How to register a company in Malta: A guide for employers

Think of Malta as your low-tax hub at the crossroads of three continents!

Malta’s attractive tax framework, extensive double taxation agreements, quick company formation process, and skilled English-speaking workforce make it a preferred destination for businesses worldwide. The country’s business-friendly regulations and access to EU markets make it an ideal choice for companies aiming to expand internationally.

However, setting up a legal entity in Malta can be time-consuming and complex, involving multiple regulatory and compliance steps. For businesses that want a hassle-free alternative, an Employer of Record (EOR) can simplify market entry by managing payroll, compliance, and hiring processes without setting up a local entity.

The business benefits of registering your company in Malta

Malta is the perfect, low-cost destination for businesses that want to establish a presence in the European Union.

Setting up a business in Malta comes with multiple advantages, including:

• Geographical advantage: Malta is an EU member state, allowing businesses to trade freely within this market. It’s location in the heart of the Mediterranean gives it a strategic edge over other European countries. A few hours’ travel takes you to most key European and North African cities, making Malta the ideal base for many businesses.
• Business-friendly tax regime: At first glance, Malta’s corporate tax rate of 35% might seem high. However, it’s among the EU’s lowest net effective tax rates. Thanks to the county’s Taxation Refund System, shareholders can claim back a significant portion of the tax paid after distributing dividends, lowering the effective tax rate to as little as 5%.
• Skilled workforce: Malta has a highly educated, English-speaking labor force.
• Government support: Various incentives, grants, and subsidies are available for foreign investors.
• Ease of doing business: Malta’s well-established legal framework ensures ease of company formation. TMF Group’s Global Business Complexity Index 2023 ranks it among the ten least complex jurisdictions.

What is the difference between standard company registration and expanding through an EOR?

Expanding into Malta? Registering a company gives you complete control, but it also means navigating complex regulations and operational challenges. On the other hand, using an EOR is a faster, low-risk option—it takes care of compliance, payroll, and legal requirements without the hassle of setting up a local entity.

Aspect	Standard company registration	EOR
Purpose	Establish a legal entity in Malta	Hire employees in Malta without setting up a company
Control	Full operational control	HR, payroll, and compliance managed by EOR
Cost	Higher upfront costs (legal, tax, admin)	Predictable, consolidated fees
Compliance	Must meet all local labor laws and tax regulations	EOR handles compliance and tax obligations
Setup time	Weeks to months	As little as 24-48 hours
Scalability	More complex to expand	Easily scalable workforce

 

How an EOR simplifies company registration in Malta

An EOR offers a hassle-free way to expand into Malta. Instead of going through the lengthy process of setting up a legal entity, businesses can use an EOR to hire employees quickly and compliantly. Key benefits include:

• Faster market entry: Forget months of paperwork—an EOR lets you start hiring in Malta within days. No need to go through lengthy registration processes or legal formalities. You can onboard top talent and get operations running almost instantly.
• No administrative burden: Managing payroll, taxes, and employee benefits in a new country can be overwhelming. An EOR takes care of it all, ensuring your employees are paid accurately and on time while complying with Malta’s tax and labor regulations.
• Full compliance: Employment laws in Malta can be intricate, with specific rules on contracts, benefits, and termination policies. An EOR ensures full compliance with all local labor laws, reducing the risk of penalties or legal issues.
• Cost-effective: Setting up a legal entity in Malta comes with significant costs. With an EOR, you skip these costs and only pay a predictable fee, making market entry much more affordable.

While an EOR offers many benefits, if you need complete control over your business operations, setting up a legal entity might be better. Here’s what you need to know about registering a company in Malta.

A step-by-step guide to registering a company in Malta

In Malta, registering a company for tax purposes is a straightforward process handled by the Office of the Commissioner for Revenue. Before anything else, businesses must first register with the Registrar of Companies. Once the necessary documents are submitted, tax registration follows smoothly. Registration takes one to two weeks.

As per the Office of the Commissioner for Revenue, a company must register for income tax if:

• It’s incorporated in Malta.
• Its management and control are based in Malta.
• It carries out business activities in Malta.

Usually, once a company is officially incorporated or a place of business is registered, it is automatically assigned a nine-digit income tax number by the Commissioner for Revenue.

Step 1: Choose a business structure

There are four main types of business structures available in Malta:

• Single-member company: In Malta, a single-member company can be set up in two ways: either by incorporating a new company with just one owner or by a single person acquiring all the shares of an existing company. However, to qualify as a single-member company, it must meet the requirements of a private exempt company—a specific type of private limited company with additional restrictions. Here’s what makes a company private exempt in Malta:
• It can’t have more than 50 debenture holders.
• No corporate entity can own or have an interest in its shares or debentures.
• The company and its directors cannot be part of an agreement that allows outsiders (other than directors, members, or debenture holders) to control company policies.

By meeting these conditions, a single-member company can enjoy the flexibility of a private limited company while keeping things simple and manageable for a solo business owner.

• Partnership: A partnership in Malta has its own legal identity, meaning it can own property in its name. There are two types of partnerships you can set up: general partnerships and limited partnerships.
  • General partnership
    • Formed through a partnership deed
    • Partners have unlimited personal liability
  • Limited partnership
    • Needs at least two partners
    • Must have at least one general partner with unlimited liability
    • If there’s more than one general partner, they share joint liability
    • Limited partners must contribute capital to the business

Regardless of the type, a partnership must be registered with the Malta Business Registry and apply for VAT.

• Limited liability companies: The most popular business structure in Malta is the limited liability company (LLC). It can have up to 50 shareholders and needs at least one director and one secretary. It must pay at least 20% of its share capital upfront. This structure can be either a public LLC or a private LLC.
  • Public LLC
    • Can offer shares to raise capital
    • Minimum share capital: €46,587.47
    • At least two people must invest in the share capital
    • Must pay at least 25% of its share capital
  • Private LLC
    • Needs at least two directors
    • Must pay at least 20% of its share capital
    • Minimum share capital: €1,164.69
    • At least two people must invest in the share capital

• Overseas Company: An overseas company is a corporate entity incorporated outside of Malta. If an overseas company wishes to establish and conduct economic activities in Malta, it must register with the Registrar of Companies in Malta within one month of setting up a branch or place of business in the country.

Step 2: Choose a company name

Next up, it’s time to pick the perfect name for your Maltese company. Keep in mind that your company’s name is unique and approved by the Malta Business Registry, and it definitely shouldn’t include words that could be seen as offensive. You’ll also want to make sure the name reflects what your business actually does—no misleading names allowed.

Step 3: Deposit share capital to local bank account

For example, the minimum share capital requirement is €1,164.69 for a private LLC. At least 20% must be paid upon registration. The bank deposit advice is the confirmation you need.

Step 4: Prepare the necessary documents, register, and pay the fee

Documents required include:

• Memorandum and Articles of Association
• Identification documents of shareholders and directors
• Proof of registered office address in Malta
• Form BO1: If one of the company’s shareholders is a corporate entity, the promoters must submit an additional document called Form BO1 with the application. This form provides details about the company’s ultimate beneficial owners.
• Proof of paid-up share capital: You’ll need to provide proof of the paid-up share capital, typically in the form of a bank deposit, at the time of incorporation.

File the incorporation documents with the Malta Business Registry and pay the fees. The fees depend on whether you’re filing in paper format or electronic format.

Step 5: Obtain a registration certificate

If everything is in place and the Registrar is satisfied, your registration process will typically take 5-10 days. Once you’ve registered your company, the Registrar will issue a certificate of registration confirming that your company has been legally registered and can now operate in Malta.

Step 6: Sign up for a PE number

The Permission to Employ (PE) number is needed when you want to hire employees in Malta. You can get this within a day from the Commissioner for Revenue website.

Hiring in new markets like Malta should feel like a big win, not a paperwork headache. That’s where an EOR like Multiplier makes all the difference, letting you onboard top talent quickly while keeping your business fully compliant and risk-free.

Step 7: Register your company for VAT and income tax

All companies registered in Malta are required to register for VAT, which comes with various compliance and payment obligations. It’s essential to understand these requirements at the time of registration. A straightforward way to apply for VAT, as per the Commissioner for Revenue, is by submitting the e-form available here.

Tax registration numbers for individuals:

• Maltese citizens and residents: The tax registration number is typically their ID number. Registration for a separate tax number is not required, as the process is automated.
• Foreigners: They are generally assigned a nine-digit (9) tax registration number.

Once your company is officially registered in Malta, you must stay compliant with ongoing legal and regulatory requirements. Keeping up with these requirements ensures your business operates smoothly and avoids penalties. Multiplier, for example, helps you stay 100% compliant with local labor laws, ensuring a seamless hiring and employment process.

The real cost of registering a business in Malta

Setting up a business in Malta comes with various costs, from registration fees to legal expenses and share capital requirements. Here’s a breakdown of the key expenses to consider:

• Company registration fees: The registration fee for your company depends on its authorized share capital and ranges from €100 to €2,250. This fee must be paid to the Malta Business Registry during the registration process.
• Notary fees and company formation services: €500 – €1,500.
• Minimum share capital: €1,164.69 for private LLC and €46,587.47 for public LLC
• VAT registration costs: Free but mandatory for applicable businesses. The standard VAT rate in Malta is 18%.

Understanding these costs upfront can help you plan your budget effectively and ensure a smooth registration process for your business in Malta.

Cost comparison: standard registration vs. EOR

Expense category	Standard registration	Employer of record (EOR)
Setup costs	€1,000 – €3,000 (depending on complexity)	No setup cost
Compliance costs	High (legal, tax, accounting)	Included in EOR fee
Payroll management	Requires dedicated team	Managed by EOR
Annual maintenance	An annual fee ranging from €85 to €1,400 (excluding legal fees) is applicable each year upon the submission of an annual return to the Malta Business Registry, depending on the authorized share capital of the private LLC. Additional maintenance costs may include accounting, tax and VAT compliance, as well as auditor fees.	Fixed monthly fee
Scalability	Limited by legal setup	Immediate scalability

Note: The figures in this article are subject to change. We recommend consulting a local expert before making any decisions. You can also reach out to our team—our experts stay up to date with Malta’s latest regulations and can guide you on whether Multiplier’s EOR is a better approach for your expansion plans.

Take the stress out of your Malta expansion with Multiplier

Expanding your business into Malta can be straightforward. With Multiplier’s EOR services, you can recruit and manage staff without the hassle of establishing a legal entity. Here’s how Multiplier streamlines the processes of hiring, payroll, and compliance, allowing you to concentrate on growing your business:

• Local recruitment expertise: Multiplier enables you to onboard international employees in less than five minutes. Our intuitive platform consolidates all management tasks in one location, allowing you to track, support, and supervise employees while easily approving leave, expenses, and requests across various countries and time zones.
• Seamless payroll administration: Eliminate the stress of administrative tasks and local payroll issues. Our advanced, fully managed payroll system handles multi-country taxes, benefits, and compensation, freeing you from these responsibilities. Plus, our team of payroll specialists in Malta, equipped with local insights and multilingual capabilities, is ready to assist you.
• All-in-one HR solutions: Multiplier’s global HR platform features a timesheet tracking tool that allows you to oversee your entire workforce from a single dashboard. It also includes an expense tracking function to keep tabs on requests submitted by your teams.
• Compliance support: Our contracts are globally compliant and encompass essential benefits, statutory leave, termination policies, working hours, salary information, and bilingual formats. Multiplier minimizes the risks and penalties associated with non-compliant hiring, enhancing your reputation as a reliable global employer.
• Competitive benefits packages: Multiplier provides country-specific health insurance through our partners in Malta, ensuring that these benefits adhere to local corporate and tax regulations.

Ready to expand into Malta? Book a demo today!