Corporate Finance

Malta Company – Formation & Management

Whilst Malta is a truly tax efficient jurisdiction in which to operate trading or holding companies, we do have the ability to incorporate companies in the UK, Ireland and around the world. Deciding upon the jurisdiction of where your business will be based depends on a number of factors such as taxation environment, ease of business set up and operation, currency, availability of skilled work force etc.

Acumum Corporate Services Limited is fully licensed and holds a Class C Corporate Services Provider (CSP) licensed issued by the Malta Financial Services Authority. A Class C CSP licence as held by Acumum is the widest CSP licence and authorises Acumum to incorporate and manage Malta companies, the provision of personal or corporate directors, registered office and company secretarial services.

Why Malta?

With its corporate laws based upon those of the UK, Malta has utilised tried and tested corporate laws and principles into its own legislations; providing comfort and security to the commercial and business community.

Corporate Vehicles

By far the most popular corporate structure is that of the limited liability company ‘Ltd’, however, there are a number of structures available, the following being the most commonly used:

• Limited liability company (LTD)
• Public limited company (PLC)
• Limited partnership – en commandite
• General partnership – en nom collectif
• Oversea branches

For investment companies, funds and financial services there are additional entities:

• SICAV – with variable share capital (also known as “open-ended” schemes), or
• INVCO – with fixed share capital (also known as “closed-ended”)

Shareholders

A Malta limited company can be registered with a single shareholder, as a private exempt company. However, it is more usual for there to be a minimum of 2 shareholders. In either case, there are no nationality or residency restrictions as to who (whether a natural person or legal entity) may be a shareholder of a Malta company.

Oversea Branches

Malta’s company laws provides the ability for foreign companies to set up branches in Malta, without the necessity of

Corporate Documentation

As per the UK, a Malta limited company is set up via the use of a Memorandum and Articles of Association, which stipulate:

• Company Name
• Details concerning the subscribers of the shares, directors and company secretary
• Registered Address
• Nature of the company—private or public
• Object & purpose of the company
• Details of the share capital—both authorised and issued
• The manner of the representation of the company

Low Statutory Fees

Registration fees upon incorporation of a Ltd company, are dependent upon the amount of the authorised share capital.
The minimum charge for incorporation is €245 being 20% fully paid up on an authorised share capital of €1200. Larger share capital – up to a maximum of €2250 can be chosen.

The Company Registrar’s fee for incorporation is €240. Thus, a Malta limited company can be incorporated for only €485 in statutory fees.

Accounting & Audit Requirements

Each Malta company must submit audited accounts at the end of each financial year, in accordance with Malta’s Companies Act 1995 and International Accounting Standards (IFRS). Financial statements constitute of the directors’ report, the auditors’ report, balance sheet, profit and loss account, notes to the financial statements together with schedules to the profit and loss account.

About Malta’s Tax System

• 5% Effective Corporate Tax Rate – Trading Income
• 6.25% Effective Corporate Tax Rate – Passive Income

Due to Malta’s system of tax refunds, the corporate tax rate of 35% can be reduced to 5% by the application of shareholder refunds for trading income or 6.25% in respect of passive income such as royalties or interest income.

Holding Companies – 0% Taxation

Subject to certain requirements, due to Malta’s Participation Exemption regime, income distributions by subsidiaries held by a Malta holding company is not taxed at the level of the Malta company. This makes Malta a perfect holding company jurisdiction.

Full Imputation System – 0% Shareholder Tax

Unique within the European Union and one of only a handful of countries world-wide, Malta’s corporate tax system employs the full imputation system. Meaning that tax paid at the corporate level is fully imputed at the shareholder level – as such shareholders’ dividends are not taxed.

Resident and non-resident shareholders are entitled to a refund of tax paid by the company with no further tax levied on the shareholders’ income.

VAT Reduction

As Malta is a full EU member state, Malta companies are subject to the EU vat regime. For certain sectors such as aviation and maritime, Malta has introduced beneficial tax and VAT regimes. In some instances, such as the importation of aircraft into the EU, the VAT rate is 0%.

Remittance – 0% Tax

As an ex-British colony, Malta retains the principal of domicile. A foreign incorporated and therefore not domiciled SPV, resident in Malta, subject to certain conditions analogous to ’effective management & control’ and type of income, will not be subject to Malta tax if foreign sourced passive income is not remitted to Malta.

A Malta company whether a trading company or holding company is a highly tax efficient vehicle through which to conduct business. Contact us for more information as to how a Malta company may work for your business needs.