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Subsidiary vs. Branch in Malta

Updated on Tuesday 19th April 2016

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Subsidiary-vs-Branch-in-MaltaForeign companies wanting to have an established presence in Malta may open a subsidiary or a branch office. The Maltese Company Act is very flexible when it comes to the registration of both types of companies. However, it is also best to keep in mind the incentives provided by the Government to foreign investors setting up companies in Malta.

Our experts in company formation in Malta will help clients choose the appropriate type of business based on their requirements.

Opening a subsidiary in Malta

The private limited liability company is one of the most employed types of business vehicle when deciding to incorporate a subsidiary in Malta. Its main advantages are the low amount to be deposited and the fact that the shareholders’ liability is limited to the amount they contributed with to the company’s share capital. The minimum share capital to register a subsidiary in Malta is 1,165 euros which must be deposited before the company starts operating. However, if the share capital exceeds this amount, the founders must only deposit 20% of it.

Opening a branch office in Malta

Considering the branch office is an extension of a foreign company in Malta, the requirements to register a branch in the country is different when it comes to the documents to be submitted with the Maltese Companies Registrar. The branch must have a Maltese representative who will keep in contact with the local authorities. The representative is required to submit the following documents in order to successfully register a branch in Malta:

  • - the parent company’s Articles of Association,
  • - a document containing the name of the directors and company secretary and their details,
  • - the business activities to be undertaken by the Maltese branch,
  • - details about the Maltese representative of the branch office.

Our agents in Malta can represent you in the company registration process.

Open a Maltese branch or a subsidiary?

The main difference between the branch office and the subsidiary resides in the independency of carrying out business activities. While the branch is completely dependent on the parent company, the Maltese subsidiary is an independent entity and will benefit from the same low taxes and other incentives as any other local company. However, both types of companies will benefit from Malta’s double taxation agreements which will significantly reduce the tax burden.

For more information about the differences between subsidiaries and branches, please contact our Maltese company incorporation agents.

 

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