Malta Subsidiary Entity Set Up

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Maltese Entity Set Up

Global expansion into Malta generally means that you need to set up an in-country entity. However, by partnering with us you create the possibility to bypass this process and utilize our expertise. By using our PEO-service we take care of the complicated paperwork.

Expanding into a new country is always an adventure, but we believe this adventure should be exciting instead of frustrating and time-consuming. Therefore, we have been supporting companies in over a hundred countries with their expansion plans.

How to set up a Maltese Subsidiary

Foreign companies moving into the Maltese economy will typically choose between a branch and a limited liability subsidiary. The subsidiary is a legal entity entirely independent of the parent company and is incorporated in Malta as a local company.

The subsidiary is regulated by the Companies Act and Malta welcomes foreign investment, but beware – the World Bank ranked Malta only 88th out of 190 nations for ease of starting a business in their latest global assessment.

The subsidiary is a 100% local Maltese entity with full independence from the parent company and follows the same incorporation procedure as any company in Malta. A Maltese subsidiary can also benefit from taxation concessions, while the foreign parent company has no liability for its activities or any debts.

To incorporate a subsidiary in Malta, the parent company must comply with the Maltese Companies Act. Both private and public limited liability companies must produce a Memorandum of Association and Articles of Association, including the following information:

  • Company name and registered office address
  • The type of company and its business activities
  • Details of the shareholders
  • The amount of share capital
  • Numbers of shared distributed to each shareholder and shareholders’ rights
  • The company directors and company secretary’s information
  • Details of company’s legal representatives
  • A bank account must be opened to hold the minimum share capital of around €1,200 (US$1,374), of which only 20% need be initially deposited
  • The Memorandum of Association, which must be registered with the Registrar of Companies, which issues a registration certificate and number
  • The subsidiary must also register its employees for social security and insurance

The Maltese Institute of Accountants and Maltese Accountancy Board require: 

  • Obtaining tax registration number from the Commissioner for Revenue Office
  • Providing office address of company keeping accounting records
  • Mandatory registration for Value Added Tax with turnover above €35,000; registration is optional for turnover between €7,001 and €35,000. Returns can be made on a quarterly basis

Benefits of setting up a Subsidiary in Malta

Specific advantages for a foreign company opening a subsidiary in Malta include not being responsible for the subsidiary’s debts or liabilities. The liability of the subsidiary’s shareholders is limited to their investment in shares.

The subsidiary can operate under a different company name while pursuing its own business interests. It operates under Malta’s Companies Law in the same way as local companies. It is taxed on its worldwide income and liable for the standard rate of 35% Corporate Tax on business profits, although the Maltese Government offers many tax incentives in addition to double tax treaties with many nations.

Through its subsidiary, the parent company has the advantage of exploring further afield among other Mediterranean countries and the European Union’s 27 member nations, in addition to enjoying access to North Africa and the eastern Mediterranean markets.