What types of companies can you open in Malta?

Malta is one of the most appealing investment destinations in Europe and the European Union, and one of the reasons that makes it attractive is its taxation system. However, to benefit from it, you must choose an appropriate business form when launching an enterprise here. This is why the article below focuses on the types of companies available for incorporation in Malta.

Legal forms under which you can start a business in Malta

The business form you choose when opening a Maltese company influences the entire incorporation procedure, not only the taxes you will pay. This is why it is important to understand how each of them works.

Here is a review of the legal forms available here:

• the sole proprietorship, which, as its name says, is suitable for single entrepreneurs;
• the partnership, which can be established as a general or limited entity;
• the limited liability company, which can also be divided into the private and the public one;
• the branch and the subsidiary, which are forms commonly used by foreign companies expanding their operations in Malta.

When should you choose a sole trader in Malta?

The first business form mentioned in the list above is the sole proprietorship, which is recommended if you are a professional and can carry out any commercial activity on your own. You should also know that there is no limited liability for this type of enterprise, meaning you will work as a self-employed person, and pay your own social security insurance, alongside a rather higher income tax on your earnings.

Partnerships – useful when working with friends or family

If you have good friends or family you want to start a business with, you can choose between:

• a general partnership, where each of you will have unlimited responsibility for the debts of the business, as well as full decision-making powers over it;
• a limited partnership, where one party acts as a general manager and also holds unlimited liability, and the other party is a limited member in terms of liability and decision-making powers.

The limited liability company – the most employed business form in Malta

The private limited liability company is by far the most advantageous legal entity you can choose to run a business in Malta, no matter if you are a foreigner or a national of this country. The minor inconvenience is the stricter registration requirements, as you need to deposit a minimum share capital specified by the Commercial Law, and to appoint at least one director. However, the incorporation procedure is rather simple, with several documents to be filed with the Business Registry.

There is also the public or joint stock company, which is suited for large operations that require a larger capital, meaning more than EUR 46,000, out of which you must pay up 25% when registering the enterprise. By comparison, you only need around EUR 1,200 for a private company.

 The main advantage of this business form is the possibility to trade shares to the general public (hence its name) and obtain capital quite quickly this way.

These are the main types of companies you can choose from when starting a business in Malta. Each has its benefits and downsides, so making a decision may not seem simple. However, with the right guidance that will help you understand which works better for you, choosing the suitable legal form will no longer be such a complicated task.