Malta Company Formation / Registration of an IBC
A Malta International Business Company (IBC) is governed by the Malta Companies Act of 1995. This is considered a business friendly law allowing IBC’s great autonomy to engage in business with little red tape. The Maltese Registry of Companies processes applications for IBC’s usually within two business days.
Foreigners can own 100% of the corporate shares in an IBC.
Malta an island nation located in the Mediterranean Sea in between Sicily and Northern Africa. Its political system is described as a “representative democracy”. Its laws are based upon English Common Laws”. It is also a full-fledged member of the European Union (EU). Since 2008, Malta is a European Schengen Zone member allowing free movement amongst other members to their countries as workers and residents.
As a former United Kingdom Territory, English is its official second language. So, all documents can be prepared and filed in English with the government.
A Malta International Business Company (IBC) obtains these types of benefits:
• Foreigners Own Shares: Foreigners can own all of the IBC’s shares.
• Tax Refund: The normal corporate tax rate of 35% can have 85% refunded. Note: United States residents and others residing in countries taxing worldwide income must disclose all income to their tax agencies.
• One Shareholder: A minimum of one shareholder is required.
• One Director: A minimum of one director is required where the only individual shareholder can become the director to manage the IBC.
• Quick Registration: It can take within two working days to register.
• Privacy: Nominee shareholders and directors are allowed for privacy.
• Low Minimum Share Capital: The minimum authorized share capital is only 1,250 Euro.
• EU Member: Malta as a full member of the European Union (EU) offers business opportunities with the entire EU membership.
• English: The second official language in Malta is English.
Malta International Business Company (IBC) Name
Maltese companies must select a company name not identical or similar to the names of other Malta companies. Company names can be in any language using the Latin alphabet.
An IBC must use the words “International Business Company” or its initials “IBC” at the end of its company name.
Typically, either a lawyer or the registered agent files an application with the Registrar of Companies to become an IBC. The Articles of Association along with a Memorandum are filed with the application. Upon approval, the Registrar provides a Certificate of Registration as proof of the IBC’s existence.
The subscriber files the company’s Memorandum and Articles of Association with the Malta Registrar of Companies. The Registrar then issues a Certificate of Registration after approval.
While there are no restrictions upon the types of trade an IBC may engage in, certain business activities may require a license such as insurance business, investment services, and other financial services.
The minimum requirement is only one shareholder to form an IBC. Shareholders can be reside and be citizens of any country. Shareholders can also be individuals or corporate bodies.
Different types of corporate shares can be issued including: registered shares, ordinary shares, redeemable shares, preference shares and shares with par value.
However, bearer shares and shares of no par value are prohibited.
Nominee shareholders are permitted for privacy of the beneficial owners.
Only one director is required to form an IBC. Directors may be individuals or corporations. Directors do have to be local residents and can reside in any country.
Nominee directors are permitted for privacy.
IBC’s are required to have a company secretary. The secretary must be an individual who does not have to be a resident of Malta and can reside in anywhere.
Registered Office and Agent
IBC’s must maintain a registered office in Malta. In addition, they are required to appoint a licensed registered agent service provider.
Minimum Share Capital
The minimum authorized share capital is 1,250 Euro.
The minimum paid up capital is 250 Euro.
All shares must remain private and cannot be sold on the Malta public stock exchange.
Accounts must be maintained demonstrating the current financial situation. Accounts do not have to be filed with the government.
Annual General Meetings
Shareholders are required to hold an annual meeting. Such meetings do not have to be held in Malta as they can be conducted anywhere.
The corporate tax rate in Malta is 35% which can be reduced to 5% after refunds to the shareholders. This is done as a rebate after the full tax is paid. The IBC applies to the government for a 6/7 refund. The total tax is reduce to only 5% when distributions are made to the shareholders as dividends. When the shareholders receive their dividends they receive a partial refund (85%) of their percentage of the total taxes paid by the IBC. This results in a 5% total tax paid.
Malta taxes worldwide income. However, Malta has over 70 double taxation agreements with other countries to ensure a company does not pay taxes twice for the same income.
There are no taxes on bank account interest and dividends. There is no withholding tax on dividends, royalties, and license fees. In addition, Malta has no wealth tax, capital gains tax, or inheritance tax.
The Value Added Tax (VAT) is only applied to companies engaged in trading intra-EU and the rate is 18%.
Note: United States taxpayers must disclose all income to their government just like anyone residing in countries taxing worldwide income.
While the names of beneficial owners, shareholders, and directors are part of Malta’s public records with access from the public, nominee directors and shareholders can be appointed to provide their privacy.
It is estimated that the filing and approval for an IBC in Malta can take up to two business days.
Shelf IBC’s are not available in Malta.
A Malta International Business Company (IBC) offers these benefits: complete ownership by foreigners, privacy, 85% corporate tax refunds, one shareholder, one director, fast registration, EU member, and English is the second official language.