DOCSLIB.ORG

Doing Business Guide Malta

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Doing Business Guide Malta Edition No. 2 January 2019 Doing Business Guide Malta This guide has been produced by the Morison KSi Maltese member firm About This for the benefit of its clients and associate offices worldwide who are Guide interested in doing business in Malta. Its main purpose is to provide a broad overview of the various issues that should be considered by organisations when setting-up business in Malta. The information provided cannot be exhaustive and – as underlying legislation and regulations are subject to frequent changes – we recommend anyone considering doing business in Malta, or looking to Malta as an opportunity for expansion, should seek professional advice before making any business or investment decision. While every effort has been made to ensure the accuracy of the information contained in this guide, no responsibility is accepted for its accuracy or completeness. The information in this guide is up to date as at the edition date. For more information, please contact: KSi Malta www.ksimalta.com Bernard Charles Gauci [email protected] +356 2122 6176 6, Villa Gauci Mdina Road BZN9031 Balzan Malta Disclaimer: Morison KSi is a global association of independent professional firms. Professional services are provided by individual member firms. Morison KSi does not provide professional services in its own right. No member firm has liability for the acts or omissions of any other member firm arising from its membership of Morison KSi. www.morisonksi.com Edition No. 2 January 2019 Contents Introduction 1 Business Structures 2 Labour and Personnel 5 International Mobility 6 Taxation System 8 Banking and Finance 13 Reporting Requirements 14 Grants and incentives / Agencies providing assistance 15 Specific sectors with favourable business opportunities 17 Why Malta? • History: Malta is proud of its Introduction ancient temples, which date back Malta has been described as one of earlier in human history than any the best places in the world to live, other structure in the world – and an ideal choice for investment. In even the pyramids of Egypt. a survey carried out by Expat Insider • Infrastructure: Malta is known and published at InterNations. as a ‘smart island’ because of its org (2016), Malta ranked in second excellent information technology place as the best country for expats (IT) infrastructure. to live in,1 based on its pleasant climate, geographical position, • Safety: The UN World Risk low crime rate, reliable banking Report Malta has consecutively system, and – last but not least rated Malta as the second safest – its tax planning incentives and country in the world, based on its opportunities. exposure to and ability to cope with natural disasters.2 The economy • Skills: As indicated in the Education and Training Monitor • Currency: Malta is a full member 2013 (issued by the European of the European Union (EU), with Commissioner for Education, the Euro as its official currency. Culture, Multilingualism and Youth) Malta has amongst the • Capital: The capital city of Malta highest rates of graduates is Valletta (named after the among the 27 EU member states. French nobleman, Jean Parisot de la Valette, who led resistance • Labour: When it comes against the Ottomans at the to recruitment and human Great Siege of Malta in 1565). resources, Malta guarantees value for money, as wages are highly • Language: Despite being such a competitive notwithstanding the small country, Malta has retained remarkable quality of Maltese its own language, Maltese. Most workers. of its population also speak English and Italian. • Climate: Malta’s bathing water is among the EU’s best, which is an additional bonus to the Island’s 300 days of sunshine. • Accessibility: There are directs flights to/from all major cities in Europe and North Africa. 1. See: www.internations.org/expat- insider/2016/the-best-and-worst-places- for-expats 2. See, for example: www.unu.edu/ media-relations/media-coverage/malta- worlds-second-safest-country-again- %E2%88%92-world-risk-report-2013.html www.morisonksi.com Malta 1 While business activities could be service provider (CSP) would Business carried out on a personal basis as submit on behalf of the prospective self-employment, for additional company the memorandum and Structures protection (in some cases) and articles of association, mainly formality one could consider the highlighting the name (a name following types of structure. reservation facility in advance is available), registered address, Limited liability company main objectives (usually including a number of secondary objectives Any person, resident or not, may that entitle the company to perform set up a private limited liability its legal business, aside from the company (LLC) in Malta with a specified principal objectives), share minimum paid-up share capital capital composition and structure, of €233. By default, any LLC board composition and the incorporated in Malta obtains company’s expected fixed duration, Maltese fiscal residence and if any. domicile, and is thus taxable on worldwide income. Compliance obligations of limited liability companies A Maltese LLC would generally have the following characteristics: LLCs registered in Malta must prepare and submit an annual • At any time, must have at least return on the date of the company’s one director and one secretary annual anniversary together with (this could be the same person) settlement of the annual fee, which ranges from €100 to €1,400. In • Shareholders’ liability is limited addition, the company’s annual to their capital contribution audited accounts would must • By default, shares cannot be be submitted at the Registry of sold to third-party shareholders Companies within 10 months unless previously offered to after financial year-end (reduced other existent shareholders to 7 months in case of public (although different pre-emption companies). rights could be set) Redomiciliation of limited liability • Must have its financial companies statements audited and submitted annually at the Malta allows for the redomiciliation Registry of Companies. in and out of LLCs in terms of ‘continuation of companies’ How long does it take to form regulations. Any profits accruing to a limited liability company? a company to be redomiciled into Malta shall not be subject to any Once all documents and signatures taxation in Malta. are in place, and the necessary due diligence testing successfully Branches in Malta completed, a company is generally set up within 3 business days. Presence through branches in Malta must be registered as overseas Establishment procedure of companies (OC) with the Registry a limited liability company of Companies. A branch is merely the extension of the actual foreign Once the company and all involved company and would have no parties have been duly vetted for separate legal entity. due diligence purposes, a corporate www.morisonksi.com Malta 2 How long does it take to form an would have unlimited (general) accumulation and maintenance, overseas company (branch)? liability. The capital of such fixed interest, spendthrift, charitable partnerships may be divided into and unit trusts. Once all documents and signatures shares. are in place and the necessary How long does it take to form a due diligence testing successfully trust? Unless a partnership en commandite completed, an OC to act as a branch has its capital divided into shares in Malta is generally set within 3 A trust need not be registered with (in which case, is to be treated as business days. any authority for its creation and a company for tax purposes) all can be legally set up unilaterally partnerships, by default, are to be Establishment procedure of an or bilaterally, by oral declaration, considered ‘transparent entities’ overseas company (branch) or in writing. When dealing with a for tax purposes, although they written trust, the settlor must set up could elect to be treated as normal Once the company and all involved the trust with a licensed trustee. An companies. parties are duly vetted for due exception to this rule exists when diligence purposes, a CSP would dealing with private and family How long does it take to form a submit on behalf of the prospective trusts, where the law provides the partnership? branch an authentic copy of the possibility for the trust to be set up instrument of constitution, details either by (i) a notarial deed with a Once all documents and signatures of directors and secretaries, and close family friend or relative acting are in place and the necessary a return outlining the key details as the trustee, or (ii) establishment due diligence testing successfully of the prospective branch such as of a private trust company – that completed, a partnership in Malta name, registered address and the is, a private trust services provider is generally set within 3–5 business activities to be carried out. without a licence, providing trust days. services only to family members. Compliance obligations of an Establishment procedure of a overseas company (branch) Establishment procedure of a trust partnership Overseas companies generally When establishing a written trust, A partnership en nom collectif is have to submit financial statements the settlor simply needs to decide formed by drawing up a deed of consistent with those required for how they would like their trust to partnership to be registered at LLCs to the Registry of Companies. operate, and ensure that the trust the Registry of Companies and to Where the accounting requirements deed is drafted properly for the include: (i) the name and residence of the place of origination differ beneficiaries. In this regard, the of each partner; (ii) the partnership’s from those of Malta, the Registry settlor can also be a beneficiary. name (ii) registered office; (iii) of Companies may still accept such The settlor can also opt for objectives; and the (iv) contribution accounts, subject to full and clear the creation of an office of the of each partner.
Load more

Recommended publications
  • Chapter 17: Tax Treaties
    Chapter 17 Tax Treaties www.pwc.com/mt/doingbusiness Doing Business in Malta Tax treaty policy Since the mid-seventies Malta has sought to expand its However, the tax levied on the companies under the Income tax treaty network. Most of Malta’s treaties are based Tax Act in such situations will be directly limited to 15% on the OECD model although some treaties (particularly as if the treaty rate applied to the company profits. Rather older ones) contain some material variations therefrom. than a refund on the payment of dividends the investors Some of them include special tax incentives for foreign can therefore qualify for the reduced rate at the company enterprises setting up manufacturing establishments in level at the time that the profits are derived and without Malta. These consist typically in low tax rates on dividends any obligation to distribute the profits to benefit from the arising in Malta supported by tax sparing provisions. Malta’s reduced tax rate. Maltese domestic law also provides that economic development, and particularly the growth in its no tax is payable by non-residents on interest and royalties financial services sector, expanded the scope for tax treaties arising in Malta, subject to certain conditions (see Chapter and in fact currently Malta has over 70 double taxation 11) and, as stated above, this rule applies irrespective of the agreements with almost all the important OECD countries. treaty provisions dealing with withholding taxes on these The current list of tax treaties is given in Appendix VII. categories of income. Similarly, no tax is payable by non- A tax treaty concluded by Malta becomes law by Ministerial residents on capital gains arising on transfers of company order and the provisions arising therefrom apply shares or securities, except where such gains are derived notwithstanding any provisions to the contrary under from the transfer of shares or securities in companies whose Maltese domestic tax law.
    [Show full text]
  • Annual Report 2006
    89 MMiinniissttrryy ooff FFiinnaannccee _________________________________________________________________________________________________________ Annual Reports of Government Departments ~ 2006 Ministry of Finance 90 Special Projects Division BACKGROUND The Special Projects Office has the function to undertake and implement a wide variety of initiatives some of which are of a corporate nature and others involving specific Ministry of Finance departments. The major corporate projects undertaken in the year under review were related to overseeing the development of: (a) Accrual Accounting; (b) eProcurement; and (c) eArchiving. Other assignments undertaken during the period under review range from the organisational reform of the revenue earning departments within the Ministry of Finance to the activities of the Co-ordinating Task Force for Own Resources. ACCRUAL ACCOUNTING Work is continuing on the introduction of accrual accounting at all ministries and their respective government departments. Accrual accounting will have a major impact on the way the internal financial business of Government will be conducted, particularly in areas of asset management and the management of debtors and creditors. This financial reform process will cross ministerial and departmental organisational boundaries and have a major influence on the departmental processes related to their day-to- day financial administration. Accrual accounting will provide more meaningful financial information that will enhance the quality of the Government's financial decision-making
    [Show full text]
  • Doing Business in Malta
    www.pwc.com/mt Doing Business in Malta A guide to doing business and investing in Malta October 2012 2013 Doing Business in Malta 1 Contents Foreword Chapter 1: Malta - A Profile 5 Chapter 2: Business and Investment Environment 13 Chapter 3: Investment Incentives 18 Chapter 4: Direct Foreign Investment 30 Chapter 5: Regulatory Environment 39 Chapter 6: Banking, Investment and Insurance Services 44 Chapter 7: Exporting to Malta 51 Chapter 8: Business Entities 54 Chapter 9: Labour Relations and Social Security 66 Chapter 10: Accountancy and Audit Requirements and Practices 74 Chapter 11: Tax System 84 Chapter 12: Tax Administration 94 Chapter 13: Taxation of Companies and Individuals 103 Chapter 14: Partnerships and other entities 113 Chapter 15: Taxation of Individuals 121 Chapter 16: Indirect Taxation 128 Chapter 17: Tax Treaties 136 2 PwC Appendix I - Qualifying companies for Investment Tax Credits 140 Appendix II - Capital Allowances 144 Appendix III - Corporate Tax Calculation 145 Appendix IV - Individual Tax Rates 146 Appendix V - Individual Tax Calculation 148 Appendix VI - Duty Documents and Transfer Act 149 Appendix VII - Tax treaties in force as at August 2011 150 2013 Doing Business in Malta 3 Foreword The Guide has been prepared for the assistance of those interested in doing business in Malta. It does not cover exhaustively the subjects it treats but is intended to answer in a broad manner some of the key questions that may arise. Before taking specific decision or in dealing with specific problems it will often be necessary to refer to the relevant laws, regulations and decisions and to obtain appropriate advice.
    [Show full text]
  • Doing Business in Malta 2016
    Doing business in Malta 2016 In association with: Contents Introduction ................................................................................................................................................................................ 3 – Country profile ................................................................................................................................................................... 4 Legal overview ........................................................................................................................................................................... 5 Conducting business in Malta ................................................................................................................................................... 9 Tax system ................................................................................................................................................................................11 Labour ...................................................................................................................................................................................... 18 Audit ......................................................................................................................................................................................... 21 Trade ........................................................................................................................................................................................
    [Show full text]
  • COMPLETING YOUR TAX RETURN a Step-By-Step Guide
    COMPLETING YOUR TAX RETURN A Step-by-Step Guide Basis YYeearar 2020 Ye ar of Assessment 2021 1 2 This information booklet has been produced by the Office of the Commissioner for Revenue to help you fill in your tax return for the basis year 2020 in a complete and correct manner. Please note that the booklet is a guide only and has no legal force whatsoever. For further information: • Visit our website: www.cfr.gov.mt • Call: Freephone 153 • Email: [email protected] The Office of the Commissioner for Revenue uses the information provided to process your Income Tax Return and Self-Assessment in accordance with the Income Tax Acts and subsidiary legislation. We may check information provided by you, or information about you provided by a third party, with other information held by us. We will not disclose information about you to anyone outside the Office of the Commissioner for Revenue unless permitted by law. The Office of the Commissioner for Revenue treats your personal information in accordance with the Regulation (EU) 2016/679 (General Data Protection Regulation) and the Data Protection Act (Cap 586) to protect your privacy. Any queries may be addressed to The Data Controller, Office of the Commissioner for Revenue, Floriana, FRN 1700. 3 CONTENTS GENERAL INFORMATION 6 YOUR TAX RETURN: THE SELF-ASSESSMENT SYSTEM 6 MARRIED COUPLES 8 SEPARATED / DIVORCED COUPLES 9 PARENTS 9 SINGLE PARENTS 9 PERSONAL DETAILS 10 OTHER INFORMATION 11 EMOLUMENT AND BUSINESS INCOME 13 1. Employment or Office 13 2. Trade, Business, Profession or Vocation 14 3. Pensions and Social Security Benefits 16 4.
    [Show full text]
  • Professional Investor Funds in Malta
    Professional Investor Funds in Malta June 2016 www.kpmg.com.mt Table of contents Why Malta? 2 Funds in Malta 5 Professional Investment Funds 11 Setting Up in Malta 13 Taxation for Funds and Fund Managers 28 Appendices: 34 Comparison between Fund Jurisdictions 35 Living in Malta 44 Key Contacts 49 1 Why Malta? Some Key data Factors contributing to Malta’s project finance, syndicated competitive advantage loans, treasury, custody and • Malta became the smallest depositary services. Malta also member state in the EU in May • Flexible legal and regulatory hosts a number of institutions 2004, and joined the Euro Zone in environment with a legislative specialising in trade-related 2008. framework in line with products such as structured EU Directives. Malta is trade finance, factoring and • GDP per capita is at 78% of the fundamentally a civil law forfeiting EU average, at €18,580 (March jurisdiction, however business 2015). • Major international accountancy legislation is principally based firms, including the Big 4 firms, • Malta was relatively unscathed upon English law principles are present on the island. Legal during the years following the • Malta boasts a high level of firms tend to be local, though financial crisis of 2008, and education with graduates most form part of international stabilised by 2012. representing a cross-section legal networks. Many • Malta has one of the highest of the various disciplines professionals in both areas figures of sunshine hours in related to financial services. pursue studies and training Europe with an average of 3,000 Specific training in financial overseas per year. services is offered at • Maltese standard time is one various post-secondary and • English widely spoken and hour ahead of Greenwich Mean tertiary education levels.
    [Show full text]
  • International Comparison July 2019 Read More
    INTERNATIONAL COMPARISON What´s in this issue: July 2019 Impatriates / Expatriates regulation Auren International Comparison is a quarterly publication that provides you an overview of trends and international tax developments by comparing tax issues in different legislations around the world, that may affect those doing business in multiple locations. Constant legislative, regulatory, and judicial changes, along with globalization, economic shifts, and operational adjustments, are challenging issues. Now more than ever, in an increasingly globalized world, companies must have a total perspective and awareness of tax issues, and this publication aims to cover key tax topics which should be of interest to businesses operating internationally. This edition includes numerous country focus pieces, in which it is analyzed the tax and legal considerations involved in moving employees to different jurisdictions around the world. We hope that you find this publication helpful. www.auren.com Index Argentina Israel Portugal more info more info more info Austria Italy Romania more info more info more info Bulgaria Japan Russia more info more info more info Chile Lebanon Serbia more info more info more info Croatia Malta Spain more info more info more info United Cyprus Morocco Kingdom more info more info more info Ecuador Nigeria Ukraine more info more info more info Germany Panama Uruguay more info more info more info India Peru more info more info INTERNATIONAL COMPARISON. July 2019 www.auren.com - 2 Argentina IMPATRIATE REGIME EXPATRIATE REGIME Normal regime Impatriate staff will be a tax subject only during the first five The expatriate staff continues to pay taxes in Argentina for their income from years in Argentina, contingent upon the topics presented in the a worldwide source as long as they are residents.
    [Show full text]
  • CJ Rules That Impossibility to Deduct Tax Losses Incurred in Another Member State Prior to the Transfer of Corporate Tax Resid
    RECENT DEVELOPMENTS FOR TAX SPECIALISTS EDITION 183 EU Tax Alert - CJ rules that impossibility to deduct tax losses incurred in another Member State prior to the transfer of corporate tax residence is not a breach of the fundamental freedoms (AURES Holdings) - CJ rules that Netherlands tax rules on dividends paid to non-resident UCITS partly violate EU law (Deka) - CJ rules that Hungarian progressive tax having greater impact on undertakings owned by non-residents is not in breach of EU Law (Vodafone; Tesco) - VAT: new payment data exchange requirements adopted Highlights in this edition - CJ rules that impossibility to deduct tax losses incurred in another Member State prior to the transfer of corporate tax residence is not a breach of the fundamental freedoms (AURES Holdings) - CJ rules that Netherlands tax rules on dividends paid to non-resident UCITS partly violate EU law (Deka) - CJ rules that Hungarian progressive tax having greater impact on undertakings owned by non-residents is not in breach of EU Law (Vodafone; Tesco) - VAT: new payment data exchange requirements adopted EU Tax Alert 3 Contents Highlights in this edition - CJ rules that Belgian tax on stock exchange transactions does not breach freedom to provide - CJ rules that impossibility to deduct tax losses services (Anton van Zantbeek) incurred in another Member State prior to the transfer - Upcoming Commission proposals for June 2020 of corporate tax residence is not a breach of the fundamental freedoms (AURES Holdings) VAT - CJ rules that Netherlands tax rules on dividends
    [Show full text]
  • Malta Companies Key Facts
    Malta Key Facts Companies A Maltese company can be registered in terms of the Companies Act, 1995 (“the Act”) as a Public Company or a Private Company. Malta’s companies regime offers numerous planning benefits to international businesses and investors. A private company is a company whose – Minimum authorised and issued share capital Memorandum & Articles: of EUR1,165, 20% of which must be paid up upon incorporation. – Restricts the right to transfer its shares. – A company can have different share classes, – Limits the number of its members to fifty. with differing rights attached to each share class. – Prohibits any invitation to the public to subscribe – Free choice of currency of share capital, of for any shares or debentures of the company. functional currency for accounting purposes and for the settlement of any tax payable. A Public Company is one that does not meet the above criteria for classification as a private company. – The company must have a registered office in Malta. Principal Features of a Private Company – Every company must hold an Annual – A minimum of two shareholders being natural or General Meeting. legal persons. It is possible to register a Private Company as a single member company however – A company must file audited financial statements certain restrictions apply. (prepared under International Financial Reporting Standards as adopted by the EU) with the Registrar – Shareholders may be Maltese or non-Maltese of Companies. Companies may qualify to file resident. Nominee shareholders can also be abridged audited financial statements should they appointed provided that they are authorised by fall within the size criteria for ‘small’ companies.
    [Show full text]
  • Doing Business in Malta
    DOING BUSINESS IN MALTA DOING BUSINESS IN MALTA Maltese Business Services Overview 3 About Malta 3 Overview 3 The Economy 3 The Government 5 Business Practice and Etiquette 5 Laws, Regulations and Standards 6 Facts and Figures 8 Setting up a Business in Malta 8 Taxation In Malta 10 Corporate Taxation 10 Personal Taxation 12 Commercial & Residential Property in Malta 14 Who To Contact 18 3 DOING BUSINESS IN MALTA MALTESE BUSINESS SERVICES OVERVIEW In line with OCRA Worldwide’s endeavours to continuously offer its clients the best business solutions available, the Malta office is one of the newer additions to the network, offering an array of custom-made business solutions and corporate services. Situated at the newly established Tower Business Centre, in Swatar, Birkirkara, with a representative office in the heart of Valletta, which has been the country’s capital city since the 16th Century occupation of the Order of Knights of the Hospital of St John, the Maltese team provides expertise on an array of commercial, banking, corporate, legal and other related services. Malta’s strategic geographical location continues to play a very important part in its economic, political and cultural development as well as its prosperity today. Having implemented a sound legislative framework over the past decade, Malta’s accession as a member of the European Union in May 2004 has stimulated significant developments in the islands’ economy. These have resulted from a boost of inward direct investment into the country. With its highly educated English speaking workforce and the competitive cost of professional services, Malta has become firmly established as a reputable business and financial centre offering attractive business solutions for individuals and international corporations alike.
    [Show full text]
  • Taxation in Malta Agenda
    Taxation in Malta Agenda 1. The Malta Company 2. Dividend Income and Capital Gains 3. Anti-Abuse Provisions 4. Passive Interest and Royalty Income 5. Trading Income 6. Elimination of Double Taxation 7. Elimination of Double Taxation: The Flat Rate Foreign Tax Credit The Malta Company • Any Malta Company registered on or after 1 January 2007 may carry out international activities whether ‘trading’ or ‘holding’ in nature. • Tax treatment would depend on the allocation of income to the different taxed accounts depending on its nature and source. • The five taxed accounts are the: 1. Final Tax Account; 2. Immovable Property Account; 3. Foreign Income Account; 4. Maltese Taxed Account; and the 5. Untaxed Account. • The current income tax rate applicable to Malta companies is 35%. Dividend Income and Capital Gains A Malta Company in receipt of dividends deriving from a participating holding or capital gains from the disposal of such holding may, at its option, have this income treated in any one of the following manners: • Apply the participation exemption whereby the dividends or capital gains received by the Malta Company are exempt from tax in Malta; OR • Declare the income or gains as part of its chargeable income, and pay tax thereon, at the rate of 35%. Upon a distribution of a dividend by the Malta Company, its shareholder may claim a full refund (100%) of the Malta tax suffered on such dividends. Definition of “participating holding” 1. A holding of at least 10% of the equity; or 2. Shareholder entitled to call for and acquire balance of equity; or 3.
    [Show full text]
  • Doing Business in Malta
    DOING BUSINESS IN MALTA DOING BUSINESS IN MALTA INTRODUCTION The aim of this publication, which has been prepared for the exclusive use of BDO Member Firms and their clients and prospective clients, is to provide the essential background information on setting up and running a business in Malta, in compliance with legislation in force as at 31st October 2017. It is of use to anyone who is thinking of establishing a business in Malta as a separate entity, as a branch of a foreign company, or as a subsidiary of an existing foreign company. It also covers the essential background tax information for individuals considering coming to work or live permanently in Malta. This publication describes the business environment in Malta and covers the most common forms of business entity and the taxation aspects of running or working for such a business. For individual taxpayers, the important taxes to which individuals are likely to be subject are dealt with in some detail. The most important issues are included, but it is not feasible to discuss every subject in comprehensive detail within this format. If you would like to know more, please contact the BDO Member Firms with which you normally deal, who will be able to provide you with information on any further issues and on the impact of any legislation and developments subsequent to the date mentioned below. BDO is an international network of public tax and advisory firms, the BDO Member Firms, which perform professional services under the name of BDO. Each BDO Member Firm is a member of BDO International Limited, a UK company limited by guarantee that is the governing entity of the international BDO network.
    [Show full text]