Setting Up A Company In Malta: A Practical Guide And Benefits

Published on October 1, 2025 and written by Cyril Jarnias

Located in the heart of the Mediterranean, Malta has established itself as a prime destination for international entrepreneurs and investors seeking to establish a presence in Europe. With its advantageous tax framework, political and economic stability, and membership in the European Union, the Maltese archipelago offers fertile ground for the creation and development of offshore companies. In this article, we will explore in detail the benefits, procedures, and essential considerations for setting up your company in Malta.

Why Malta is the Paradise for Savvy Entrepreneurs

Malta is not just a picturesque sun-drenched island; it’s also a dynamic business hub attracting entrepreneurs from around the world. Its strategic position between Europe, North Africa, and the Middle East makes it an ideal springboard for businesses aiming for international expansion. But this is just the tip of the iceberg of the benefits offered by this small island nation.

One of Malta’s major assets lies in its attractive tax system. Although the official corporate tax rate is 35%, a unique refund system allows shareholders to reclaim up to 6/7ths of the tax paid upon the distribution of dividends. This ingenious tax structure can reduce the effective tax rate to just 5% for many companies, a considerable advantage compared to other European jurisdictions.

Furthermore, Malta benefits from an extensive network of tax treaties with over 70 countries, which helps avoid double taxation and facilitates international operations. The island’s political and economic stability, coupled with a strong regulatory framework and a skilled, English-speaking workforce, creates a business-friendly environment. Malta’s membership in the European Union also provides privileged access to the single European market, an invaluable asset for companies seeking to establish themselves in Europe.

The Legal Structures That Make the Difference

When it comes to setting up a company in Malta, several legal structures are available to entrepreneurs, each with its own specificities and advantages. The most commonly chosen form is the Limited Liability Company (LLC), which offers optimal flexibility and protection of shareholders’ personal assets.

The main available structures are:

• The Limited Liability Company (LLC): Ideal for most commercial activities, it can be formed with a single shareholder and a minimum capital of €1,165.
• The Public Limited Company: Suitable for large companies considering a stock exchange listing, with a minimum capital of €46,600.
• The Limited Partnership: Combines the advantages of a partnership and a capital company, offering interesting tax flexibility.
• The Investment Company with Variable Capital (SICAV): Specifically designed for investment funds, benefiting from a special tax regime.

The Maltese LLC stands out for its flexibility in terms of management and capital structure. It can be incorporated in just 2 to 3 business days, making it one of the fastest jurisdictions in Europe for company formation. Furthermore, Maltese legislation allows for the appointment of non-resident directors, offering additional flexibility to international investors.

Another notable advantage is the possibility of creating a holding company in Malta, benefiting from a tax exemption on dividends and capital gains from qualifying holdings. This structure is particularly attractive for international groups seeking to optimize their overall tax structure.

Maltese Taxation: A Major Asset for Your Business

The Maltese tax system is one of the pillars of the island’s attractiveness for foreign investors. Although the nominal corporate tax rate is 35%, Malta’s unique tax refund system can significantly reduce the effective tax burden. Here’s how it works:

• A Maltese company pays 35% tax on its profits.
• Upon the distribution of dividends, shareholders can request a refund of 6/7ths of the tax paid by the company.
• This mechanism can reduce the effective tax rate to just 5% for many businesses.

This system is particularly advantageous for holding companies and businesses engaged in international activities. Furthermore, Malta does not impose withholding tax on dividends, interest, and royalties paid to non-residents, which facilitates international financial flows.

Another attractive aspect of Maltese taxation is its participation exemption regime. Capital gains and dividends from qualifying holdings (generally holdings of more than 5% in foreign companies) can be completely exempt from tax in Malta. This provision is particularly interesting for international holding structures.

Malta also offers specific tax incentives for certain sectors, including:

• The maritime sector, with an advantageous tax regime for vessels registered in Malta.
• The online gaming industry, benefiting from a favorable regulatory framework and tax advantages.
• Research and development activities, with generous tax credits.

From Idea to Reality: Setting Up Your Company in Malta

Setting up a company in Malta is a relatively simple and fast process, but it nevertheless requires careful attention to certain details. Here are the key steps to bring your entrepreneurial project to life on the island:

1. Choose a name for your company: Check the name’s availability with the Malta Business Registry. The name must be unique and comply with certain rules (no offensive or misleading names, for example).

2. Prepare the incorporation documents: You will need to draft the Memorandum of Association and the Articles of Association of your company. These documents define the structure, objectives, and operating rules of the business.

3. Appoint the company directors and secretary: At least one director is required. For international companies, it is common to appoint a local director to facilitate daily management.

4. Open a bank account: Choose a Maltese bank and proceed to open an account for your company. This account will be used to deposit the initial share capital.

5. Register the company with the Malta Business Registry: Submit all required documents, including the registration form, incorporation documents, and proof of share capital deposit.

6. Obtain a VAT number: If your activity is subject to VAT, you will need to register with the Maltese tax authorities.

7. Register with social security: If you plan to hire employees, you will need to register as an employer with the social security department.

The entire process can be completed in 2 to 3 business days, making Malta one of the fastest jurisdictions in Europe for company formation. However, it is highly recommended to engage a local lawyer or accountant to ensure all legal and regulatory requirements are met.

Malta vs Other Offshore Havens: A Strategic Choice

In the landscape of attractive offshore jurisdictions, Malta stands out for its unique balance between tax advantages, political stability, and access to the European market. Let’s compare Malta to other popular destinations:

Malta vs Cayman Islands: – Malta: 5% effective tax rate, access to the EU market, strong international reputation. – Cayman Islands: 0% tax rate, but no direct access to the European market and increased scrutiny from international authorities.

Malta vs Ireland: – Malta: Flexible tax refund system, lower operational costs. – Ireland: Fixed 12.5% tax rate, more expensive workforce, but more developed tech ecosystem.

Malta vs Cyprus: – Malta: More extensive network of tax treaties, common law-based legal system. – Cyprus: Fixed 12.5% tax rate, potentially higher real estate costs.

Malta’s key advantage lies in its unique combination of advantageous taxation, political and economic stability, and EU membership. Unlike many traditional tax havens, Malta is not on any blacklist or grey list of non-cooperative jurisdictions, which strengthens its credibility with business partners and international tax authorities.

Furthermore, Malta’s common law system, inherited from the British period, offers a familiarity and legal predictability appreciated by international investors. The flexibility of the Maltese tax system, allowing for adjustments based on the company’s profile, is a major asset compared to the more rigid tax regimes of other jurisdictions.

Social Obligations in Malta: A Framework Favorable to Employers

The Maltese social system, while protective for employees, remains relatively favorable to employers compared to other European countries. Businesses enjoy a certain flexibility while respecting European standards in labor law. Here are the main points to know:

• Social contributions: Employers contribute 10% of the employee’s gross salary, capped at a certain annual amount.
• Paid leave: Employees are entitled to a minimum of 24 days of paid leave per year for a full-time job.
• Work week: The legal working time is 40 hours per week, with provisions for overtime.
• Minimum wage: Malta has a national minimum wage, reviewed annually, which remains competitive compared to other EU countries.

A particularly attractive aspect of the Maltese system is its special regime for highly qualified expatriates. This program offers a fixed tax rate of 15% on income up to €5 million for foreign professionals working in key sectors like finance, online gaming, or aviation. This measure facilitates the attraction and retention of international talent.

Malta also offers incentives for training and skills development. Companies can benefit from grants and tax credits for staff training, thus encouraging investment in human capital.

In terms of flexibility, Maltese labor law allows for the use of fixed-term contracts and temporary employment agencies, giving companies the possibility to adapt their workforce to economic fluctuations.

Opening a Corporate Bank Account in Malta: The Key Steps

Opening a corporate bank account is a crucial step in setting up your company in Malta. Although the process may seem complex, especially for non-residents, it is entirely achievable with good preparation. Here are the steps to follow:

1. Choose the bank: Malta has several international and local banks. Look for the one that best matches your needs in terms of services, fees, and international accessibility.

2. Prepare the documents: You will generally need the following: – Company incorporation documents – Company registration certificate – Passports and proof of address for directors and shareholders – Detailed business plan – Proof of source of funds

3. Make a preliminary application: Contact the chosen bank to initiate the process. Some banks allow you to start the procedure online.

4. Meet with a bank representative: In most cases, an in-person meeting will be necessary. Be prepared to explain your activity and projects in detail.

5. Background checks: The bank will conduct thorough due diligence on your company and its key players.

6. Approval and account activation: Once your file is approved, you can proceed with account activation, usually by making an initial deposit.

It is important to note that Maltese banks have strengthened their verification procedures in recent years, in response to international regulatory requirements. This can make the process longer and more rigorous, especially for non-resident companies or those operating in sectors considered high-risk.

To facilitate the process, it is often recommended to use a local intermediary, such as a lawyer or accountant, who can guide you through the specifics of the Maltese banking system and help you prepare a solid file.

Promising Sectors in Malta: Where to Invest for Success

Malta has successfully diversified its economy over the years, creating opportunities in various sectors. Some areas stand out particularly for their growth potential and the specific advantages offered by the Maltese framework. Here are the most promising sectors for investors:

1. Financial Services: Malta has established itself as a leading financial center, attracting numerous financial institutions, investment funds, and asset management companies. The favorable regulatory framework and tax incentives make this sector a preferred choice.

2. Online Gaming: The island has become a major hub for the iGaming industry, offering a stable regulatory environment and specific tax benefits. Many leading companies in the sector have established their headquarters in Malta.

3. Information and Communication Technology (ICT): With significant investments in digital infrastructure, Malta is attracting more and more tech companies, particularly in the fields of blockchain and artificial intelligence.

4. Tourism and Hospitality: A traditional but still growing sector, tourism offers numerous opportunities, especially in the high-end segment and business tourism.

5. Maritime and Aviation: Malta’s strategic position and advantageous tax regimes for these sectors make it a destination of choice for transport and logistics companies.

6. Creative Industries: The film, audiovisual production, and digital media sector is experiencing rapid growth, supported by attractive government incentives.

7. Education and Training: With strong demand for English-language education and vocational training, this sector offers interesting opportunities, particularly in international education.

The Maltese government has established specific incentive programs for several of these sectors, offering grants, tax credits, and innovation support. For example, Malta Enterprise, the country’s economic development agency, offers various assistance programs for innovative businesses and start-ups.

Recruiting in Malta: Building a Winning Team

Recruiting qualified staff is a crucial element for the success of your business in Malta. The island has a well-trained and predominantly English-speaking workforce, which facilitates the integration of international teams. Here’s how to optimize your recruitment process:

1. Understand the local job market: – Malta has a relatively low unemployment rate, which can make competition for qualified talent quite fierce. – Growing sectors like finance, ICT, and online gaming are particularly demanding of specialized profiles.

2. Use local resources: – Jobsplus, the national employment agency, offers free matchmaking services between employers and job seekers. – Online job sites like MaltaJobs and Keepmeposted are popular for recruitment.

3. Consider international recruitment: – Malta attracts many foreign professionals, expanding the available talent pool. – The “Key Employee Initiative” program facilitates obtaining work permits for highly qualified non-EU professionals.

4. Understand salary expectations: – Salaries in Malta are generally lower than in other Western European countries, but the cost of living is also lower. – Offering competitive packages, including non-salary benefits, can help you attract the best talent.

5. Comply with labor legislation: – Make sure you understand the legal obligations regarding employment contracts, probation periods, and termination. – Maltese labor law offers some flexibility, particularly for fixed-term contracts.

6. Invest in training: – Malta offers tax incentives for employee training, encouraging continuous skills development. – Offering training opportunities can be a major asset for attracting and retaining talent.

A unique aspect of the Maltese labor market is the availability of government-supported internship and apprenticeship programs. These programs can be an excellent way to integrate young talent into your company while benefiting from financial incentives.

Conclusion: Malta, Your Springboard to International Success

Malta positions itself as a destination of choice for entrepreneurs and investors seeking to establish a presence in Europe while benefiting from significant tax advantages. Its favorable regulatory framework, political and economic stability, and membership in the European Union make it a strategic hub for international businesses.

The unique combination of advantageous taxation, a qualified and English-speaking workforce, and a business-friendly environment offers exceptional opportunities in various sectors, from financial services to emerging technologies. The speed and simplicity of the business formation process, coupled with a solid banking system, greatly facilitate the establishment and development of activities.

However, as with any international expansion project, it is crucial to prepare well and surround yourself with local experts to navigate the Maltese legal and tax environment effectively. The key to success lies in meticulous planning and a thorough understanding of local specificities.

By choosing Malta as a base for your business, you are not just benefiting from short-term tax advantages. You are strategically positioning your company in the heart of the Mediterranean, with privileged access to European, African, and Middle Eastern markets. It is an investment in the future, paving the way for sustainable growth and successful international expansion.