Set up an LLC in Malta in 2023
Setting up a business in a foreign country can be a daunting task, but Malta offers a highly advantageous business environment with several benefits for foreign entrepreneurs looking to expand their business operations in Europe.
Malta has a strategic location in the Mediterranean Sea, a stable economy, and a highly skilled workforce, making it an ideal destination for businesses seeking to expand in the region.
One of the most popular forms of business entities in Malta is a limited liability company (LLC), which offers several advantages, including limited liability protection, flexible ownership structure, and low taxation. An LLC in Malta is easy to set up, and the incorporation process is straightforward.
This article will provide a detailed guide on how to set up an LLC in Malta, including the eligibility criteria, the necessary documents, the costs involved, and the taxes you may need to pay.
Why register an LLC in Malta?
Registering a Limited Liability Company (LLC) in Malta can be beneficial for several reasons:
Malta has a favorable tax system, including a low corporate tax rate of 35% and a participation exemption regime that exempts dividends and capital gains from subsidiary companies from taxation.
Malta is known for its pro-employment behavior and strong political atmosphere. It has a powerful economy, with well-enlightened manpower and decent infrastructure.
Malta is a member of the European Union, which provides access to a large market of over 500 million consumers. This could be especially helpful for industries that wish to enhance their projects in Europe.
Easy company registration
Registering an LLC in Malta is a straightforward process, and the company can be established within a few days. The process can be completed online, which makes it easy for foreign investors to set up a company in Malta.
Malta has a good reputation as a jurisdiction for international business. It is well-regarded by other nations and has a decent track record of acknowledging global laws.
Process for LLC incorporation in Malta
Here is a general step-by-step process for incorporating an LLC in Malta:
Step 1:- The first step is to choose a name for your LLC.
Step 2:- Draft and sign the memorandum and articles of association of the LLC.
Step 3:- Every LLC in Malta should possess an enlisted agent who is accountable for obtaining rightful reports and other administrator papers on behalf of the firm.
Step 4:- You will need to open a bank account in Malta to deposit the initial capital required for incorporating the company.
Step 5:- You will need to file the memorandum and articles of association, as well as other registration documents, with the Registrar of Companies in Malta.
Step 6:- There is a fee that you must pay to register an LLC in Malta. The cost differs relying on the percentage of authorized share capital.
Step 7:- Once your LLC is registered, you will need to obtain a tax identification number (TIN) from the Inland Revenue Department in Malta.
Step 8:- Depending on the nature of your business, you may need to obtain additional licenses and permits from the relevant authorities in Malta.
Document required to open a limited liability company in Malta
To open a limited liability company (LLC) in Malta, you will need to provide the following documents:
- Memorandum and Articles of Association
- The company’s legal existence and registration with the Registrar of Companies in Malta.
- You will be required to sign documents for all stakeholders, directors, and the firm secretary.
- It is crucial to offer a listed office address for your firm in Malta.
- Appointment of a firm secretary, who is accountable for ensuring that the firm complies with lawful and regulatory regulations.
- You may be required to provide a bank reference letter for each shareholder and director.
- There are fees associated with incorporating an LLC in Malta.
Eligibility criteria for LLC incorporation in Malta
The eligibility criteria for incorporating a limited liability company (LLC) in Malta are as follows:
- Stakeholders: An LLC in Malta can be formed by 1 or more stakeholders.
- Capital Requirement: There is no minimum share capital requirement
- Directors: An LLC in Malta should possess a minimum of 1 director who is accountable for governing the company.
- Company Secretary: Every LLC in Malta must have a firm secretary, who is credible for guaranteeing that the firm complies with lawful and regulatory regulations.
- Registered Office: An LLC in Malta should possess an enlisted office address in Malta.
- Business Activities: The LLC must engage in lawful actions that are not restricted by legislation.
Various taxes for an LLC in Malta
If you open a limited liability company in Malta, you may have to pay the following taxes:
- Corporate Income Tax: LLCs in Malta are subject to corporate income tax on their worldwide income at a standard rate of 35%. Non-citizen stakeholders of an LLC in Malta may be accountable for giving tax on dividends.
- Value Added Tax (VAT): The basic rate of VAT in Malta is 18%, with lower taxes of 5% and 7% applicable to distinct goods and services.
- Capital Gains Tax: Gains arising from the disposal of capital assets by an LLC in Malta are subject to capital gains tax at a rate of 35%.
- Stamp Duty: Certain documents, such as the Memorandum and Articles of Association, may be subject to stamp duty in Malta.
- Social Security Contributions: Workers in Malta are expected to do social security contributions for the better half of their workers. The rate of social security contributions varies depending on the employee’s earnings.
Cost to set up an LLC in Malta
The cost of setting up a Limited Liability Company (LLC) in Malta can vary depending on several factors, such as the services you require and the complexity of your business.
Here are a few of the expenses linked with LLC incorporation in Malta:
- Incorporation Fee: The incorporation fee for an LLC in Malta is €245.
- Legal and Professional Fees: You may need to hire a lawyer, accountant, or other professionals to assist with the incorporation process and other legal requirements. The expenses for this assistance can differ relying on the scope of work and the professional’s experience.
- Registered Office: An LLC in Malta should possess a listed office address in Malta. The cost of renting or purchasing office space can vary depending on the location and the size of the office.
- Tax and Other Regulatory Fees: There may be various tax and regulatory fees associated with setting up an LLC in Malta. For example, there may be fees for registering for VAT or obtaining certain licenses or permits.
Setting up an LLC in Malta offers a plethora of benefits and opportunities for entrepreneurs, including access to the European Union market, low taxation, and a skilled workforce. Malta presents an excellent opportunity for businesses intending to enhance their performances in Europe.
It is important to note that seeking the advice of a business advisor is crucial to ensure that you comply with all the necessary regulations and requirements.
Obtaining assistance from skilled professionals from Odint Consultancy is recommended if you desire to open a limited liability company in Malta.
To set up an LLC in Malta, you need to be at least 18 years old, have a clean criminal record, and have the necessary funds to start the business. Non-Maltese citizens can also set up an LLC in Malta as long as they comply with the necessary regulations and requirements.
The necessary documents to set up an LLC in Malta include the Memorandum and Articles of Association, the company’s registered office address, the details of the company director and company secretary, and other relevant information.
The incorporation process involves registering the company with the Malta Business Registry, drafting and filing the Memorandum and Articles of Association, appointing a director and a company secretary, and obtaining the necessary licenses and permits.
The costs of setting up an LLC in Malta may include incorporation fees, legal and professional fees, company secretary fees, registered office fees, and tax and regulatory fees.
Malta offers a favorable tax regime for LLCs, with a flat corporate tax rate of 35%, which can be reduced to 5% through the Malta tax refund system.
No, it is not crucial to employ a resident director to set up an LLC in Malta. However, every LLC in Malta must have at least one director, who can be a non-Maltese resident.