Company Formation Survey 2008


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		1. Company law	Companies Act, 1995 (as amended) and regulations issued thereunder (Chapter 386); Merchant Shipping (Licensing of Shipping Organisations) Regulations, 2004, issued under the Merchant Shipping Act (Chapter 234).
		2. Types of company:	Limited Liability Companies (Public or Private); Partnerships en commandite (Partnerships limited by Guarantee); Partnerships en nom collectif (Unlimited Partnerships);
		(a) type of company preferred for international transactions:	Private Limited Companies or licensed shipping companies owning or operating a so-called tonnage tax ship.
		(b) shareless companies:	The only shareless corporate forms are partnerships which are limited by the guarantee of members (partnership en commandite), or which are unlimited (partnership en nom collectif).
		3. Capital requirements:	Minimum paid-up capital of the foreign currency equivalent to LM500 (approx. USD 1,500, current approx. exchange rate: USD3:LM1). Any foreign currency may be used. No maximum capital requirement.
		4. Costs to incorporate, excluding government fees:	For a Private Limited Company approx. USD 2,640 (including fees for provision of registered office facilities). For shipping companies, approx. USD1,200 (including fees for provision of registered office facilities). May vary slightly from firm to firm.
		5. Fees paid to authorities to incorporate:	Registration fee depends on the value of the authorised share capital. If minimum capital is used, registration fee is LM150 (approx. EUR350) whereas the maximum fee payable (irrespective of value of capital) is LM750 (approx. EUR170).
		6. Annual fees paid to authorities:	Annual Return fees also depend on the value of the authorised share capital. If minimum capital is used, annual return fee is LM70 (approx. EUR170) whereas the maximum annual return fee payable (irrespective of value of capital) is LM 420 (approx. EUR980).
		7. Taxation rates applied to companies generally:	Maltese companies are subject to a corporate tax of 35% on net profits.
		(a) the taxation of companies in 2 (a)	Depending on the operations of the company including whether the Maltese company earns income from participating holdings, the shareholders of Maltese Companies may be entitled to certain tax refunds and tax credits. Licensed shipping organisations which own or operate a tonnage tax ship are exempt from taxes.
		8. Method of incorporation:	Applications for company registration is submitted to the Registry of Companies. Such application must contain: (i) Executed memorandum and articles of association, together with the relevant powers of attorney (ii) evidence of remittance of the share-capital into a bank account in the company’s name (iii) due diligence documentation on non-resident shareholders and directors.
		9. Who may incorporate - specify what, if any, local representatives/ professionals required?	An application for incorporation may be submitted by the shareholders personally or through Maltese attorneys or agents.
		(a) are ready made companies available?	Maltese corporate practice does not provide for shelf companies.
		10. Length of time to incorporate:	Once all information and documentation is available and in order, an ITC, HC or shipping company can be set up within 24 hours.
		11. Minimum members:	Every company must have at least two shareholders. Licensed Maltese nominee companies may subscribe to the shares on a nominee basis. In certain limited cases, a single member company may also be formed.
		12. Registered office:	A registered office must be maintained in Malta.
		(a)Can the registered office be a bank/ lawyer/ accountant's office (brass plate)?	Yes.
		13. Directors and secretary:	All companies must have at least one director and a secretary.
		(a) Must a director/ secretary be resident?	No.
		(b) Are Corporate Directors allowed?	Yes, however, the company secretary must at all times be an individual.
		14. Appointee directors/ secretary possible?	Shareholders may appoint any person as director of the company. Even if considered as a "nominee" director, such appointee would still have full personal responsibility for affairs of the company in terms of the Companies Act, 1995.
		15. Amount of fees payable to appointee directors/ secretary:	Will depend on private agreement between the company and its officers. The current going rate for a Maltese director or secretary, is between EUR600-900 per annum (varies from case to case). Due to potential liabilities involved, not all firms provide this service or provide director services against more expensive fees.
		16. Meetings:	Annual general meeting of shareholders of company is necessary. Need not be held in Malta. The annual general meeting may also be held by round robin resolution in writing.
		17. Annual return:	All companies are required to file an annual return made up to the date of the company’s anniversary of incorporation. Fines are imposed for the late filing of both annual returns and annual accounts.
		(a) Must financial statements of a company be audited?	Yes.
		18. Is disclosure of profits required by filing balance sheets with annual returns?	Yes, annual audited accounts must be filed annually. Smaller companies may file abridged accounts.
		19. Are there any exchange control or other financial restraints imposed upon a company?	No.
		20. Companies formed in the last year:	2,979 (as at 31st December 2006).
		21. Number of companies on the company register altogether:	Approx. 40,000.
		22. How, if any, is migration into and out of the jurisdiction achieved?	Non-Maltese companies registered in an “approved jurisdiction” may apply to be registered as continuing in Malta. Applicants must file with the Malta Registrar of Companies (i) a resolution authorising the continuance, (ii) new Memorandum and Articles of Association, (iii) a good-standing certificate, and (iv) a Declaration by the directors confirming inter alia that there are no proceedings against the Company in the foreign jurisdiction and that the company is solvent and expects to remain solvent within the next 12 months. Upon filing, a Provisional Certificate is issued by Maltese Registrar, which has legal effect of continuing the company in Malta from the date thereof. Once evidence is provided within a six-month period to Maltese Registrar that foreign company has ceased to exist under foreign law, it is converted into a Certificate of Continuation.
		23. Is migration out of your country provided for?	Maltese companies may be continued under laws of any “approved jurisdiction” by application to Registrar of Companies. Applicants must also file an extraordinary resolution authorising continuance and a directors’ declaration confirming inter alia that company is solvent. Creditors of Maltese companies may oppose a proposed continuation within a three-month period from publication of a notice to that effect in Malta. Societas Europaea (SE) legislation also permits SEs to move their registered office throughout the European Union.
		24. Any amendments to company law over the last 12 months:	None.
		25. Anticipated amendments to company law over the next 12 months:	No primary legislation amending company law appears to be in the pipeline for the year 2007. Bill No. 87 of 2007 reforming certain aspects of Maltese taxation of companies in line with an agreement reached between Malta and the European Commission is expected to be adopted some time in March. The obtaining situation after the Bill is adopted by Parliament is described under 7, above.
S I T E M A P BACK TO TOP			Compiled by Dr. David Borg Carbott, Ganado & Associates - Advocates