APGI Malta International Business Company
Malta Offshore Company Incorporation
From €3610/US$4515
WHY Malta?
Malta is not classified as a Offshore Tax Havens by OECD, hence companies operating from Malta do not carry the Offshore Tax Havens stigma and are less subject to scrutiny when trading outside it's shores. Malta is part of the EU and hence a company registered here now carries much more prestige. A Malta registered company is entitled to obtain a VAT REGISTRATION number that would facilitate trading throughout Europe. Malta's laws and regulations are drawn in such a way that "BAD APPLES" will find it hard to creep in. Malta is aiming only at attracting reputable companies who want to be amongst other reputable companies. In this way there is less risk that the reputation of the jurisdiction be tainted with any scandal that may affect other companies.
We find that the above is more than enough to convince a potential SERIOUS investor. Obviously Malta cannot hope of attracting all potential investors, but do have quite a high incorporation rate with serious investors and international companies.
Malta Incorporation Information and Features
- Malta Key Corporate Features
- Malta General Information
- Malta Company Information
- Malta Compliance
- Malta Schedule of Fees
Key Corporate Features
| General | |
|---|---|
| Type of entity: | International Trading Company |
| Type of Law | Civil |
| Shelf company availability: | no |
| Our time to establish a new company: | 3-5 Working days |
| Minimum government fees (excluding taxation): | One-time minimum fee of Euro 350 for authorized share capital of Euro 4,700 and under. Minimum annual return fee of Euro 170, with effect from 2nd year. |
| Corporate taxation: | Yes but credits/refunds apply to the shareholder |
| Double taxation treaty access: | Yes |
| Share Capital | |
| Standard currency: | Euro/ US Dollar/ GBP |
| Permitted currencies: | Any hard currencies |
| Minimum paid up: | Euro 250 |
| Usual authorized: | Euro 1,250 |
| Directors | |
| Minimum number: | One |
| Local required: | No |
| Publicly accessible records: | Yes |
| Location of meetings: | Anywhere |
| Members | |
| Minimum number: | One |
| Publicly accessible records: | Yes |
| Location of meetings: | Anywhere |
| Company Secretary | |
| Required: | Yes |
| Local or qualified: | No |
| Accounts | |
| Requirement to prepare: | Yes |
| Audit requirements: | Yes |
| Requirement to file accounts: | Yes |
| Publicly accessible accounts: | Yes |
| Requirement to file annual return: | Yes |
| Change in domicile permitted: | Yes |
General Information
The Republic of Malta is an archipelago consisting of three inhabited islands Malta, Gozo and Comino. The Maltese islands are situated in the middle of the Mediterranean Sea about 100 km South of Italy.
Malta's strategic geographical location played a decisive role in its history and continues to play a very important part in its economical, political and cultural development and prosperity today. Having implemented a sound legislative framework over the past decade, Malta's accession as a member of the European Union has stimulated significant developments in the islands' economy, brought about principally by a boost of inward direct investment into the country. With its highly educated workforce and the comparatively lower cost of professional services when compared with other EU centers, Malta has become firmly established as a reputable business and financial center offering attractive business solutions for individuals and international corporations alike. There are several daily flights to Malta from all major European cities.
Population
The population of Malta is approximately 400,000. Maltese society is homogenous having its own identity and language. The natural population growth has in recent years been supplemented by a net inflow of Maltese who had previously emigrated to America, Canada, Australia and the United Kingdom.
Political Structure
Malta boasts a rich history of tradition and culture lavishly woven by the many civilizations that have swept the Mediterranean leaving their imprints on those small islands. The first evidence of life dates back as far back as The Neolithic age, when early settlers some 6000 years ago left evidence of their magnificent temples of worship and burial grounds. After these, new faces belonging to new civilizations appeared, all leaving their indelible traits: Phoenicians; Carthaginians; Romans; Arabs; Aragonese; the Knights of St.John; the French under Napoleon Bonaparte and finally the British.
The British stayed for more than a century and a half and during this time set up a prominent naval and military base for their Mediterranean fleet and their influence, particularly on the infrastructure of the country, its legal system and its civil service, remains.
Malta obtained its independence in 1964 but retained a NATO military base, which turned out to constitute the Island's main source of revenue. Ten years later it became a Republic and in 1979 it closed the military base.
Malta is a sovereign independent state enjoying traditional political, economic and social stability. It enjoys a parliamentary democracy based on the British model. It joined the EU in May 2004 and forms an integral part of Western Europe both politically and culturally. Malta is a member of the United Nations, of the Council of Europe and of the Commonwealth. Malta maintains friendly relations with all countries through its policy of non-alignment.
The President is the titular head of the state, while executive powers rest with the Prime Minister and the Cabinet. Parliament is composed of 65 representatives elected every five years. Based on the English juridical system, the judiciary has a tradition of independence that dates back hundreds of years. The supreme law of the country is its written constitution, which expressly incorporates the fundamental principles of Balance of Powers, the Rule of Law, the Independence of the Judiciary and the Human Rights.
Infrastructure and Economy
With the closure of the military base in 1979, it became imperative for the country to launch a series of development programs to re-orientate the islands' economy.
A strong infrastructure and promotional drive basing itself on price competition and on high standards of tourism facilities turned tourism in to Malta's primary source of foreign exchange, with more than a million tourists visiting Malta each year. Malta's natural harbors host one of the most renowned dry-docks in the Mediterranean and a shipbuilding yard.
The geography of the Island has always provided natural attractive safe marinas for yachts coming from all over the world. Manpower is the most precious resource in Malta. Human resources development is fundamental to the Island's economic progress, which is why great stress is placed on an enlightened education system and the training and preparation of the labor force to levels required by modern industry and sophisticated technology.
Following an overhaul of Malta's financial legislation in the early 1990's, Malta has obtained international recognition as a stable financial services center of repute. Today, Malta's regulatory framework for financial services is fully consolidated and aligned to internationally recognized standards. Its onshore regime provides a seamless framework that supports both domestic and international economic activity. The Malta Financial Services Authority (MFSA) is Malta's single regulator for banking, investment services, insurance and other financial services activity. The regulator's accessibility and its pro-active approach to addressing market developments has proved to be a highly successful formula.
The Maltese financial services industry has witnessed a rapid growth over the last decade, with over 6,000 people currently employed in the financial services sector (excluding law firms and accountancy firms), contributing a significant 12% to the country's GDP. The Maltese Government continues to evaluate and update relevant legislation and regulations, keeping it abreast of developments in the industry with a view to maintaining Malta's competitiveness in this sector.
Malta joined the 2004 EU enlargement along with nine other countries. Several state-controlled corporations have been sold and markets have been liberalized in anticipation of Malta's EU membership, and the Government's remaining participations in the private sector continue to be privatized. Reserves for foreign currency per head are amongst the highest in the world. The Maltese Lira is strong and stable, and in 2005 has been pegged at a fixed rate to the Euro. With more than 100 years experience behind them, Malta's banks are continually expanding and improving their services. Financial institutions have been streamlined to keep abreast of transformations that are taking place in what has become a global marketplace. Exchange controls have also been removed to facilitate the free movement of capital across Malta's national borders, in line with EU legislation. Malta is also in the course of adopting regulations to implement the Schengen Treaty provisions by 2007.
Language
The official languages are Maltese and English; all Maltese citizens speak the latter fluently. Business correspondence is mainly in English. Most of the population is also fluent in Italian.
Currency
Maltese Lira
The Maltese government entered the ERM II framework in May 2005, and is intending to adopt the Euro as the country's currency on 1 January 2008.
Exchange Control
Exchange controls have been abolished since 19 April 2004, save for certain restrictions for transactions involving non-residents from non-EU/non-EEA countries.
Type of Law
Malta is a Civil Law jurisdiction, however, all modern legislation including company, tax and maritime laws are modeled on their UK counterparts.
Principal Corporate Legislation
Companies Act 1995; Trusts and Trustees Act, 1988; Malta Financial Services Authority Act 1994; Investment Services Act 1994; Banking Act 1994; Financial Institutions Act 1994; ; Financial Markets Act 2002 and the Business Promotion Act 1988.
Company Information
Type of Company for International Trade and Investment
Two types of Maltese companies are generally used: the International Trading Company and the International Holding Company. The International Trading Company is normally used for trading activities, whilst the International Holding Company is used for the holding of investments, intellectual property and other similar sources of “passive” income.
Procedure to Incorporate
This involves the deposit of the paid-up share capital into a bank account and the filing of the Memorandum and Articles of Association with the Registrar of Companies. Non-EU / non-EEA resident shareholders are also required to submit a bank reference besides an identification document on the immediate shareholder (ex passport copy or certificate of incorporation).
Restrictions on Trading
An International Trading Company (ITC) is a normal Maltese company, having its objects limited to trading activities conducted outside Malta and to such other acts as are necessary for operations in Malta, and, except as provided by the Income Tax Act, a company cannot carry out trading activities with persons resident in Malta.
However, the Income Tax Act specifically recognizes that this type of company may:
- Engage in purchases for export of goods manufactured, assembled or processed in Malta, provided that such purchases are not made from a person who owns directly or indirectly more than 15% of the ordinary share capital of the said International Trading Company.
- Trade with companies registered in Malta under the Malta Financial Services Authority Act 1994;
- Trade with other International Trading Companies;
- manage Maltese companies whose business is restricted to affiliated insurance (or “captive insurance») carried on exclusively with non-residents;
- Provide management, administration or other services to collective investment schemes resident in Malta where such schemes are marketed exclusively outside Malta and are licensed or exempt from licensing under the Investment Services Act, 1994;
- Provide ship management services provided that objects are limited to activities relating to the management of ships which are not less than one thousand tons and which are engaged in the carriage of goods or passengers.
Powers of Company
A Maltese company may exercise all those powers outlined in the Memorandum and Articles of Association of the Company.
Language of Legislation and Corporate Documents
English.
Registered Office Required
Companies must maintain a registered office in Malta.
Time Scale to Incorporate
Three to five working days.
Name Restrictions
Anything identical or similar to the name of a company already incorporated or reserved; anything that in the opinion of the Registrar of Companies is offensive or otherwise undesirable.
Language of Names
Names can be expressed in any language using the Latin alphabet.
Name Requiring Consent or a Licence
The following names or their derivatives: bank, insurance, trust, fiduciary, nominee or their foreign-language equivalents.
Suffixes to Denote Limited Liability
The name of the company must end with the word “Limited” or “Ltd” in the case of private limited companies and “ p.l.c.” in the case of a public limited company.
Disclosure of Beneficial Ownership to Government Authorities
The identity of the beneficial owners of a Maltese company may remain confidential if a trustee company authorized by the Malta Financial Services Authority is engaged to act as shareholder on behalf of the underlying beneficial shareholders. This confidentiality is maintained as long as the company and its beneficial owners are not involved in any money laundering activity.
Compliance
Authorized and Issued Share Capital The minimum authorized share capital is of Lm 500 (approx. Euro 1,250). The minimum issued share capital is Lm 500 (approx. Euro 1,250), 20% paid up. The share capital may be denominated in any convertible currency.
Classes of Shares Permitted
Companies may have preference shares, redeemable shares and shares with or without voting rights.
International Trading Companies
Malta 's full imputation system of taxation and the refund of tax provisions contained in the legislation make the ITC a very tax efficient vehicle for non- resident shareholders. An ITC is taxed at the normal company rate of tax, which is currently 35%. However upon receipt of a dividend from an ITC, non-resident shareholders are:
- Taxed at a flat rate of 27.5% on the gross amount of the dividend and are credited with the amount of tax paid by the company on the profits out of which the dividend was paid. By application of Malta's full tax imputation system and the fact that the ITC would have suffered income tax at 35%, then the non-resident shareholder would effectively be entitled to a refund of 7.5%, which is claimed in the shareholder's income tax return submitted to the Maltese Inland Revenue Department.
- Entitled to a refund under the provisions of the Income Tax Management Act of two thirds of the Malta tax paid by the company on the same profits. This refund is payable by the Inland Revenue Department not later than the fourteenth day following the end of the month in which the refund becomes due.
International Trading Companies may request an advance ruling on their tax status. Such a ruling guarantees the tax position of the company for a minimum period of five years and may be renewed for a further period of five years. Any changes in the tax legislation during these periods will not become operative before the lapse of two years from the coming into force of the new law.
As a result of the favorable tax treatment afforded to non-resident shareholders, and the element of discrimination that this brings about in the context of EU law, the International Trading Company will be phased out by the end of 2006 and replaced with a similar vehicle that is expected to remove the existing discrimination by making the tax refunds available to both resident and non-resident shareholders alike. In the meantime, all advance revenue rulings issued by the Inland Revenue Department will continue to be honored for the duration of their two-year validity.
International Holding Companies
The term “international holding company” (IHC) is a label given to specific types of companies which avail themselves of the application of special tax rules and benefits resulting from the operation of the company's foreign income account.
These rules and benefits are applicable to companies resident in Malta (including non-Maltese companies managed and controlled in Malta) holding certain type of assets and receiving foreign-source income there from as well as in the conduct of certain holding activities as opposed to trading activities.
Like all other Maltese companies, an IHC is liable to a flat-rate corporate tax of 35% on profits. Through a series of tax credits, this tax liability is reduced to 18.75%, which must be paid to the Revenue within 18 months from the end of the accounting year in which it arises. This tax liability can be further reduced if the company has tax-deductible expenses. Normally, reasonable administrative expenses are allowed as deductibles.
After the payment of a dividend by the company, the non-resident shareholders in that company are entitled to receive a two-thirds refund of the tax paid by the company imputable to the dividend received.
In the case of dividends received by a shareholder and arising from a “participating holding” or an equity holding of 10% or more of the capital of a company OR an investment worth more than MTL500,000 which is approximately equivalent to €1.2 million or GBP 800,000, the full amount of Maltese tax paid would be refunded, resulting in an effective tax rate of nil.
The effective rate of tax of an international holding company thus varies between a minimum tax incidence of nil to a worst case maximum of 6.25% in the case of dividends paid out of other foreign source income.
VAT
Maltese companies may need to be registered for VAT purposes. The Maltese VAT prefix is 'MT'.
Double Taxation Agreements
Malta 's wide network of double tax agreements as well as other methods for relieving double tax on cross border transactions provide an excellent base for establishing tax efficient structures including international trading and holding company activities.
Financial Statement Requirements
Maltese companies are required to keep financial records reflecting the assets and liabilities and financial position of a company and are also required to submit audited annual accounts for the company with the Registry of Companies. Accounting records are required to be kept for a period of 10 years. If the books are kept at any place outside Malta the company is required to keep sufficient records in Malta to disclose the financial position of the company to its officers. Failure to maintain accounts or make them available for inspection by the officers of the company at the company's registered office is an offense punishable by a fine. Parent companies are also required to submit consolidated accounts.
Directors
The minimum number of directors is one, who need not be a Maltese resident. Corporate directors are also allowed.
Company Secretary
The secretary is to be an individual and may be a non-resident of Malta.
Shareholders/Members
The minimum number of shareholders is normally two, however a “single member company” may also be registered, subject to the satisfaction of certain formalities.
Schedule of Fees
| Basic Fees:Malta Company | € EURO | $US DOLLAR |
|---|---|---|
| Professional fees and Maltese bank account | €850 | US$1063 |
| MFSA Registration Fees | €450 | US$563 |
| Name Reservation: | €35 | US$44 |
| Annual Audited Accounts | €1025 | US$1282 |
| Company Capital | €1250 | US$1563 |
| TOTAL FIRST YEAR FEES: | €3610 | US$4515 |
| Additional Services: | €EURO | $US DOLLAR |
| Corporate Seal | €40 | US$50 |
| Company Secretary | €650 | US$813 |
| Registered Office | €450 | US$563 |
| Resident Corporate Director | €850 | US$1063 |
| Resident Local Director | €1650 | US$2063 |
| VAT Registration | €350 | US$43 |
| VAT Administration | €675 | US$844 |
| Annual Fees: | € EURO | $ US DOLLAR |
| Maintenance Fee | €2000 | US$2500 |
| Company Secretary | €650 | US$813 |
| Registered Office | €450 | US$563 |
| Resident Corporate Director | €850 | US$1063 |
| Resident Local Director | €1650 | US$2063 |
| VAT Administration | €675 | US$844 |
If you are a serious investor or business interested in one of the very best jurisdiction Europe has to offer please contact us or order you Malta International Business Company online.