Doing business in Malta offers a compelling combination of a strategic location within the EU, a stable economy, a highly skilled English-speaking workforce, and an exceptionally advantageous tax system for international trade.
Here is a comprehensive guide on how to establish and operate a business in Malta:
1. Choosing a Business Structure
The most common and recommended legal structure for foreign investors is the Private Limited Liability Company (Ltd.).
| Feature | Private Limited Company (Ltd.) |
| Minimum Shareholders | 1 (Single Member Company) or 2 |
| Minimum Directors | 1 |
| Company Secretary | 1 (Must be an individual, though not necessarily a resident) |
| Minimum Share Capital | €1,164.69 |
| Paid-up Share Capital | Minimum of 20% (€232.94) must be deposited upon incorporation. |
| Liability | Limited to the value of the shares held. |
2. Company Registration Process
The registration process is managed by the Malta Business Registry (MBR) and typically takes a few working days, assuming all documentation is in order. It is highly recommended to engage a licensed Corporate Service Provider (CSP) to manage this process.
- Name Approval: Apply to the MBR to reserve the proposed company name.
- Document Preparation: Draft the Memorandum and Articles of Association (M&A), which must detail the company’s type, name, registered address in Malta, share capital, and details of the initial subscribers, directors, and company secretary.
- Capital Deposit: Open a temporary bank account and deposit the minimum paid-up share capital (e.g., 20% of €1,164.69). Obtain a bank deposit advice to prove payment.
- Submission: File the signed M&A, the bank deposit advice, and mandatory due diligence documentation for all directors and shareholders with the MBR.
- Certificate of Registration: The MBR issues a Certificate of Registration, officially incorporating the company.
- Tax and VAT Registration: Register the company for Income Tax and Value Added Tax (VAT) with the Commissioner for Revenue. The standard VAT rate in Malta is 18%.
- Other Registrations: Obtain a Permission to Employ (PE) number if you plan to hire employees, and secure any specific trading or industry licenses (e.g., for finance, iGaming, or food services).
3. The Maltese Tax Advantage
Malta’s headline Corporate Income Tax (CIT) rate is 35%, but its unique Full Imputation System and tax refund mechanism can significantly reduce the effective tax rate for non-resident shareholders.
| Tax Refund Type | Effective Tax Rate | Application |
| 6/7ths Refund | 5% | Applicable to most active trading income. (The standard refund) |
| 5/7ths Refund | 10% | Applicable to passive interest and royalty income. |
| 100% Exemption | 0% | Applicable to income derived from a qualifying Participating Holding (e.g., dividends from a foreign subsidiary). |
How the 5% Effective Rate Works (The 6/7ths Refund):
- A Maltese company earns a profit and pays the statutory 35% CIT.
- The company distributes the post-tax profit as a dividend to its non-resident shareholder.
- The shareholder then applies to the Maltese tax authorities for a refund of 6/7ths of the 35% tax paid by the company.
- This results in a net tax retention in Malta of only 5%.
Other Tax Benefits:
- No Withholding Tax: Malta does not levy any withholding tax on dividends, interest, or royalties paid to non-residents.
- Double Taxation Treaties: Malta has an extensive network of Double Taxation Treaties to prevent being taxed twice on the same income.
4. Special Programs for Entrepreneurs and Investors
Malta actively seeks to attract foreign talent and offers specific residency programs:
- Malta Start-up Residence Programme: Designed for non-EU founders and co-founders of innovative start-ups. It offers an initial three-year residence permit (renewable for five years) provided the business plan is approved by Malta Enterprise and a minimum tangible investment/paid-up share capital of €25,000 is made.
- Key Employee Initiative (KEI): Fast-tracks work/residence permits for highly-specialized third-country nationals with a minimum annual gross salary of €30,000.
5. Key Business Opportunities
As a stable EU member state and Eurozone country, Malta has established itself as a hub for:
- Financial Services: Fund administration, asset management, and FinTech.
- iGaming/Online Gambling: A world-leading jurisdiction with a strong regulatory framework.
- Information and Communications Technology (ICT) / Digital Economy: Software development, AI, and blockchain technology.
- Maritime and Aviation: Ship and aircraft registration and management.
6. Due Diligence and Compliance
Given Malta’s role as a financial hub, it maintains robust anti-money laundering (AML) and Know Your Customer (KYC) regulations. The due diligence process for all shareholders and directors is stringent and requires:
- Certified true copies of passports/IDs.
- Proof of address (utility bills).
- Professional and bank reference letters.
- Detailed CVs and a clear declaration of the Source of Wealth and Source of Funds.
Working with a licensed and experienced Maltese Corporate Service Provider is essential for ensuring full compliance with all local laws.