Company formation in Malta
Business entities in Malta are typically established through a joint venture, a partnership or by incorporating a limited liability company.
Business entities in Malta are typically set up through:
- setting up a joint venture, or
- setting up a partnership, or
- incorporating a Maltese limited liability company, or
- re-domiciling an existing overseas company to Malta, or
- registering a Malta branch of an overseas company.
Joint venture or a partnership
Being part of a joint venture is one of the options to set up a business in Malta. A joint venture is not considered to be an entity in itself and is usually set up through the drafting of a joint venture agreement by the business promoters, with the resulting profits from the business venture being shared between the parties to the agreement.
Under Maltese legislation, a partnership can be either en nom collectif or en commandite or a civil partnership. All of these would be validly constituted in Malta once a partnership deed is drawn up between the partners. A partnership en commandite differs from the other forms of partnerships in that its partners could be limited partners or general partners. The liability of limited partnerships is usually limited to the unpaid contribution of the partner if any. Conversely, the obligations of the partnership are guaranteed by the unlimited and joint and several liabilities of general partners.
With regards to the setting up of limited liability companies, these will be validly constituted once a Memorandum and Articles of Association is drawn up and a certificate of registration is issued by the Registrar of Companies. In view of the accessibility of the local regulatory authorities, the setting up of a business entity in Malta is achievable within a relatively short time frame.
Limited liability company
The issued share capital cannot be less than the authorised minimum (€1,164.69); at least 20% of this amount must be fully paid up at the time of incorporation.
A private limited liability company cannot have more than 50 shareholders. Shareholders can be of any nationality; however, one may opt to appoint nominee shareholders as the registered holder of the shares instead.
A company must have at least one director. There is no restriction on directors’ nationality or place of residence. Corporate directors may be appointed however, this is not permissible in single member companies.
Memorandum and Articles of Association
The shareholders must draw up a Memorandum and Articles of Association and submit it to the Registrar of Companies. This document should include all the key details of the company, such as the names of directors and shareholders, as well as procedural details on the issue of new shares, the transfer of shares and directors’ appointments amongst others.
On incorporation, a fee is payable to the Registrar of Companies. The fee charged is based on the authorised share capital of the company, with the minimum fee being of €245 and the maximum of €2,250.
A body corporate, which is similar in nature to a Maltese limited liability company and which is registered in an approved jurisdiction, may be re-domiciled to Malta without going into the process of liquidation overseas. Continuation of the company will be allowed provided that its constitutive documents allow it to be re-domiciled to another jurisdiction, and provided that the necessary due diligence is presented to the Registrar of Companies.
Registration of a branch
Alternatively, overseas companies may set up a branch or place of business in Malta. Within one month of establishment, the overseas company must deliver a number of documents to the Registrar of Companies. These include a copy of the statute of the company as well as a list of involved parties.
Redomiciliation of companies
The Continuance of Companies Reg. provides the possibility for companies to redomicile to Malta, without the need to wind up the company in the foreign country.