|Type of Company
|Common or Civil Law
|Disclosure of Beneficial Owner
|Migration of Domicile Permitted
|Tax on Offshore Profits
|Language of Name
|Minimum Number of Shareholders
|Minimum Number of Directors
|Bearer Shares Allowed
|Corporate Directors Permitted
|Company Secretary Required
|Standard Authorised Share Capital
|Government Register of Directors
|Government Register of Shareholders
|RECURRING GOVERNMENT COSTS
|Minimum Annual Tax/Licence Fee
|Annual Return Filing Fee
The Republic of Malta is an archipelago consisting of three inhabited islands Malta, Gozo and Comino. The Maltese islands are situated in the middle of the Mediterranean Sea about 100 km South of Italy.
The population of the Islands is approximately 360,000. Maltese society is homogenous having its own identity and language. The natural population growth has in recent years been supplemented by a net inflow of Maltese who had previously emigrated to America, Canada, Australia and the United Kingdom.
Malta boasts of a rich history of tradition and culture lavishly woven by the many civilisations that have swept the Mediterranean leaving their imprints on those small islands. The first evidence of life dates back as far back as the Neolithic age, when early settlers some 6000 years ago left evidence of their magnificent temples of worship and burial grounds. After these, new faces belonging to new civilisations
appeared, all leaving their indelible traits: Phoenicians; Carthaginians; Romans; Arabs; Aragonese; the Knights of St. John; the French under Napoleon Bonaparte and finally the British. The British stayed for more than a century and a half and during this time set up a prominent naval and military base for their Mediterranean fleet and their influence, particularly on the infrastructure of the country, its legal system and its civil service, remains.
Malta obtained its independence in 1964 but retained a NATO military base, which turned out to constitute the Island’s main source of revenue. Fifteen years later, Malta closed the military base and became a republic.
Malta is a sovereign independent state enjoying traditional political, economic and social stability. It enjoys a parliamentary democracy based on the British model. It forms an integral part of Western Europe both politically and culturally. Malta is a member of the United Nations, of the Council of Europe and of the Commonwealth. Malta maintains friendly relations with all countries through its policy of non-alignment.
The President is the titular head of the state, while executive powers rest with the Prime Minister and the Cabinet. Parliament is composed of 65 representatives elected every five years. Based on the English juridical system, the judiciary has a tradition of independence that dates back hundreds of years. The supreme law of the country is its written constitution, which expressly incorporates the fundamental principles of Balance of Powers, the Rule of Law, the Independence of the Judiciary and the Human Rights.
INFRASTRUCTURE AND ECONOMY
With the closure of the military base in 1979, it became imperative for the country to launch a series of development programs to
re-orient the Island’s economy.
A strong infrastructure and promotional drive basing itself on price competition and on high standards of tourism facilities turned tourism in to Malta’s primary source of foreign exchange, with close to a million tourists visiting Malta each year. Malta’s natural harbours host one of the most renowned dry-docks in the Mediterranean and a shipbuilding yard.
The geography of the Island has always provided natural attractive safe marinas for yachts coming from all over the world. Manpower is the most precious resource in Malta. Human resources development is fundamental to the Island’s economic progress, which is why great stress is placed on an enlightened education system and the training and preparation of the labour force to levels required by modern industry and sophisticated technology. Today Malta has a well-based and adaptable labour force, which is eager to grasp the challenges of modern technology. This has been the basis behind the success Malta has achieved in attracting foreign investors in light industry.
Reserves for foreign currency per head are amongst the highest in the world. The Maltese Lira is strong and stable. With more than 100 years experience behind them, Malta’s banks are continually expanding and improving their services. Financial institutions have been streamlined to keep abreast of transformations that are taking place in what has become a global marketplace.
The Republic’s official languages are Maltese and English; the latter is spoken fluently by all Maltese citizens. Business correspondence is mainly in English. Most of the population is also fluent in Italian.
Yes, but International Trading Companies (ITC’s)/International Holding Companies (IHC’s) are exempted.
TYPE OF LAW
Malta is a Civil Law jurisdiction, however, all modern legislation including company, tax and maritime laws are modelled on their UK counterparts.
PRINCIPAL CORPORATE LEGISLATION
Companies Act 1995; Malta Financial Services Act Centre 1994; Investment Services Act 1994; Banking Act 1994; Financial Institutions Act 1994 and the Industrial Development Act 1988
PROCEDURE TO INCORPORATE
This entails the issue of an exemption certificate from the Exchange Control Division, the deposit of the share capital and the filing of the Memorandum and Articles with the Registrar of Companies.
RESTRICTIONS ON TRADING
All objects of the company are limited to trading activities outside Malta and to such other acts as are necessary for operations in Malta, and, except as provided in the Income Tax Acts, a company cannot carry out trading activities with persons resident in Malta.
An International Trading Company is a normal onshore Maltese company, with the main distinction that its trading activities are carried out from, rather than in Malta. The Income Tax Act specifically recognises that this type of company which may engage in purchases for export of goods manufactured, assembled or processed in Malta provided that such purchases are not made from a person who owns directly or indirectly more than 15% of the ordinary share capital of the said International Trading Company; trading with companies registered in Malta under the Malta Financial Services Centre Act 1994 and trading with other International Trading Companies.
A company cannot manage or service another Maltese company, or act as a trustee for any trust established in terms of the Trusts Act, 1988.
A company cannot carry on the business of Financial Services as defined in the Banking Act 1994, the Financial Institutions Act 1994 and the Investment Services Act 1994.
POWERS OF COMPANY
Such powers as are outlined in the Memorandum of Association of the company.
LANGUAGE OF LEGISLATION AND CORPORATE DOCUMENTS
REGISTERED OFFICE REQUIRED
Must be maintained in Malta.
SHELF COMPANIES AVAILABLE
TIME SCALE TO INCORPORATE
Anything identical or similar to the name of a company already incorporated or reserved; anything that in the opinion of the Registrar of Companies is offensive or otherwise undesirable.
LANGUAGE OF NAME
SUFFIXES TO DENOTE LIMITED LIABILITY
The name of the company must end with the word “Limited” or “Ltd”.
DISCLOSURE OF BENEFICIAL OWNERSHIP TO AUTHORITIES
The identity of the beneficial owners of an international trading company may remain confidential if they incorporate a company through the services of a licensed nominee company. This confidentiality is maintained as long as the company and its beneficial owners are not involved in any money laundering activity.
AUTHORISED AND ISSUED SHARE CAPITAL
The minimum authorised share capital is of Lm 500. The minimum issued share capital is Lm 500, 20% paid up. The share capital may be denominated in any currency.
CLASSES OF SHARES PERMITTED
A company may have different classes of shares.
BEARER SHARES PERMITTED
Malta’s wide network of double tax agreements as well as other methods for relieving double tax on cross border transactions provide an excellent base for establishing tax efficient structures including international trading and holding company activities.
Malta’s full imputation system of taxation and the refund of tax provisions contained in the legislation make the ITC a very tax efficient vehicle for non-resident shareholders. An ITC is taxed at the normal company rate of tax, which is currently 35%. However upon receipt of a dividend from an ITC, non-resident shareholders are:
|Taxed at flat rate of 27.5% on the gross amount of the dividend and are credited with the amount of tax paid by the company on the profits out of which the dividend was paid
|Entitled to a refund under the provisions of the Income Tax Management Act of two thirds of the Malta tax paid by the company on the same profits. This refund is payable by the Inland Revenue Department not later than the fourteenth day following the end of the month in which the refund becomes due
International Trading Companies and International Holding Companies may request for an advance ruling on their tax status. Such a ruling guarantees the tax position of the company for a minimum period of five years and may be renewed for a further period of five years. Any changes in the tax legislation during these periods will not become operative before the lapse of two years from the coming in to force of the new law. LICENCE FEES
Lm 100 minimum for a share capital of Lm 2,000 and under.
FINANCIAL STATEMENTS REQUIRED
Annual returns and audited accounts.
A minimum of one whom need not be a Maltese resident.
Every company shall have a company secretary, whose name and address shall appear in the Memorandum and Articles of Association. The secretary has to be an individual and not a body corporate and must be a resident of Malta.
The minimum number of shareholders is normally two, however a “single member company” may also be registered.