Table of Contents Why Your Malta Business Needs Professional Contract Templates Directors Agreement Malta: The Most Important Contract for Your Company Employment Contracts in Malta: Getting It Right from Remote to Full-Time Other Essential Contract Templates for Malta-Based Companies Where to Find Reliable Contract Templates for Malta Frequently Asked Questions about Malta Contract Templates You’ve set up your Malta company and now you’re thinking: Contracts? I can just throw something together myself. Stop! I know how tempting it is to cut corners when it comes to contract templates. But trust me: after two years on the island and countless conversations with entrepreneurs who had to pay dearly for contract revisions, my advice is clear—invest in professional legal documents from the start. Malta may be an EU member state and have English as an official language—but there are local laws here that are different from those in your home country. Especially with Directors Agreements, Employment Contracts, and Shareholder Agreements, there are pitfalls that can end up costing you a fortune. Why Your Malta Business Needs Professional Contract Templates Before I walk you through the most important types of contracts, let’s be honest: Malta isn’t Germany, Switzerland, or Austria. You’ll realise this the moment you sit down with a Maltese lawyer and they tell you your international standard contract won’t work here. Understanding Malta’s Legal Specifics Malta follows the Common Law system (similar to the UK), while most EU countries operate under Civil Law. In real terms: case law and judicial decisions carry more weight than in Germany or Austria. Your contracts have to reflect this reality. An example from real life: a German business owner used his usual termination clauses in Maltese employment contracts. The result? A year later, he was standing before the Industrial Tribunal (Maltese employment court) and had to pay a five-figure settlement because his clauses were invalid under Maltese law. Typical Cost Traps with DIY Contracts Here are the most expensive mistakes I see newcomers to Malta make: Incorrect jurisdiction clauses: You’ll want to avoid Maltese courts where possible—but your clause still needs to be legally watertight Unclear notice periods: Notice periods in Malta are different from Germany (periods of up to 3 months are common) Omitted tax residence clauses: Without the right wording, you risk tax disadvantages Missing compliance provisions: Malta takes AML (Anti-Money Laundering) very seriously—your contracts need to reflect this How Does Malta Differ from Other EU Countries? The biggest differences are found in three areas: Aspect Malta Germany/Austria Legal system Mix of Common Law & Civil Law Pure Civil Law Official languages Maltese and English German Contract language Usually English, sometimes Maltese German Court proceedings Often lengthy (1–3 years) More structured, but also time-consuming Directors Agreement Malta: The Most Important Contract for Your Company The Directors Agreement is the contract between your Malta company and you as director. Sounds straightforward? It’s not. This contract not only outlines your duties and remuneration, but also crucial tax aspects of your Malta structure. What Should a Directors Agreement Include? A professional Directors Agreement for Malta must cover: Duties and Responsibilities: Clearly defined director duties Remuneration Structure: How and when you’re paid Tax Residence Clauses: Essential for tax optimisation Confidentiality Provisions: Protection of sensitive company information Termination Procedures: How and when either party can end the arrangement Indemnity Clauses: Protection from personal liability Particularly important: the tax residence clauses. If you are not a Maltese resident and receive director’s fees, different tax regimes may apply. Wording mistakes here can mean accidentally triggering Maltese tax liability. Common Pitfalls with Directors Agreements These mistakes come up over and over again: Unclear Ordinarily Resident definition: Malta distinguishes between Resident and Ordinarily Resident—which can make a tax difference of 35% vs. 5% Missing substance requirements: Your Directors Agreement needs to show that real business activity is happening in Malta Omitted MFSA compliance: Regulated companies face extra requirements Wrong currency clauses: Euro, USD or Maltese lira (historically)—the agreement needs to be explicit Template vs. Tailor-Made Contract The reality: a basic template will cost you €200–500; a fully customised contract from a top lawyer is €2,000–5,000. For starters, a high-quality template is often enough, but you should always have a Maltese lawyer review it. My tip: Start with a good template and have a local lawyer tailor it for €300–500. That’s the sweet spot between cost and security. Employment Contracts in Malta: Getting It Right from Remote to Full-Time Planning to hire staff in Malta? Here’s what you should know: Maltese employment law is more employee-friendly than you may expect. Forget the German fire at will approach—Malta has robust employee protections. Malta Employment Law at a Glance The key points for your employment contracts: Probation policy: Maximum of 6 months for new positions Notice periods: Depending on length of service, 1–12 weeks Minimum wage: Currently €195.92 per week (as of 2024) Paid leave: Minimum of 24 working days per year Sick leave: Up to 12 weeks of paid sick leave per year What many don’t realise: Malta has very specific rules on redundancy (lay-offs for business reasons). You can’t just downsize—there are procedures to follow. Special Considerations for International Employees If you’re hiring EU citizens or third-country nationals, some extra points apply: Type of Employee Work permit required? Key Points EU nationals No Free choice of workplace, but must obtain ID card after 3 months EEA nationals No Treated like EU nationals Non-EU nationals Yes Employment licence required, complex process Remote workers Depends Nomad Residence Permit possible Templates for Different Working Models Depending on the working arrangement, you’ll need different contract clauses: Full-time on-site: Standard employment contract with all statutory provisions Remote/Hybrid: Additional clauses for workplace, equipment and data protection Part-time: Pro-rata calculation of all benefits, clear working hours regulation Freelancer/Contractor: Service agreement instead of employment contract (very important for tax!) A common mistake: treating freelancers like employees. Malta examines closely whether someone is genuinely self-employed or covertly employed. Other Essential Contract Templates for Malta-Based Companies In addition to the Directors Agreement and employment contracts, there are a few more documents your Malta business needs. Here’s a summary of the most important: Shareholder Agreements If you’re not the sole shareholder, a Shareholder Agreement is a must. In Malta, this contract regulates: Voting rights: How are decisions made? Transfer restrictions: Who can sell shares to whom? Exit strategies: What happens in case of dispute or exit? Dividend policies: How are profits distributed? Tag-along/drag-along rights: Protection for minority shareholders Malta-specific note: international structures often involve several legal systems. A German and a US investor have different tax requirements. Service Agreements for International Clients Your Malta company will likely provide services to international clients. These service agreements need to be drawn up with great care: Scope of work: Precisely defined deliverables Payment terms: Currency, timing, late payment interest Intellectual property: Who owns the work products? Liability limitations: Limiting liability under Maltese law Dispute resolution: Where and how disputes are settled Important: If you work with EU clients, GDPR compliance is a must. Malta takes data protection very seriously. Office Lease Agreements A physical office is mandatory for many Malta companies (substance requirements). Lease agreements come with Maltese quirks: Aspect Malta Standard Tips Deposit 2–6 months’ rent Always document in writing Term Usually 3–5 years Negotiate break clauses Notice period 3–6 months Especially relevant with international structures Utilities Often not included Check common areas, utilities separately Where to Find Reliable Contract Templates for Malta Now the practical question: where can you get good contract templates without breaking the bank? With two years’ experience, I recommend several routes depending on your budget and the complexity of your company structure. Professional Law Firms vs. Online Templates The reality: for 90% of Malta businesses, professional templates from reputable sources are fully sufficient. Only complex structures (multiple countries, regulated industries, large transaction volumes) require custom contracts right from the start. Top law firms in Malta: Ganado Advocates (for large international deals) Camilleri Preziosi (strong corporate work) GTG Advocates (well-suited for tech companies) Fenech & Fenech Advocates (traditional but solid) Online platforms for templates: Malta Business Registry (official basic templates) MFSA Templates (for regulated industries) Cost and Benefit Comparison A realistic cost overview: Contract Type Basic Template Lawyer Review Tailor-Made Directors Agreement €200–400 €300–600 €1,500–3,000 Employment Contract €100–200 €200–400 €800–1,500 Shareholder Agreement €300–500 €500–800 €2,000–5,000 Service Agreement €150–300 €250–500 €1,000–2,500 My Starter Recommendations Based on my experience with Malta companies, here’s my roadmap: Phase 1 (Startup): Professional templates + local lawyer review (Budget: €1,000–2,000) Phase 2 (Growth): Customise the most important contracts (Budget: €3,000–5,000) Phase 3 (Scale): Complete set of fully bespoke contracts (Budget: €10,000+) My general advice: invest early in a good Maltese lawyer for an initial consultation. An hour’s advice might cost €200–400, but it can save you thousands in future amendments. Insider tip: Many Maltese lawyers offer company formation packages that include basic contracts. These packages are often cheaper than buying templates individually. Frequently Asked Questions about Malta Contract Templates Can I use German contract templates for my Malta company? No, that’s not advisable. Maltese law differs greatly from German law. German clauses may be ineffective or even create disadvantages. Does my Directors Agreement need to be in English or Maltese? English is absolutely sufficient and is preferred, since it’s the business language in Malta. Maltese is only necessary if all parties request it. How often should I update my contract templates? At least every 2–3 years, or whenever relevant laws change. Malta regularly adjusts tax and company law to conform to EU requirements. What happens if I operate without a Directors Agreement? That’s risky. You won’t have a clear legal framework for your position, which can create tax and liability issues. Do I need different employment contracts for EU and non-EU employees? Yes, absolutely. Visa and work permit requirements are totally different and must be addressed in the contract. Can I simply use free online contract templates? Theoretically, yes, but it’s risky in practice. Free templates are often outdated or incomplete. Spend the money on properly vetted templates instead. What can it cost me if I use the wrong contracts? It can get very expensive. Compensation claims, tax reassessments and invalid contracts can easily cost you five-figure sums. Do I need a Directors Agreement if I’m a sole entrepreneur? If you act as director of your own Malta company, a Directors Agreement is strongly recommended—especially for tax optimisation. How do I find a good Maltese lawyer for contracts? Get recommendations from other business owners, or check the Malta Chamber of Commerce or Malta Business Registry for lists of qualified lawyers. Can I draft my contracts in German? Legally possible, but impractical. Maltese courts and authorities work in English and Maltese. A German contract would need to be translated.
