Malta is one of the easiest countries in the world in which to setup a business. This is mainly due to the country’s favorable legislation, business-friendly tax structure, a sound economy and a skilled workforce. Read on as we explore these and other components that make setting up a business in Malta so favorable and what you need to start your own business on the island.
Your Complete Guide to Setting Up a Business in Malta
Business Registration
One of the measures that the Maltese government has taken to attract new business is reducing the time and effort it takes to register a business. The state did this by introducing a new public credit registry that allows individuals to register a business within days of application.
Language
Another factor that makes it easy to setup a business in Malta is the fact that English is an official language that’s widely spoken by most of the inhabitants, and the country has a population of just 500, 000 citizens.
Taxation
Malta has the lowest tax rate in all of Europe at 35% tax rate, of which only 5% is effective. Maltese companies can own share capital in any currency and no exchange restrictions apply. In addition, companies don’t have to worry about stamp duties or withholding taxes.
Sound income tax policies
Malta offers fair income tax policies that are based on salary amounts. The higher your salary, the higher your income tax. That’s why it’s advisable to stick with a modest salary to enjoy a relatively low tax rate.
Lower minimum wage
Malta has a minimum wage of €720 per month, and most employees can live comfortably on a salary of €1, 000 to €2, 000. This is great news for any business that’s looking for a skilled yet accessible workforce.
Low share capital requirement
You can easily open a company in Malta with a share capital of only €1,165. The best part is that your bank account only needs to reflect about 20% of this amount.
A decent climate
Malta has a favorable Mediterranean climate, with 300 days of sunshine per year. Rainfall is limited to a few hours at a time, and only happens during the short winter period.
Types of companies you can start in Malta
Maltese corporate law makes provision for different types of company setups. You can register your business as a sole proprietorship, limited liability, partnership or a trust.
Sole proprietorship:
This company structure is perfect for anyone who plans to operate as a one-man show with no additional employees. A sole proprietorship is easy and straightforward to setup with the only requirement being that you can only make 24, 000 Euro or less when selling services or 35, 000 Euro or less for goods. You don’t even have to register for VAT (value added tax) or pay any registration costs.
Limited liability companies (LLCs):
This type of structure is perfect for subsidiaries and branches of existing companies, and can be in the form of public or private LLCs. A private LLC is limited to 50 shareholders and must have a 1, 200 Euro worth of share capital-minimum! A public LLC has a minimum share capital requirement of 46, 600 Euro and those shares can be traded on the Malta Stock Exchange.
Partnership:
All you need to register a partnership is a notarized agreement. A general partnership is when there is more than one liable party in the company known as general partners. They are responsible for the obligations and debt of the company, whereas limited partners are only responsible in so far as they have contributed to the company.
International holding companies:
As the name implies, an international holding company is created to hold and represent the interests of an international company. This includes the business’ assets and shares. Registering as an international holding company may even exclude your enterprise from paying tax on capital gains and income.
Trusts:
Setting up a trust is a great way to transfer property, money, and other assets to a beneficiary. This type of business structure may also help to alleviate certain tax obligations, allow you to contribute to charity or hold assets for someone else.
