COMPANY FORMATIONS IN MALTA
Our firm is licensed by the Malta Financial Services Authority (MFSA), to offer company formations and other corporate services in Malta. This has been enabled through the specializations our people hold in their respective fields.
This ensures that our clients receive expert advise whereby company formations and corporate services are delivered through the highest standards of quality. Moreover, since these services are provided in-house, we are able to provide them through the most competitive prices.
Our services are not only geared to holistically handle the whole setting up of the client’s preferred corporate structure but also extend to the ongoing maintenance of the company. We offer holistic financial solutions to our clients including but not limited to, auditing and assurance, indirect and direct tax advice, assistance and advice on bank finance, accountancy, human resource management, corporate consultancy, other corporate services and fiduciary services.
Through our affiliate company which is a licensed trustee by the Malta Financial Services Authority, we are able to provide expert advice in relation to fiduciary and trustee services to clients.
1. Effective Tax Rate in Malta
Setting up a company in Malta provides numerous benefits, particularly when the ultimate beneficiary owner of the company is not resident in Malta. In these scenarios, the company would be taxed at a rate of 35% but would be subject to a refund claim of 6/7th of the Maltese tax paid. Thus, benefitting from an effective tax rate of 5% on profits arising from the company’s trading activities. This activity does not necessarily have to be carried out in Malta.
On the other hand when the profits arise from passive income, these are taxed at a rate of 35% but would be subject to a refund claim of 5/7th of the Maltese tax paid. Thus, benefitting from an effective tax rate of 10% on profits arising from the company’s passive income generated from interest and royalties.
2. Single Member companies
A single member company may be set up in Malta. This is where the same person is vested with all powers in the company including roles related to the Director, Shareholder, Judicial and Legal Representation and Company Secretary. In the case of single member companies, the only restriction would be that the company may only carry out one trading activity.
3. Time and Cost effectiveness
Having a company set up in Malta, is not only efficient in terms of timeframes but is also cost effective. The company formation process takes an average time frame of three days to be completed. The initial share capital to set up the company may be as low as Eur 1,165. The professional fees to have the company registered are similarly cost effective, when compared to those of other jurisdictions
Once the company is registered one would need to apply for the Income Tax registration of the company, which registration number would be issued instantaneously. Registration for the Value Added Tax number together with the opening of the Bank Account in Malta would follow.
4. Documents required to register a company
Prior to registering the company in Malta, the professional body would require to carry out a due diligence exercise on the client in accordance with Anti-Money Laundering legislations in Malta.
In this regard, the following documentation would be requested from the client as part of this process:
- Passports of the involved parties;
- Proof of residence of the involved parties which may include a utility bill, the driving license or the identity card of the parties;
- Bank Reference from a recognised bank which confirms a relationship of more than two years during which time the client has conducted his or her account in a satisfactory manner;
- A confirmation of the source of wealth of the shareholders.
Once this exercise is completed, the client would be required to provide information in relation to the corporate structure to be set up, including:
- Name of company;
- Name of the involved parties;
- Percentage of shares to be owned by each shareholder;
- Share capital to be invested in the company;
- The trading activity which the company will be carrying out.
5. Different corporate structures that may be set up in Malta
- Public Companies:
This is the case where a company has more than 50 shareholders owning the company. Such companies would be required to be listed on the Malta Stock Exchange. Due to the size of the company, this structure carries with it considerable requirements.
- Limited Liability Companies:
Companies having a limited liability are required to have two or more Directors involved in the corporate structure of the company. The shareholders of such companies enjoy a limitation to the liability for debts and obligations contracted under the company.
- Single Member Companies:
Single member companies have the same attributes as ‘Limited Liability Companies’ however have only one person involved in the structure of the company. This person would be vested with all powers, including, those related to Director, Shareholder, Judicial and Legal Representation and Company Secretary.
In the case whereby two or more persons join to carry out an economic activity, this may be done through the setting up of a partnership. Partnerships do not have the same statutory obligations as companies, however the partners do not enjoy any limitation to their liability for debts and obligations under the partnership.
- Sole Traders:
In the case whereby one person decides to carry out an economic activity, this may be done through a self-employed status whereby one is not required to register a company with the Malta Financial Services Authority. The person would be required to apply for a Value Added Tax (VAT) number with the VAT Department of Malta, depending on the level of expected annual turnover his or her activity will generate.
COMPANY FORMATIONS IN WORLD WIDE JURISDICTIONS
Parker Randall Turner is a member of the international network Parker Randall International. Through its affiliate members in the network, the firm is able to set up companies in world wide jurisdictions according to the requirements of the client.
Companies being set up in Malta may also have as directors companies which are registered in other jurisdictions.
Through our people’s expertise we are also able to advise in relation to what would be the best solution vis-à-vis the requirements of the client.
STATUTORY RECORDS AND COMPANY REGISTER DOCUMENTS
Within our corporate department, we offer clients other services ancillary to company formation services. Following the formation of the company, the Directors of the company may decide to effect changes in the structure of the company in relation to the involved parties, the share capital, the registered address, the name and the trading activities of the company.
The Companies Act requires that these changes are recorded in the statutory books of the company. This is done through the documentation of minutes taken by the Board. We can assist as company secretaries in the provision of these services. Our corporate department is equipped with technical persons in the field who have the necessary expertise to assist directors of companies.
Our corporate department will also ensure that the required changes are executed in a seamless manner according to the criteria laid down in the Memorandum & Articles of Association of the company and the Companies Act. We also take care to inform the respective authorities to update the respective records related to the company.
Changes in the corporate structure of the company may also effect the structure of the bank account signatories. Therefore we also take care, on behalf of the client to update the respective banks of these changes and to provide the necessary documentation for the banks to be in a position to effect such changes. Our firm acts as service corporate provider and we liaise such amendments as necessary with the bank.
Where changes in the corporate structure of the company will relate to the shareholders, a share transfer would need to be effected according to the designated amount of shares that each shareholder would be transferring or acquiring. A valuation of the shares currently held by the respective shareholders within the company may be required. In these cases, our corporate department will handle the whole process of the share transfer and/or share valuation, including the submission of the necessary documentation with the respective authorities. Our people will also ensure that the client is guided at all times through the whole process.
Malta is not only popular for its strong and stable political and economic environment but also for its robust and efficient banking system. Malta hosts a number of established banks both locally based and international banks. The two major banks in Malta are Bank of Valletta plc and HSBC Bank Malta p.l.c..
Banks in Malta undertake a rigorous due diligence process in accordance with Anti Money Laundering regulations. This has been the key to the maintenance of the robust banking system in Malta. At the same time, this process may bring about ambiguity to the client. Therefore our corporate department handles the whole process on behalf of the client, whereby we do not only liaise with the respective bank of choice of the client, but also prepare and submit all the necessary documentation.
We also handle on behalf of the client other ancillary banking services including but not limited to, the opening of personal bank accounts for the client, applications for online banking, applications for debit and credit cards, payments to third parties and issuing bank drafts or cheque books.
Through our international network, Parker Randall International, we are also able to extend these services to any other jurisdiction according to the preference of the client.
DIRECTORSHIP & COMPANY SECRETARY SERVICES
Our corporate department offers directorship services to clients. This may be done through the setting up of a resident director or also through the setting up of a director company which may be in other jurisdictions, according to the preference of the client.
The role of the director may be that of an administrative or an operational nature according to the requirements of the client.
Similarly, to this service our corporate department offers company secretary services to clients. The role of the company secretary is mainly to keep minutes of statutory legal obligations and adhere to statutory obligations in accordance with the Companies Act.
REGISTERED OFFICE SERVICES
Every company which is registered in Malta, is required to have a registered address in Malta. We can offer to host the registered office of the company or otherwise this would mean that clients would need to rent out offices in order to have this registered address in Malta. Therefore, by offering this service, we would be assisting the client in saving up even further on costs.
Our office will host the documentation the client will receive in relation to the company and this will be filed in the respective client’s documentation. Where the client’s attention needs to be drawn to a particular document which has been received, this is done on the same day that the document has been received.
HOLDING COMPANY DIRECTIVE
Normally, a cross-border merger takes place when two companies from different jurisdictions are consolidated into one entity. On the other hand, a cross-border acquisition is carried out when one company from one jurisdiction takes over another company from another jurisdiction and becomes its new effective owner.
Malta is very attractive for the registration of holding companies through the attractive fiscal treatment offered as well as through the introduction of the participation exemption regime introduced in Malta in 2007.
The concept of participation exemption means that income or gains derived from a qualifying participating holding company, may be exempt from tax in Malta. A shareholding qualifies as a qualifying participating holding, where:
i) is a company that holds directly at least 10% of the shares of a company whose capital is wholly or partially divided into shares. Such holding must give the right to at least 10% of any two of the following- either the right to vote, or the profits available for distribution, or to the assets available for distribution on winding-up; or
ii) A company is an equity shareholder in another company and this latter company is entitled at its option to call at its option to call for and acquire the entire balance of the equity shares not held by that equity shareholder company to the extent permitted by the law of the country in which the equity shares are held; or
iii) a company is an equity shareholder in a company and the equity shareholder company is entitled to first refusal in the event of the proposed disposal, redemption or cancellation of all of the equity shares of that company not held by that equity shareholder company.
CROSS BORDER STRCUTURES
Cross-border structures are becoming increasingly attractive for tax planning and other reasons. They are the essence of the strategic management of several international scenarios that serve to help enterprises grow, especially if they trade on an international level. For this reason, the need at times arises where we carry out cross border mergers and acquisitions, in order to bring about and set up the most adequate structures for the client. Cross-border mergers and acquisitions involve the buying, selling, dividing and merging of two or more structures.
In today’s world, a client’s most valuable asset could very well be his Intellectual Property. For this reason Malta has a very sound legal framework to attract international clients in registering their IP property here. The main four laws that regulate intellectual property in Malta, are the Trademarks Act, the Patents and Design Act, the Copyright Act and the cross border measures governing Intellectual Property Rights.
The Trademarks Act protects the brands and marks that are unique to a company. The Patents and Designs Act 2000 protects industrial property rights. Being a member of the EU means that Malta is a member of the Community Trade Mark and Community Design system. In Malta copyright needs not be registered since copyright works receive automatic protection. This protection is entrenched in the law and covers the works of artists, audio-visual works, music and literary works, amongst others.
At Parker Randall Turner, we assist our clients with various aspects that come under the umbrella of IP. In fact, IP is one of the initial topics that are covered once we take a client on Board since we would want to ensure that such an important asset is properly protected.
Thereafter we discuss the possible registration of trademarks, patents and design with the client, including the registration of trademarks within the EU. We draft agreements between entities in order to protect the intellectual properties of our clients and their confidentiality, mode of transfer, non-disclosure and other such important aspects of every business. We can also assist our clients in reaching out of court settlements and dispute resolutions in relation to intellectual property.