Setting up a business in Malta
20 November 2009by Ina Dimireva -- last modified 26 January 2010
An overview of the process of starting a new business in Malta.
Legal requirements
In Malta, companies and commercial partnerships are formed under the Companies Act. The first step to take when setting up a business in Malta is to choose its legal structure. Entrepreneurs can choose to either carry out business in their own name according to the provisions of the Commercial Code, or operate through a separate entity which they create.
The limited liability company is the most common form of business structure in Malta and has two essential features:
- the creation of a separate legal person distinct from that of its members
- the limitation of liability of its members to the amount, if any, left unpaid on its shares.
A limited liability company may have only one member. It is formed by means of capital divided into shares held by its members.
Where insolvency is unlikely, the founders of a business, may choose to form a partnership en nom collectif for the exercise of one or more acts of trade. There must be a minimum of two partners. While this partnership also has a separate legal personality, its members do not enjoy the benefit of limited liability since the obligations of the partnership are guaranteed by the unlimited joint and several liability of all the partners. On the other hand, the regulatory obligations imposed on the partnership are considerably fewer than those imposed on companies.
Another type of business structure which has a separate legal personality is the partnership en commandite (or limited partnership) which can be regarded as a 'cross' between a company and a partnership en nom collectif. This partnership has two types of partners, namely the general partners who assume unlimited responsibility for the obligations of the partnership and the limited partners, whose liability is limited to the amount, if any, left unpaid on their contribution. The capital of such a partnership may be divided into shares.
Malta country profile - How to set up a company
As well as smooth start-up procedures, any successful new business requires a sound commercial strategy and secure financing.
Administrative procedures
In order to form a limited liability company, founding members subscribe to a memorandum of association which, when signed, is submitted to the Registrar of Companies who verifies it for compliance with the necessary acts before registering it. The company comes into existence from the date of registration indicated in its certificate of registration. The articles of association, a separate document relating to the internal management of a company, may also be registered with the memorandum. Unless such articles are registered, the model articles found in the First Schedule to the Companies Act will apply.
Registry of Companies on-line system
The memorandum of association of every company must, among other things, contain the following information:
- whether the company is a public company or a private company
- the name and residence of each of the subscribers
- the name of the company
- the address of the company's registered office in Malta
- the objects (aims) of the company
- the amount of share capital at the time of registration, its division into shares of a fixed amount, the number of shares taken up by each of the subscribers and the amount paid up in respect of each share and, where the share capital is divided into different classes of shares, the rights attaching to the shares of each class
- the number of directors, their particulars and the manner in which the representation of the company is to be exercised, and the name of the first person or persons vested with such representation
- the name and residence of the first company secretary or secretaries
- the period, if any, fixed for the duration of the company; and
- in respect of each shareholder, director and company secretary, the number of an official identification document should also be given
In order to form partnerships en nom collectif or en commandite, the founding partners enter into an agreement called the deed of partnership which contains the essential rules on how the partnership should operate. The deed is signed by all the partners and submitted to the Registrar of Companies for registration. After verifying that the applicable provisions have been complied with, the Registrar issues a Certificate of Registration. The partnership comes into existence from the date indicated in the certificate and is then authorised to start trading under the partnership name.
Personalised help and advice
Malta Enterprise supports the development of businesses in Malta. It offers assistance and advice to those seeking to learn more about the multitude of business and investment opportunities available on the island. Likewise, it offers investors the best possible service before, during and after they decide to do business in Malta.
Malta Enterprise: business support
The Malta Chamber of Commerce and Enterprise offers its members, among other benefits, entry in the Malta Trade Directory, a newsletter and bimonthly magazine, business education courses at special rates and a chance to have their views represented to decision makers.
Malta Chamber of Commerce and Enterprise
The Government of Malta's work and business page offers services including import/export and trading licenses, levies and price verification. In essence a portal, it provides a list of organisations ranging from the Craft Council through to the National Statistics office and links to the various services offered by the Employment and Training Corporation, the VAT Department and the Malta Financial Services Authority.
The Malta Chamber of SMEs is run by the Association of General Retailers and Traders, Malta's national organisation of independent, private businesses. The organisation has over 7 000 members and its policies are geared towards encouraging and supporting small and medium-sized enterprises.
Association of General Retailers and Traders
The Commerce Division of the Ministry for Competitiveness and Communications sets out to facilitate contact between entrepreneurs and any authority, body, ministry or department offering help to small businesses. It is an intermediary, gathering relevant information and passing it on to those trusted with helping small businesses flourish.
The Enterprise Europe Network provides businesses with information and advice through its local partners.
Enterprise Europe Network – contact points – Malta
SOLVIT helps businesses deal with problems that arise when national authorities wrongly apply EU market rules.
SOLVIT – contact points – Malta
Source: European Commission
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