8 Reasons to Form a Company in Malta

Malta has a reputation as one of the top locations for establishing an international business, whether it be a fresh start-up or the transfer of an existing company. 

8 Reasons to Form a Company in Malta

Foreign investors are drawn to Malta because of its relationships and double taxation agreements with nations inside and outside the EU (European Union). International businesses have their company formation in Malta to enjoy one of Europe’s most vibrant economies.

Malta is a fantastic location for business, but it's also a destination that many tourists appreciate and love because of the friendly locals, perfect weather, and breathtaking scenery. Investing in a business in Malta can be beneficial and comes with attractive advantages.

Where is Malta?

Malta's geographical location is midway between Africa and Europe. Thus, the ideal place to establish ties with the EU, the Middle East, and Africa. 

Malta is positioned on one of the most important and strategic trade routes in the Mediterranean. All of the major financial hubs in Europe are only a short flight away, and it serves as a significant port of call for many ships. It also has a sizable international container terminal and a Freeport, making it a significant port of call for hundreds of ships.

8 Reasons for Company Formation in Malta

Company formation in Malta is not only tax-effective but also a secure and safe investment. 

Malta's combination of tax advantages, stable political environment, strategic location, skilled workforce, and business-friendly regulatory environment makes it an excellent location for company formation and a secure and safe investment destination.

Here are more reasons you should consider setting up a company in Malta:

1. Most Affordable Corporation Taxes in the EU

The efficient corporation tax in Malta is an essential justification for company formation. Malta has the highest corporate tax rate in the EU at 35%, which is a flat rate. The company's shareholder, however, is qualified to receive a reimbursement for the tax the company has already paid.

This results from Malta's full-imputation corporate taxation system, whereby a shareholder is given credit for the income tax a firm has paid in Malta through dividends. Giving the holding company a portion of the profits lowers the effective tax rate to roughly 5-7%.

2. Low Cost to Set Up a Company in Malta 

Malta offers a lower cost for business formation than the majority of other locations on the planet. This is because only €1,164.69 in startup capital is needed to establish a business. 

Even better than this is the requirement that only 20% of this capital be in the business bank account, meaning that starting a firm requires less actual cash. Additionally, remember that there is an annual fee of €100.

3. Double Taxation Treaties

Almost all of the significant Organization for Economic Co-operation and Development (OECD) nations, as well as more than 70 other nations, have signed double taxation agreements with Malta. 

The double tax agreements not only guarantee that you won't have to pay taxes in two places but also serve as a mechanism to encourage investment from particular nations. Therefore, if you were to establish a business in Malta, this could not only enable you to lower the costs of your enterprise but also increase the potential for investors from around the world.

4. Taxes on Income That are Reasonable

Malta indeed has relatively high-income tax rates, and thus paying a large wage would result in a significant tax burden. The secret is to only withdraw what you actually need; because the income tax rates are banded, doing so effectively lowers the tax rate.

Malta features an easy-to-understand income tax structure that requires earners to pay higher percentages only when they surpass a band. Check out the infographic below for the current income tax brackets:

5. Company Registration in Malta Has Favorable Incentives 

Current Income Tax Brackets

The government has created several programs and schemes that offer tax credits for foreign-registered business owners across various industries. This is because they recognize the significance of foreign investment for economic growth. Some of these incentives make it simple and convenient for multiple types of businesses to establish themselves in Malta.  

6. Additional Businesspeople With Similar Perspectives

Success is dependent mainly on networking. In Malta, networking for business is relatively simple. Many businesspeople from around the world come to Malta because of the favorable business environment it offers.

Being surrounded by people with the same mindset is fantastic for business. There are businesspeople from all over the world, and you may quickly become acquainted with those following the same business line.

The simplest method for developing a successful business is to spend time with other successful businesspeople.

7. Malta’s Pleasant Weather 

The average number of days with sunshine per year is 300, and the climate is generally pleasant. A substantial amount of rain falls on the island throughout the winter, but it is pretty concentrated and typically only lasts a few hours at a time.

8. Reduced Linguistic Gap

Malta has a large English-speaking population, making it one of the two official languages there, along with Maltese. All government documents and signs are translated into English, making it relatively simple to establish a business in Malta, even though some of the older islanders are not very fluent.

In a Nutshell

Malta has a lot to offer, whether you're hoping to enter the European market, looking for tax savings through incorporation, enjoying double taxation treaties, or looking for a logistically sound headquarters.

Also, aside from business, Malta is a beautiful nation and a great place to live. It has fewer language barriers and friendly locals to interact with, along with pleasant weather.

Company Formation in Malta FAQs

What is the cost of registering a business in Malta?

The company's authorized share capital determines the registration charge to be paid to the Registrar in Malta. The cost starts at € 245, and the maximum is set at € 2,250 if the authorized share capital exceeds € 2,500,000. Additionally, there is an annual fee payable to the Registry of Companies in Malta based on the company's share capital, with a minimum of € 100 and a maximum of € 1,400. 

Does Malta let foreigners start businesses?

Yes, foreigners are welcome to start businesses in Malta. There are no restrictions on foreign ownership. Company formation and registration are both open to everyone in Malta.

What is the required minimum capital for a business in Malta?

In Malta, a private company must have a minimum approved capital of €1,164.69 and at least 20% of the capital of shares given. A public company must have a minimum authorized capital of €46,587.47 and at least 25% of the capital of shares issued.

How long does it take in Malta to launch a business?

The process of forming a corporation in Malta takes around two weeks.

Do I need to appoint a director who is a resident of Malta to form a Malta company? 

A director of a Malta corporation may be either a resident or a non-resident. However, it is strongly advised that at least one director resides in Malta.