Establishment of a company in Malta
Main company types in Malta.
In the state of Malta it is possible to open four different types of companies:
- Ltd – Private Limited Company
- Plc – Public Limited Company
- LLP – Limited Liability Partnership
- Unlimited Company
The Ltd. is the kind of society that is most chosen by companies who want to open a business or activity in Malta . It is a company whose participations are represented by shares and whose shareholders can be both natural persons and other companies. For the establishment of an Ltd in Malta it is sufficient to appoint a director, not necessarily resident on the spot.
The Plc , however, is comparable to ours, Ltd. and is a corporate form that is normally used by large-scale enterprises . A minimum capital of 50,000 Euros (or an equivalent amount in another currency) is required for its establishment. Also in this case, to open a Plc it is not required that the administrator be resident on the spot and the shareholders can be both physical subjects and companies.
The LLP is a limited liability company , which by its constitution requires at least two shareholders and whose interests are represented by shares. This type of company is not present in Italy, as partnerships have unlimited liability.
The LLP provides for taxation for transparency , i.e. corporate products are taxed to shareholders and not to the company itself. If, therefore, the members do not reside in Malta, the taxation will be applied according to the rules in force in the country of residence, while no tax payment will be due to the Maltese tax authorities.
Finally, the Unlimited Company , which in Italy can be identified in the company in a collective name, requires that each shareholder respond personally and without limitation through his or her own personal capital to the company’s activities. Also for this type of company there is a taxation system for transparency.
·Is there a minimum share capital to be paid for the establishment of a Maltese company?
As regards Private Limited Companies and Limited Liability Partnerships, it is not necessary to set up a minimum capital: 1 Euro is also sufficient.
The opening of a Public Limited Company, on the other hand, requires a minimum capital of 50,000 Euros.
Furthermore, based on the will of the shareholders, the capital of a Maltese company can also be expressed in another currency other than the Euro.
·Do I need to be present on site to open a company in Malta?
No. The establishment of the company, the request for a Maltese VAT number and the opening of a current account can be managed remotely. Furthermore, the presence of a notary is not required.
·Do I need to be a resident of the island to open a company in Malta?
No, it’s not necessary. Both members and administrators may not be residing in Malta.
·Is it possible to keep the identity of the members of a company in Malta anonymous?
Yes. To protect the identity of the members, you can choose to appoint a trustee or establish a trust . This second choice involves the transfer of the shares by the customer to a trustee (who will become the actual owner of the shares), who will have the task of administering them based on the will of the customer and any other beneficiaries.
If, on the other hand, you choose to proceed with the trusteeship , the client, from a legal point of view, remains the owner of the shares, while the trustee will become the holder. The legitimate owner of the shares can revoke the mandate from the trustee at any time.
·Can a trustee be appointed?
Yes, the customer can choose to remain anonymous by appointing a trustee. To do this, simply sign a fiduciary mandate with a local professional.
The customer can maintain the exclusive management of the current account. The position of trustee can be revoked by the client at any time.
·Is the appointment of a single auditor or a board of statutory auditors envisaged?
No, Maltese law does not provide for either of these two figures. However, once specific thresholds are exceeded, an auditor must be appointed.
·What documents and information are needed to set up a company in Malta?
For all the partners and the directors of the companies are required:
- copy of passport or other identity document. If one of the partners is a company, the Chamber of Commerce certificate or similar document must be provided;
- a certification of your residence (certificate of residence, first page of the bank statement, telephone or other user).
It will also be necessary to communicate:
- surname, first name, place and date of birth and address of residence of each shareholder and director;
- company name;
- initial capital, number of shares and distribution among shareholders;
- description of the type of activity to be carried out.
·Is it possible to open a bank account even outside Malta?
Yes, if the customer needs it, it is possible to open a bank account even outside Malta.
·Annual return of a Maltese company: what it is
The annual return is nothing more than an updated list of shareholders that the directors of the company are required to file annually with the Maltese company register.
·What to do if the company is canceled from the register for failure to file the financial statements or the annual return?
If the financial statements or annual return are not filed, the company is canceled from the Malta business register.
It is possible to revoke the cancellation with the restoration process , through which the shares are reallocated to the shareholders. Obviously, in order for the restoration process to start, it is necessary to have fulfilled the obligation to deposit the balance sheet or the annual return.
·Is it possible to transfer a property located in Italian territory to a Maltese company?
Yes, it is sufficient to approve a capital increase of the Maltese company, to be freed through the transfer of the property. For the evaluation of the property, unlike Italy, it is not necessary to carry out a sworn appraisal, but only the administrator is sufficient.
The real estate contribution must necessarily be registered with a notarial deed, which certifies the transfer of ownership.
·Can a secondary office of a Maltese company be opened in Italy?
Certainly. To do this, a resolution must be prepared for the opening of the secondary office in Italy, which must have apostille in Malta and be filed with a notarial deed in Italy, together with the articles of association and the company statute, translated into Italian with a sworn translation. .
It will also be necessary to appoint a representative for the secondary office, whose name will appear in the Italian company register. As regards the financial statements, however, the latter will be prepared on the basis of the law envisaged by the state of Malta and then deposited with the Italian business register.
The firm is able to support its customers in all phases of opening a secondary office in Malta.
·Can a company incorporated in Malta choose to operate only in Italy?
Yes, it is possible. In this case the company should be subject to Malta’s corporate legislation, while it will be subject to the Italian tax system for tax purposes.
·Is it mandatory for directors and members of a Maltese company to pay social security contributions to Malta?
No, there is no obligation in this regard.
·How is the sale of shares in a Malta-based company?
The sale operation is very simple and consists in the signing of a stock transfer form by the seller of the shares, without any type of notarial intervention.
·Is there an agreement between Italy and Malta against double taxation?
Yes, between the Italian Government and that of Malta there is an agreement (L. 5 November 1990, n. 329) in force since 30 December 1990 aimed at preventing tax evasion and avoiding double taxation.
·Do Maltese companies always have to pay taxes in Malta?
Income tax payment is determined based on the company’s tax residence country. Therefore, if a company with registered office in Malta is then administered in Italy, it will be subject to Italian IRES tax on all income produced not only in Italy, but also abroad. On the contrary, if the company is administered in Malta, it would be subject to Maltese taxation, paying in Italy only for the income produced in Italy.
·Where does a company incorporated in Malta pay VAT?
If the Maltese company is resident in Italy for tax purposes, it will pay VAT according to Italian law. On the contrary, if the company also resides in Malta for tax purposes, it can request a VAT number from the Maltese tax authorities.
·Can a Maltese company be challenged by the Italian tax authorities?
If the company operates in full compliance with the law, the establishment of a company in Malta is considered regular and therefore not subject to any type of dispute.
·Is there an obligation to employ employees?
Absolutely not; hiring staff is at the discretion of the company.
Open a representative office of an Italian company in Malta:
Representative offices cannot carry out commercial activities or generate revenues in Malta, nor register for VAT purposes, but can only carry out study and market research activities. A representative office is a mere administrative organization and not an independent legal entity.
Procedure for opening a representative office
The authorization to open a representative office is valid for a limited time and can be renewed.
Certain documents are necessary for the opening of a representative office, including copies certified by a notary of the title search, the articles of association and the statute of the foreign company. A letter is also required in which the objectives for opening the office and the name of the relative representative are indicated.
Representative offices are required to file the annual financial statements of the foreign company with the competent Maltese authorities.
Since a representative office cannot carry out commercial activities, it does not normally constitute a permanent establishment and is therefore not subject to any income tax in the Maltese territory.
Trust establishment in Malta
Trust means the transfer by a person, also called the settlor, of his properties with the aim of administering them according to the interests of one or more beneficiaries. It is also possible to appoint a third party to supervise the administration of the assets by the trust.
The beneficiary can also coincide with the settlor: in this case we speak of self-declared trust.
The objectives of the trust
The establishment of a trust in Malta can take place to achieve multiple purposes:
segregation of assets
Attention: if trusts are set up for the purpose of protecting the assets, it is necessary to ensure that the trust is set up before the assets in question already have restrictions and rights on the part of third parties.
In Italy there is no legislation on trusts, but the legislation recognizes the trusts established according to the Maltese law as valid, thanks to the ratification (law 16 October 1989 n. 364) of the “Convention relating to the law applicable to trusts and their recognition” (Hague, 1st July 1985).
What are the main types of trusts in Malta
Real estate trust (tab)
This type of trust consists in the transfer of real estate to a trustee in order to protect one’s real estate assets from possible aggression by creditors.
Used as a tool to protect one’s assets, the real estate trust can also be a valuable aid during the hereditary subdivision of real estate assets.
Corporate Trust (tab)
Corporate trust means the transfer by a settlor to a trust of corporate shares in order to protect its assets from possible aggression by creditors. With this tool, in fact, the shares can be affected only by creditors belonging to the trust, but not by those of the settlor. Corporate trust is also applied in cases of generational succession of companies.
Trust for guarantee purposes (tab)
The purpose of the establishment of this type of trust is the creation of a separate patrimony and guaranteed by a special certificate, which will make it unassailable by the creditors of the settlor. The trust for the purpose of guarantee consists, therefore, in the transfer to the trust of assets of various kinds, from money to real estate in order to have the maximum possible protection of one’s assets.
Family and disabled trusts (tab)
The purpose of the family trust is to regulate family situations such as marital crises, cohabitation relationships, generational transfers and successions through the transfer of assets to the trust.
Instead, trust for the disabled is used for the exercise of curatorship and judicial protection.