Table of Contents Why your Malta company needs professional contract templates Directors Agreement Malta: The key contract for your company Employment contracts in Malta: How to get remote to full-time right Other essential contract templates for Malta companies Where to find reliable contract templates for Malta Frequently Asked Questions about Malta contract templates You’ve set up your Malta company and you’re thinking: “Contracts? I can just put something together myself.” Stop! I know it’s tempting to save on contract templates. But trust me: After two years on the island and countless conversations with entrepreneurs who had to pay dearly to fix their contracts, my advice to you is: Invest in professional legal documents from the very beginning. Malta may be an EU member and has English as an official language – but there are still special laws here, which differ from your home country. Especially with Directors Agreements, Employment Contracts and Shareholder Agreements, there are pitfalls that can end up costing you real money down the line. Why your Malta company needs professional contract templates Before I explain the most important types of contracts, let’s be honest: Malta isn’t Germany, Switzerland or Austria. You’ll realize this latest when you sit down with a Maltese lawyer for the first time and they tell you that your “international standard contract” won’t work here. Understanding Maltas legal particularities Malta follows a Common Law system (similar to the UK), whereas most EU countries practice Civil Law. In practical terms: Precedent and case law play a bigger role than in Germany or Austria. Your contracts need to take this into account. A real-world example: A German entrepreneur used his usual termination clauses in Maltese employment contracts. The result? A year later, he was standing in front of the Industrial Tribunal (Maltese labor court) and had to pay five-figure compensation because his clauses were invalid under Maltese law. Typical cost traps with DIY contracts Here are the most frequent (and costly) mistakes I see with Malta newbies: Wrong jurisdiction clauses: You don’t want to end up in Maltese courts if you can avoid it – but the clause must be legally watertight Unclear notice periods: Malta has different rules than Germany (notice periods up to 3 months are common) Forgotten tax residence clauses: Without proper wording, you risk tax disadvantages Missing compliance provisions: Malta takes AML (Anti-Money Laundering) very seriously – your contracts must reflect that How does Malta differ from other EU countries? The biggest differences are in three areas: Aspect Malta Germany/Austria Legal system Common Law + Civil Law mix Pure Civil Law Official languages Maltese and English German Contract language Usually English, sometimes Maltese German Legal proceedings Often lengthy (1-3 years) More structured, but also time-consuming Directors Agreement Malta: The key contract for your company The Directors Agreement is the contract between your Malta company and you as director. Sounds simple? It’s not. This contract regulates not just your duties and compensation, but also crucial tax aspects of your Malta structure. What belongs in a Directors Agreement? A professional Directors Agreement for Malta must cover these points: Duties and Responsibilities: Clearly defined director responsibilities Remuneration Structure: How and when you’re paid Tax Residence Clauses: Essential for tax optimization Confidentiality Provisions: Safeguard sensitive company data Termination Procedures: How the collaboration can end Indemnity Clauses: Protection from personal liability Especially important: the tax residence clauses. If you, as a non-Maltese resident, receive director’s fees, various tax regimes may apply. If the contract is worded incorrectly, you could unintentionally become taxable in Malta. Avoiding common Directors Agreement mistakes I see these pitfalls over and over: Unclear Ordinarily Resident definition: Malta distinguishes between Resident and Ordinarily Resident – which can result in a tax difference of 35% vs. 5% Missing substance requirements: Your Directors Agreement needs to show that genuine activity takes place in Malta Forgotten MFSA-compliance: If regulated, extra requirements apply Wrong currency clauses: Euro, USD, or historic Maltese Lira – this must be clear Template vs. custom-made contract The reality: a basic template costs €200-500, a bespoke contract from a top lawyer €2,000-5,000. For starters, a professional template is usually enough, but have it reviewed by a Maltese lawyer. My tip: Start with a good template and have it adapted by a local lawyer for €300-500. That’s the sweet spot between cost and safety. Employment contracts in Malta: How to get remote to full-time right Planning to hire staff in Malta? Then you should know: Maltese labor law is more employee-friendly than you might think. The German Fire at Will principle doesnt apply here – instead, there are clear protection provisions. Overview of Maltese Employment Law The key points for your employment contracts: Probation period: Max. 6 months for new roles Notice periods: Depending on tenure, 1-12 weeks Minimum wage: Currently €195.92 per week (as of 2024) Annual leave: Minimum 24 workdays per year Sick leave: Up to 12 weeks paid sick per year What many don’t realize: Malta has very specific rules for “Redundancy” (termination for business reasons). You can’t simply “downsize” without following due process. Special rules for international employees If you hire EU citizens or third-country nationals, extra factors arise: Employee Type Work Permit needed? Particularities EU citizen No Free choice of work, but ID card required after 3 months EEA citizen No Treated like EU citizens Third-country national Yes Employment licence needed, complex process Remote Workers Depends Nomad Residence Permit possible Templates for different employment models Depending on working model, you’ll need different contract clauses: Full-time onsite: Standard Employment Contract including all statutory requirements Remote/hybrid: Extra clauses re workplace, equipment, and data protection Part-time: Pro-rata calculation of benefits, clear hourly regulations Freelancer/Contractor: Service Agreement instead of Employment Contract (important for tax!) A common mistake: treating freelancers as employees. Malta closely assesses whether true self-employment exists or if there’s a disguised employment relationship. Other essential contract templates for Malta companies Besides the Directors Agreement and Employment Contracts, there are other documents you’ll need for your Malta business. Here’s an overview 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 Maltese specialty: With international structures, several legal systems usually need to be considered. A German and a U.S. investor have different tax needs. Service Agreements for international clients Your Malta company will likely provide services to international customers. These service agreements must be drafted with particular care: Scope of Work: Clearly defined deliverables Payment Terms: Currency, timing, interest Intellectual Property: Who owns the results? Liability Limitations: Liability limitations under Maltese law Dispute Resolution: Where and how are disputes resolved? Important point: If you’re working with EU clients, you must ensure GDPR compliance. Malta takes data protection very seriously. Office lease agreements A physical office is mandatory for many Malta companies (substance requirements). Lease contracts have Maltese particularities: Aspect Malta Standard Tips Deposit 2-6 months’ rent Always record in writing Term Usually 3-5 years Negotiate break clauses Notice period 3-6 months Important for international structures Additional costs Often not included Check common areas, utilities separately Where to find reliable contract templates for Malta Now to a practical question: Where can you get good contract templates without breaking the bank? After two years’ experience, I can recommend several approaches – depending on your budget and structure’s complexity. Professional law firms vs. online templates The truth is: For 90% of Malta companies, professional templates from reputable providers are sufficient. Only with complex structures (several countries, regulated sectors, high transaction volumes) do you need fully custom-made contracts from day one. Top-tier law firms in Malta: Ganado Advocates (for major international deals) Camilleri Preziosi (strong in corporate law) GTG Advocates (great for tech companies) Fenech & Fenech Advocates (traditional but solid) Online platforms for templates: Malta Business Registry (official basic templates) MFSA templates (for regulated areas) Cost and benefit comparison Here’s a realistic cost overview: Contract Type Basic Template Lawyer Review Custom-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 recommendations for getting started Based on my experience with Malta companies, here’s my roadmap: Phase 1 (Startup): Professional templates + local lawyer for review (Budget: €1,000-2,000) Phase 2 (Growth): Customization of key contracts (Budget: €3,000-5,000) Phase 3 (Scale): Fully bespoke contract suite (Budget: €10,000+) My general advice: Invest early in a good Maltese lawyer for a basic consultation. An hour’s meeting costs €200-400 but can save you thousands in retroactive costs. Insider tip: Many Maltese lawyers offer “company formation packages” which include standard contracts. This is often cheaper than buying contracts individually. Frequently Asked Questions about Malta contract templates Can I use German contract templates for my Malta company? No, that’s not a good idea. Maltese law is very different from German law. German clauses can be invalid or even harmful. Does my Directors Agreement need to be in English or Maltese? English is absolutely fine and is preferred, as it’s the business language in Malta. Maltese is only needed if all parties want it. How often should I update my contract templates? At least every 2-3 years, or whenever relevant laws change. Malta regularly adapts tax and company law to reflect EU requirements. What happens if I work without a Directors Agreement? That’s risky. You won’t have a clear legal basis for your activities, which can cause both tax and liability problems. Do I need different employment contracts for EU and non-EU employees? Yes, absolutely. Visa and work permit requirements differ completely and must be reflected in the contract. Can I just copy and use online contract templates? Theoretically yes, but it’s risky. Free templates are often outdated or incomplete. It’s better to invest in verified templates. How expensive can using the wrong contracts get? It can be very costly. Retroactive pay, back taxes or invalid contracts can easily result in five-figure losses. Do I need a Directors Agreement even as a sole trader? If you act as the director of your own Malta company, a Directors Agreement is definitely advisable – especially for tax optimization. How do I find a good Maltese lawyer for contracts? Recommendations from other entrepreneurs, the Malta Chamber of Commerce or the Malta Business Registry have lists of qualified lawyers. Can I sign my contracts in German? Legally possible, but impractical. Maltese courts and authorities operate in English and Maltese. German contracts would have to be translated.
