Legal and Regulatory Framework for Company Formation and Operation in Malta
English constitutes one of the two official languages of Malta. Owing to its strategic geographical location, Malta serves as a significant logistics and commercial hub facilitating trade between Europe, North Africa, and the Mediterranean region. The Government of Malta adopts a pro-business policy framework and actively promotes foreign direct investment (“FDI”) through various incentive schemes.
Notwithstanding the foregoing, Malta has established the National Foreign Direct Investment Screening Office pursuant to Regulation (EU) 2019/452 of the European Parliament and of the Council establishing a framework for the screening of foreign direct investments into the Union. The said Office is entrusted with the review and screening of foreign direct investment projects, including new FDI initiatives, joint ventures involving foreign participation, and the transfer of shares and/or controlling interests in existing companies where the owner, titleholder, or ultimate beneficial owner originates from a third country, being any country that is not a Member State of the European Union.
Corporate Legal Framework
Companies incorporated in Malta are governed by the Companies Act (Chapter 386 of the Laws of Malta), enacted in 1995 and substantially modelled on the UK Companies Act. The Maltese legislative framework regulating company formation and administration is aligned with the principal European Union directives, thereby ensuring compatibility with EU legal standards and facilitating cross-border recognition and operation.
The Maltese regulatory regime provides for various types of legal entities, including public limited liability companies, private limited liability companies, general partnerships, limited partnerships, and European companies (Societas Europaea). The most commonly utilised vehicle is the private limited liability company.
A limited liability company possesses a separate juridical personality distinct from that of its shareholders. The liability of shareholders is limited to the amount, if any, unpaid on the shares respectively held by them.
Incorporation Procedure
The incorporation of both private and public limited liability companies in Malta is generally conducted in an efficient and expeditious manner. Where all statutory documentation, duly executed and accompanied by the requisite supporting documentation, is submitted in proper form to the Registrar of Companies, a Certificate of Incorporation is typically issued within approximately one week of submission.
The principal constitutional document required for incorporation is the Memorandum of Association, which must contain the information prescribed by law.
With effect from 1 March 2025, all incorporation and dissolution documentation must be filed electronically through the Malta Business Registry’s online platform, BAROS. This digital system is intended to enhance administrative efficiency and promote environmentally sustainable practices. Subject to full compliance with legal requirements, including the submission of all due diligence documentation, incorporation may be completed within twenty-four (24) hours.
A Maltese company offers an effective corporate structure within a European Union jurisdiction.
Licensing Requirements
No prior clearance or licence from a public authority is required for the incorporation of a Maltese company, provided that the company does not engage in any activity which is regulated or requires authorisation under applicable legislation, including but not limited to:
- the Gaming Act - the Banking Act - the Financial Institutions Act - the Investment Services Act - the Financial Markets Act - the Insurance Business Act - the Insurance Intermediaries Act - the Retirement Pensions Act - the Trusts and Trustees Act - the Special Funds Regulation Act - the Company Service Providers Act
Entities intending to conduct activities falling within the scope of the above legislation must obtain the requisite licence or authorisation from the competent regulatory authority prior to commencing operations.
VAT Registration
All companies established in Malta are required to register for Value Added Tax (“VAT”) where applicable and must comply with the corresponding reporting and payment obligations.
Registration may be effected under one of the following provisions of the VAT Act:
Article 10 Companies carrying out taxable supplies, exempt supplies with credit, exports to third countries, intra-Community supplies, or services deemed to take place in other EU Member States are required to register under Article 10. Entities registered under Article 10 are entitled to claim input VAT incurred on purchases attributable to their taxable supplies.
Article 11 Companies qualifying as a “small undertaking” in accordance with Part 1 of the Sixth Schedule to the VAT Act (1998) may register under Article 11. Such entities are not permitted to charge VAT on their supplies and are not entitled to claim input VAT. They are accordingly treated as exempt without credit.
Article 12 Companies not registered under Article 10 which make intra-Community acquisitions exceeding €10,000 in a calendar year are required to register under Article 12. Registration under Article 12 is also mandatory where services are acquired from suppliers established outside Malta (whether within or outside the EU) and the place of supply is deemed to be Malta, with the tax liability resting on the recipient under the reverse charge mechanism.
Corporate Taxation
Malta operates a full imputation system of taxation, designed to eliminate economic double taxation of company profits. Corporate profits are subject to tax at a standard rate of 35%.
Upon the distribution of dividends, shareholders may be entitled to claim a refund of the Malta tax paid at the corporate level, generally amounting to six-sevenths (6/7) of the tax paid, subject to the nature of the underlying income. In certain circumstances, including where profits are derived from a participating holding and the statutory conditions are satisfied, a full (100%) tax refund may be available to a qualifying Maltese holding company.
International Tax Developments
In the Budget 2023 announcement, Malta indicated its intention to defer implementation of the European Union Directive introducing a minimum effective global tax rate of 15% for multinational enterprise groups with consolidated annual revenues exceeding €750 million. Consequently, Malta has not introduced a domestic top-up tax to increase the effective rate to the OECD-mandated minimum.
The existing corporate taxation framework, including the full imputation system, remains in force. Under this regime, corporate profits are taxed at 35%, with shareholders potentially able to reclaim a substantial portion of the tax paid, subject to statutory conditions.
Malta continues to provide a structured and EU-compliant legal environment for company incorporation and redomiciliation. The process is governed by the Companies Act (1995) and reflects principles derived from UK company law, rendering Malta an attractive jurisdiction for the establishment of new entities or the continuation of companies from other jurisdictions.
Who may incorporate?
A Limited Liability Company in Malta may be registered either by the shareholders themselves or by their authorised representatives namely "subject persons" licensed to act as corporate services providers such as lawyers or accountants.
We are a professional services firm specialising in corporate documentation and regulatory filings, the incorporation of companies in Malta, and the provision of tax advisory and consultancy services within the jurisdiction of Malta. Our practice encompasses a comprehensive range of international corporate, advisory, and tax solutions, with particular emphasis on cross-border and international business structures.
Our service team is composed of qualified corporate lawyers, company managers, tax advisors, and accountants, including duly authorised Corporate Service Providers (CSP) and professionals regulated under the Malta Financial Services framework. Collectively, our professionals possess extensive experience in delivering tailored business and financial solutions, supported by a broad and integrated portfolio of services.
The process of registering a company in Malta commences not merely with the submission of statutory documentation to the Malta Business Registry, but with the development of a clear and structured business concept. Such concept must be carefully evaluated and organised by the ultimate beneficial owners into a legally compliant, practical, and commercially viable corporate structure, aligned with applicable regulatory and tax requirements.
We offer comprehensive assistance in the establishment of Maltese companies, providing strategic guidance and ongoing support extending well beyond the act of incorporation. For more than a decade, we have delivered efficient, reliable, and client-focused services to both local and international clients.
Establish your presence in the global marketplace through the formation of a company in Malta. We invite you to contact us for professional advice tailored to your objectives and to support the successful achievement of your business goals.
