Published on and written by Cyril Jarnias
Setting up a structure in Malta to sell online, bill for consulting or offer digital services allows combining full access to the European Union market, a competitive tax framework and an ecosystem highly attuned to digital issues. But for the setup to be solid, you need to understand both company law, taxation (corporate income tax and VAT), e‑commerce rules and, where applicable, residence programs such as the Nomad Residence Permit.
For an entrepreneur wishing to set up a company in Malta for an online activity (e-commerce, consulting or digital services), this article provides an operational overview based on current rules and administrative practices.
Choosing the right structure for an online activity
Before looking at VAT, the One Stop Shop (OSS) or payment gateways, choosing the legal form is decisive. In Malta, several options exist, but, for an online project with an international dimension, the private limited liability company is almost always preferred.
Main business forms
Several types of entities are provided for under Maltese law:
Overview of available structures depending on your project: start-up, large company, micro‑activity or prospecting.
The most common form for start-ups, e‑commerce structures, consulting agencies or SaaS. Limits shareholders’ liability to their contributions and provides a clear framework to bring in investors.
Suitable for large-scale projects or a future listing, with higher capital requirements and enhanced formalities.
Interesting for a micro‑activity, but much less suitable if you are targeting cross-border sales, using international PSPs or raising funds.
A prospecting tool to test the Maltese market without carrying out commercial activity or generating local profits.
For an e‑commerce, consulting or digital services activity aimed at several EU countries, the Ltd offers the most robust balance between banking credibility, limited liability and compatibility with tax refund and VAT mechanisms.
The minimum capital of a private company is modest, which makes entry easier:
| Type of company | Minimum legal share capital | % paid up at start | Main comment |
|---|---|---|---|
| Private limited liability company | €1,165 | 20% (~€233) | Standard threshold for most projects |
| Public limited company | €44,588 | 25% | Reserved for significant-scale projects |
| SME or small structures (some sources) | €233–240 (mentioned) | Variable | Differences in interpretation depending on texts |
In practice, the operational reference is the €1,165 threshold for a private company, of which at least 20% must be effectively paid up before registration, into a provisional bank account in the name of the company being formed. A deposit slip from the bank will be required by the Malta Business Registry (MBR).
Each Maltese company must also have:
– At least one director (individual or legal entity), with no nationality or residence requirement.
– A company secretary, also with no nationality condition.
– A registered office address in Malta, used for official correspondence.
Shareholders, directors or beneficial owners can be non‑residents, which facilitates setups for foreign entrepreneurs, including digital nomads.
The role of the Malta Business Registry and the constitutive deed
Companies are created by signing a Memorandum and Articles of Association and registering with the companies register, managed by the MBR, which operates under the financial supervision authority (MFSA).
The Memorandum specifies notably:
– The company name, which must be available and validated with the register.
– The address of the registered office in Malta.
– The objects (e‑commerce, consulting, software development, etc.).
– The share capital and its initial allocation.
– The identity of the first shareholders, directors and secretary.
The Articles of Association organize governance: powers of directors, decision-making procedures, transfer of shares, meeting rules, etc.
The documents must be signed by the subscribers, directly or through a duly authorized representative (power of attorney, resolution). KYC/AML documents (ID, proof of address, certificate of good standing for legal entities, bank references for certain non‑residents) are systematically required.
Incorporation procedure and initial administrative steps
Setting up a company in Malta is a relatively quick procedure once the file is complete and compliance requirements (KYC/AML) are anticipated.
Registration: from the file to the Certificate of Incorporation
The MBR has largely digitized its services. Company formation can be done online via its platform, and as of March 1, 2025 all filings must be submitted electronically. In practice, the timeline looks like this:
Steps include checking and reserving the name with the register, drafting the Memorandum and Articles of Association, opening a provisional bank account to deposit the paid-up capital, assembling the file with signed deeds, proof of capital deposit, certified copies of IDs, proof of registered office address and the BO1 form, then filing the file and paying the fees.
MBR registration fees vary according to authorized capital:
| Authorized capital | Registration fee (approximate) |
|---|---|
| Up to €1,500 | ~€245 |
| Above, up to several M€ | Progressive scale, up to ~€2,250 |
| General announced cases | Floor around €100, ceiling around €1,900 according to some scales |
After filing, registration is often finalized within 24 to 48 hours if no further information is required. The Certificate of Incorporation is then issued and the company legally exists.
Tax numbers, VAT and employer registration
Registration with the register is only the first step. To actually operate (issue invoices, employ staff, declare VAT), several registrations must be made with the Malta Tax and Customs Administration (MTCA) and the Commissioner for Revenue (CFR).
The key elements are: key elements
To carry out an activity in Malta, three numbers are essential: the TIN/TRN for corporate tax and withholding, the VAT number as soon as the activity is taxable or for certain non-residents, and the PE number to register as an employer and manage social security contributions, with automatic registration with Jobsplus.
A consolidated procedure via an eForm now allows companies already registered with the register to centralize these requests (VAT, employer, statistics) and obtain the necessary numbers in less than 48 hours.
Maltese VAT and online activity: the rules to master
For e‑commerce, consulting or digital services, VAT is often more structuring than corporate income tax. Malta applies rules aligned with the European directive, with several interesting particularities.
VAT rates: a low standard and targeted reduced rates
Maltese VAT is governed by the Value Added Tax Act (Chapter 406), administered by the Commissioner for Revenue. It has several levels:
| Rate | Main categories concerned (examples) |
|---|---|
| 18% (standard) | Majority of goods and services, including most digital services |
| 12% | Short-term yacht charter, certain guaranteed financial services, certain health services |
| 7% | Tourist accommodation, sports facilities, declared heritage sites |
| 5% | Printed books and e-books, certain printed matter, medical equipment, electricity, confectionery, certain renovation work |
| 0% | Food, pharmaceutical products, international transport, intra-EU exports, etc. |
The standard rate of 18% is one of the lowest in the EU, which can be particularly attractive for certain B2C models when the VAT of the supplier’s country remains applicable (especially below the OSS thresholds for certain services).
When to register for VAT in Malta?
The rules differ depending on whether the company is established on the island or abroad.
For companies established in Malta:
– Obligation to register as soon as annual turnover exceeds €35,000 for activities that allow deduction.
– Threshold lowered to €24,000 for exempt activities without deduction (exempt without credit).
For foreign companies:
No turnover exemption applies to Malta: the first invoice must include Maltese VAT if the place of taxation is Malta without OSS/IOSS coverage, but non‑residents can use the OSS to centralize their intra‑EU B2C obligations.
A simplified regime option (Article 11) exists for small operators, allowing reduced reporting obligations, including for certain non‑established operators as long as their operations remain below certain thresholds.
VAT and e‑commerce: distance selling, OSS and IOSS
For an online store based in Malta selling to consumers in other Member States, the VAT e‑commerce reform has transformed the rules.
The key points are:
– A Maltese company selling B2C to other EU countries can use the OSS to declare, via a single quarterly return filed in Malta, all VAT due in the other States. No more need to multiply national VAT registrations.
– The common annual threshold of €10,000 in cross‑border B2C sales (all States combined) is the boundary:
– Below: the company can apply the Maltese rate of 18% to all its intra‑EU sales.
– Above: it must apply the VAT rate of the customer’s country and declare via the OSS.
– B2C sales of goods imported into the EU in parcels worth up to €150 can be managed via the IOSS, which allows the customer to pay VAT at the time of order rather than at import.
To register for OSS or IOSS, entrepreneurs use the MTCA e‑services portal. Connection is made with an e‑ID or a dedicated VAT account. When using the OSS, operators do not need to register separately for VAT in each country of consumption.
VAT on consulting services and online services
For consulting or digital services (SaaS, web development, hosting, online advertising, etc.), the issue is more about the place of supply than logistics.
In summary:
– For intra‑EU B2B, services are, by default, taxable in the customer’s country. The reverse charge mechanism applies: the taxable customer declares VAT in their country, and the Maltese supplier invoices without VAT after verifying the customer’s VAT number.
– For B2C, services are normally taxable in the supplier’s country, i.e. Malta, except for exceptions.
– The major exception concerns electronic services (ESS) and telecommunications, broadcasting and television (TBE) services provided to individuals: in this case, VAT is due in the customer’s state, even for a Maltese supplier. Then you must either register in each state or use the OSS.
Maltese guidelines reinforce the application of the destination principle: an automated digital service provided to an individual is taxed where that individual is established, permanently resides or usually resides. This notably concerns online gaming platforms, streaming and B2C SaaS.
Returns, payments and corrections
Reporting obligations are relatively standardized:
– VAT returns are generally quarterly, due within one month and 15 days after the end of the quarter (i.e. a deadline of 1.5 months).
– OSS returns are also quarterly, filed before the end of the month following the reference quarter.
– IOSS returns are monthly.
Payments related to OSS/IOSS schemes, when Malta is the Member State of identification, are made by card or bank transfer online, using the reference provided at the time of filing. A payment is considered on time if it was initiated on the due date, with supporting evidence. To date, no specific penalties are applied in Malta for these schemes, but interest and fines exist for late standard VAT returns.
Corrections to OSS/IOSS returns beyond three years require direct contact with the MTCA, via a correction form sent to the contact point (e.g. [email protected]).
Corporate income tax: a 35% system… for an effective rate close to 5%
The other key advantage of Malta lies in its corporate income tax system combined with a refund to non‑resident shareholders regime.
Nominal rate and full imputation system
The statutory corporate income tax rate is 35%, applied to the taxable income of resident companies on their worldwide income and capital gains. But Malta operates a full imputation system: the tax paid by the company is imputed at the shareholder level when a dividend is distributed, avoiding economic double taxation.
This mechanism is the foundation on which several refund systems are based.
Refunds and effective rates
For Maltese companies owned by non‑residents, carrying out a trading activity, a refund of 6/7 of the tax paid is generally available on distributed profits:
– On taxable profit of 100, the company pays 35.
– The shareholder can obtain a refund of 6/7 of these 35 (i.e. 30).
– The net tax cost is therefore 5 (one seventh of 35), i.e. an effective rate of 5%.
In addition to the standard rate, rates of 2/3, 5/7 or 100% exist for interest, royalties, dividends and capital gains. The participation exemption fully exempts certain dividends and capital gains from qualifying holdings, provided that passive interest income is not predominant.
To benefit from these arrangements, the administration requires the company to demonstrate real substance in Malta: strategic decisions taken on site, operational presence consistent with the activity, governance documentation.
Additional incentives for innovation and SMEs
An e‑commerce or digital services entrepreneur can also take advantage of targeted incentives:
| Measure/regime | Main effect |
|---|---|
| Notional Interest Deduction | Deemed deduction on certain equity, capped at 90% of profit, carry forward |
| R&D deduction (175%) | Super deduction for certain research and innovation expenses |
| Accelerated depreciation | Over 2 years for investments in AI, digitalization, automation, cybersecurity |
| MicroInvest | Tax credit (up to 45%, or even 65% in some cases) on eligible investment expenditure, with cap raised to €65,000 for digital solutions |
| Seed Investment Scheme | Tax credit of 35% on investments in young companies, possible exemption of capital gains after 3 years |
Combined with the 6/7 refund system, these measures can result in a very contained tax burden for a well-structured Maltese company that develops and markets online solutions.
E‑commerce: logistics, OSS and payment
Setting up an online store with a Maltese company involves dealing with three dimensions: physical flows (import/storage/delivery), cross‑border VAT and payment solutions.
Structuring logistics flows in the EU
A common strategy is: mobilize internal resources to face exogenous challenges and thus strengthen the organization’s resilience.
1. Import stocks in one go from a third country into the EU (e.g. via a port or airport in a state like Germany, Poland or the Netherlands). 2. Store these goods in a fulfillment center in that state (or several if targeting a pan‑European FBA network). 3. Then sell these products B2C to the 27 member states, these flows being classified as intra‑EU distance sales.
In this model, the Maltese company:
To sell online in the EU, first obtain an EORI number for customs. Then, if you physically store goods in a country, apply for a local VAT number. Finally, centralize VAT for B2C sales via the OSS one-stop shop by filing a quarterly return in Malta, breaking down the VAT collected by country of destination.
The legal structure (Maltese Ltd) is unique, but indirect taxation adapts to the location of stocks and customers.
Invoicing obligations and marketplaces
In accordance with European law, each transaction must give rise to an invoice containing standard information (date, sequential number, identity of seller and buyer, description and quantity of goods or services, unit price excluding VAT, VAT rate applied, VAT amount per rate, etc.). For sales to individuals, simplifications are sometimes possible, but traceability must remain complete to justify declarations.
Platforms may be considered the ‘deemed supplier’ for VAT on low-value sales or facilitated distance sales. The Maltese seller must check whether the VAT is collected by the platform or by themselves, which impacts their OSS/IOSS declarations.
Setting up a compliant payment system
A merchant based in Malta who collects card payments through a provider (Stripe, PayPal, BOV Merchant Services, foreign PSPs ‘passported’ under PSD2, etc.) does not themselves need a payment license: they are a customer of the PSP, which holds the MFSA license or a license from another Member State ‘passported’ to Malta.
To obtain a merchant account, banks and PSPs require detailed documentation:
| Typical document/information requested | Main use |
|---|---|
| Certificate of incorporation, M&A | Verify legal existence and structure |
| IDs of directors and UBO | KYC, AML/CFT |
| Proof of address (registered office, directors) | Address verification |
| Recent bank statements | Financial capacity, history |
| Business plan, forecasts, model description | Risk and viability analysis |
| Statutes, sector licenses (gaming, pharma, crypto…) | Regulatory verification |
| Proof of domain name ownership, website screenshots | Business consistency, compliance (T&Cs, GDPR) |
| Refund and privacy policies | Consumer protection compliance |
| Processing history (if previous account) | Chargeback rate, payment behavior |
High‑risk sectors (gaming, crypto, travel, online pharmacy, etc.) are subject to stricter requirements and longer onboarding times.
Consulting, digital services and data protection
An international consulting or digital services activity (development, maintenance, SaaS, online marketing) from Malta also involves mastering the data protection aspect.
GDPR and Maltese online service providers
The General Data Protection Regulation applies:
– As soon as data processing targets individuals located in the EU, whether the company is based in the Union or not.
– Regardless of the medium (automated or not) as long as structured files are kept.
A Maltese company providing online services to European customers must therefore: comply with EU data protection regulations, ensure its services comply with local laws of the countries where it operates, and guarantee the security of online transactions. Additionally, it must be transparent about the management of personal information of its customers.
To be compliant, you must: identify your legal basis for processing (contract, consent, legal obligation, legitimate interest, etc.), clearly inform individuals about the use of their data, regulate data transfers outside the EU and manage data subject rights (access, rectification, erasure, objection, portability, etc.).
Maltese authorities, notably the Information and Data Protection Commissioner, participate in European work to harmonize supervision, and many firms and service providers offer outsourced DPO, training or GDPR audit services.
Specifics for certain online sectors
For online gaming or crypto‑asset operators — fields sometimes related to e‑commerce or digital services — specific sectoral frameworks exist (Malta Gaming Authority, Virtual Financial Assets Act, future MiCA regime for CASPs). These companies must combine:
Companies must comply with general obligations (company law, taxation, VAT, GDPR) and specific sectoral requirements such as MFSA/MGA licenses, appointment of compliance and AML officers, drafting of internal policy manuals, and submission of regular reports to the regulator.
Even if not the core of goods sales or consulting services, it is common for a single group to operate several online service lines. You must then ensure that each line of activity is properly covered by the necessary licenses and that flows (e‑commerce revenues vs regulated revenues) are clearly identified.
Setting up a company in Malta as a digital nomad
The Nomad Residence Permit (NRP) gives non‑EU entrepreneurs the possibility to settle in Malta while working remotely for foreign employers or clients. Combined with a Maltese structure for an online project, it can form a coherent ecosystem.
Conditions of the Nomad Residence Permit
The permit is aimed at third‑country nationals (outside EU/EEA/Switzerland) who work remotely. The main conditions include:
This program requires monthly gross income of at least €3,500 (approximately €42,000 per year). You must provide an employment contract with a foreign employer, status as director of a foreign company, or freelance assignments for clients outside Malta. Comprehensive private health insurance valid in Malta and the Schengen area is mandatory. A rental lease of at least 12 months or local property title is required (hostel stays are not accepted). Finally, a clean criminal record is required, with police certificates for each country of residence of the last five years, apostilled and translated if necessary.
The process is done via the Residency Malta Agency portal, with submission of a letter of intent, supporting documents (contracts, bank statements, CV, cover letter, etc.), and payment of processing and issuance fees.
Once the permit is obtained, the nomad:
– Must provide proof of health insurance and accommodation.
– Submit to fingerprinting for the residence card, valid for one year and renewable for up to four years.
– Opens a Maltese bank account and registers for tax if necessary.
Personal taxation of nomads and articulation with the company
The tax status of digital nomads depends on their length of stay and the source of income:
This number of days per year in Malta determines tax residency status and the taxation of income.
Under the Nomad Residence Permit, beneficiaries are generally taxed on their income generated in Malta, but not on their worldwide income, provided they respect the planned structure and flows. When the nomad holds a Maltese company, you need to coordinate:
– Possible remuneration as an employee or director of the company (locally taxable salary).
– Dividends received from the company (potentially benefiting from tax refund mechanisms at the shareholder level).
It is advisable to plan this structuring with a tax advisor, to avoid any reclassification.
Accounting, reporting and compliance obligations
A Maltese company, even small and exclusively digital, remains subject to strict annual obligations.
Filings with the Malta Business Registry
All companies must file:
– An annual return within 42 days of the anniversary of their registration.
– Annual financial statements within 10 months after year‑end for private companies, 7 months for public companies.
Even a dormant company is not exempt as long as it is not struck off. The accounts must be approved by the board, signed by a director or the secretary, and, for the vast majority, audited.
The maximum amount of administrative penalties that can be applied for late filing exceeds €2,000.
Corporate income tax return and typical schedule
The Commissioner for Revenue expects the corporate tax return within nine months of year‑end, with some schedule details:
| Year‑end | Deadline for filing tax return |
|---|---|
| Between January 1 and June 30 | Until March 31 of the following year |
| From July 31 | Nine months after the year‑end date |
In a typical schedule for a year‑end of December 31, it can be summarized as:
– Months 1–3: finalize accounting and financial statements, audit if applicable.
– Month 4: board approval of accounts.
– Months 4–5: file accounts with the MBR.
– Months 5–9: prepare and file the tax return, pay any balance of tax.
VAT and e‑commerce compliance
In addition to periodic returns, companies involved in intra‑EU flows must:
File monthly or quarterly recapitulative statements for certain B2B flows and keep for ten years all supporting documents proving the place of supply of electronic services (customer geolocation, IP addresses, delivery documents, etc.).
E‑commerce and service flows are monitored by the administration: persons who buy goods in their own name to resell them to individuals via third-party platforms are clearly identified as subject to VAT and income tax. Failure to declare e‑commerce income can lead to administrative or even criminal proceedings.
Conclusion: a flexible European platform for online activities
Setting up a company in Malta for e‑commerce, consulting or digital services allows you to fully integrate into the single market with:
Poland offers a standard VAT rate of 18% aligned with European standards with operational OSS/IOSS regimes. Corporate income tax has a face rate of 35%, but an effective rate close to 5% for non‑resident shareholders through refunds. Incorporation is fast via the MBR with a low minimum capital and openness to foreign founders, including a favorable framework for online models (sales, consulting, digital services).
This attractiveness comes with real requirements in terms of substance, AML/CFT compliance, beneficial owner transparency, data protection and periodic reporting. A serious establishment project must therefore be built taking into account, from the outset, direct taxation, VAT, e‑commerce regulation and, where applicable, the residence conditions of the founders (Nomad Residence Permit or other regimes).
For an entrepreneur ready to invest in proper structuring, Malta offers a particularly suitable framework for growing an online business targeting Europe.
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Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.
On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.
Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.
