The majority of international investors in Malta would select a limited liability corporation as their corporate structure. This is why this particular business format rose to become the most common one in the country. This business form is further divided into private LLCs and public LLCs. This article provides a complete guide on the registration procedure of private limited liability firms.
Private limited liability company
There are numerous forms of corporations for people involved in business setup in Malta, as stipulated by the Maltese Corporate Code. Private limited liability firms are the commercial entities that are used the most frequently among them. This LLC has the following qualities and is governed by Malta’s Companies Law.
- The stakeholder’s number may range from two to fifty;
- Only investors are permitted to exchange assets, and
- the corporation is not permitted to sell its stocks on the capital exchange.
A legitimate business in Malta or a skilled broker acting on their behalf, such as a foreign entrepreneur, can create a limited liability corporation.
Set up
The corporation must have fewer than 50 owners to continue doing operations under the current legislation. The minimum number of original shareholders required to start a private limited corporation is two. Nevertheless, the also permits a unique type of corporation with just one stakeholder. To assure the firm’s governance, at least one supervisor and one official adviser are required. The corporation must have a basic share capital of 1,200 EUR or its counterpart in another currency. At the time of business registration, 20% of this sum must be transferred to a checking account.
The procedure for opening a private LLC
The creation of the firm’s Articles of Incorporation is the first stage in forming a restricted liability firm. The state registrar will acquire and authorize the paperwork. It will take around two days to incorporate. Additional conditions for establishing a limited liability organization in Malta are:
- The company must be legally located in Malta;
- A separate corporate bank account with a share deposit;
- A professional accountant to look after the books of the company;
- Registration proof with staff training agency; and
- Commercial license based on the type of activities.
Documents required
The terms and conditions document, which must expressly specify that the corporation is a private entity, is the most crucial record relating to the formation of an organization. It must have a recognized office in the country and stockholders must contribute a required share capital of about 1,165 euros for it to be considered a national business. At the time of the LLC’s incorporation, the capital amount must be committed.
Before being authorized to function, it must also submit applications for several licenses or permissions. To register a Maltese LLC, the following documents must be submitted:
- Name;
- Articles of association;
- Proof of capital deposit;
- VAT number;
- Financial statements;
- Details of the owner; and
- Business permits.
Tax requirements
The majority of foreign entrepreneurs are drawn to Malta’s tax framework for limited firms. The corporation tax is fixed at 35%, however, if a foreign entity is established in another country and its assets are owned by an LLC in Malta, the tax might be slashed to 5%. It is important that entities operating in the EU commerce sector comply with the standard VAT rate of 18%.
Annual meeting requirements
An LLC in Malta is required to hold the yearly conferences, which may be held anywhere in the globe as long as all members approve of the business. The topic of the conference is pre-decided and an invitation is sent to all shareholders.
