With its attractive climate, wide use of the English language and EU membership, lots of companies look at setting up their business in Malta. In addition to foreign companies looking at making Malta their base, there are obviously countless companies with Maltese owners based on the island too.
Setting up a company in Malta is relatively straightforward, and company formation is regulated by the Malta Financial Services Authority (MFSA) and forming a company can take as little as 48 hours.
Malta is a tax efficient location for companies and with costs of company formation being relatively low, Malta is an attractive option when looking at starting up a business. Companies and commercial partnerships are formed under the Companies Act.
The first step when setting up a company is to decide on its legal structure. These are the three main types of business in Malta.
The owner of the business and one or more partners can form a partnership en nom collectif for the exercise of one or more acts of trade. Its members do not benefit from limited liability because the obligations of the partnership are guaranteed by the unlimited joint and several liability of all the partners.
The partnership en commandite has a separate legal identity and has two types of partners:
- the general partners, who assume unlimited responsibility for the partnership;
- the limited partners, whose liability is limited to the amount left unpaid on their contribution.
The partners enter into a deed of partnership which contains the essential terms and conditions of the partnership’s operation. The deed is signed by the founding partners and this is then submitted to the Registrar of Companies.
The limited liability company is the most popular form of business structure and this type of company has two important features:
- Limitation of liability of its members to the amount left unpaid on its shares;
- Creation of a distinct, separate legal entity from that of its members.
The original members of a limited liability company have to sign a memorandum of association which is then submitted to the Registrar of Companies for verification of compliance prior to registration.
Members must also register with the Department of social Security and the company must be registered for VAT. There are several organisations in Malta than can help with company formation. The largest and best-known is Malta Enterprise.
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