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How to Start a Business in Malta as a Foreigner

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Malta is a small island in the Mediterranean Sea, strategically located between Africa and Europe. It has a population of about 400,000 inhabitants, and it is a good destination for those who wish to start businesses. 

Malta also has a skilled and flexible workforce with useful logistical links to mainland Europe and North African markets. If you want to establish a business in Malta, here are the simple steps below: 

One of the key points to note is that you are not required to have Maltese residency to incorporate a company in Malta. Even a non-resident can be a director of a company in Malta. All you need to do is provide the required documents, and you can start the company formation process. 

Before you begin the whole process, it is necessary to prepare all the information and documents that are required at the incorporation stage. These include the following:

  • Desired/proposed company name

  • Main trading objectives of the business

  • Name(s) of the Director(s) and their respective home/office addresses

  • Shareholder(s) and their respective home/office address

  • Secretary and respective home/office address

  • A detailed description of your planned business activities

If you are an individual trying to establish a sole trader company, you might also need to provide the following:

  • An identity card and passport

  • Your proof of address

  • A professional reference letter of character

  • A police clearance or conduct certificate

You should also note that further documents might be needed depending on your nationality. It is not uncommon for the officials to request records indicating the source of wealth and source of funds as well. 

Once you prepare all the documents you need in place; you can then proceed with the process. 

Deposit the Minimum Share Capital

To begin with, all companies need capital, however small. You have to deposit at least €1,200. Fortunately, you are only required to deposit about 20% of this value at a bank. This step, therefore, requires you to open a bank account in the company's name. 

Registration

In this step, you will have to present the following:

  • A filled-in company registration form

  • The articles and memorandum of association

  • A share capital deposit slip

These documents are submitted to the Malta Financial Services Authority. This board oversees all locally registered companies. The whole process can last anywhere between 2 to 3 days. Please note that depending on the size of the company, a certain registration fee needs to be paid as well.

Licencing 

To obtain a trading licence, you only have to fill in an application form for commercial activity. Licencing is carried out by the Commerce department of government, and you will have to pay an annual fee for each licence. 

Legal and tax 

Tax identification number 

This step might not be the most interesting, but it is a legal requirement that you obtain a tax identification number. You can find all the necessary forms online, and there is no need to pay any fees. 

VAT registration 

Obtaining a VAT number is also a free and speedy process. The process is handled by the office of the Commissioner for revenue. 

Obtaining a PE number- Permission to employ

You should obtain a PE number in order to be able to retain and pay the taxes linked to the national insurance for your employees. These payments are classified under the final settlement tax reporting procedures. 

You can ignore this step if you are a self-employed individual or if you do not plan to have any employees. If, however, you are registering a limited liability company, it means that you are automatically an employee of the company and you need to carry out this step.

To obtain a PE number, you should fill in an online form by the Inland Revenue Department. The entire process should take not more than three days and is also free of charge.

ETC registration

The Employment and Training Centre (ETC) oversees all employment registration in Malta. You need to register with them whether you are planning to start a business as a self-employed person or you want to establish a limited liability company. These forms should be filled when you are registering or terminating employment. Fortunately, the entire process is fast and free of charge.

Data Protection Registration

If you are a business that will be gathering or collecting personal details of prospective or existing clients, you should carry out this step. By so doing, you will be ensuring that you are taking all steps necessary to protect people's information. This, in turn, ensures that the customer's personal details and sensitive information will not be stolen by third parties. 

Bottom Line

Starting a company in Malta is a relatively easy and fast process. You will have many advantages, including their taxation system, which offers up to 6/7 refunds to foreign shareholders. The costs of creating and running a company are relatively low as well so you can rest assured the process will be quite enjoyable.





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