Formation and
Management

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

Acumum Corporate Services Limited is fully licensed and holds a Class C Corporate Services Provider (CSP) licence 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, provide personal or corporate directors, registered offices and company secretarial services

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

The limited liability company (Ltd) is by far the most popular corporate structure.
However, there are a number of structures available, with the following being the most commonly used:

• Limited liability company (Ltd)
• Public limited company (PLC)
• Limited partnership, or en commandite partnership
• General partnership, or en nom collectif partnership
• Overseas branches

There are additional entities for investment companies, funds and financial services, including:

• SICAV: with variable share capital (also known as ‘open-ended’ schemes), or
• INVCO: with fixed share capital (also known as ‘closed-ended’).

A Malta limited company can be registered with a single shareholder as a private exempt company.

However, it’s more common for there to be a minimum of two shareholders. In either case, there are no nationality or residency restrictions as to who may be a shareholder of a Malta company (whether a natural person or legal entity).

Malta’s company laws provide the ability for foreign companies to set up branches in Malta, without the necessity of incorporating new, or re-domiciling established companies, providing additional choice and flexibility in respect of corporate structuring.

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 and purpose of the company
• Details of the share capital, both authorised and issued
• The manner of the representation of the company

• 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 upon an authorised share capital of €1200. Larger share capital of up to a maximum of €2250 can be selected
• The Company Registrar’s fee for incorporation is €240. Thus, a Malta limited company can be incorporated for only €485 in statutory fees

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

• 5% Effective corporate tax rate on trading income
• 6.25% Effective corporate tax rate on 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 income from interest.

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

Unique within the European Union, and one of only a handful of countries worldwide, Malta’s corporate tax system employs the full imputation system. This means that tax paid at the corporate level is fully imputed at the shareholder level and, 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.

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 for the importation of aircraft into the EU, the VAT rate is 0%.

As an ex-British colony, Malta retains the principle of domicile.

A foreign incorporated, and therefore not domiciled, SPV residing in Malta may be subject to certain conditions, analogous to ’effective management and control’ and type of income, and will not be subject to Malta tax if foreign-sourced passive income is not remitted to Malta.

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