The island’s stable economy coupled with the valued business environment present has driven a number of individuals to start their own business. If you’re thinking of taking the plunge too, there are several steps you need to take before making things happen. However, if the bureaucratic process of filling in the necessary paperwork or coming up with your company’s legal structure seems overwhelming, advisory and consultancy firms can help you realise your dream.
Reach out to one of the many firms listed on Yellow that have a wide-ranging experience and expertise in the audit, accounting, tax and business sectors. Filter your results based on location or opening hours and set yourself on the right path to success.
Brief overview of company types
Setting up a business in the Maltese islands is a relatively easy process and unless you intend to operate in the medical, financial, insurance or pharmaceutical sectors, no licence or permits are required. However, do note that irrespective of the industry, it is compulsory to register a company if you wish to carry out any form of business on the island. Doing so not only prevents issues from cropping up, but you may also benefit from the various government incentives that are offered from time to time.
Before registration can take place, you must first decide on the type of company you would like to set up. Depending on your needs and what you’d like to accomplish with your company, there are a number of structures you can opt for. These are outlined below:
Private limited liability company (Ltd.) - the most popular business form on the island
Public limited liability company - (p.l.c) - usually used by larger businesses
General partnership - ideal for small to medium-sized businesses
Limited partnership - similar in structure and scope to a general partnership
Sole proprietorships - intended for individuals who are conducting business activities on their own behalf
The next step after establishing the type and structure of your company is to undergo the process of company formation. In essence, this outlines the manner in which your company is formulated and acts as a contract between the shareholders representing the company. The company formation is established via a Memorandum and Articles of Association which must be drafted by a notary public. This must include details like the company name, registered address and contact details, type of company, the object and purpose of the company and full details regarding the shareholders, directors and company secretary.
Yet, the registration process does not end with the issuing of the memorandum. Prospective companies must also determine the capital needed to jump-start their company. You are required to deposit 20% of the capital’s value at a bank, which means that you need to open a bank account on the company’s name. Once again, some documentation is required including a completed Know your Client (KYC) form, a form or letter requesting to have an account opened on your company’s behalf and a copy of the memorandum amongst other documents. Ensure that the receipt provided by the bank is kept since this together with the drafted memorandum must be registered with the Registry of Companies either online or in person. The process of company formation can take between 24 to 48 hours to be finalised, provided that the process is done correctly and that all requirements have been satisfied.
The registered company
With your company registered and approved, you will be given a registration certificate.You may now obtain a business licence, a Tax Identification Number (TIN), while you may register for a Value Added Tax (VAT) number. Typically, the majority of businesses need a trade licence, however, companies that will be operating in the food and beverage industry or will be providing well-being and beauty treatments are required to apply for additional licences. Unlike the company formation procedure, obtaining a licence may take around ten days. Additionally, note that each licence may have one or more fees that must be paid on an annual basis.
Another legal requirement is registering for a VAT number. This process can be easily accomplished by simply downloading the form online and filling it in, while there are no fees involved. You must though fill in a tax return form on a yearly basis. Depending on the turnover your business is expected to exceed, there are three thresholds you must follow. For instance, your company needs to be registered for a VAT if the turnover exceeds the yearly threshold of €35,000 for goods and €24,000 for services. If your turnover is not set to reach €12,000 in a year, then VAT is not charged, however, you will still need to register. Further details on the different thresholds can be found on the Inland Revenue’s website.
In addition to assisting you with the registration of your company, advisory and consultancy companies also offer other services. These include administrative tasks like back-office and secretarial services or accounting related solutions that may range from filling your tax returns to bookkeeping and management reporting consultation. Other services are more corporate in nature and may include the setting up of directorships, dealing with fiduciary applications and procedures related to redomiciliation for companies that would like to transfer their domicile to Malta.
In need of some more advice? Have a look at our expert tips on how to start your own business in Malta and see your big idea come to fruition.