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Malta Private Limited Liability Company (LLC)

Sovereign-LION-logo-Shiny-Button-S    Read about the overall benefits of setting up an Offshore LLC Company

Overview of a Malta Private LLC

Malta is a traditional tax based system with a number of advantages for foreign and non-resident individuals and companies. Malta has four “non-resident”—a.k.a. offshore—companies, the most popular being the Private Limited Liability Company (LLC) 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, though because of its liberal tax laws, it has managed to keep much of its foreign financial business through offering public and private non-resident companies.

There are a number of differences between a private and a public liability company. A Malta Private LLC has a restriction on its:

  • Right to transfer shares
  • Limits on the number of employees (under 50)
  • Right to offer the public any of its debentures or shares

Malta also offers clients the availability of 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 manage 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.

Key Corporate Features of a Malta Private LLC

Malta LLC Corporate Details
General  
Type of Entity Private Limited Liability Company (LLC)
Type of Law Civil Law (with strong Common Law influence)
Governed by Companies Act 1995
Registered Office in Malta
Yes
Shelf company availability No
Our time to establish a new company 1-2 Business days
Minimum government fees (excluding taxation) €245
Corporate Taxation Yes (Credits and refunds come back to shareholders)
Access to Double Taxation Treaties Yes
Share capital or equivalent  
Standard currency EURO €
Permitted currencies Any
Minimum paid up €250
Usual authorized €1,165
Bearer shares allowed No
No-par-value shares allowed No
Directors  
Minimum number One
Local required No
Publicly accessible records Yes
Location of meetings Anywhere
Corporate directorship allowed Yes
Shareholders / Members  
Minimum number Two (possibility of one)
Publicly accessible records Yes
Corporate members allowed Yes
Location of meetings Anywhere
Company Secretary  
Required Yes
Local or qualified No
Accounts  
Requirements to prepare Yes
Audit requirements Yes
Requirements to file accounts Yes
Publicly accessible accounts Yes
Recurring Government Costs  
Minimum Annual Tax / License Fee  €245
Annual Return Filing Fee €100 – 1,400*
Other  
Requirement to file annual return Yes
Migration of domicile permitted Yes
*Annual Return Fee
An annual fee ranges between €100 and €1,400 (for companies with authorized capital up to €1,500 and €2,500,00 respectively) with discounts of €15 - €300 for electronic submission.

Advantages & Top Uses of a Malta Private LLC

Advantages

  • Reputable jurisdiction
  • Benefits of being apart of EU
  • Proximity to European ports and trading centres
  • Single member ownership is available
  • Re-domiciliation allowances
  • Corporate Tax benefits
  • Nominee service availability
  • English speaking country
  • Any name may be used in the Latin alphabet
  • Administrative flexibility
  • Asset security
  • Modern legislation
  • Not a typically associated offshore jurisdiction
  • Non resident companies have much of the same benefits as resident companies
  • Malta is a signatory to over 70 Double Tax Treaties agreements

Top Uses

  • Own a maritime vessel
  • Holding Company
  • International trading platform
  • E-Commerce
  • Online Gaming
  • Holding of Intellectual Property Rights

Requirements for Registration of a Malta Private LLC

In order to form a Malta LLC, it is required that the following documents are submitted to the Companies Register:

  • Memorandum and Articles of Association
  • A confirmation of the minimum share capital
  • Confirmation of acceptance of proposed company name
  • Details, address, passport and bank reference of each shareholder and director
  • Required Fees

Taxation of a Malta Private LLC

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:

  • No inheritance tax
  • No wealth tax
  • No annual property tax
  • No tax on interest
  • No tax on dividends
  • No tax on royalties or licence fees
  • No withholding on dividends

Corporate Details of a Malta Private LLC

Anonymity, Confidentiality and Disclosure

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.

Company Shares

Ordinary shares, registered shares, preferences shares and redeemable shares are permissible for a Maltese LLC.

Required Capital

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.

Directors

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.

Company Secretary

A company secretary is required and must be an individual; in certain cases, it can be the Director.

Company Meetings

Meetings may take place anywhere in the world and are not required.

Principal Corporate Legislation

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:

  • Trusts and Trustees Act 1988
  • Malta Financial Services Authority Act, 1994
  • Investment Services Act 1994
  • Banking Act 1994
  • Financial Institutions Act 1994
  • Financial Markets Act 2002
  • Business Promotion Act 1988

Type of Law

Civil Law with strong Common Law influences in company, tax and maritime laws modelled off of the UK.

Shareholders / Members

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.

Exchange Controls

Since 2004, Malta has no exchange controls

Powers of the Company

A Malta LLC may exercise the powers outlined in the Company’s Memorandum and Articles of Association.

Language of legislation and Corporate Documents

English

Registered Office required

Yes, a registered local office is required for all Malta LLCs

Local Presence

Yes, a local registered office is required where a register of the shareholders and directors is kept.

Financial Statements required

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.

Audit Requirements

A Malta LLC is required to prepare a financial audit of accounts.

Annual Reporting

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:

  • Balance sheet is less than €2,562,311
  • Turnover less than €5,124,622
  • Employees are less than 50

Private companies – also submit abridged balance sheets and profit & loss accounts

If a company meets at least two of the following three:

  • Balance sheet total less than €46,587
  • Turnover less than €93,175
  • Employees less than two

Shelf Companies available

A shelf company is not available for a Malta LLC

Time required to form offshore company

1-2 days is required to process all of the necessary documents.

Name Restrictions

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

Language of Name

The name of a company may be in any language that uses the Latin alphabet.

Names of Company requiring a special licence or permission

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.

Trading Restrictions

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.

Permitted limited liability suffixes

The name of the company must end in either “Limited” of “Ltd”

Access to Double Tax Treaties

Malta has signed over 70 Double Tax Treaties

Licence Fee

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.

Malta Private LLC Offshore Company Formations

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