Malta LLCFormation of Limited Liability Company in Malta

The term offshore was used in Malta only in the ’Offshore Company’, which has been phased out in favor of the International Trading and Holding Company (ITC and IHC) forms. Non-residence was a key criterion for obtaining offshore tax treatment in most situations. Until the 1st January 2007, Malta used to allow the incorporation of International Holding Companies and International Trading Companies, both of which were very attractive because of the generous refunds of tax allowed to the non-resident shareholders. These companies will remain in existence until the 31st December 2010 and it is no longer possible to incorporate them today. This follows on pressure from the European Union for Malta to end the tax discrimination between resident and non-resident shareholders of Maltese companies.
After an agreement reached with the EU, from 1st January 2007 Malta has amended the Income Tax Act to create what is today known as the Malta Company, while keeping in place the full-imputation system of corporate taxation, which ensures that these companies are still the most tax-advantageous corporate structures within the European Union. A Malta Company is a normal onshore Maltese company registered in Malta, which is allowed to carry on any kind of activity, be it trading, holding, investments or whatever. The company can also mix the nature of its business and is not limited in any way.

LEGAL FORM

Maltese company law derives chiefly from civil or Roman law, rather than common law. A new Companies Act 1995 replaced the old Commercial Partnerships Ordinance, and set up a new regime for commercial entities under the Registrar of Companies. By far the most usual form that businessmen and/or corporations prefer is the private company limited by shares. Limited Liability Company may take the form of a private company or public company.

COMPANY NAME

Malta companies must use the suffix Limited or Ltd. to denote limited liability and can use any name unless it includes words such as Empire, Crown, Imperial, Windsor, Royal, Chartered or Municipal. Special consent is required for names such as Bank, Insurance, European, Maltese or International.

MEMORANDUM AND ARTICLES OF ASSOCIATION

To register a limited liability company, Memorandum and Articles of Association must be prepared by a licensed law practitioner and filed at the Office of the Registrar of Companies. A limited liability company may be registered by the shareholders or their authorized agent. In practice, a local firm of lawyers, accountants or consultants is engaged to carry out all necessary formalities. Memorandum specifies the activities in which the company may engage and Articles of Association specifies the rules governing the internal management of the company.

SHAREHOLDERS

The number of shareholders in a private Limited Liability Company may be from 2 to 50. Single member companies can be incorporated under certain conditions. Details of shareholders appear on the public file but anonymity can be preserved by the use of nominee shareholders. The company must have at least 2 shareholders one of which must be a physical person. Bearer shares cannot be issued.

SHARE CAPITAL

Maltese Limited Liability Company may be registered with a minimum authorized share capital of EUR 1,250. It is also required that 20% of the authorized share capital is paid up.

DIRECTORS

The minimum number of directors is one, who may be corporate or individual. The full name, nationality, residential address and occupation together with copy of the passport are required. Details of the directors appear on the public file but anonymity can be preserved by the use of nominee directors.

REGISTERED OFFICE AND SECRETARY

Every company registered in Malta is required to have a registered office and address in Malta, which should be notified at the Registrar’s Office. It is also required that a Maltese resident secretary is appointed.

AUDIT AND FINANCIAL RETURNS

All Malta registered companies must file annual returns showing details of shareholders and directors and must submit their audited accounts.

MEETINGS

Company meetings need not be held in Malta.

INCORPORATION TIME

Usually 3 – 7 working days.

RECURRING AND MAINTENANCE FEE AS FROM 2ND YEAR

• Provision of registered office and registered address
• Provision of company Secretary
• Annual Government Fee
Preparing and filing of Annual Return

IMPORTANT NOTE: LICENSABLE BUSINESS ACTIVITIES

If you conduct any activity without required license or authorization granted by a relevant authority in any jurisdiction, Agent Legal will not be able to assist you with the company formation or bank account opening related to such unlicensed activity.

Licensable activities include, but not limited to: provision of financial services involving trading/brokerage in foreign exchange, financial and commodity-based derivative instruments and other securities; offering investment advice to public; insurance and banking business; operation and administration of collective investment schemes and mutual funds; payment processing services; money exchange, money transmission or money brokering; asset management; safe custody services; gaming, gambling and lotteries.

Please contact us if you need our assistance in licensing of your financial, Forex brokerage or gambling company.

TAXATION

Maltese companies incorporated after 01/01/1995 are considered as being resident in Malta for tax purposes irrespective of the place of management and control. Following pressure from the European Union on Malta to remove the discrimination in its corporate taxation laws between resident and non-resident shareholders, corporate taxation has been reformed and now varies between zero and 10% for all shareholders.

Briefly, the main tax advantages of a Malta Company are the following:

Low effective tax rate on worldwide profits as follows: 0% on dividends received from a participating holding, that is: 1) where the parent company holds at least 10% of the equity in the subsidiary; 2) or holds an investment in the subsidiary of at least EUR 1.5 million and holds that investment for more than 183 days).

0% on capital gains made from the disposal of a participating holding;

5% on dividends from non-participating holdings;

5% on trading income;

10% on passive income (interest, royalties etc).

possibility to have European Union VAT number for EU VAT trading (where applicable);

no withholding tax on distribution of dividends to the shareholders.

The corporate tax rate in Malta is 35%. The taxable income for companies which are both resident and domiciled in Malta includes the worldwide income and certain capital gains.Сorporate tax of 5% is effective if companies are owned by non-residents or by residents without domicile in Malta. The unique structure complies with “subject to tax” regulations of double tax treaties: companies pay a profit tax of 35% and the recipient of dividends receive 30% or 6/7, if it is a corporation whose beneficial owners are not both resident and domiciled in Malta.
Malta does not levy withholding tax on dividends paid to shareholders, which is a nice feature for international businesspeople. Royalties are not subject to withholding tax as well.

AUDIT AND FINANCIAL RETURNS

All Malta registered companies must file annual returns showing details of shareholders and directors and must submit their audited accounts.

OUR SERVICES FOR THE COMPANY FORMATION IN MALTA INCLUDE:

• Name check and approval
• Filing the incorporation documents with the Registrar of Companies
• Payment of the Government Fees
• A standard set of original corporate documents
• Payment of the Government fees
• Provision of registered office and registered address for one year
• Rubber stamp

DOCUMENTS REQUIRED FOR THE COMPANY FORMATION

Please provide the following documents for all Directors, Shareholders, Beneficial Owners, Authorized Signatories:

• Notarized copy of valid passport.
• Original or Certified copy of utility bill / bank statement (as verification of residential address, dated within 3 months).
• Original or certified copy of Banker’s reference letter (dated within 3 months).
• In cases where shareholders and/or directors are corporate bodies, full apostilled set of corporate documents and Certificate of Good Standing (for companies registered more than 1 year).

IMPORTANT NOTE: LICENSABLE BUSINESS ACTIVITIES

If you conduct any activity without required license or authorization granted by a relevant authority in any jurisdiction, Agent Legal will not be able to assist you with the company formation or bank account opening related to such unlicensed activity.

Licensable activities include, but not limited to: provision of financial services involving trading/brokerage in foreign exchange, financial and commodity-based derivative instruments and other securities; offering investment advice to public; insurance and banking business; operation and administration of collective investment schemes and mutual funds; payment processing services; money exchange, money transmission or money brokering; asset management; safe custody services; gaming, gambling and lotteries.

Please contact us if you need our assistance in licensing of your financial, Forex brokerage or gambling company.

SHIPPING COST

Shipping of corporate documents or banking kits to your destination requires an extra charge and will be automatically added to the invoice during checkout. Shipping costs for international courier services are set automatically and can vary from USD 75 to USD 95. The fees depend on the jurisdiction of your ordered company, the country where the bank is based as well as your destination country.