The Maltese Companies Act, 1995 is based primarily on UK company law principles but has also been harmonised with the EU Directives. Accordingly, similar to UK law, Maltese company law provides for the set up of three types of commercial entities, namely partnerships en non collectif; limited partnerships en comandite and limited liability companies. With regard to companies, legislation distinguishes between two main types of companies, namely the:
- private limited liability company; and
- public limited liability company.
Whereas public companies may offer their shares to the investing public, private companies are prohibited from so doing. Transfer of shares in private companies is restricted, in that shareholders must first offer their shares to the other existing shareholders before offering them to third parties.
A private company may opt for private exempt status in which case it may have a single shareholder. However, the main relevance of the private exempt company is for accounting purposes since such companies may submit fewer accounting documents to the Registrar of Companies
The Companies Act regulates in detail the workings of companies and also the procedure to be followed at each and every stage, from incorporation to liquidation, with relative provisions for fraudulent and negligent trading to ensure maximum protection of creditors and shareholders.
Registration of a branch in Malta
A foreign body corporate (constituted or incorporated outside Malta) must register with the Registrar within one month from establishing a branch or place of business in Malta by delivering the following documents:
- An authentic copy of the charter, statute or Memorandum & Articles of the oversea company
- A list of directors and company secretary or the persons vested with the administration of the oversea company
- A list of persons vested with the representation of the oversea company
- A return indicating the name of the Maltese branch, its address in Malta and its activities, the names and addresses of a resident individual/s authorised to represent the oversea company for the branch’s local activities and the extent of such individual’s authority
- A return indicating the legal form of the oversea company and the identity of the register in which the oversea company is registered and the registration number
Benefits of setting up a branch in Malta
- Taxable on a remittance basis
- Same corporate tax system as that of companies will apply
- Non-resident shareholders of oversea companies can apply for tax refunds
- Access to Malta’s extensive network of double tax treaties
- No withholding taxes on branch profits