What are the requirements for opening a branch in Malta?
International companies can easily establish branches in Malta, following and respecting the appropriate legal framework. Below you can find important information about branches and incorporation in Malta:
The actions and responsibilities of a branch in Malta are taken by the foreign company, alongside the capital and assets.
No minimum capital is required upon registration of a branch.
Branches established in Malta usually pay the same income tax as the local companies, however, in most cases, tax facilities are granted.
Maltese branches activate under the rules of limited liability companies, the proper business structure chosen for most of the operations in this country. The formalities involved can be completely explained by our team of company formation representatives in Malta to overseas entrepreneurs.
What are the advantages of a branch in Malta?
The advantages of owning a branch in Malta
are numerous and among these, lower incorporation costs compared to the subsidiary, no withholding taxes on dividends or interest and royalties as well as the exemption from income payment if the foreign company's country has signed a double tax treaty with Malta
, no minimum share capital requirements, the possibility to refund the taxes. Additionally, there is higher control for the parent company meaning that many actions of the branch must receive specific approvals from that company. The foreign investors who want to open a branch and also immigrate to Malta or other European countries, such as France, are recommended to get in touch with our local partners specialized in immigration
who will help them with the legal issues.
Documents for opening a branch in Malta
Various articles of the Companies Act
provide all the necessary regulations that a branch must follow in order to be registered with the Registrar of Companies
and start its business activities. The documents and information about the parent company that must be deposited are:
• the authentic copies of the formation deeds, articles or memorandum of association,
• the form of company,
• the name and address of the registrar where the company is registered,
• a list of the persons in charge with the administration of the foreign company.
The Articles of Association must comprise the name of the branch and its address, the activities which will be performed by the branch, the name and addresses of the branch’s representatives who can be a natural person with residency in Malta.
Other requirements for Maltese branches
The foreign company must register also the balance sheet of the company, a profit and loss account and the audited statements. Any changes that arise in the foreign company’s Articles of Association or memorandum, as well as changes regarding the officers of the company or the branch’s authorized representative need to be submitted to the Registry of Companies in Malta. As it is known, the branch needs to perform the same activities as the parent company on the Maltese territory. The Maltese rules for submitting the annual financial statements as well as the taxation principles in the country must be considered at the time the branch is incorporated in Malta. In case of company liquidation in Malta, the branch can be dissolved as any other type of company in the country, mentioning that this decision needs to be submitted to the Registrar one month before it starts.
In what kind of sectors can I establish a branch in Malta?
There are many sectors in which the branches opened in Malta may activate: having shares in non-resident companies, keeping and leasing goods, banking, insurance, investments, trading activities with residents or non-residents.
Office facilities for branches in Malta
Traditional offices and virtual offices
are at the disposal of entrepreneurs wanting to establish branches in Malta
. The main difference refers to the costs involved for each type of office. For instance, those wanting virtual office packages in Malta will pay only a fraction of costs of a traditional office. A notable business address, a virtual assistant, mail collection and forwarding, a private phone number and extra usage of meeting rooms are among the facilities comprised by a virtual office package in Malta. Do not hesitate to get in touch with our company formation agents in Malta
and find out more about how you can purchase virtual office packages or about how you can register a company in Malta
Branches vs. subsidiaries in Malta
Foreign corporations have two major structures available for registration in Malta
: a branch or a subsidiary
, depending on their business needs. In comparison, a branch is partially independent and it is an extension of the parent company. As for a subsidiary in Malta, this is an independent legal entity which can be formed under specific conditions: a minimum share capital of EUR 1.165, at least 2 shareholders involved and a representative in Malta. We mention that one of our consultants can act on your behalf and represent your business interests and the Maltese company
, with a power of attorney. In matters of taxation, a branch needs to be registered only for VAT purposes, while a subsidiary must register for all tax purposes and submit the annual financial statements. It is important to know that the incomes of branches in Malta
are taxes only in Malta, while subsidiaries are taxed on the global income. Specific tax exemptions are applicable to branches and subsidiaries if mentioned by the double taxation treaties signed by Malta with countries worldwide.
Overseas investors are the ones who can decide on the type of business structure suits most of their needs, whether a branch or a subsidiary, and in most cases, the pros and cons of each structure will weigh much in making a decision. In any case, you may request our advice and support if you would like to establish a branch or a subsidiary in Malta.
Accounting requirements for branches in Malta
Just like any other type of company, branches in Malta
need to be registered for VAT
and other tax purposes in this country. Submitting the annual financial statements of a branch is needed for branches in Malta
. We remind that you can get in touch with our consultants and ask for complete accounting services for your branch in Malta
instead of opening an accounting department. It is important to know that if a branch is not the appropriate business solution for your activities, and if you want to have a high degree of independence from their Maltese counterpart, you can choose to open a subsidiary – a legal entity that acts separately from the parent company and can perform other business activities.
Facts and figures about companies in Malta
A wide range of motives might stand at the base of opening a company in Malta
, and among these, a stable economy, an attractive tax system and the ease of doing business. Also, the lack of formalities for incorporating a company in Malta
is another important detail when deciding on opening a firm. Malta is quite an appealing business destination, and if you would like to know more in this matter, the following information might interest you:
- • there are more than 200 foreign companies established in Malta;
- • USD 206 billion represents the total FDI flow for 2018 in Malta;
- • Malta signed more than 50 double taxation treaties with countries worldwide;
- • there are more than 115 ports that connect Maltese companies to the ones from abroad;
- • incentives for job creation and reduced taxes for reinvested profits are important encouragements for entrepreneurs in Malta.
For more detailed information about the branch and subsidiary in Malta
as well as advice for investors, please contact
our agents specialized in company formation in Malta