Setting up a Company in Malta

Key Legal Issues

• Choice of company type and minimum capital requirements under the Companies Act (Cap. 386)
• Shareholder and director requirements, including substance and governance considerations
• Corporate taxation framework, including Malta’s full imputation system
• Regulatory licensing where activities are regulated (e.g. financial services, gaming, aviation)
• Ongoing compliance: accounting, audit, tax filings and statutory reporting

Why Malta for international company formation

Malta combines EU membership, a common law–influenced corporate framework and a long-established role as an international business and finance centre. For many international clients, Malta offers:

• Legal certainty under a robust Companies Act, closely aligned with EU company law directives
• An English-speaking business environment with English as an official language
• Access to the EU Single Market and freedom of establishment
• An extensive double tax treaty network
• A corporate tax system designed for cross-border efficiency, subject to proper structuring and substance

For internationally mobile founders, family offices and multinational groups, Malta often serves as a holding, trading, intellectual property or operational hub within a wider international structure.

Types of companies available in Malta

The most commonly used corporate vehicle is the private limited liability company.

Private limited liability company

Key features include:

• Separate legal personality
• Liability limited to the unpaid amount on shares
• Minimum share capital of EUR 1,165, of which at least 20% must be paid up on incorporation
• Can be formed with a single shareholder and single director

This structure is flexible and suitable for trading, holding, financing and IP-related activities.

Public limited company

Less commonly used, typically for regulated or larger structures:

• Higher minimum share capital (EUR 46,588)
• More onerous governance and disclosure requirements

Branches and other vehicles

Foreign companies may also register a branch in Malta, though this does not create a separate legal entity. Partnerships and other vehicles exist but are used more selectively in cross-border planning.

Shareholders, directors and governance

Shareholders

• Individuals or corporate entities of any nationality may act as shareholders
• Nominee arrangements are permitted, subject to transparency and anti-money laundering rules
• Ultimate beneficial owners must be disclosed to the Maltese Beneficial Ownership Register

Directors

• At least one director is required
• Directors may be individuals or corporate entities
• While there is no statutory requirement for Maltese-resident directors, substance and effective management are critical for tax purposes

Company secretary

Every Maltese company must appoint a company secretary, responsible for statutory compliance and corporate governance.

‍

From a practical perspective, governance arrangements should be aligned with the company’s commercial reality, decision-making processes and international tax positioning.

The Maltese corporate tax framework in outline

Malta operates a full imputation system of taxation. Companies are taxed at a headline rate of 35%, but this is not the end of the analysis.

Full imputation and shareholder refunds

Under Malta’s system:

• Tax paid by the company is imputed to shareholders upon distribution
• In many cross-border scenarios, shareholders may be entitled to tax refunds, typically resulting in an effective tax rate significantly below 35%

The availability and level of any refund depend on:

• The nature of the income (trading, passive interest/royalties, capital gains)
• The shareholder profile
• Whether anti-abuse provisions apply

No withholding taxes

Malta does not levy withholding tax on outbound dividends, interest or royalties paid to non-residents, subject to conditions.

Participation exemption

Dividends and capital gains derived from qualifying shareholdings may benefit from the participation exemption, removing Maltese tax at source in appropriate cases.

‍

Importantly, Malta’s tax system is rules-based, not discretionary. Outcomes must be analysed carefully against the Income Tax Act (Cap. 123) and relevant subsidiary legislation.

Substance, management and international tax alignment

In today’s international tax environment, substance is no longer optional.

Key considerations include:

• Where strategic decisions are taken
• The composition and location of the board
• Operational presence, employees and premises
• Alignment with OECD principles on economic substance and EU anti-avoidance rules

A Maltese company should be structured and operated in a manner that reflects genuine commercial activity, particularly where treaty access or refund mechanisms are relied upon.

Accounting, audit and ongoing compliance

Once incorporated, a Maltese company must comply with ongoing obligations, including:

• Statutory accounting records, prepared in accordance with IFRS or GAPSME
• Annual financial statements, filed with the Malta Business Registry
• Audit requirements, subject to size thresholds
• Corporate income tax returns and provisional tax payments
• VAT registration and compliance where applicable

Failure to maintain compliance can have regulatory, tax and reputational consequences, particularly for internationally active groups.

Regulated activities and licensing

Certain activities require prior authorisation from Maltese regulators, including:

• Financial and investment services (MFSA)
• Virtual financial assets and fintech-related activities (MFSA)
• Gaming (Malta Gaming Authority)
• Aviation and shipping (Malta Transport Authority)

Where a company’s intended activities fall within a regulated sector, licensing timelines, capital requirements and ongoing supervision must be factored into the incorporation process from the outset.

Typical use cases for Maltese companies

In practice, Maltese companies are frequently used for:

• International trading and distribution
• Holding structures within multinational or family-owned groups
• Intellectual property ownership and licensing
• Group financing and treasury functions
• EU-based operational hubs for non-EU businesses

Each use case raises distinct legal and tax considerations, reinforcing the importance of bespoke structuring advice.

Common pitfalls to avoid

While Malta is business-friendly, challenges often arise where:

• Structures are implemented without sufficient commercial rationale
• Substance requirements are underestimated
• Tax outcomes are assumed rather than analysed
• Governance is treated as a formality rather than a control framework

Early legal and tax input is essential to avoid costly restructuring at a later stage.

Strategic implications

Setting up a company in Malta should be approached as a strategic structuring decision, not a purely administrative exercise. When properly implemented, a Maltese company can serve as a robust and compliant platform for international business. When poorly designed, it can expose shareholders and directors to tax, regulatory and reputational risk.

‍

The key is alignment: between legal form, commercial reality and international tax expectations.

How our Malta corporate and tax advisors can help

Andersen Malta advises international businesses, entrepreneurs, family offices and multinational groups on:

• Company formation and corporate structuring
• Cross-border tax planning involving Maltese entities
• Governance, substance and international compliance
• Ongoing corporate, tax and regulatory support

Our approach is practical, coordinated and tailored to the specific objectives and risk profile of each client.