General characteristics of Maltese companies
Different types of companies can be set up in Malta. These include the following:
- A limited liability company
- Limited partnership
- General partnership
Company incorporation of a Maltese private limited liability company will typically take between two to four working days to be processed and finalised by the Malta Registrar of Companies.
A minimum of two shareholders are required for the formation of every private company set up in Malta. In order to meet this requirement, a third party must hold a single share with all the other shares being held by the intended beneficiary. Alternatively, a private exempt company may opt to have a single shareholder. Without these minimum requirements, company incorporation in Malta cannot go forward.
Registered office and establishment of a branch office in Malta
All companies incorporated in Malta must have an office registered locally. Such companies set up in Malta aiming to expand their organisation abroad may wish to register a branch as an overseas company. Some companies receive tax breaks by continuing to be incorporated in their home country while they attempt to establish a Malta operation.
Registration of a Maltese company
A company is set up in Malta by a Memorandum of Association being entered into and subscribed to by the shareholders and a certificate of registration being issued in respect thereof. The following should be included in the Memorandum:
- company name;
- address and official identification of the sub-scribers thereto;
- the nature of the company (private or public);
- tube registered office of the company in Malta;
- the object and purpose of the company to be incorporated;
- details of the authorised issued and paid up share capital;
- the way in which the representation of the company is to be exercised; and,
- the number of directors and the particulars of the first directors and secretary.
Taxation and double taxation treaties
Company incorporation in Malta brings many benefits. The company rate of tax is 35% on the chargeable profits based on the audited accounts of the company. Despite this, a system of tax refunds rewarded to shareholders provides substantial fiscal benefits, reducing Malta tax to shareholders to 0% in the case of holding companies, and 5% in the case of trading companies. In both instances, there are specific legal requirements that must be satisfied in order for shareholders to benefit from such refunds.
Accounting and Auditing Requirements
All accounting records have to be audited at the end of each financial year, in accordance with Malta’s Companies Act, 1995 and International Accounting Standards. Financial statements constitute the directors’ report, the auditors’ report, balance sheet, profit and loss account, notes to the financial statements together with schedules to the profit and loss account.
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