Malta Summary Guide

Business Forms in Malta

Maltese company law is based on civil, rather than common law.

The business forms likely to be of most interest to a small business person looking to locate in Malta are the Private Limited Company, General Partnership, Limited Partnership, Trusts, or Sole Proprietorship. Branches of overseas companies are also permitted.

Overall, the most common form of business entity is the Limited Liability Company, which can be formed by just one person, and represents a separate legal entity from its proprietor, whilst providing – as the name suggests – limited liability.

General Partnerships may also be of interest, and must be formed by at least two partners, who will be liable jointly and severally for the full debts of the partnership; liability is not limited (although the formation of a Limited Liability Partnership, which represents something of a hybrid between an LLC and a Partnership, is permitted).

Sole proprietors do not have to register their business or its name (as is necessary for the majority of incorporated business forms) but they do have to register for personal income tax and VAT (if turnover is above the VAT registration threshold of EUR24,000 and EUR35,000, depending on whether services or goods are being sold) and income tax. VAT registration can be carried out online, if desired.

Registration for income tax for self-employed individuals can also be done online at the website of the Inland Revenue Department (www.ird.gov.mt ). Registration for self-assessment and Social Security contributions can be completed at this website. The Maltese Inland Revenue Department encourages the use of online registration and filing of tax returns and will issue an individual with an e-ID.

As previously stated, various corporate forms associated with Malta’s ‘offshore’ regime were dismantled following the country’s entry to the European Union.

In March, 2006, the European Commission formally requested Malta under EC Treaty state aid rules to abolish the tax regime for Maltese Companies with Foreign Income (CFI) and the International Trading Companies’ (ITC) regime by the end of 2010 at the latest. In May, 2006, the Maltese government formally decided to gradually abolish the existing aid schemes.

Malta’s acceptance of the EC recommendation meant that the existing ITC and CFI schemes were effectively abolished by 1st January 2007, with the tax status of ITC not available to any new company registered in Malta after 31st December 2006, and existing ITCs only able to benefit from the previous system only until 31st December 2010.

Malta Summary Guide Contents

Malta Summary

Malta Summary Chart

Malta Residence

Taxation of Business People in Malta

Living and Doing Business in Malta

Business Forms in Malta

Latest Comments

Expat Brit

Hi,

I am facing a dilemma and would like to invite any reader to advise me.

I am a Brit who has lived outside UK since 1993- initially in Belgium (5 years) & subsequently in 4 African countries. After a year outside UK, the UK Inland Revenue confirmed my status as ‘non-resident’ for tax purposes and as I have had no income in UK, I have not completed a UK tax return for many years. I visit UK very rarely, normally for one or two weeks per year.

In May 2011, I was made redundent by my employers, who were downsizing. This coincided with a move to retire in the Netherlands, where I now have official residency (my wife is Dutch). I thought that, at 63 years of age, I would be unlikely to find suitable employment; in fact, I have not tried hard and had resigned myself to permanent (but slightly premature) retirement.

However, to my surprise, I have recently been approached (through a mutual acquaintance) by a company that wishes to use my skills on a project in the Isle of Man. The role, if & when confirmed, would see me working for about 10 days a month in Isle of Man, with about 5-7 additional days per month, working from home. Contract will be for about two years. The firm has asked me to confirm if I would prefer to be paid (and therefore be taxed) in Netherlands or Isle of Man, the idea being that I create a self-employment entity for this employment. I have no data on which to base a response. Given Isle of Man's traditional ‘low tax ‘environment, are there any benefits to declaring an income in IOM? Are there any Isle of Man residency implications? Netherlands takes a tax cut on total world wide income, and, as I have never had any contact with the Dutch authorities, I am reluctant to start such a relationship now. Do I have to declare income in both countries, with a breakdown prorata to the time spent in each jurisdiction? Should I declare income to UK Inland revenue?

If anyone has pertinent advice on these points, I’d be grateful to hear them.

TJM @ Eindhoven, NL

T. Dog

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Jersey vs. Malta??

Hi, I live in South Africa, and along with 2 business partners (one in South Africa and one in Ireland - all South African citizens though) are setting up a company that designs Smart phone applications. As they will be sold on the various platforms (none of which operate out of South Africa)we have to list our company as operating out of Ireland anyway. As such, we have decided to set up our company in the best tax country and are wanting info on whether Jersey or Malta is best? If anyone has some inside info we would really appreciate it!! Thanks!Mary

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Purchasing investment-link insurance for my staff

Would that count as income tax to my staff? And would that count as expense to my company?Michael

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Irish crisis - effects on small business?

Hi all,

Just wondering if anyone 'on the ground', as it were, might be reading and able to help me...I was considering relocating my hairdressing business from the UK to Ireland before the economy started to go properly belly-up...now, not so much.

Are things as bad as they seem over there, or is it being over-hyped by the media? And is the government still keen to support small business people? Cos if not, I'll look elsewhere...

Thanks,Kate

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Living in France contracting to Australian company

I am moving full time to France in Jan 2012 where I will be working as a freelance contract engineer to a number of Australian based companies. It is my choice to move to France not a work requirement. I will be renting my house out in Austrlalia and renting a house while I am in France. I hold both EU & Austrlain citizenshiip. I am married with 2 young children. Approx total family income $100k AUD.
Do I pay tax in France or Australia or both ?
Any help or guidance would be much appreciated.France move

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