Company Formation in Malta: Guide for US Entrepreneurs

For American entrepreneurs and expats seeking an EU base, Malta has a great deal to offer. Starting a business in this Mediterranean country tends to come with many advantages, including efficient registration procedures and notable tax incentives.

To help you understand how to set up a Maltese company and take advantage of the country’s business-friendly climate, we’ll cover the benefits of incorporating in Malta as a foreign business owner, as well as the costs, registration process and legal requirements. We'll also talk about how BatchTransfer can help your team do international payroll.

Why Choose Malta for Company Formation

As mentioned above, Malta can be an ideal location for US companies to expand or start a new business. Now considered by many to be a strategic location for international business, registered Maltese companies benefit from EU membership and access to the European single market, meaning seamless trade and travel within the Schengen zone.

Here are other notable perks for non-residents:

• Malta maintains more than 70 double taxation treaties,¹ preventing companies from being taxed twice on the same income
• The country has a stable and transparent legal framework with strong investor protections
• With English as an official language and a multilingual, highly skilled workforce in sectors like finance, iGaming and technology, Malta makes it easy for foreign entrepreneurs to operate and hire talent locally
• Malta’s standard corporate tax rate is 35%, but a unique tax refund mechanism can reduce the effective tax rate to around 5% for foreign shareholders

Malta’s Corporate Tax System

The corporate tax rate is 35% on profits, which on the surface is an EU-average rate. However, Malta operates a full imputation tax system with refunds to shareholders.² This effectively turns Malta into a low-tax jurisdiction for many international businesses: the full imputation tax system allows for a refund of up to 6/7 of the tax paid.

In effect, if a Maltese company pays 35% tax on its profits and then distributes dividends, the non-Maltese shareholders could claim back a significant portion of that tax.

Additionally, there are no withholding taxes on dividends, interest and royalties paid to non-residents. In practice, this means firms can enjoy tax efficiency on par with traditional offshore jurisdictions, but within a fully compliant EU country.

These advantages, along with a quick incorporation process and reasonable fees, make Malta popular among U.S. expats and entrepreneurs for those seeking a low-tax, internationally recognized jurisdiction.

6 Steps to Incorporate a Company in Malta

For US businesses or expats, setting up a company in Malta is straightforward and can often be done remotely. The Malta Business Registry (MBR) even allows users to register a new company online through its digital system.³

Below, you’ll find a step-by-step overview of how to register a company in Malta.

Step #1: Choose a Company Structure and Name

Start by deciding on the type of company structure that suits your needs. For most, a private limited liability company (Ltd) is chosen. Other options include public companies (PLC), partnerships and sole proprietorships.

Next, select a unique company name that isn’t already in use or too similar to an existing name.

Step #2: Prepare Incorporation Documents

Draft the Memorandum and Articles of Association, which are the constitutional documents of the company.⁴

The Memorandum of Association includes key details such as the:

• Company name
• Registered Maltese office address
• Business objectives
• Share capital
• Details of initial shareholders, directors and the company secretaryYou will also need to gather due diligence documents (e.g., identification and proof of address) for all directors, shareholders and beneficial owners as part of Malta’s Know Your Customer (KYC) and anti-money laundering compliance.

Step #3: Appoint Directors, Secretary and Registered Office

As per the Malta business registry, every Maltese company must have at least one director and one company secretary.⁵ Thankfully for international expats and entrepreneurs, these can be any nationality; there is no requirement for directors or officers to be Maltese residents.

You’ll also need a local registered office address in Malta for the company’s official correspondence.

Step #4: Deposit Share Capital in a Bank

Malta has a minimum share capital requirement for companies:⁶

• For a private limited company, the minimum authorized share capital is approximately EUR 46,587.47, to be paid up when forming the company
• For a public company, the minimum capital is EUR 1,164.69, with 25% paid up front

You will need to open a bank account (or a temporary deposit account) in Malta and deposit the paid-up capital. The bank will issue a deposit slip or letter confirming the amount paid, which must be submitted to the MBR as proof of capital contribution.

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BatchTransfer has an easy-to-use instant payments system that allows you to make multiple payments, for both domestic and international, in one go. Small businesses and enterprises can get access to BatchTransfer with no additional cost after getting a Wise Business account.

BatchTransfer’s core strengths for payroll:

What sets BatchTransfer apart is its commitment to providing the mid-market rate for currency conversions. This means that businesses get a fair and transparent deal when making international payments.

Another perk of using BatchTransfer for international payroll is its extensive coverage of over countries and currencies! With features like automatic payment scheduling and API integration, small businesses can streamline their payroll process, freeing up valuable time and resources for other important tasks.

• How can businesses use BatchTransfer for payroll?: Businesses can send up to 1000 payments with a single click with BatchTransfer. US-based business can access BatchTransfer at no extra charge.

• Connect to your accounting software: You can easily manage and reconcile your mass payments through accounting software integrations such as QuickBooks or Xero.

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Step #5: File Registration Forms with the MBR

Submit the Memorandum and Articles of Association, along with all required documentation (identification documents, bank deposit slip, etc.), to the Malta Business Registry for registration.

You must also pay the Malta company incorporation cost to the registry, which is a one-time fee.⁷

Once the MBR approves the application and fee, it will issue a Certificate of Incorporation. This certificate is proof that the company is officially formed and can begin trading.

Maltese business incorporation tends to be fast. In many cases, the certificate is issued within a few working days, often 24 to 72 hours after submitting complete documents.

Step #6: Post-Incorporation Tasks

Once you’ve formed your Maltese company, there are still a few important steps you might need to take before you can operate legally, including:

• Depending on your business activities, you may need to obtain specific licenses or permits
• All trading businesses should register for a Tax Identification Number (TIN) with the Maltese tax authorities and register for VAT if applicable
• You’ll also want to open a corporate bank account (if you only had a temporary account for share capital) to conduct business transactions
• Register as an employer for Social Security if you will hire employees
• Familiarize yourself with Malta’s employment laws and payroll obligations

Compliance and Ongoing Obligations for Malta Businesses

In Malta, as in any reputable jurisdiction, national and international companies must fulfill certain annual compliance requirements.

Here are some of those obligations to keep your company in good standing:

• Annual Return: Every Maltese company submits an annual return to the Malta Business Registry, which updates the company’s basic details (shareholders, directors, capital, etc.).
• Financial Statements: Companies are required to maintain proper accounting records and prepare annual financial statements. For most companies, audited financial statements must be filed with the authorities each year.
• Tax Filings: Corporate tax returns are due annually, and any tax due (after refunds, if applicable) must be paid. VAT returns are filed quarterly or monthly, depending on turnover.
• Licenses and Special Compliance: If your company operates in a regulated industry, you must maintain your license in good standing and comply with any sector-specific reporting.
• Beneficial Ownership Registry: Malta maintains a register of ultimate beneficial owners (UBOs) of companies (as per EU anti-money laundering directives). When you incorporate, you must declare any individuals who ultimately own or control more than 25% of the company. Changes in beneficial ownership must be reported.

Using Malta Company Formation Agents

While you can technically incorporate a company in Malta on your own, using professional Malta company formation agents or corporate service firms tends to be the preferred route for international entrepreneurs.

Formation agents simplify the process by preparing documents, submitting them to the registry and liaising with Maltese authorities on the foreign company’s behalf. They handle due diligence checks, provide local services such as a registered office address and company secretary, and can even arrange nominee directors or shareholders.

Company formation agents can also help you with opening bank accounts as well as registering for tax and VAT.

Once your company is set up, these agents and firms can continue to help with ongoing administration, accounting and compliance as needed. Consider them to be your international company’s local administrative backbone while you focus on the business itself.

Moving Forward with Company Formation in Malta

Malta offers a compelling mix of benefits to American entrepreneurs and expats looking to form an international business, including:

• Quick, cost-effective business establishment process;
• Strategic EU location;
• Business-friendly regulations;
• Considerable tax advantages for international owners; and
• Legal framework that welcomes 100% foreign ownership with no local shareholder or director mandates.

U.S.-owned companies can ultimately enjoy very low effective tax rates in a legitimate EU jurisdiction when they leverage Malta’s full imputation tax system. Altogether, Malta is often highlighted as a top choice for American entrepreneurs.

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Wise is not a bank, but a Money Services Business (MSB) provider and a smart alternative to banks. Wise makes it easy to send, hold, and manage business funds in currencies. You can get major currency account details for a one-off fee to receive overseas payments like a local. Simply add the local account details when billing international customers to receive international payments with no fees.

Account opening is 100% online, with no need to visit a branch or book appointments.

Once you’re set up, you can connect to software such as Wave, FreshBooks, and more. You can also withdraw funds from Stripe without currency conversion fees.

Open a Wise Business account online

Some key benefits of Wise Business include:

Major local account details to receive international payments with ease No monthly account fees just a simple one-off fee for account details Receive payments from e-commerce platforms such as Amazon or via Stripe. Free invoicing tool to generate and send invoices. Create invoices using the Wise invoice generator or invoice templates. Accounting integrations, including a QuickBooks Bill Pay connection. Bill payments will be synced, matched, and categorized in QuickBooks for simple reconciliation. Access to BatchTransfer. Fast payment of up to 1,000 people.

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Sources:

1. Double Taxation Conventions
2. International Tax Malta Highlights 2024
3. Malta Business Registry (MBR)
4. Memorandum and Articles of Association
5. Directors and Company Secretary
6. Capital Requirements
7. Malta Company Incorporation Cost