Table of Contents Why Set Up a Company in Malta? An Overview of the Three Main Company Types in Malta Setting Up a Malta Limited Company: Step-by-Step Guide Partnership Malta: When a Partnership Makes Sense Branch Office Malta: Subsidiary Instead of a Standalone Company Malta Company Types Compared: Which Fits Your Business Model? Pitfalls and Common Mistakes When Setting Up a Company in Malta Practical Tips for Your Malta Company Formation Why Set Up a Company in Malta? Before I explain the different company types, let me be honest: Malta is not the secret tax haven some claim it to be. But for certain business models, the island can still be incredibly attractive. After accompanying over 100 company formations, I know: the legal form is only as good as your strategy behind it. Malta as an EU Business Location As an EU member since 2004, Malta offers you all the benefits of the single market—without the complexity of larger countries. You can offer services to all 27 EU countries, benefit from free movement of people, and still have English commercial law. That’s particularly valuable if youre already familiar with contracts or structures from the UK system. The Malta Financial Services Authority (MFSA) has provided solid regulation for years, which fosters international trust. This is gold for fintech, iGaming, or online services. At the same time, bureaucratic hurdles remain manageable—nothing like Germany or France. Tax Benefits at a Glance Here’s where it gets concrete: Malta uses a full imputation system that, with the right structure, allows for effective tax rates of 5% down to 0%. In short: Your Malta Limited pays 35% corporate tax When profits are distributed to EU shareholders, you get back 6/7 of the tax paid Effective burden: 5% on distributed profits Undistributed profits: 35% (with potential refund later) Important: This only works for active business activity, not passive income. Malta now strictly checks for real substance (office, staff, decision makers). When Malta Really Pays Off From my experience, Malta starts making sense at annual profits of €100,000—below that, incorporation and compliance costs eat up your tax savings. Perfect fit for: Online businesses with customers throughout the EU Consultancy services (IT, marketing, consulting) E-commerce with fulfillment in other EU countries Licensing and IP exploitation Holding structures for international investments Not suitable for local business in Germany or if you can’t spend at least 6 months a year flexibly. Malta wants real business activity—not just a mailbox. An Overview of the Three Main Company Types in Malta Malta offers several legal entities, but for 95% of cases, only three are relevant. Each has its merits—the art is picking the right one for your business model. Limited Company – The Classic for Entrepreneurs The Malta Limited Company is equivalent to the German GmbH and the most popular choice. You found an independent legal entity with limited liability—your personal assets remain protected. Minimum Capital: €1,165 (at least 20% paid in = €233) Shareholders: Minimum 1, no upper limit Directors: Minimum 1 (doesnt have to be a shareholder) Registered Office: Must be in Malta The big advantage: You can make full use of all available tax planning opportunities while enjoying the flexibility of a corporate entity. For most online entrepreneurs, this is the sweet spot. Partnership – Flexible but Risky Partnerships in Malta work like general partnerships in other countries. There are two types: General Partnership: All partners have unlimited personal liability—risky, but very flexible in profit allocation and tax planning. Limited Partnership: Combines general partners (with unlimited liability and management authority) and limited partners (liability limited to their contribution, but no say in management). Partnerships are mainly suited for consultancy firms or if you already have an established multi-owner structure. Branch Office – Extension of Your Existing Business A Branch Office isnt a separate legal entity but the Maltese branch of your existing company. Legally and economically, everything stays with the parent company—you’re just extending your operations to Malta. This makes sense if you already have an established business and want to serve Maltese clients or use EU passporting for financial services. But it usually offers little in the way of tax benefits since profits are attributed to the parent. Setting Up a Malta Limited Company: Step-by-Step Guide The Limited Company is the right choice for 80% of my clients. That’s why I’ll guide you through the incorporation process in detail—including the pitfalls that cost me nerves in the early years. Requirements and Documents Before you start, you’ll need these documents: Passport or ID card for all shareholders and directors Proof of address (no older than 3 months) for all parties Memorandum and Articles of Association—that’s your company agreement Form A—the official company registration application Registered Office in Malta (can be rented from service providers) Important Note: All foreign documents have to be apostilled. In Germany, this usually takes 2–4 weeks—factor this in, otherwise you’ll face delays. The Incorporation Process in Practice Here’s how it works if you do everything right: Name Reservation (Day 1–2): Malta Business Registry checks if your preferred name is available. Cost: €25, turnaround: 24–48 hours. Prepare documents (Day 3–7): Have Memorandum and Articles of Association drafted. Don’t cut corners here—a good corporate lawyer costs €1,500–2,500, but can save expensive restructuring down the road. Submit to Registry (Day 8–10): Submit Form A plus all documents electronically. The Malta Business Registry is surprisingly efficient—usually, you’ll have your Certificate of Incorporation within 2–3 working days. VAT Registration (Day 11–15): If your annual revenue exceeds €35,000, you must register for VAT. This is done online and takes 3–5 business days. Apply for tax number (in parallel): This happens automatically with company formation—the Tax Identification Number is issued by the Inland Revenue Department. Costs and Timeframes An overview of the real costs for setting up a Malta Limited Company: Item Cost Comments Government Fees €245 Fixed Registry fees Legal Documents €1,500–2,500 Memorandum, Articles, legal advice Registered Office (1 year) €600–1,200 Depends on provider and service level Apostille Germany €150–300 About €25–50 per document VAT Registration free If required Total €2,500–4,200 Plus recurring costs Time required: 2–4 weeks if all documents are in order. Realistically, it often takes longer due to missing paperwork or apostille delays. My tip: Always allow 6 weeks and a total first-year budget of €5,000. That way, youre covered—and youll be pleasantly surprised if its faster or cheaper. Partnership Malta: When a Partnership Makes Sense Partnerships are less common in Malta than Limited Companies, but unbeatable in certain situations. Let me explain when they make sense—and when you should steer clear. General Partnership vs Limited Partnership General Partnership means all partners are jointly and severally liable without limit. If your business partner screws up, your personal assets are fully at risk. Sounds scary? It is. Still, there are scenarios where General Partnerships make sense: Professional services (lawyers, consultants, architects) Family businesses with maximum trust between partners Temporary joint ventures for specific projects Limited Partnership is much more attractive: General Partners (unlimited liability but managerial authority), and Limited Partners (liability limited to their stake, no involvement in management). This works well for: Investment fund structures Real estate projects with silent investors Private equity or venture capital deals Pros and Cons in Detail Advantages of Partnerships: More flexible profit allocation than corporations Lower setup costs (from €1,000 onwards) Less formal compliance requirements Pass-through liability can be beneficial for certain tax arrangements Faster setup (1–2 weeks with complete documentation) Drawbacks of Partnerships: Unlimited liability (at least for general partners) Complex succession rules if a partner exits Less international recognition than Limited Companies Tax disadvantages compared to Malta’s refund system More difficult to open a bank account Formation and Legal Aspects You establish a partnership by registering with the Malta Business Registry. You’ll need: Partnership Agreement—the contract between all partners Application Form with details on all partners Registered Address in Malta ID documents for all partners Minimum requirements: At least 2 partners (individuals or legal entities) No minimum capital required Registered office in Malta At least one partner must reside in Malta (except for Limited Partnerships) My assessment: Partnerships are niche solutions. For 90% of online entrepreneurs, the Limited Company is the better fit. Only choose a Maltese partnership if you have very specific requirements, or already run a successful partnership structure elsewhere. Branch Office Malta: Subsidiary Instead of a Standalone Company A branch office is the Maltese branch of your existing company. Legally, it’s not a separate entity, just an outpost of your main company. This can be a clever move—or totally pointless—depending on your situation. When a Branch Office Is the Right Choice Branch offices make sense in these scenarios: EU passporting: You operate financial services and need an EU license for other markets Regulatory requirements: Your sector demands a physical presence in Malta Customer trust: Maltese clients prefer buying from a local address Market entry: You want to test the Maltese market before forming a company Sales optimization: You’re selling physical goods and need a local warehouse or office Not suitable for: Tax optimization. Profits are attributed and taxed by the parent. If your German GmbH runs the branch, you pay German corporate tax—not Maltese. Registration and Requirements Registering a branch office is surprisingly straightforward: Application to the Malta Business Registry with parent company details Certified copy of the parent’s certificate of incorporation Certificate of Good Standing from the home country (not older than 6 months) Board resolution from the parent authorizing opening of the branch Registered address in Malta Local representative—a person residing in Malta as contact Costs: €140 registration fee plus approx. €1,000–1,500 for legal services. Significantly cheaper than forming a Limited Company. Processing time: 1–2 weeks if all documentation is complete. Tax Particularities This is where it gets interesting—and often misunderstood: Basic rule: A branch office isn’t a separate taxpayer. All profits and losses are attributed and taxed at the parent company level. However: If the branch constitutes a permanent establishment, then profits attributable to Malta may be taxed in Malta. This applies when: The branch carries out real business activities Decisions are made from Malta Staff on-site carry out substantial tasks Contracts are negotiated and signed in Malta Check double taxation agreements: Germany and Malta have a DTA, specifying where profits are taxed. It’s complicated, and you definitely need tax advice. My verdict: Branch offices are usually not suitable for tax optimization. They are valuable for operational or regulatory reasons, but if your aim is tax savings, a Limited Company is almost always the better choice. Malta Company Types Compared: Which Fits Your Business Model? After more than 100 company formations, I know the typical mistakes. Most entrepreneurs go with their gut or fall down the rabbit hole of online forums. But choosing the right legal form is a strategic decision that will shape your business for years. Decision Criteria at a Glance Consider these factors in your decision: Liability: How much personal risk are you willing to bear? Tax: Which structure optimizes your tax burden? Compliance: How much bureaucracy can you tolerate? Investors: Are you planning to bring in external capital or exit? Internationalization: Do you want to expand abroad? Business model: Does the legal structure match your type of business? Budget: How much can you spend on setup and ongoing costs? Comparison Table of Key Aspects Criterion Limited Company Partnership Branch Office Liability Limited to company capital Unlimited (GP) / Limited (LP) As per parent company Minimum capital €1,165 None None Setup costs €2,500–4,200 €1,000–2,000 €1,200–1,800 Annual compliance €2,000–4,000 €1,000–2,500 €800–1,500 Tax optimization Excellent (5% possible) Limited None Investor-ready Yes Partially No International recognition Excellent Good Good Formation time 2–4 weeks 1–2 weeks 1–2 weeks Typical Business Models and Recommended Legal Forms Online business / E-commerce: → Limited Company – Perfect for tax optimization and international expansion. Limited liability protects you from product liability risks. Consultancy Services: → Limited Company or Partnership – Depends on number of partners. Solo consultants usually pick Limited Company, teams often Partnership. Software as a Service (SaaS): → Limited Company – The absolute standard. Investors expect corporate structures; limited liability is essential in case of software bugs. Investment / Trading: → Limited Company or Limited Partnership – Depends on whether you operate alone or with silent partners. Physical products / Manufacturing: → Limited Company – Product liability risks make limited liability a must. Subsidiary of an Existing Business: → Branch Office – If you already have an established company and need Malta as a branch location only. Professional Services (lawyers, doctors): → Partnership – Traditional structure for professional services, but Limited Company is also possible. My recommendation for 80% of cases: Limited Company. It offers the best mix of flexibility, tax optimization, and international reputation. Only in very specific cases are other forms preferable. Pitfalls and Common Mistakes When Setting Up a Company in Malta Let’s be frank: these are the traps I and my clients have fallen into over the years. Some only cost nerves, others serious money. Compliance and Ongoing Obligations The biggest misconception: Once the company is formed, everything runs itself. Wrong! Malta has strict compliance requirements that must be fulfilled annually: Annual Return: Annual confirmation of company data with the Registry (due 6 months after financial year-end) Financial Statements: Year-end reporting per Maltese standards Tax Returns: Tax declaration with the Inland Revenue Department VAT Returns: Quarterly or monthly, depending on revenue UBO Register: Declaration of the beneficial owners (tightened since 2021) Costs: €2,000–4,000 annually for professional handling. If you do it yourself, you’ll need Maltese tax advisor qualifications and a lot of time. Consequences of missing deadlines: Fines from €100 upwards, or in the worst case dissolution of the company. I’ve seen businesses struck off after two years due to missing annual returns. What I Learned from 50+ Company Formations Mistake #1: Ignoring substance A Maltese address used to suffice. Today, Malta rigorously checks for real business activity. You’ll need: Office or coworking space (not just a PO box) Local staff or regular presence on the ground Board meetings in Malta Business decisions made from Malta Mistake #2: Underestimating opening a bank account Company formation takes 2 weeks, bank account 6 months—not a joke. Maltese banks are extremely cautious with foreigners. Expect: 3–6 months waiting time Extensive due diligence Minimum deposits of €25,000–100,000 Ongoing fees of €100–300 monthly Mistake #3: Confusing corporate and personal tax residence Having a Maltese company doesn’t make you a Maltese tax resident. Your personal tax liability depends on where you live and work. In Germany, you remain taxable until you deregister and physically move abroad. Mistake #4: Underestimating EU law Malta must implement EU directives, especially: ATAD (Anti-Tax Avoidance Directive)—stricter substance requirements DAC6—mandatory reporting of aggressive tax arrangements Beneficial Ownership—transparent ownership structures Red Flags and Warning Signs Advisors to avoid: Promise 100% legal tax-free solutions Try to cross-sell Cyprus setups Can’t offer Maltese reference clients Sell complete package incl. residency for under €10,000 Don’t answer critical substance-related questions How to spot reputable providers: Licensed in Malta with local offices Ask about your business model and flag risks Explain compliance duties in detail Have several years’ experience serving German clients Work with Maltese lawyers and tax advisors My most important advice: Malta is no longer a tax haven but a regulated EU hub with real business demands. If you understand and plan for this, you can still do very well. If you’re after quick solutions, you’ll be disappointed. Practical Tips for Your Malta Company Formation To wrap up, here are concrete tips to save you time, money, and stress—based on everything I’ve learned in 4 years of Malta experience. Choosing the Right Advisor Must-have qualifications: Malta legal license or accountant qualification At least 5 years’ track record with German clients Own office in Malta (not just a PO box) Transparent cost breakdown with no hidden fees References from existing clients Good questions to ask in the initial meeting: How do you ensure my company has sufficient substance? What happens if EU regulations change? Which banks still work with German clients? What are realistic first-year costs? Can you provide Maltese reference clients? How to avoid hidden costs: Negotiate fixed fees instead of hourly rates Request a breakdown of all extra charges Ask about pricing tiers for multi-year contracts Watch out for hidden fees for minor services Opening a Bank Account – The Reality Check The hard truth: Opening a bank account is the toughest part of setting up in Malta. Here’s my approach, based on over 50 successful openings: Bank of Valletta (BOV): Maltese mainstay, conservative but reliable Minimum deposit: €5,000 for business account Processing time: 2–4 months Fees: €15–25 monthly Advantage: Local, knows the market Disadvantage: Slow, limited online banking HSBC Malta: International, professional, but selective Minimum deposit: €25,000 Processing time: 3–6 months Fees: €100–200 monthly Advantage: Excellent online banking, global network Disadvantage: High requirements, expensive Revolut Business: Alternative for the start Opening: 1–2 weeks online Fees: €25 monthly Advantage: Fast, affordable, great online banking Disadvantage: Not all Maltese authorities accept neobanks My recommendation: Start with Revolut for the first few months, and apply for a traditional bank account in parallel. This helps you get up and running faster. Planning Costs and Budget Realistic budget for Malta Limited Company (first year): Item Cost Timing Formation (legal, registry) €2,500–4,200 One-off Registered Office €600–1,200 Yearly Compliance (tax advisor) €2,000–4,000 Yearly Bank account fees €300–2,400 Yearly Office/coworking €3,000–12,000 Yearly Travel expenses to Malta €2,000–5,000 Yearly Total Year 1 €10,400–28,800 Ongoing costs/year €7,900–24,600 Break-even analysis: With 20% tax savings, you need at least €50,000 profit to make Malta worthwhile. Below that, extra expenses outweigh the tax benefits. My conclusion after 4 years in Malta: The island offers real opportunities for international entrepreneurs—but only for those willing to fully commit. Half-hearted solutions no longer work. But if you go all-in, are physically present and build real economic activity, Malta can still be very attractive. The company form is just the first step. Your long-term strategy is more important: Where do you want to be in 5 years? What role should Malta play in your business? And are you also prepared to embrace the island on a personal level? If you can answer yes to these, Malta is one of the best decisions you can make. If not, save yourself the trouble and focus on your home country. Frequently Asked Questions (FAQ) How long does it take to set up a Malta Limited Company? With all paperwork in order: 2–4 weeks. In practice, 6–8 weeks is common due to additional documentation or apostille delays. Always allow for 2 months to be safe. Can I set up a Malta company completely online? No, at least not reliably. You have to travel to Malta for opening a bank account, visiting your office, and to prove real substance. Skipping this risks trouble with the authorities. Do I need to be a Maltese resident for my company? No, but you need to demonstrate actual business activity in Malta. At minimum, an office or coworking space, plus regular presence for board meetings and operational decisions. What are the real tax rates in Malta? Officially 35% corporate tax, but with the refund system, effectively 5% if structured correctly. This only works with real business activity and EU shareholders. Is Malta still safe after the money laundering scandals? Yes, but Malta has massively tightened compliance requirements. Beneficial ownership register, stricter due diligence, and increased substance checks have made opaque arrangements impossible. Which bank is best for German entrepreneurs? Bank of Valletta for standard needs, HSBC for international business with large volumes. Revolut Business for a fast interim solution. Plan 3–6 months for traditional banks. Can I move my existing German company to Malta? Technically yes, via cross-border merger, but practically very complex and expensive. A new company set up in Malta is usually simpler and cheaper. What happens to Malta companies after Brexit? Nothing—Malta is an EU member and unaffected by Brexit. Many companies even relocated from London to Malta to retain EU market access.
