Company Formation and Management
Zeta does not only provide cost-effective incorporation services but is also specialised in administering these companies.
The process of company formation will depend on the jurisdiction where the company is being registered. Zeta advisors will discuss and inform our clients on the legal implications as well as the processes that take place when incorporating a company. Limited liability companies remain the most popular vehicles for businesses to carry out their operations. This is because, with limited exceptions, the apparent advantage is that the company can protect its owners from personal liability for business debts.
We have the expertise to help our clients identify which corporate jurisdiction would be the best suited for the formation of their new company. Zeta’s advisors will take the time to ensure that the corporate structure identified will provide not only several benefits but also legally protect the client’s assets, allowing access to worldwide markets.
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.
Malta has strong banking, insurance fund 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 either by the shareholders themselves or by their authorised representatives, namely “subject persons” licensed to act as corporate services providers.
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 one director. Every company must 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.
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 within 10 months from the end of the financial year, with a subsequent grace period of 42 days.
Taxation of a Malta Company
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 for shareholders to benefit from such refunds.
The Maltese legal framework allows for companies incorporated in an approved jurisdiction to make a request with the Malta Business Registry to domicile 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.
A request to re-domicile the foreign company must be made to the Malta Business Registry (MBR) and the following documents must be presented:
- An Extraordinary Resolution or equivalent document of the foreign company authorising it to be registered as being continued in Malta;
- A copy of the Memorandum and Articles of Association;
- A certificate of good standing issued by the foreign competent authority;
- A declaration signed by at least two directors of the company confirming the foreign company’s solvency;
- A list of directors of the foreign company as well as the company secretary;
- Payment of registration fees, this amount depends on the authorized share capital of the company.
After submitting the required documentation to the Malta Business Registry, a provisional certificate of continuation will be granted. The foreign company will then have a six-month period after the issuance of the certificate to submit the necessary evidence that it has ceased to be registered in the foreign jurisdiction where it was initially registered. If the foreign company does not comply, the Malta Business Registry can take action and either strike the company off the register or if rational cause is shown, the registrar may grant a further period of 3 months prior to striking the name of the register.
Once the evidence has been reviewed and approved by the MBR a Certificate of Continuation will be issued that confirms that the company has been registered as continuing in Malta.
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 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.
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.
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 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.
- 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.