Limited Liability Company, Malta
Many business minded people choose to start a Limited Liability Company in Malta because the tax burden on business in Malta is much lower than it is in most other countries. Not only great, well established business have opted for setting up in Malta but also small business owners have opened their eyes to the benefits that come from operating in Malta. It enables big business to increase their profits and smaller businesses to grow.
Starting a Limited Company in Malta is uncomplicated and citizens of countries within the European Union are welcome to relocate without any hassle from the authorities. However, it is not necessary to reside in Malta in order to establish a business there.
Start a Limited Liability Company Malta
Share Capital. When starting a Limited Company in Malta, all you need is 1200 Euros in share capital which is not much compared to the requirements in many other countries. In Sweden, for example, the minimum is approximately 5400 Euros.
Address in Malta. A Limited Liability Company has to have a physical address in Malta. If you reside in Malta you can use your home address but if you live elsewhere there are solicitors (lawyers) who will not only arrange for an address but also handle your business mail. All of this is completely legal and will not in any way compromise your company or yourself.
Owner. If the owner of a Limited Liability Company is a natural person one authorized signatory is enough, but if there are separate legal entities two authorized signatories are required.
Bank account. Your Limited Liability Company is required to have a bank account in Malta but the bank you choose does not necessarily have to be a Maltese bank. Opening a bank account is a simple process but you will need to show a bank reference from your bank in your home country.
VAT-registration. Two weeks after your Limited Company is registered you will receive your VAT number and you can start billing your customers.
Hiring a lawyer in Malta
The best way to register a new business in Malta is to hire a lawyer to set everything up. He/she will handle your dealings with authorities and take care of your bookkeeping and VAT. Your lawyer will also answer any questions you may have regarding taxes and will make sure you get the most profit out of your business.
Corporation tax in Malta
Corporation tax in Malta is 35 % which may seem like a lot but remember that income tax is extremely low and there are plenty of generous deductions. For example, you may deduct half of the cost for your home if you reside in Malta and your company is registered to your home address. This is how much income tax you will be paying in Malta (the numbers in parentheses are for married people):
Free of tax: 0 – 8500 Euros (11 900 Euros)
15 % tax: 8 501 – 14 500 Euros (11 901 – 21 200 Euros)
25 % tax: 14 501 – 19 500 Euros (21 201 – 28 700 Euros)
35 % tax: 19 500 Euros or more (28 701 Euros or more)
In addition to income tax, 10 % will go to social security contributions.
How to pay 5% in corporation tax in Malta
In order to minimize corporation tax, many choose to start an offshore company in Cyprus. If your Maltese Limited Company is owned by your company in Cyprus you will receive a refund of close to 86 % of your taxes. This means that if you have paid 35 % corporate tax in Malta you get 86 % back, which in the end equals paying only 5 % in corporate tax.