Table of Contents Why Malta Is the Right Choice for Your Business Business Structures in Malta: Your Options at a Glance Malta Limited Company: The Popular Classic Costs of Starting a Business in Malta in 2025 Step-by-Step Guide: How to Launch Your Malta Business Tax Aspects: What You Need to Know About Maltas Tax System Banking in Malta: Opening a Business Account Made Easy Common Pitfalls and How to Avoid Them Alternatives and Special Cases for Unique Situations Practical Tips for Everyday Business Life in Malta Frequently Asked Questions Why Malta Is the Right Choice for Your Business Lets be honest: If someone had asked me three years ago whether Id ever write an article about starting a business in Malta, I would have laughed. Today, Im sitting on my terrace in Sliema, gazing at the Mediterranean, and I can tell you first-hand why Malta has become a true hidden gem for entrepreneurs. Malta offers a unique combination of EU membership, English-speaking administration, and attractive tax benefits. This small island nation has evolved into a real business hub over the past several years—there’s a reason why more than 10,000 international companies have set up shop here. Malta’s Advantages at a Glance EU Membership: Free movement of goods and capital, harmonized legal standards English as Official Language: No language barriers with authorities or courts Attractive Tax Planning: Effective tax rates starting at 5% are possible Fast Setup: Company registration within 1-2 weeks Stable Economy: AAA rating from Standard & Poors Geographic Location: Ideal bridge between Europe, Africa, and the Middle East Who Should Choose Malta? Not everyone should move their business to Malta. In my experience, it makes the most sense for: Online businesses and SaaS Companies: Digital services can be easily offered from Malta Fintech and Crypto Companies: Malta has progressive regulations for new technologies International Trading Companies: Perfect location for import/export operations Consultancies: Low taxes for high-margin services Investment Vehicles: Holding structures benefit from double taxation treaties If, however, you run a local business with physical products for the German market, think twice. Logistics costs can quickly eat up the tax advantages. Business Structures in Malta: Your Options at a Glance Malta offers several company types, but let’s be real: For most international founders, only two are really relevant. Here’s the overview: Private Limited Company (Ltd.) This is the absolute classic—its right for 95% of situations. A Private Limited Company is similar to a German GmbH: limited liability, separate legal entity, and you need at least one director and one shareholder (these can be the same person). Minimum Capital: Only €1,164.69—a joke compared to Germany Liability: Limited to share capital Administration: Annual general meeting and Annual Return required Public Limited Company (Plc.) Only relevant if you want to go public or have more than 50 shareholders. For almost all founders, this is simply overkill. Partnership Does exist—but who wants unlimited personal liability? Best to steer clear. Branch Office Interesting if you already have a business in another EU country and just want a Maltese branch. Fewer formalities, but less flexibility for tax planning. Structure Minimum Capital Liability Suited For Private Ltd. €1,164.69 Limited All business models Public Plc. €46,587.47 Limited IPO, many shareholders Partnership No minimum Unlimited Not recommended Branch Office Not relevant Like parent company Existing EU businesses Malta Limited Company: The Popular Classic in Detail So, you’ve chosen a Limited Company—a smart move. Let me walk you through the most important details you need to know. Essential Requirements for a Malta Limited Company Good news: The barriers are low. You’ll need: At least one director: Doesn’t have to be Maltese, but EU citizens have it easier At least one shareholder: Can be the same person as the director Registered office: Must be a Maltese address (not your apartment!) Company secretary: Can be an individual or a company Minimum capital: €1,164.69, of which at least 20% must be paid up Name Rules: Do’s and Don’ts There are a few rules when choosing your company name. It must end with Limited or Ltd. and shouldn’t be misleading. Check the availability in advance via the Malta Business Registry (MBR)—this will save you nasty surprises. Insider Tip: Reserve your chosen name as soon as you’ve decided. The reservation costs €25 and is valid for 60 days—giving you time to prepare the rest. Corporate Governance Requirements Malta takes corporate governance seriously, but the requirements are manageable: Board meetings: At least once a year, minutes required Shareholders’ meeting: Annual general meeting no later than 15 months after the last one Annual Return: Annual filing with the Malta Business Registry Financial statements: Required depending on company size Beneficial Owner: What Does That Mean for You? Since 2018, you must declare the beneficial owner—anyone who directly or indirectly owns more than 25% of shares or exercises control. Don’t worry: for most small businesses, that’s just you. The declaration is filed with the Beneficial Ownership Register and costs €100 per year. Don’t forget—penalties can be hefty. Costs of Starting a Business in Malta in 2025 So, time for numbers: How much does it really cost to set up shop? Honestly—it’s cheaper than in Germany, but not free. Here’s my breakdown based on current rates: One-Time Setup Costs Item Cost Notes Government fees (Malta Business Registry) €245 State fees Memorandum & Articles of Association €150-300 Depending on lawyer/service Registered Office (first year) €500-1,200 Provider dependent Company Secretary (first year) €300-800 Can be bundled with Registered Office Apostille of documents €50-150 If foreign documents are needed Due Diligence Check €200-500 For directors and shareholders Total Incorporation Cost: €1,445 to €3,195 Ongoing Annual Costs That’s not all. Here are the yearly running costs you can expect: Annual Return: €100 (Malta Business Registry) Registered Office: €500-1,200 per year Company Secretary: €300-800 per year Bookkeeping: €1,500-5,000 (depending on complexity) Annual accounts: €1,000-3,000 Tax return: €800-2,500 Beneficial Ownership Register: €100 Annual Costs: €4,300 to €12,600 Hidden Costs Often Overlooked From personal experience, these items are commonly missed in calculations: VAT registration: If required, additional compliance costs Business license: Depending on activity, €200-2,000 Business bank account fees: €20-50 monthly Legal fees: For specialised advice, €200-500 per hour Insurance: Professional indemnity, director’s insurance, etc. Saving Potential: Where Not to Cut Corners My tip: Avoid bargain providers for Registered Office and Company Secretary. Ive heard too many horror stories of entrepreneurs whose mail disappeared into nowhere or who suddenly found themselves without a secretary. It’s better to invest in a reputable corporate service provider. That may cost €200-300 more per year, but it’ll save you headaches and potential compliance issues. Step-by-Step Guide: How to Launch Your Malta Business Enough theory—here’s the practical guide I wish I’d had when starting my first Malta company. Just follow these steps: Phase 1: Preparation (1-2 Weeks) Step 1: Check and Reserve Company Name Go to the Malta Business Registry portal and check your desired name’s availability. Reserve it right away for €25—you’ll then have 60 days to proceed. Step 2: Choose a Corporate Service Provider You’ll need someone for your Registered Office and Company Secretary. My advice: research at least three providers and conduct interviews. Look for: References and track record Response times Bundled services (banking support, bookkeeping) Transparent pricing Step 3: Prepare Documents Gather all necessary paperwork: Passport or national ID (notarized) Proof of address (not older than 3 months) Bank reference letter Professional reference letter CV/resumé Phase 2: Incorporation (1-2 Weeks) Step 4: Draft Memorandum & Articles of Association These are your company’s founding documents. Your service provider will help, but make sure the Objects Clause (company purpose) is broad enough for your planned activities. Step 5: Complete Due Diligence Malta is serious about AML (Anti-Money Laundering). You’ll need to prove where your funds come from and that you’re not engaged in suspicious activities. Be honest and transparent—it speeds things up. Step 6: Register with Malta Business Registry Your service provider files all documents. Processing normally takes 5-10 working days. You’ll then get your Certificate of Incorporation—your company is born! Phase 3: After Incorporation (2-4 Weeks) Step 7: Apply for a Tax Number Register with the Inland Revenue (Malta tax office) online via the myAccount portal. You’ll need your tax number for everything else. Step 8: Open a Business Bank Account Often the trickiest part. Maltese banks have become very particular. Allow 2-4 weeks and prepare thoroughly: Business plan Proof of funds Expected transaction volumes Supplier and customer information Step 9: VAT Registration (if needed) If your annual revenue will exceed €35,000 or you want to sell EU-wide right away, you need a VAT number. Registration is online. Step 10: Apply for Business License Depending on your business, you might need a special license. The Malta Financial Services Authority (MFSA) issues finance-sector licenses; others are managed by various authorities. Typical Timelines from Experience Scenario Duration Notes Standard online business 4-6 weeks Simple structure, no special licenses Fintech/crypto 3-6 months Additional regulatory approvals required E-commerce with warehouse 6-8 weeks Additional registrations for trading goods Consultancy 3-4 weeks Usually no special licenses required Tax Aspects: What You Need to Know About Maltas Tax System This is where it gets interesting—and complicated. Malta’s tax system is unique in the EU and can be very attractive if you understand it right. But beware: this is not tax advice, just an overview. For your specific situation, you’ll need a Maltese tax advisor. The Maltese Full Imputation System Explained Malta uses a full imputation system. Sounds complex, but it’s pretty smart: your company pays 35% corporate tax on all profits. But—here’s the trick—as a shareholder you can reclaim a large part of that. The refund depends on the source of your profits: Malta business activities: 6/7 of tax paid refunded (effective 5% tax rate) Foreign business activities: 6/7 of tax paid refunded (effective 5% tax rate) Passive income (interest, dividends): 5/7 of tax paid refunded (effective 10% tax rate) Requirements for Tax Refund This is important—refund is not automatic for everyone: Economic substance: Your company must have real business activity in Malta Management and control: Key decisions must be made in Malta Appropriate premises: A virtual office won’t cut it Qualified employees: On-site, depending on your activity Important note: After ATAD (Anti Tax Avoidance Directive) and stricter EU rules, tax structures are thoroughly scrutinized. Malta is no longer a zero-substance tax haven. The 183-Day Rule and Personal Taxation If you spend more than 183 days per year in Malta, you become a tax resident—which has pros and cons: Benefits: Access to non-domiciled status (15% flat tax on foreign income possible) No tax on capital gains from private investments Various residency programs available Drawbacks: Worldwide tax liability once you are domiciled in Malta Reporting obligations to your home country More complex tax planning required Using Double Tax Treaties Malta has signed over 70 double taxation treaties—a huge plus for international operations. Especially interesting for German entrepreneurs: Germany’s DTA with Malta is very business-friendly. Type of Income Malta Withholding Tax DTA Benefit Dividends 0% No further tax in Germany Interest 0% Taxed only in country of residence Royalties 0% Taxed only in country of residence Capital gains 0% Generally not taxed in Malta Banking in Malta: Opening a Business Account Made Easy Let me be upfront: Opening an account in Malta has become more difficult. After recent money-laundering scandals, banks are extra cautious. But with the right preparation, you can still succeed. Top Banks for Businesses In Malta, you can choose between local and international banks: Bank of Valletta (BOV): The largest Maltese bank, good local network, but sometimes slow processing. HSBC Malta: International standards, good online services, but higher minimum deposits required. APS Bank: Smaller local bank, more personalized service, but limited international services. Banif Bank: Specializes in business clients, flexible solutions, but higher fees. Requirements for Opening a Business Account Every bank has its own criteria, but you’ll need these documents everywhere: Certificate of Incorporation (not older than 3 months) Memorandum & Articles of Association Board Resolution for account opening Beneficial Ownership Declaration Business plan (detailed!) Directors’ personal documents: Passport, proof of address, bank references Source of funds documentation Expected transaction volumes and customer information Account Opening Process, Step by Step Step 1: Choose your bank and book an appointment Not all banks accept new corporate clients. Call ahead and briefly explain your business model. Some banks categorically reject certain industries. Step 2: Document checks Have all documents notarized by a Maltese lawyer or notary. Foreign documents often need an apostille. Step 3: The bank interview Be prepared! Bankers will quiz you on: Why Malta as a location? How exactly does your business work? Who are your clients and suppliers? What’s your expected turnover? Where’s the start-up capital from? Step 4: Due diligence and waiting period After the interview, the bank checks your documents. This can take 2-8 weeks. Be patient and respond promptly to follow-ups. Account Fees and Terms Bank Minimum Deposit Monthly Fee Transaction Fees Bank of Valletta €500 €15-25 €0.50-2.00 HSBC Malta €2,500 €20-40 €0.75-3.00 APS Bank €1,000 €12-20 €0.40-1.50 Banif Bank €1,500 €25-35 €1.00-2.50 Alternative: EMIs and Neobanks If the traditional banks won’t play ball, there are alternatives: Revolut Business: Fast account opening, low fees, but limited services Wise Business: Perfect for international transfers Pleo: Great for expense management N26 Business: Easy signup, but not all services available Important Note: Ensure the EMI license in question is sufficient for your business activity. Some authorities and business partners accept only real bank accounts. Tips for a Successful Account Opening From my experience, these factors significantly boost your chances: Demonstrate local presence: Have a real Maltese address and show you’re regularly on-site Flawless paperwork: All documents complete, current, and professionally presented Realistic figures: Don’t overstate expected turnover Leverage banking partners: Some corporate service providers have good bank relationships Be patient: Never rush the process. Banks don’t like pressure Common Pitfalls and How to Avoid Them Time for some hard truths. Over the past few years, I’ve accompanied many founders through the Malta process and kept seeing the same mistakes. Here are the most common pitfalls—and how to elegantly sidestep them. Pitfall 1: Unrealistic Expectations About Substance Requirements The classic: I’ll just set up a Malta company and save taxes. It’s not that easy anymore. Malta has toughened up and now requires true economic substance. What that means: You need a real office (not just a virtual one) Major business decisions must be made in Malta Depending on activity, you may need staff on the ground Your bookkeeping must be managed in Malta Solution: Budget €2,000–5,000 extra per year for proper substance from the outset. Still cheaper than German taxes, but not free. Pitfall 2: Underestimating Banking Hurdles Many think: Company formed, account comes automatically. Wrong. Opening a bank account is often the trickiest step in the whole process. Common mistakes: Incomplete documents for the bank meeting Unrealistic expected revenue declarations No plausible explanation for choosing Malta Poorly communicated business model Solution: Invest time in a bulletproof business plan and prepare as if for a job interview. Banks want to clearly understand how you make money. Pitfall 3: Compliance Traps During Ongoing Operations Formation is just the beginning. Malta has strict compliance requirements that many underestimate. Frequent compliance mistakes: Missed annual returns (€100 fine + interest) Late financial statements (up to €465 fine) Unreported changes in directors/shareholders Neglected AML obligations Incorrect VAT treatment for EU sales Solution: Engage professional compliance support from day one. The €2,000–3,000 per year for a good service provider is money well spent. Pitfall 4: Tax Traps in Profit Distribution Malta’s tax system is complex—and full of traps: Timing refunds: Tax refunds are only paid after distribution Double taxation: Without careful planning, you pay in Malta and at home Substance requirements: Refunds are denied if substance is lacking CRS reporting: Malta automatically reports to other EU countries Solution: Map out your tax structure with an expert before your first profit distribution. Corrections after the fact are costly or impossible. Pitfall 5: Underestimating Living Costs Malta has become more expensive. If you plan to live here long term, be realistic: Item Monthly Cost Notes Rent (1-2 bed, good area) €800-1,500 Sliema/St. Julians much pricier Groceries €300-500 Imported goods are very expensive Transport €100-400 Car vs. public transport Utilities €100-200 Electricity is very costly in summer Internet/phone €30-60 Speeds often disappointing Pitfall 6: Overestimating Infrastructure Malta is a small country—with the usual limitations: Internet: Not always reliable, especially in bad weather Traffic: Jams are normal, public transport is unreliable Authorities: Can be slow, especially in summer Logistics: Everything is imported—pricey as a result Reality check: Spend at least a month in Malta before deciding to move your business here. The island is beautiful, but it’s not for everyone. Alternatives and Special Cases for Unique Situations Malta isn’t the right answer for everyone. Here well look at alternative structures and special situations that may require different approaches. Holding Structures for Complex Company Groups If you own or plan to own multiple businesses, a Maltese holding company can be very attractive: Malta as a holding location: No withholding tax on outgoing dividends Extensive double tax treaty network EU Parent-Subsidiary Directive applies Flexible financing structures possible Typical structure: Malta holding company (owns stakes) Operating companies in various countries Profit distributions optimised for Malta tax rules Reinvestment or further distributions to shareholders Malta as Part of International Tax Planning For larger companies, Malta can be a part of a more complex structure: IP holding in Malta: Intellectual property (patents, trademarks, software) can be held very tax-efficiently in Malta. The effective tax burden is often below 5%. Trading company for non-EU business: Malta is a great base for doing business with non-EU markets, especially Africa and the Middle East. Alternative EU Locations Compared Depending on your situation, other EU countries might suit you better: Country Advantages Disadvantages Best For Cyprus 12.5% corporate tax, strong DTAs Compliance requirements, political risk Holdings, shipping Ireland 12.5% on trading income, large tech scene High living costs, complex rules Tech companies, software development Netherlands Excellent DTA network, stable infrastructure 25% corporate tax, high costs International holdings, IP structures Estonia 0% on retained earnings Only for certain business models, fewer DTAs Tech startups, software Special Cases: When Malta Doesnt Fit E-commerce with warehousing: If you sell physical products in Germany, using Malta often causes more trouble than its worth: Complicated VAT treatment Higher logistics costs More difficult returns processing German consumer laws still apply Local services: Consulting, trades, or other local services are hard to deliver from Malta. Substance requirements are barely achievable. Highly regulated industries: Banks, insurance, and other heavily regulated sectors often face higher hurdles in Malta than in Germany. Timing: When Is the Right Time? Not everyone should move to Malta right away. Here are my recommendations: Worth it immediately: Online business with >€100,000 annual profit International clients, location-independent Planned EU expansion Already established Maltese connections Reconsider for later: Very new businesses without stable profits Major local customer relationships in Germany Complex operational structures Lack of long-term clarity Exit Strategies: What If It Doesn’t Work? Honestly: Malta isn’t paradise for everyone. Plan your exit strategy from the start: Liquidation: Relatively simple if there are no liabilities Migration: Company can be moved to another EU country Sale: Maltese companies can be sold—though the market is small Dormancy: An option for temporary pauses Liquidation costs €1,500–3,000—factor this in. Practical Tips for Everyday Business Life in Malta Now to the practical part: What’s daily business life in Malta really like? After three years here, I can share some insider tips to make your journey smoother. Accounting and Compliance: Your Key Partners A good accountant is worth their weight in gold in Malta. Here’s what to look for: Choosing the right accountant: ACCA or MIA qualification (Maltese professional bodies) Experience with international clients Software integration (Xero, QuickBooks, SAP) Response time under 24h for important questions Transparent pricing with no hidden fees Monthly vs. Quarterly Bookkeeping: My tip: Invest in monthly bookkeeping. Costs €200–300 more per year, but you’re always up to date and avoid nasty surprises at year-end. Useful Software Tools for Malta Businesses These tools have proven themselves in practice: Accounting: Xero: Perfect integration with Maltese banks QuickBooks: Good for smaller companies Sage: If you already use it VAT Management: Avalara: Automatic VAT calculation for EU sales Taxamo: Especially for digital services Expense Management: Pleo: Company credit cards with automatic receipt capture Expensify: Photo-based expense reporting Networking and the Business Community Malta is small—networking is especially important here: Key events and organisations: Malta Blockchain Summit: Every November, top event for tech Malta Business Network: Monthly meetups European Business Network: Great for EU-focused companies Malta Chamber of Commerce: Classic business networking AiGaming: For gaming and fintech businesses Coworking spaces: Idea Space (Rabat): Very professional, great facilities BeesNest (Lija): Startup vibe, lots of founders Spotlight (St. Julians): Modern, pricier The Office (various locations): Solid option Dealing With Maltese Authorities Bureaucracy has its quirks. Here are my survival tips: Timing is everything: Never in the last two weeks before holidays Mornings are better than afternoons August is practically dead—don’t plan anything important Festa season (May–September) means unpredictable hours Communication: Always stay polite, even if frustrated Keep all communication in writing Collect and keep reference numbers For complex matters: get a local agent involved Everyday Banking: Practical Tips Daily banking works differently than in Germany: Online banking realities: Not all functions are available online Transfers often have limits (€5,000–25,000 depending on bank) International transfers may require phone approval Mobile apps are functional but less convenient than German ones Cash and Payments: Many small shops accept cash only Cards often not accepted for amounts under €10 Tips always in cash Always bring cash for dealings with authorities HR: Employing Staff in Malta If you need local employees: Labour law basics: Probation: standard 6 months Notice periods: 1 week to 3 months depending on seniority Annual leave: 24 days + 14 public holidays 13th salary: not legally required but common practice Recruiting: JobsPlus: Government job portal Keepmeposted: Local job board LinkedIn: Also works well in Malta Recruitment agencies: For specialist roles Position Average Salary Notes Administrative Assistant €18,000-25,000 Language skills key Software Developer €28,000-45,000 Depends on experience and skills Marketing Manager €25,000-40,000 Digital marketing in high demand Accountant €22,000-35,000 ACCA qualification highly valued Work-Life Balance: Life as an Entrepreneur in Malta Malta is stunning, but also demanding: The positives: 300+ days of sunshine per year Short distances—everything within 30 minutes International community Relaxed lifestyle Safe environment The challenges: Traffic chaos, especially in Valletta and Sliema Overcrowded beaches in summer Limited cultural offerings Everything costs more in summer Island fever—that feeling of being stuck My advice: Plan regular trips to Europe. A weekend in Rome or Barcelona often costs less than €200 and helps cure island fever! Frequently Asked Questions About Setting Up a Business in Malta Can I set up a Maltese company without living in Malta? Yes, in principle this is possible. But you’ll need a local registered office and must meet substance requirements. For tax benefits, you must prove that key business decisions are made in Malta. How long does it really take to set up a company in Malta? For a standard limited company without special licences: 4-6 weeks from application to a fully operational business with a bank account. The actual registration takes 1-2 weeks; bank account opening is often the slowest step. What’s the minimum economic substance required? Malta requires adequate substance according to business activity. At minimum: a genuine Maltese business address, local bookkeeping, and demonstrable local activity. For IP holding or trading, qualified staff might also be needed. As a German citizen, can I open a business account in Malta without issues? As an EU national your chances are good, but banks have become picky. Key: full documentation, plausible business model, proof of Malta connection. Allow 2-8 weeks for processing. Is the 5% tax rate in Malta real? Yes, but only under certain conditions. Malta’s tax refund system can yield effective rates of 5%, but real economic substance and proper tax planning are required. Without substance, there is no refund. What happens if EU tax laws change? Malta adapts regularly to EU rules. The tax refund system has existed since 2007 and is likely to remain, but substance requirements get tougher. Work with a professional for future-proof planning. Do I absolutely need a Maltese tax advisor? For ongoing compliance: yes. Malta’s tax system is complex and often changes. A local expert costs €2,000–5,000/year, but protects you from costly mistakes and gets you full benefits. Can I move my German company to Malta? A direct transfer is legally complicated. Usually it’s better to found a new Malta company, gradually shift operations, and later liquidate the German entity. Be sure to get tax advice due to exit taxation. What are the main differences from a German GmbH? Main differences: lower minimum capital (€1,165 vs. €25,000), English administration, different tax structure, less strict director’s liability. But: stricter AML compliance and international reporting obligations. Is Malta worthwhile for smaller companies? It starts to make sense from profits of about €50,000/year, truly attractive from €100,000. Below this, costs for compliance and local presence usually outweigh tax savings. Get an individual analysis from an expert.
