FBS Trust Limited
Regulated by Malta Financial Services Authotity

Leaders in Malta
Company Formation
and Corporate Services

Focus Business Services is one of the most reputable and well-established corporate service providers in Malta. Our mission is to provide an impeccable and seamless services to our ever-increasing local and international client base at reasonable prices

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Malta Company Formation: Complete Walk-through

The Maltese company offers one of the most versatile and effective tax solutions for any promoter, from the small start-up company to the most savvy investor.

At the outset, the Maltese corporate tax rate is set at thirty-five percent (35%), however, the shareholders are, upon a final distribution of dividends, entitled to a series of tax refunds – leaving an ultimate tax leakage of just 5% or less. This tax leakage, already the most advantageous in the European Union, may be further reduced, if the Maltese company has incurred expenses outside Malta, which expenses may be grossed up in the income tax computation, so as to further lower the tax leakage.

Further complementing this generous tax treatment, is an ever expanding network of double tax treaty which has placed Malta firmly on the tax planning map.

Reputable jurisdiction and solid growth

Taxation is always one of the key factors, behind Malta company formation. The Maltese Companies Act allows three commercial partnerships to be set up, and by far the limited liability company is the most popular variant. The Maltese registrar of companies has registered strong and steady growth in the number of limited liability companies incorporated every year. The total number of companies, incorporated in 2012, were a record 3,800, representing a marked 12% increase from the previous levels set forth in 2011, and 2013, showing again double digit growth.

Legislative Framework

The major legislative milestone was represented by the Companies Act 1995 – which provided a complete overhaul of the company legal framework ever undertaken in Malta introducing a number of key provisions such as:

Nullity of companies
The ultra vires doctrine
Minority shareholders rights
Denomination of shares
Duty to file accounts including consolidated accounts
Obligation for all companies to have a company secretary; etc

Once the promoters of a company have resolved to form a limited liability company, certain formalities have to be followed in order to procure the registration of the company. It is therefore valuable to avail oneself of the expertise of the FBS Group, which is now in its sixteenth year of operation, and is one of the top incorporators of Maltese registered companies.

These formalities include the preparation of certain documentation, the delivery thereof to the Registrar of Companies and the payment of the appropriate registration fees. Registration fees are a one-time fee which are calculated in accordance to the authorized share capital of the Company. The higher the share capital, the higher the registration fees. This said, registration fees for a lowly capitalized company, start off at a very competitive EUR 245.

Malta Company Formation and Malta Citizenship Packages

€250 Malta Company Formation
€22.500 Malta Citizenship

We specialize in Malta Company Formation and Malta Citizenship and Residency – Residence. We help you with Malta company formation, company set up and incorporation, management services, bank account opening, issue of passports and residence permits, taxation as well as Malta Residence and Citizenship Services in order to obtain Malta Company Tax and Malta Residence and Citizenship Advantages.

Malta provides unique advantages and constructive use of Malta state incentives can give you significant benefits. Tax, residency, safety and lifestyle advantages.

We are leading Company Formation and Citizenship professionals who are part of the FBS Kotsomitis Global Network. We will be your Partner in Malta for ALL your Malta Company Formation and Malta Citizenship Needs.

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Formation Formalities

All companies, irrespective of whether they are private or public companies require the filing of a Memorandum of Association. The Companies Act prescribes that a company shall not be validly constituted under the Act unless a memorandum of association is entered into and subscribed by at least two persons, and a certificate of registration is issued in respect thereof. In reality, these due documents, merely crystallize a process that would have been initiated through the collection and deposit of other key documents.

Furthermore, it must be remarked that, notwithstanding the aforesaid, the Companies Act does make exceptions to the two-subscribers rule by enabling an exempt private company to have a single member as long as the object clause of such a company specifies which activity of the company shall be its main trading activity and the business of the company shall consist principally of that activity. The rationale behind this exception is that a ‘company’ as the word implies implies a plurality of subscribers rather than one individual member. Recent amendments to the Companies Act, have now extended the possibility of the sole shareholder being also a corporate person ( a matter precluded until August 2013). However, it is still not possible for a single member company to have a corporate person holding the office of director.

Articles of Association

Contrary to the aforesaid Memorandum of Association, the Articles of Association does not prescribe the minimum area requirements to be inserted therein. Typically however, the articles of association would cover matters as the transfer and transmission of shares, the issue of shares, forfeiture of shares, calls on shares, procedures at general meetings and board meetings, resolutions, alternate directors, notices, dividends and reserves and capitalization of profits – in other words, the internal organization of the company or the manner in which the company’s affairs will be managed.

It is also worth noting that the articles of association are not an essential part to the company statutes, and it is possible for a Company not to register an article of association at all. In this eventuality, the model articles contained in the First Schedule to the Companies Act will ipso jure become the articles of the company “in the same manner and to the same extent as if they were contained in duly registered articles. The rationale of such a consideration is to promote uniformity, in a text which is acceptable and in conformity with the laws of Malta. In reality, it would be unwise to incorporate a company without such articles of association, since any eventual decision regarding the introduction of such articles, would necessitate the consensus of the existing shareholders of the company, consensus which may not always be attainable. When such articles of association is filed, then like the memorandum and articles of association, they must be signed off by the subscribers, and effectively constitute a contractual agreement between the shareholders.

Malta Company Incorporation Tax Incentives

In preparation for Malta’s accession to EU Membership in 1 May 2004, a series of legislative measures were enacted to the main provisions regulating income tax in Malta mainly to the Income Tax Act and to the Income Tax Management Act.

Final Taxed Account
The Final Tax Account includes distributable profits that have suffered tax, including the following:

Profits after tax resulting from income which has been charged to tax under the investment income provisions;
Profits that are exempt under Maltese law and where the distribution of such profits by the company to the shareholders is exempt from tax;
The amount of chargeable income, the tax chargeable of which has been relieved from payment by any tax credits where the distribution of such profits is exempt from tax in the hands of the shareholders;
Dividends paid out of profits allocated to the final tax account of another company;
The profits after tax derived from the transfer of immovable property;
Any profits after tax which under the provisions of Maltese Law are not subject to tax when such profits are distributed by a company to any person and where upon such a distribution no person is entitled to claim any tax credit in respect of any tax paid on such profits;
Profits resulting from income or gains in respect of which the Participation Exemption may and has been applied;
Profits resulting from any grant or subsidy where the distribution of such profits is exempt from tax in the hands of the shareholders;and
Profits after tax derived from rental income received by the Housing Authority

Immovable Property Account
The Immovable Property Account includes distributable profits that have suffered tax, including tax derived (directly or indirectly) from immovable property situated in Malta and include:

Profits or gains from the transfer of immovable property;
Net profits or gains deemed to have been derived from immovable property;
Gross amounts which are deemed to have been derived from immovable property;
Annual Market Rent

Foreign Income Account
The Immovable Property Account includes distributable profits that have suffered tax, iThe Foreign Income Account includes distributable profits that have suffered tax, including profits resulting from royalties and similar income arising outside Malta and includes:

Profits resulting from royalties and similar income arising outside Malta and from dividends, capital gains, interest, rents, income or gains derived from a Participating Holding or from the disposal of such holding, and any other income derived from investments situated outside Malta, which are liable to tax in Malta and are receivable by a company registered in Malta;
Profits resulting from investments, assets or liabilities situated outside Malta, and licensed as a bank in Malta or in possession of a licence granted under the provisions of the Financial Institutions Act;
All profits or gains of a company registered in Malta, which are liable to tax in Malta and attributable to a Permanent Establishment (including a branch) situated outside Malta, and for these purposes “profits or gains” shall be calculated as if the Permanent Establishment is an independent enterprise opertaing in similar conditions and at arm’s length;
Profits resulting fom dividends and paid out of the foreign income account of another company registered in Malta;
Profits or gains resulting from a company registered in Malta under the Insurance Business Act

Leaders in Malta Company Formation and Corporate Services