The Ultimate Guide to Registering a Company in Malta

Contents

1. An Overview of Malta’s Corporate Tax System

2. Consolidated Group (Income Tax) Rules 2019

3. Incorporating a Company in Malta

4. Substance Requirements

5. Setting Up a Company in Malta: Key Steps

1. An Overview of Malta’s Corporate Tax System

Companies incorporated in Malta which are effectively managed and controlled within the jurisdiction are considered to be both resident and domiciled in Malta. This means that they are subject to income tax in Malta on their worldwide income at a tax rate of 35%.

Companies which are registered in foreign jurisdictions whose management and control are effectively exercised in Malta are subject to tax on income arising in Malta and on foreign income remitted to Malta. It is worth noting that capital gains arising outside of Malta are not subject to tax in Malta even if the income is remitted therein, provided that the company is not domiciled in Malta.

Malta operates a full imputation system. This allows shareholders to receive full tax credits on tax paid by the distributing company on profits. This is operated through the tax refund mechanism. The applicable refund depends on the nature and source of the income. Through the tax refund mechanism, the effective tax rate is reduced from 35% to as low as 5%, in some cases even lower.

The main refund rates available under Malta’s tax system are as follows:

• ‍100% refund on dividends derived from an investment which qualifies as a participating holding, subject to anti-abuse provisions and/or from the disposal of such a holding.
• ‍5/7ths refund on passive interest, royalties, or income and/or capital gains from a participating holding that does not qualify for the participation exemption.
• ‍2/3rds refund when double taxation relief has been claimed. ‍
• 6/7ths refund in all other cases.‍‍

2. Consolidated Group (Income Tax) Rules 2019

In 2019, Malta introduced the Consolidated Group (Income Tax) Rules 2019, which brought the concept of fiscal units into Maltese tax law. These rules are applicable from the year of assessment 2020 (basis year 2019). Such rules allow a parent company and its subsidiaries to be treated as a single taxpayer for income tax purposes in Malta.

A parent company may elect to form a fiscal unit with its subsidiaries, including both Maltese and foreign companies, provided the following conditions are met:

• The parent company must satisfy at least two of the following:
  • Hold at least 95% of the voting rights in the subsidiary;
  • Be beneficially entitled to at least 95% of the profits available for distribution to the subsidiary’s ordinary shareholders;
  • Be beneficially entitled to at least 95% of the subsidiary’s assets available for distribution to its ordinary shareholders upon winding up.
• The principal taxpayer must be a company that is resident in Malta or a non-resident company carrying on activities in Malta.
• The accounting periods of the parent and subsidiary must align i.e. begin and end on the same dates, with exceptions in the case of newly incorporated or companies wound up during the year.

Once registered, the principal taxpayer assumes all rights, obligations, and duties under the Income Tax Act on behalf of the fiscal unit. Intra-group transactions are disregarded for income tax purposes, except for the transfer of Maltese immovable property or shares in property companies.

Fiscal unity enhances tax compliance and reporting efficiency within corporate groups. It is important to note:

• An entity cannot be part of more than one fiscal unit at a time.
• If the parent company does not hold 100% of the subsidiary, approval from minority shareholders is required for the subsidiary to join the fiscal unit.

If a shareholder within the fiscal unit is entitled to a tax refund under Article 48(4) or 48(4A) of the Income Tax Management Act, when calculating the tax liability of a fiscal unit, Maltese tax rules allow for a net effective tax rate to be applied directly at the company level. This means that the fiscal unit can offset the shareholder’s refund entitlement against the tax due, achieving tax efficiency without requiring a dividend distribution and separate refund application.

In practice, this allows the fiscal unit to pay an effective tax rate of 5% upfront, rather than paying the standard corporate tax rate of 35% and waiting for a refund. This significantly improves cash flow by eliminating the typical six-month refund waiting period, facilitating smoother cash flow management while maintaining compliance with Malta’s fiscal unit regime.

‍3. Incorporating a Company in Malta

Setting up a company in Malta offers an efficient, EU-based solution with a favourable tax regime that can benefit ultimate beneficial owners. The incorporation process is straightforward and can be completed within a few days, provided all required documents are submitted correctly and promptly. A company is legally formed once a memorandum of association is signed by at least two individuals or a single member, and a certificate of registration is issued.

The company’s Memorandum and Articles of Association is submitted to the Malta Business Registry and must include the following details:

• Whether the company is private or public,
• The name and address of each subscriber,
• The name of the company,
• The registered office in Malta and the company’s email address,
• The objects (purpose) of the company,
• The company’s authorised share capital, how it is divided into shares of a fixed value, the number of issued shares of each subscriber, and how much has been paid on each share.
• The number, names, and addresses of the first directors, including any corporate directors and the company’s chosen method of legal and judicial representation.
• The name and address of the first company secretary. If it is a body corporate, include its name, registration number, and registered office.
• The duration of the company, if it is not intended to exist indefinitely.

A company in Malta must have a minimum share capital of €1,164.69 for a private company.If the share capital is exactly at the minimum, it must be fully subscribed in the memorandum of association. When greater, at least 20% of the shares must be paid up.

Upon registering the memorandum and articles of association, the Registrar will issue a certificate confirming the company’s registration. Once such certificate is issued, the company officially comes into existence and is authorised to begin business from the date shown on the Certificate of Incorporation.

Shareholders

Private limited companies registered in Malta may have a minimum of 1 ( single member company) and a maximum of 50 shareholders. The liability of each shareholder will be limited to the amount invested in the company and the amount of unpaid share capital.

Directorship

Every private company must have at least one director. The directors are responsible for managing the company’s business and may exercise all powers of the company, except for those that are required by law or by the company’s memorandum or articles of association to be exercised by the shareholders in a general meeting.

Directors are appointed by the shareholders and shall be responsible:

• to promote the company’s well-being and ensure its proper administration and management;
• for the general supervision of the company’s affairs;
• for the legal compliance with Maltese legislation; and
• for the general corporate governance of the company.

A company director must act honestly and in good faith in the best interests of the company. They must exercise the care, diligence, and skill that would reasonably be expected from someone in their position, considering both the general expectations for the role and their own personal knowledge.

Company Secretary

All companies registered in Malta are obliged to have a company secretary who is appointed by the directors. The roles and responsibilities of a Company Secretary are mainly the following:

• to minute the general board meetings of the Company;
• to minute the meetings of the Board of Directors;
• ensure that proper notices are given if all meetings maintain and update statutory registers; and
• ensure timely submission of applications.

New MFSA CSP Framework Now in Effect for the Director and the Company Secretary

The MFSA continues to refine the regulatory environment for directors and company secretaries with the recent updates to the Company Service Providers Framework which now includes the introduction of a Notification Regime and Registration Regime for individuals acting in a personal capacity.

The Notification Regime for Restricted CSPs applies for individuals acting as company secretaries or directors on a limited basis for up to 5 involvements, including a maximum of 2 groups of companies not considered “by way of business”. Hence not receiving any direct or indirect renumeration for being appointed to this role.

The Registration Regime for Limited CSPs applies for individuals acting as company secretaries or directors “by way of business” with up to 10 involvements.

New MFSA CSP Framework – Exemptions

Certain individuals are exempt from specific requirements under the CSP framework due to their existing roles or the nature of their involvement. These include:

Regulated professionals, such as those already authorised by the MFSA to act as trustees or provide fiduciary services, registered VFA Agents, and natural persons providing services to entities licensed by the MFSA or other reputable foreign regulators.

Individuals acting as directors / company secretaries not by way of business, but do so as part of their employment, due to their shareholding in the company, or based on family ties.

Under the updated CSP Framework, proposed directors or company secretaries who plan on taking on new roles, must take a step back to assess their current position, evaluate their compliance obligations, and engage with the MFSA as necessary.

Registered Address

Every company registered in Malta must have a registered address situated in Malta.

Accounting and Audit

A company must maintain proper accounting records covering all money received and spent, its assets and liabilities, and if dealing in goods, detailed records of stock and transactions. These records must explain the company’s financial activities, accurately reflect its financial position, and support the preparation of financial statements. The records should be kept at the company’s registered office or another location chosen by the directors. If stored outside of Malta, summaries and returns must be kept locally and updated at least every six months. ‍

4. Malta Company Formation: Substance

In recent years, tax authorities globally have adopted a stricter stance against tax avoidance, thereby making the current tax environment more challenging for multinational businesses operating across multiple jurisdictions. As a result, businesses are now required to maintain adequate substance in the jurisdictions in which they operate to ensure compliance and sustainability of their tax structures.

For companies operating in Malta, demonstrating management and control within Malta is essential to establish tax residency and to benefit from Malta’s favourable tax regime. This is achieved through the following:

• Holding directors’ and shareholders’ meetings in Malta, duly documented through minutes and resolutions.
• Ensuring that all key management and strategic business decisions are made in Malta by resident directors.
• Setting up and maintaining a Local Bank Account demonstrates financial activity and commitment to the jurisdiction hence, establishing genuine economic substance and ties within Malta.
• Maintaining a physical presence, such as office space or local employees, on the island.

Furthermore, maintaining a genuine physical presence and demonstrating real economic activity within Malta is necessary to avoid classification as a shell or letterbox company under OECD guidelines and EU Anti-Tax Avoidance Directives (ATAD).

Ensuring adequate substance is not only a regulatory requirement but also a strategic necessity for long-term tax sustainability‍

5. Setting Up a Company in Malta: Key Steps
As of 1st March, 2025, all company incorporation applications must be filed via the MBR’s online platform. This move reflects MBR’s continued commitment to becoming a completely paperless agency, expanding on previous initiatives. The shift aims to improve processing efficiency and promote a more sustainable, environmentally friendly process. To this effect, a Company Service Provider licensed by the MFSA with access to an MBR Corporate Account needs to be contacted to assist with the company incorporation process.

The following key steps are to be followed when setting up a Company in Malta:

• Determine the most tax efficient structure applicable to the relevant business
• Obtain full due diligence documentation on the parties involved in the corporate structure
• Reserve the proposed company name with the Registry of Companies (MBR)
• Deposit the initial issued share capital of the company with a preferred local bank
• Prepare the Memorandum and Articles of Association and any other documentation as required by the Maltese Companies Act
• File the Memorandum and Articles of Association along with the relevant documentation with the Registry of Companies
• Settle the Company Registration fee due to the Registry of Companies (MBR)
• Register the company for income tax and VAT purposes (if applicable)
• Initiate the process to open a bank account for the company

Malta offers a compelling environment for company formation, combining a robust legal framework, competitive tax incentives, and streamlined incorporation procedures. Whether you’re establishing a standalone entity or integrating into a fiscal unit, Malta’s corporate infrastructure supports both local and international business growth.

At Zampa Partners, we specialise in guiding clients through every stage of the incorporation process, from structuring and registration to ongoing compliance and tax optimisation. Our team is equipped to help you unlock the full potential of Malta’s business landscape.

Get in touch to explore how we can support your corporate strategy and ensure your Maltese entity is built for long-term success.

‍Zampa Partners provides corporate services through Zampa Partners Corporate Services Limited which is authorised to act as a Company Service Provider by the Malta Financial Services Authority.