Company Formation and Management

Overview

Malta has quietly emerged as one of Europe’s most stable and innovative financial domiciles. Despite Malta drawing a large influx of tourists due to its warm climate and vast culture, the small and densely populated state offers much more. Malta’s decision to join the European Union in 2004 and the Eurozone in 2008 have proved critical to its development as a central finance and business centre it is today.

Malta has strong banking, insurance, investment funds and wealth management sectors that have attracted investment from the world’s leading financial institutions, blue-chip multinationals, and high-net-worth individuals.

Maltese Registered Companies

Malta’s Companies Act is primarily formulated around English Law and EU directives and defines the type of Maltese corporate entities or commercial partnerships that can be registered.

The following types of companies are available:

• A limited liability company;
• Limited partnership;
• General partnership;
• Branches of Foreign Companies and Other Entities.

A limited liability company may be registered via an authorised representative, namely a “subject person” that is licensed to provide corporate services. Zeta Corporate & Management Services Limited is a Class C Corporate Service Provider regulated by the Malta Financial Services Authority, Malta’s sole regulator.

A Malta company must have a registered office in Malta. The registered office may be at the office of a local firm of lawyers, accountants, or other corporate services providers. Any changes to the company’s registered office must always be notified to the Malta Business Registry.

Directors and Company Secretary

A public company must have at least two directors, whereas a private company must have at least one director. Every company should have a company secretary.

No company may have:

• its sole director acts as a company secretary unless the company is a private exempt company (single member);
• a sole director of the company being a body corporate acts as company secretary to the company.

It shall be the duty of the directors of a company to take all reasonable steps to ensure that the company secretary is an individual who appears to have the essential knowledge and experience to discharge the functions of a company secretary. The law does not require that the company secretary be resident in Malta. A company secretary may also be a duly registered company service provider in terms of the Company Service Providers Act.

Annual Accounts

Companies are required to file a copy of the annual accounts. These are to be accompanied by a copy of the auditors’ report thereon. The annual accounts must be approved and filed within 10 months from the end of the financial year, with a subsequent grace period of 42 days.

Corporate Tax

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 requirements that must be satisfied for shareholders to benefit from such refunds.

Overview

The Maltese legal framework allows for companies incorporated in an approved jurisdiction to make a request with the Malta Business Registry to domicile their company(ies) to Malta without the need to wind up their foreign business.

What is the Criteria?

For a foreign company to re-domicile to Malta the following criteria needs to be met:

• The foreign company must be formed and incorporated under the laws of an approved foreign country, which is similar in nature to a company registered in Malta.
• The laws of the country where the foreign company is incorporated must allow for the company to be continued in a foreign jurisdiction.

We will assist you by coordinating the entire process with the Malta Business Registry and other relevant local authorities to re-domicile the foreign company. There are mandatory documents that we will prepare to file the request. Some information will be requested from the registrar of the foreign jurisdiction. You will be guided accordingly.

The entire process can take anything up to six months.

Get in touch with us today for more information.

Overview

Gibraltar is a popular location for the registration of international trading companies. One of the most beneficial aspects of a Gibraltar company is there is no tax on profit if the profit is generated from activities outside Gibraltar.

Gibraltar Companies

Gibraltar is a UK dependency, and Gibraltar companies are structured similar to that of a UK company. Companies are incorporated under the Companies Act, which is based on English law; however, it has been adjusted to suit Gibraltar’s needs.

The following types of companies are available in Gibraltar:

• Public Limited Company – A Public Limited Company may issue shares to the general public and may be quoted on the stock exchange;
• Private Limited Company – A Private Limited Company may issue shares to a restricted group of people. It is not permitted to offer shares to the general public, and its shares may not be quoted or traded on any stock exchanges;
• Company Limited By Guarantee – A Company Limited by Guarantee does not generally have a share capital or shareholders; instead, it has members who act as guarantors.

Taxation of a Gibraltar Company

Except for royalty income and loan interest above £100,000 per annum, only income which accrues in or is derived from Gibraltar is subject to tax in Gibraltar. As long as the preponderance of income-generating activity of a Gibraltar company takes place outside Gibraltar, it will not pay corporation tax in Gibraltar.  

Key Factors for Gibraltar Incorporations

Several factors make Gibraltar attractive for offshore business conduct:

• Good geographical location and bilingual (English and Spanish) territory;
• Cost-effectiveness and attractive fiscal regime for offshore investors;
• Excellent reputation, stable government, and special status within the European Union;
• Excellent infrastructure and communications;
• Favourable tax status for offshore banks;
• No exchange controls.

Luxembourg

Zeta provides advice on the most appropriate corporate structure to suit your requirements. There are various options of corporate structures that can be formed in Luxembourg, with the most common being a Limited company locally know as a S.A.R.L.

The jurisdiction of Luxembourg is also an ideal place to incorporate a Holding Company, which allows our clients to minimise tax earnings sourced from other European Countries legally. Corporate Structuring is common in Luxembourg for cross-border investments. The country is a member of the EU and has a stable Government. The country’s economy significantly lies in the Financial Sector having more than 200 banks, over 3,900 investment funds and approximately 20,000 Holding Companies.

Key factors

The local authorities encourage foreign investors to set up a fund in Luxembourg. Luxembourg investment funds are split into three areas:

• UCI (Undertaking for Collective Investment);
• UCITS (Undertaking for Collective Investment in Transferable Securities – designed for retail investors);
• SIF (Specialised Investment Funds).

All the investment as mentioned above, funds are not taxed on their income nor on capital gains obtained in Luxembourg. A stamp duty on the share issues or transfers is not required.

Luxembourg has a large number of double tax treaties concluded by the Grand Duchy with many countries worldwide.

Shelf companies are available for those who want to start doing business without having to wait for the standard length of the incorporation process.

Switzerland

Switzerland is strategically located in the heart of Europe, from a trading perspective, with the neighbouring countries of the European Union. Switzerland ranks as an international financial centre with an excellent reputation.

This confederation is made up of 26 autonomous cantons. Thanks to a flexible fiscal policy based on discretion (confidentiality and anonymity: two strong points of this jurisdiction), as well as its’ wealthy economy, Switzerland allows entrepreneurs to enjoy several advantages to optimise company’s profits.

Key factors

• Although Switzerland is not considered a tax haven by the OECD, those who set up their company here can carry out their business enjoying a professional image and excellent reputation at a global level;
• Companies most frequently used are the Société Anonyme (S.A.) and the Société à Responsabilité Limitée (S.A.R.L.);
• There are zero limitations regarding the number of shareholders. A single shareholder may be sufficient who can also be an employee of the company. However, the company must have at least one Director resident in Switzerland (Zeta can put you in touch with resident Directors if necessary);
• The minimum capital requirement to be paid at the time of the incorporation of the company is CHF 100,000 for the S.A. and CHF 20,000 for the S.A.R.L.;
• Shareholders who set up a S.A.R.L are not anonymous, and their identity is listed in the local registry. In some cases, we can offer solutions to preserve their anonymity;
• Shareholders who set up an S.A. may choose the bearer report system and thus not appear in the Commercial Register;
• By being “out of Europe”, Switzerland is not obliged to comply with the decisions of the Euro Zone for fiscal and financial matters. However, to nurture relationships with international partners and avoid appearing on blacklists, Switzerland has introduced a new tax convention model. Every company set up in Switzerland pays a tax or duty on the profits that vary depending on both the canton in which it was set up and on its activity;
• Similarly, Swiss companies are required to maintain their accounts and file their annual statement.