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A Malta Limited Liability Company (LLC) can either be a private or public limited liability company.
Malta LLC’s are governed by the Malta Companies Act of 1995. This law is based on the United Kingdom’s Company Law.
In addition, the Malta Financial Services Authority and the Malta Registry of Companies are the two government agencies regulating LLC’s.
Foreign investors are welcome in Malta with the vast majority of them forming private limited liability companies. Foreigners can own 100% of the company’s shares.
Malta is a Mediterranean island nation and a full member of the European Union (EU). Its official name is the “Republic of Malta”. Located between North Africa and Italy with easy access to European countries.
Its political system is a unitary parliamentary republic with a democratically elected legislature with a prime minister. After being a French colony, in 1814 the Treaty of Paris made Malta part of the British Empire until 1974 when it was granted independence.
A Malta Limited Liability Company (LLC) obtains these types of benefits:
• Total foreign Shareholders: Foreigners may own 100% of the LLC’s shares.
• Low Corporate Tax: The corporate tax rate can be only 5% by following a special structure. However, U.S. taxpayers must reveal all income to their government just like everyone else residing in global income taxing countries.
• Privacy: Nominee directors and shareholders are permitted for privacy.
• One Shareholder: Only one shareholder is required.
• One Director: Only one director is required who can be the sole natural person shareholder for extra control.
• Fast Registration: It only takes two days to incorporate.
• Limited Liability: Shareholders’ liability is only for the unpaid amount for shares.
• Low Minimum Share Capital: The minimum authorized share capital is only 1,200 Euro.
• EU Member: Malta is a full member of the European Union (EU) offering opportunities to conduct business with other EU members.
• English: As a former British Territory, the second official language in Malta is English.
Malta Limited Liability Company (LLC) Name
Every Malta company name must differ from all others.
A private LLC must include at the end of its company name wither “Limited” or “Ltd”.
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.
The Memorandum and Articles of Association must explain the purpose for the company
A shareholder’s liability is limited to any unpaid amounts on his or her shares.
Private Limited Liability Company
A private limited liability company is different than a public one.
Public LLC’s can have unlimited shareholders, their shares and debentures are sold to the public, their minimum authorized share capital is 46,600 Euros, and they must have a minimum of two shareholders and two directors.
A private LLC can have only one shareholder (with a maximum of 50) and one director and only an authorized minimum share capital of 1,200 Euro.
Private companies can convert into public ones by amending its Memorandum and Articles of Association. The resolution for these amendments must be filed with the Registrar of Companies.
Only one shareholder is required to form a private LLC. Shareholders can be of any nationality and residing in any country. Shareholders can also be natural persons or legal entities.
If the company’s director is a corporate body, a minimum of two shareholders will be required. If the sole director is a natural person, then only one shareholder will be required.
Nominee shareholders are permitted for privacy.
Different types of shares and classes may be issued. However, private LLC’s are not permitted to issue bearer shares.
A minimum of one director is required to form a private LLC. Directors can be natural persons or corporate bodies.
While directors do not have to be local, it is strongly recommended to appoint a Malta resident (natural person or company) as a director.
Private LLC’s are required to appoint a company secretary who must be a natural person and can be a citizen of or resident in any country.
Registered Agent and Office
LLC’s must appoint a local registered agent and have an office address in Malta.
Minimum Share Capital
The minimum authorized share capital for a private LLC is 1,200 Euro with 20% paid up.
Accounting and Auditor
A licensed, local auditor must be appointed.
Annual returns are required.
Annual General Meetings
Annual general meetings of the shareholders are required, but they can be held anywhere in the world.
The corporate tax rate in Malta is 35% which can be reduced to 5% after refunds to the shareholders. One way this works:
To lower Malta’s corporate tax, many foreigners create an offshore company is Cyprus which owns the all of the shares in the Malta LLC. A refund near 86% of Malta’s corporate tax is provided for the Malta LLC which is equivalent to only paying 5% as Malta’s corporate tax. This provides an extra layer of privacy by using the Cyprus offshore company as a buffer between the beneficial owners of the Malta LLC. There are other ways to structure a Malta LLC to obtain over 85% refunds f the corporate tax to the shareholders.
Malta taxes global income. However, there are no taxes on bank account interest and dividends. There is no withholding tax on dividends, royalties, and license fees. In addition, there is no capital gains tax, inheritance tax, or wealth 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.
LLC’s can employ expatriates from any country. They will be subject to local income taxes and contributions to the National Insurance system (social security). The income tax can range from 0% up to 35% depending upon exemptions and sliding scale income.
Work permits are required.
The government maintains a registry of shareholders and directors which are available to the public. However, nominee shareholders and directors are available for privacy.
Time for Formation
Expect a private or public LLC to be formed in 2 business days once all documents are filed with the Registrar.
Shelf companies are not available in Malta.
A Malta Limited Liability Company (LLC) obtains these types of benefits: total ownership by foreigners, limited liability, privacy, low corporate tax after refund, one shareholder, one director, fast registration, low share capital, EU member, and English is Malta’s second official language.