Malta is a traditional tax based system with a number of advantageous for foreign and non-resident individuals and companies. Malta has four “non-resident” or offshore companies, the most popular being its Private Limited Liability Company (LLC) and the Malta IBC formed under the Companies Act in 1995.
Though the offshore sector has been around for a number of years, Malta has had to change its use of the word “offshore”, commonly associated with the international finance industry; and since becoming a member of the European Union, the country has had to dismantle its offshore industry. In 2004 Malta ceased offering its international offshore companies; However because of its liberal tax laws it has managed to keep much of its foreign financial business through offering a restructured public and private non-resident companies.
There are a number of difference between a private and a public liability company in: its restriction on its right to transfer shares, its limits on the number of employees (under 50), and its restriction of its right to offer the public any of its debentures or shares. Malta also offers clients the availability of being a private exempt LLC allowing for single member ownership of a company.
Malta is a highly reputable jurisdiction with a low corporate tax system that attracts many for its modern infrastructure, EU conforming legislation and superb banking system, ranked 10th for bank soundness by the World Economic Forum. Because of the many rebates and credits given through their tax imputation system, many companies are able to effectively mange to avoid all corporate taxes.
Though the price for a Malta LLC is more than other jurisdictions, the superb location together with its reputation and tax advantages makes Malta a superb choice for those clients and companies wishing to incorporate in the European Union.
For more information on the Advantages of Malta as an Offshore Financial Center, click here.
Table of Contents:
|Malta LLC||Corporate Details|
|Type of Entity||LLC|
|Type of Law||Civil Law with Common Law influence|
|Governed by||Companies Act 1995|
|Registered Office in Malta||Yes|
|Shelf company availability||Yes|
|Our time to establish a new company||1-2 Business Days|
|Minimum government fees (excluding taxation)||245 EUR|
|Corporate Taxation||Yes |
(credits and refunds go back to shareholders)
|Access to Double Taxation Treaties||Yes|
|Share capital or equivalent|
|Minimum paid up||EUR 250|
|Usual authorized||EUR 1165|
|Bearer shares allowed||No|
|No-par-value shares allowed||No|
|Publicly accessible records||Yes|
|Location of meetings||Anywhere|
|Corporate directorship allowed||Yes|
|Publicly accessible records||Yes|
|Corporate members allowed||Yes|
|Location of meetings||Anywhere|
|Local or qualified||No|
|Requirements to prepare||Yes|
|Requirements to file accounts||Yes|
|Publicly accessible accounts||Yes|
|Recurring Government Costs|
|Minimum Annual Tax||EUR 245|
|Annual Return Filing Fee||EUR 100 (minimum)|
|Requirement to file annual return||Yes|
|Migration of domicile permitted||Yes|
In order to form a Malta IBC, it is required that the following documents are submitted to the Companies Register:
Malta has a “full-imputation” tax system where corporate profits are taxed at the standard 35% corporate tax rate; however, when dividends are distributed to individuals out of taxed profits, it carries an imputation credit on the tax that has already been paid by the company; and after refund to shareholders, the tax burden decreases to 5%, or 0% in certain circumstances. This inherently eliminates the double taxation that occurs.
Under Malta’s tax law, all income coming from a company that qualifies as a “participatory holding” company also qualifies for a full refund of the taxes paid by the company, when distributions are paid back to the company’s shareholders. Furthermore, provided certain conditions are satisfied, income can be exempted from being taxed, based on the “participation exemption” clause.
There is a Value Added Tax rate of 18% applicable to those companies that are trading within the EU.Maltese based LLCs also enjoy many other tax benefits including:
Details of a LLC and its shareholders, directors, beneficial owner and financial accounts are submitted to the Register and are on public record. However, details of the beneficial owner may remain confidential, if a trustee company is used. Nominee services are also readily available to ensure privacy and confidentiality.
Ordinary shares, registered shares, preferences shares and redeemable shares are permissible for a Maltese LLC.
The minimum capital is €250, with the usual authorized at €1,165. Neither the capital nor any shares can be registered on the public stock market and must be kept within the company.
A minimum of one (1) Director is required to form a Malta Private Limited Liability Company. A Director may be from any nationality, a resident of any country and may be an individual or a body corporate.
A company secretary is required and must be an individual; in certain cases, it can be the Director.
Meetings may take place anywhere in the world and are not required.
The Companies Act (1995) is based on Common Law and the UK Company Law principles, but is also aligned with the broader EU financial directive. The 1995 legislation replaced the Commercial Partnerships Ordinance, to fit more in line with EU regulations upon entering the European Union. Other financial legislation include:
Civil Law with strong Common Law influences in company, tax and maritime laws modeled off of the UK.
It is required that a Malta LLC has at least two (2) members who may be an individual or corporate body and may be a resident and nationality of any country. A single-shareholder company is allowed though its director may be a corporate body.
Since 2004, Malta has no exchange controls.
A Malta LLC may exercise the powers outlined in the Company’s Memorandum and Articles of Association.
Yes, a registered local office is required for all Malta LLCs.
Yes, a local registered office is required where a register of the shareholders and directors is kept.
Financial statements and accounting must be prepared according to the International Financial Reporting Standards, and can be kept in any office around the world and may be held in any currency.
A Malta LLC is required to prepare a financial audit of accounts.
An annual return is required to be submitted by all Malta based LLCs every year. The format of the accounts to be submitted depends on the size of the company.
Small companies – submit abridged balance sheets and profit and loss accounts. If a company meets at least two of the following three:
Private companies – also submit abridged balance sheets and profit & loss accounts. If a company meets at least two of the following three:
A shelf company is not available for a Malta LLC.
1-2 days is required to process all of the necessary documents.
A name may not be used that is seen to be undesirable or offensive to the Register, or any name that is similar or already in use.
The name of a company may be in any language that uses the Latin alphabet.
The name of the company must end in either “Limited” of “Ltd”.
Any LLC involved in, but not limited to investment services, insurance, assurance, banking and other financial services must seek permission and may have to obtain a special licence.
There are no restrictions on trading for a Malta LLC. A company that is seeking to own real estate property must be given appropriate authorization.
Malta has signed over 70 Double Tax Treaties.
Minimum registration fee is €245. The registration fee ranges between €245 and €2,250, depending upon the authorized share capital. If the share capital does not exceed €1,500 then the fee is €245.
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