Malta
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The private limited liability company (Ltd) is by far the corporate vehicle most commonly used by foreign investors conducting business in Malta. It is governed principally by the Companies Act (Chapter 386 of the Laws of Malta). Maltese law also provides for other forms of commercial partnerships, which are considerably less common for foreign investment purposes. The Companies Act additionally provides for public limited liability companies.A foreign company may alternatively establish a branch/place of business in Malta, although this does not create a separate Maltese legal entity and entails registration and ongoing filing obligations in Malta.The incorporation and ongoing filing process is increasingly digital. The Malta Business Registry (MBR) operates the Business Automation Registry Online System (BAROS), through which documentation relating to the registration and ongoing administration of companies may be filed electronically.Electronic filing attracts lower statutory registration fees in certain cases.
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A Maltese private limited liability company can be incorporated as a single-member company and may therefore be wholly owned by a single foreign individual or legal entity, subject to the applicable statutory requirements.The minimum authorised share capital of a private limited liability company is €1,164.69, of which at least 20% must be paid up on incorporation.While a Maltese company cannot be incorporated without an initial capital contribution, contributions in kind are permitted, subject to applicable requirements.
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Both foreign individuals and legal entities may hold shares in a Maltese company. There is no nationality or residence requirement applicable to shareholders under Maltese company law, and therefore nothing preventing a foreign individual or corporate entity from incorporating or holding an interest in a local company, subject to fulfilment of due diligence requirements.All companies are also subject to applicable beneficial ownership identification and registration requirements. The MBR maintains Malta’s central Register of Beneficial Owners and verifies beneficial ownership information as part of its regulatory functions. Accordingly, foreign investors and the persons behind any corporate shareholders (whether having an ownership stake or exercising control by other means) would need to be disclosed.Additional requirements may arise where the company proposes to conduct a regulated activity (e.g. insurance, banking, fiduciary or investment services), or where sector-specific rules apply, but these restrictions are unrelated to foreign shareholding.
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Maltese company law does not impose a Maltese nationality or residence requirement on the directors of Maltese private limited liability companies, which are required to have at least one director.Notwithstanding this, the place from which the company is actually managed and controlled can have important tax, substance and regulatory implications. Foreign investors should therefore obtain advice on the appropriate governance and substance arrangements for the proposed activities rather than considering residence solely from a company law perspective.
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Anna Maria Zammit, Partner: annamaria@vallettalegal.comReuben Balzan, Parter: reuben@vallettalegal.comNaomi Galea, Associate: naomi.galea@vallettalegal.comLeanne Scicluna, Associate: leanne.scicluna@vallettalegal.comOur team can assist foreign investors with the structuring and incorporation of Maltese companies, the provision of registered office, fiduciary shareholding, company secretarial and other corporate services, including statutory filings, and ongoing corporate governance and compliance.We also provide supporting back-office services, including accounting and payroll.
