Malta Commercial Partnerships
In Malta, a commercial partnership has a legal personality distinct from that of its member or members and such legal personality shall continue until it is struck off the register. There are three kinds of partnership, namely a partnership en nom collectif, a partnership en commandite and a company. The limited liability company is the corporate form of choice in Malta and one which is formed by means of subscription to capital divided into shares. The most important aspect of the limited liability company is that the liability of the shareholders is limited to the amount, if any, unpaid on the shares held in it.
The minimum share capital required to set up a private company in Malta is €1,165 of which 20% must be paid up. A company in Malta may have its share capital denominated in any currency and is not subject to any exchange control restrictions. The company‘s income tax is paid in the same currency of the share capital and any tax refunds are also given in that same currency.
Registration of a company
A company is a legal entity or corporate body which is brought into being by the regsitration procedures laid down by the Companies Act of 1995. Private companies are required to have at least two natural or legal persons as shareholders. A private limited liability company may nevertheless be formed as a single-member company, subject to certain conditions laid down in the Companies Act.
We may help assist our clients with the drafting of a company statute according to their specific commercial requirements and also act as their representatives for the incorporation of their company here in Malta. The company will require appropriate administration in order to adhere to statutory requirements and deadlines. In this respect we also provide a full back office and secretarial service.
The company is obliged by law to settle its tax liability in the same currency in which its share capital is denominated within nine months from the financial year-end (this is extended to eighteen months from the financial year-end should 90% or more of the company’s business arise outside Malta), however the company’s income tax return must always be filed by not later than nine months after the financial year-end. Thus for a company whose financial year-end is December 2015, the tax return must be filed by 30th September 2016 whilst the tax liability for that year must be settled by 30th June 2017 or by the date of distribution of that year’s profits, whichever is the earlier. This has obvious cash flow advantages.
Maltese companies performing trading activities are obliged to register for a VAT number which is recognisable within the EU permitting cross border trade of goods and services. The standard rule is that no VAT incidence shall exist so long as the parties to the transaction are both registered for VAT in different EU member states. The standard Malta VAT rate is currently 18% and the Maltese VAT law is in conformity with all relevant EU Directives. Returns for VAT and intra-stat declarations must be submitted every three months. We provide a comprehensive accounting service to meet all these statutory requirements.
We also offer assistance in the formation of corporate vehicles in other financial services centres.
Continuation of Companies
A foreign company which is substantially similar in form to a company incorporated under Maltese law may request to be registered as being continued in Malta under the Companies Act. The request will be accepted if the continuation is allowed in terms of the law of that country and of the company’s statute. The continuing company will be struck off from the register of the foreign registry and the company will be treated as if it had been incorporated in Malta. Similarly, a company registered in Malta may request to be continued in another country as long as the law of that country allows the procedure.
The main advantage of such a procedure is that contractual agreements and commitments entered into by the company will continue to be recognized in the new jurisdiction.
Setting up a branch in Malta
The Companies Act allows foreign companies to register a branch in Malta. Every oversea company wishing to establish a branch in Malta must file with the Registrar of companies, within one month of establishment, the following documents:
- A copy of the Memorandum and Articles of Association, or the charter or other instrument defining the constitution of the company;
- Particulars of directors and secretary of the company;
- Name and address of at least one person resident in Malta who is authorised to accept service of notices on behalf of the company.
A branch in Malta will also enjoy the same Malta tax treatment as that applicable to Malta registered companies.