company formation and management in Malta

Malta companies can typically be incorporated within two weeks. This timeframe is dependent on necessary approvals from the Maltese authorities.

Companies or partnerships are formed by agreement between the shareholders or members of private companies and must be registered at the Malta Business Registry.

The following types of entity are permitted: sole proprietorship, limited liability company (private or public) or, with at least one other person, a general (en nom collectif) or limited (en commandite) partnership.

An important advantage of the limited liability company is that the liability of the shareholders is limited to the amount which remains unpaid on their shares. A company is a legal person distinct from its shareholders and the assets and liabilities of the company are separate from those of its shareholders.

A private company can be formed by one shareholder only (single member company), who may also be the sole director and secretary of the company.

• A private company must have a minimum of one shareholder (single member company) and a maximum of 50 shareholders.
• Public companies must have at least two shareholders. There is no maximum number of shareholders.

• The minimum share capital of a private company is €1,165; of which at least 20% must be paid up.
• The minimum share capital of a public company is €46,588; of which at least 25% must be paid up.

The money must be deposited in a bank account under the name of the company in formation. The deposit slip should then be presented to the Registry of Companies as proof of the deposit.

The forming members are free to choose the name unless it is the same or very similar to the name of an existing company. The Malta Business Registry can refuse to register a name if it is considered offensive or otherwise undesirable. If the chosen name is not being used and is acceptable, the Registrar can reserve the name for a period of three months.

• The minimum number of directors in a private company is one; there is no maximum number.
• The minimum number of directors in a public company is two; there is no maximum number.

The essential document is the Memorandum of Association, which should include:

• Name of company.
• Private or public status.
• Registered office address.
• Details of shareholders.
• Objects of the company.
• Amount of authorised and issued share capital.
• Number of shares taken up by each shareholder and the amount paid on each share.
• Where shares are divided into different classes, the rights attaching to each class of share.
• Details of directors and company secretary.
• Details of persons vested with legal or judicial representation of the company.
• Period, if applicable, fixed for duration of company.

The memorandum may be accompanied by the Articles of Association, which govern the internal workings of the company. If no Articles of Association are registered, it is assumed that the model Articles of Association found in the First Schedule to the Companies Act have been adopted.

A company will be required to maintain a minimum presence in its place of incorporation – a registered office and a resident company secretary and/or a resident agent. We generally provide these services for all our clients and describe them as ‘domiciliary services’.

Sovereign also provides directors for many of the companies that we incorporate in order to ensure that their affairs can be properly managed and controlled from their place of incorporation. This service is often combined with our expertise in other company management and/or our domiciliation services.

The submission must also include a signed declaration containing information on the beneficial owners of the company. A beneficial owner includes any natural person or persons who:

• Ultimately own or control, whether through direct or indirect ownership or control, more than 25% of the shares or voting rights in the company; or
• Otherwise exercise control over the management of that company.

The information, in respect of each beneficial owner, must consist of the name, the date of birth, the nationality, the country of residence, an official identification document number indicating the type of document and the country of issue, and the nature and extent of the beneficial interest held.

This requirement does not apply to a company listed on a regulated market or a company whose registered shareholders are exclusively natural persons (not acting in a fiduciary capacity) who are disclosed in the public records held by the Registrar of Companies.

It is only natural person(s) who must be identified, irrespective of how many layers of ownership there are in the company’s corporate structure. The name of another company cannot be provided as a company’s beneficial owner.

Where a proposed company has no identifiable beneficial owner(s), the Registrar will accept a signed declaration. The natural person(s) who act as the senior managing official(s) will be recorded as the beneficial owner.

If the documentation is compliant with the Companies Act, it is registered and retained by Registrar of Companies which, upon payment of the applicable registration fee, issues a certificate of registration and a company number. After registration, the entity may enter into contracts, own credit and financial institutions, own property and open bank accounts.

Yes. Sovereign has longstanding professional relationships with a number of financial institutions and is able to arrange introductions and account openings on behalf of clients. We are also familiar with their account opening processes and their customer identification and due diligence procedures.

Registered and companies registered in Malta are obliged to:

• Maintain accurate records by filing the appropriate documentation whenever there is a change in the directors, shareholders, company secretary, the Memorandum or Articles of Association.
• File an annual return, accompanied by the relevant registration fee.
• File the company accounts once a year, within 10 months and 42 days from the end of the financial year.
• Hold an Annual General Meeting once a year and retain the minutes at the company’s registered office.
• All directors’ meetings must also be recorded and retained at the company’s registered office.

There are fines for late or non-submission of returns or/and documents.

If appointed to manage your Malta entity, Sovereign can provide clients with the on-going administrative support that enables them to maintain regulatory and tax compliance. We can also provide full back-office solutions including accountancy, human resources, pensions, insurance, trademark and intellectual property protection, obtaining local licences and permits, executive relocation and specialist tax advice.

The shareholders must take a resolution to dissolve and wind up the affairs of the company during a general meeting. A notice of dissolution must then be submitted to Registrar within 14 days of the date of dissolution and a liquidator must be appointed within 30 days of the date of dissolution. The liquidator is entrusted with winding up the affairs of the company and distributing the assets of the company.