After a few scouting visits, a thorough reflection, you have decided to create your own business in Malta, and you are right!
First of all, why create your company in Malta?
Indeed, in addition to an exceptional living environment, Malta offers many advantages to encourage entrepreneurs to set up there: an international entrepreneurial environment, simplified procedures, a low rate of charges, tax advantages and a geographical proximity to many capitals in Europe and North Africa. Malta also has one of the strongest banking systems in the world and is on the European white list.
At this stage of your project to set up a business in Malta, you have a lot of questions and you want simple, precise answers. My Little Malta has investigated for you and found the answers to your questions:
1. What are the steps involved in setting up a business in Malta?
To create a company with every chance of success requires a methodical approach that respects chronological steps. Thus, there are three important phases:
Prepare an Executive Summary of your project
During the various stages of setting up a business in Malta, you will be asked to provide precise information on the nature of your project.
This information will help your contact person to propose the best solutions in terms of structure and statutes and will also provide him/her with the information necessary to carry out the preliminary study required by Maltese law (Due Diligience).
The more detailed your Executive Summary is, the more it will save you time and help your interlocutors to bring you optimal solutions. This document of a few pages may contain the following information:
- Summary of the project
- Customer problem and proposed solution (products, services)
- Competitive advantage
- Market
- Distribution channels
- Investments
- Expected CA
In order to carry out his due diligence, your Maltese lawyer will ask you for information about your professional background and the origin of the funds invested in the project.
Validate the feasibility of your project in Malta
The choice of Malta as a business location can be motivated by various reasons, including
- Tax benefits
- A privileged sector of activity in Malta: online games, blockchain, digital economy, aviation, etc.
- Geographic location and use of English as an official language
- The living environment
One reads everything and its opposite on the Internet. That is why, before embarking on a business creation, it would be necessary to validate if :
- The activity requires a specific license
- My company can benefit from the advantages offered by Malta
- The structure is optimized from a legal and tax point of view
- Local banks agree to open a bank account for my business
Our advice:
The validation of these points beforehand is essential to avoid incurring creation, maintenance and sometimes liquidation costs. Some unscrupulous firms will paint you a rosy picture and forget to tell you some crucial details to make you want to start a business in Malta. Turning back the clock could be very costly in terms of energy and associated costs.
Incorporate a company in Malta
Incorporating a company in Malta can be quite easy and quick: 10 to 15 days on average to gather the necessary paperwork and complete the necessary procedures.
However, it is advisable to go through a specialized firm to get advice and assistance in these steps. Indeed, the documents are written in English in a legal language that is not accessible to everyone. A specialist could give you the benefit of his experience to understand everything and help you make informed decisions.
Here are the main steps to register your company in Malta:
- Deposit of the capital on a CIF Account (Company in Formation Account), it is a bank account of waiting to obtain a proof of the deposit of the capital of a minimum of 1164.69€ from the bank.
- Drafting and filing of the ” Memorandum of association and articles of association ” M&A.
- Reservation and registration of your company name with the Registrar of Companies.
- Opening a bank account
- Registration with the Inland Revenue Departmentto obtain the TIN and VAT number.
- Obtaining a business permit or license by applying to the Trade Services Directorate or Business First.
- Register as an employer with ETC (Employment and Training Corporation) and obtain a PE number.
2. How much does it cost to start a business in Malta?
In this section, we give averages. It is important to know that prices vary greatly between different firms. At the end of this paragraph, we will give you some tips on how to make the right choice.
Enterprise creation fee in Malta :
- Preliminary advice and validation of the project parameters in terms of license, legal structure and various advantages: between 400€ and 800€.
- Incorporation of a company: 1200€ to 2500€ depending on the complexity of the structure, the number of shareholders and the firm chosen
- Assistance in opening a bank account: 500€ to 800€.
- Tax registration and obtaining a VAT number: 600€ to 1000€ (it is not always necessary to obtain a VAT number)
Annual business maintenance fee in Malta:
- Domiciliation and basic secretarial services: 1200€ to 1800€.
- Accounting and 4 VAT returns: 1600€ to 2400€.
- Audit (annual balance sheet) and tax return: 600€ to 1200€.
Our advice:
Not all firms offer pre-consultation, but we recommend that you ask for it in order to commit your provider and avoid any disappointment
Prepare a standard document to request accurate and complete quotes that include all the services you need
When you receive your different quotes, make a detailed chart of the different costs to compare what is comparable. Indeed, fees for the creation of a company at 800€ can hide many surprises later on.
3. Does the entrepreneur have to reside in Malta?
It is not necessary to be resident in Malta to set up a business in Malta.
4. Are there many differences between Malta and other European countries?
From a methodological point of view, there are no fundamental differences. However, if your project is aimed at the Maltese market, you should not neglect cultural differences, consumer habits and the understanding of the local economic fabric. Malta remains a European country and these differences are not so important compared to what one can find in the Middle East or in Asia.
It is advisable to immerse yourself in the local culture, join professional groups and talk with other local entrepreneurs to avoid making mistakes that could negatively impact your business performance. On the other hand, if your project requires confidentiality, it is preferable to be advised by specialists bound by professional secrecy.
5. We often talk about the tax advantages of Malta, can you tell us more?
Like any other country, Malta encourages foreign investment in its territory. This depends on the nature of the project, the potential jobs created and the sector of activity. Industries, online gaming and technological innovations are among the sectors clearly supported by the Maltese government.
But in general, any foreign investor can benefit, under certain conditions, from important advantages. Indeed, it is quite possible to have an effective tax rate of 5% for companies owned by foreign shareholders.
On top of that, the employer’s tax rate is 10%, which is quite low compared to other European economies.
For industrial projects, the Maltese government encourages entrepreneurs by offering significant tax reductions, tax breaks and industrial premises at competitive rates.
6. Can you recommend some specialized firms?
Your accountant and your lawyer will accompany you throughout your project. It is important that you choose them according to your own criteria. A lawyer who is suitable for me may not be suitable for you.
You can ask your friends or other entrepreneurs for advice, but I advise you to meet with several advisors and make up your own mind.
7. What advice do you have for young entrepreneurs interested in Malta?
Starting a business is an extraordinary adventure and very rich in professional and personal lessons.
Doing it in an English-speaking and eclectic country like Malta, brings a “plus” to this beautiful experience.
But creating a company is also a risky adventure that requires in-depth reflection, good preparation and sustained, methodological work.
It is therefore necessary to be prepared, to surround oneself and to enter into professional networks of entrepreneurs to learn from their experience, to share their own thoughts and to test their ideas in order to make their project evolve according to the new data that will appear as the project progresses your business creation.
I would also like to say that the preparation work is essential in order to benefit from all the advantages that the archipelago of Malta offers. To give your project the best possible chance of success, it’s important to find out all you can about support structures, available grants and optimal legal structures.
