Image Credit: John Haslam on Flickr
The tiny island nation of Malta has only about half a million inhabitants. However, last year alone it attracted more than two million tourists from around the world.
With so much money coming into the economy via tourism, it’s not surprising that many international entrepreneurs are deciding to start new businesses in Malta. The favorable local economy and steady supply of tourists make Malta’s economy an ideal breeding ground for organically grown businesses.
In turn, these businesses can easily expand and scale up. All they need to do is leverage the simple and streamlined trade that Malta enjoys with all of Europe and North America.
RELATED ARTICLE: GO GLOBAL: 6 KEY BENEFITS OF EXPANDING YOUR BUSINESS INTERNATIONALLY
1. Choose a Corporation Type
First, you’ll need to decide which kind of corporate entity you want to register. Your main options are:
- Limited liability company (LLC)
- International holding company
- Partnership
- Self-employed individual
By far the most common type is the LLC. This is because of the filing benefits and the advantage of having limited liability as the company owner in certain scenarios.
You also have the option of choosing between a public LLC or a private LLC. However, keep in mind that founding a public company will require a much more substantial minimum capital deposit. We will discuss that a little later in this guide.
Similarly, individuals looking into obtaining citizenship by investment in Malta would need to make some sort of monetary contribution. Or they would need to prove that they’ve had a financial stake in the nation’s economy.
2. Complete Registration Documents
Now that you’ve decided on a company type, you’ll need to draft and file the necessary articles of incorporation and memorandum documents. If you’re from the UK, you’ll find the process to be a breeze. That’s because the Malta Company Act was based mainly around the UK Companies Act.
If you’re going to prepare these documents independently, you’ll need to contact your local jurisdiction in Malta to determine how to proceed. However, you should seek professional assistance with this matter to avoid any mistakes and eliminate first-time hassles.
3. Deposit the Minimum Capital into an Account
As part of your business plan and memorandum, you’ll want to determine what your minimal starting capital should be. Do this with the help of an accountant. As a bare minimum, Malta requires that a private LLC deposit a minimum share capital of at least €1,200. However, only 20% of that amount needs to be deposited into a bank.
On the other hand, if you wish to start a public LLC then you’ll need to make a minimum share deposit of €46,600. However, only 25% of that must be deposited into a bank account.
All the same, the deposit must be made into a business account. Inform the teller that you are depositing your share capital. At this point the money will be stored in a holding account until the company has fully completed the registration process.
It’s important to keep the receipt for your share capital deposit. That’s because you will need it to bolster the documentation you’ll be submitting.
To recap for this step, you’ll be opening a business bank account, depositing your minimum share capital, and keeping the deposit slip for your records.
4. Submit Documentation to the MFSA
Now you’ll need to fill out a company registration form and submit it to the Malta Financial Services Authority (MFSA). Additionally, include your articles of association and share capital deposit slip. The full process takes about two to three days. There is also a registration fee that you’ll have to pay.
To learn more about the registration process and fees, visit the MFSA’s official guide to registering a company.
5. Apply for the Appropriate Licenses
For the majority of businesses that are founded in this country, you only need to fill out an application form for commercial activity. This will give you all the licensure you need to do business.
However, if your business will be handling food, providing beautician services, or operating a large manufacturing operation, you may need to obtain additional licenses from different departments. The best way to find out which licenses you need is to contact Malta’s Commerce Department.
6. Obtain a Tax Identification Number
Next, you’ll need to contact the Commission for Revenue department to apply for a Tax Identification Number. This a straightforward step that won’t require any fees.
However, you will need to file a tax return form once per year. You may want to seek the assistance of an accountant when filing for the first year of business.
7. Register with VAT
Regardless of what kind of business you’re going to operate, you’ll need to register with Malta’s VAT department. If your business doesn’t have an expected turnover of more than €12,000 annually, then you won’t need to charge VAT on transactions.
However, if you are expecting a turnover of more than €20,000 annually then the VAT will vary. Therefore, it’s best to contact the VAT department directly to make sure you’re handling this step correctly.
8. Apply for a PE Number
If you’re self-employed, you can skip this step. If not, you will need to apply for a PE number with the Inland Revenue Department.
9. Register with the Employment Training Centre (ETC)
For every employee you hire, you will need to fill in a form for the Employment and Training Centre (ETC). These forms need to be filled out both when you hire new employees and terminate existing ones.
10. Consider Data Protection Regulation
Finally, if your company is going to be collecting and storing sensitive personal data for its clients, you’ll need to become familiar with Malta’s Data Protection regulations.
Conclusion
The above steps are just a brief outline of what it will take to start a business in Malta. However, these are necessary before you can even think about launching your start-up.
Even so, Malta is quickly becoming one of the globe’s leading travel destinations. Moreover, business growth is expected to rise exponentially in the coming years. As a result, the country can offer a better than average return on your investment.
