Act whilst including provisions customized to the company's requirements and the shareholder's wishes.
- Adopt Articles which are of a completely ad hoc and of a separate nature of those provided by the Companies Act.
Whilst the model Articles are often suitable for straightforward incorporations, bespoke Articles may be preferable where the shareholders wish to regulate matters such as share transfers, pre-emption rights, drag-along rights, decision-making procedures or other shareholder rights.
For single member companies, the Companies Act imposes additional statutory requirements. Article 212 expressly provides that in order for a company to be composed of a single member, it must possess the status of an exempt company.
This means that said company must meet the requirements posed in Article 211(2), being:
- that the number of debenture holders does not exceed fifty; and
- that no body corporate acts as a director of the company, nor may the company or any of its directors enter into an arrangement under which the company's policy or management may be determined by persons other than its directors, members or debenture holders.
Preparing Other Statutory Documentation
Alongside the constitutional documents mentioned above, several statutory forms and supporting documents must be prepared. Chief among them is the Form K1, a document in which the proposed director would, in line with Article 139, consent to being appointed as director to the soon to be incorporated company.
The Form BO1, is submitted to declare the beneficial ownership of the company.
Preparing Proof of Share Capital and the Registered Office Documentation
Proof of Share Capital
Prior to incorporation it is mandatory for the shareholders to ensure that the statutory minimum share capital requirements are satisfied. In the case of private limited liability companies, the minimum authorised share capital is set at €1,164.69 with at least 20% (€232.04 euro) paid up upon incorporation.
The Malta Business Registry requires satisfactory evidence that the paid-up share capital is readily available. This is typically demonstrated through a bank account opened in the company's name (where available) or by confirmation from the Corporate Service Provider holding the funds pending incorporation.
Registered Office Consent Letter
The company must also maintain a registered office in Malta. Where the premises are owned by a third party, a consent letter confirming that the company may use the address as its registered office is generally required.
Preparing the Know Your Customer (KYC) Documentation
Before a company may be incorporated, customer due diligence measures must be completed in accordance with Malta's anti-money laundering and counter-terrorist financing legislation. The documentation required will vary depending on whether the proposed shareholder, director or beneficial owner is an individual or a legal entity.
Individual Shareholders
For individuals, the required KYC documentation will generally include:
- a certified copy of a valid passport or other acceptable photographic identification document, with the certification carried out by an EU certifier;
- proof of their residential address by means of a recent utility bill (excluding mobile service bills), a bank statement or another acceptable document evidencing their residential address. Utility bills and bank statements must not be more than six months old; and
- where the individual is a non-EU national, a certified reference letter attesting to the individual's character, with such certification likewise being carried out by an EU certifier.
Corporate Shareholders
For corporate entities, no additional constitutional documentation is generally required where the entity is incorporated in Malta, as the relevant information is available through the Malta Business Registry.
However, where the shareholder or beneficial owner is a foreign corporate entity, a certified copy of the entity's Certificate of Incorporation together with either a certificate confirming its registered office or an official extract from the relevant company registry must be provided.
Submission to the Malta Business Registry
Once all incorporation documents have been prepared and executed, they are submitted electronically to the Malta Business Registry together with payment of the applicable registration fee.
The Registration Fee
The registration fee is calculated on a sliding scale based on the company's authorised share capital as stated in the Memorandum of Association.
At present, the fee ranges from €100 for companies with an authorised share capital of up to €1,500 to a maximum of €1,900 for companies with an authorised share capital exceeding €2.5 million.
Malta Business Registry Review
Upon receipt of the application, the Malta Business Registry reviews the documentation to ensure compliance with the Companies Act before proceeding with the registration of the company.
Certificate of Registration
Upon registration, the Malta Business Registry issues a Certificate of Registration/Incorporation. From the date appearing on the certificate, the company comes into legal existence as a body corporate separate from its shareholders. The company is allocated a unique registration number and may commence business, subject to obtaining any licences or regulatory approvals required for its intended activities.
Post-Registration Matters
Following incorporation, several practical and regulatory steps should be completed before the company commences operations.
Registering with Tax Authorities
Following incorporation, the Company must register with the relevant Tax Authorities in order to obtain a Tax Identification Number (TIN).
Where the Company intends to supply goods or services, it generally requires registration with the VAT Department within 30 days from the date on which it first supplies goods or services.
Corporate Governance
Following registration, the Company must ensure ongoing compliance with its statutory obligations in order to remain in good standing. This includes the preparation and maintenance of the relevant statutory registers and the issuance of share certificates to all shareholders. The Company Secretary is also responsible for notifying the Malta Business Registry of any changes affecting the organisation and structure of the Company.
Financial Reporting
The Company must maintain proper accounting records and prepare annual financial statements in accordance with applicable legal requirements.
These financial statements must undergo an audit, provided the company does not qualify for an audit exemption under the Audit Exemption Rules, prior to submission to the Malta Business Registry within the applicable statutory deadlines.
Other Procedures (Where Applicable)
Registering with Employment Authorities
Companies intending to employ individuals in Malta must register with Jobsplus and obtain a PE Number in order to comply with applicable employment registration requirements.
Registering with Regulatory Authorities
Certain business activities, including air operations, investment services, banking and other regulated activities, require prior licensing, registration or authorisation from the relevant competent regulatory authorities before the Company may commence such activities.
Next Step: Start the Process Today!
Malta provides an efficient and well-established framework for individuals and businesses seeking to incorporate a company. A Maltese company structure offers the benefits of limited liability protection, a clear legal framework and a straightforward incorporation process, provided that all statutory requirements are satisfied.
Whether establishing a new business or expanding existing operations, persons wishing to incorporate a company in Malta can benefit from professional guidance to ensure that the necessary documentation is properly prepared and that all ongoing corporate, tax and regulatory obligations are met.
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Zeta Corporate & Management Services Limited can assist in incorporating your company, maintaining your company and registering with tax and other competent authorities.
