Table of Contents Why Malta is the Right Choice for Your Business Legal Entities in Malta: Your Options at a Glance Malta Limited Company: The Popular Classic Costs of Incorporating in Malta 2025 Step-by-Step Guide: How to Set Up Your Malta Company Tax Aspects: What You Need to Know About Malta’s Tax System Banking in Malta: Setting Up a Business Account Made Easy Common Pitfalls and How to Avoid Them Alternatives and Special Cases for Particular Situations Practical Tips for Everyday Business in Malta Frequently Asked Questions Why Malta is the Right Choice for Your Business Let’s be honest: If someone had asked me three years ago if I’d ever write an article about setting up a company in Malta, I would have laughed. Today I’m sitting on my terrace in Sliema, looking out over the Mediterranean, and I can tell you first-hand why Malta has become an insider tip among entrepreneurs. Malta offers a unique combination of EU membership, English-speaking administration, and attractive tax advantages. This small island nation has developed into a vibrant business hub in recent years – over 10,000 international companies are now located here for good reason. The Advantages of Malta at a Glance EU Membership: Free movement of capital and goods, unified legal standards English as Official Language: No language barriers with authorities and courts Attractive Tax Setup: Effective tax rates from as low as 5% Fast Incorporation: Company registration in 1–2 weeks Stable Economy: AAA rating from Standard & Poor’s Geographical Location: Ideal bridge between Europe, Africa, and the Middle East Who Does Malta Make Sense For? Not everyone should move their business to Malta. In my experience, it makes especially good sense for: Online Businesses and SaaS Companies: Digital services can be offered easily from Malta Fintech and Crypto Companies: Malta has progressive regulation for new technologies International Trading Companies: Ideal location for import/export business Consulting Companies: Low taxes on high margins Investment Vehicles: Holding structures benefit from double taxation treaties However, if you run a local business selling physical products to the German market, you should think twice. Logistics costs can quickly eat up the tax benefits. Legal Entities in Malta: Your Options at a Glance Malta offers various company forms, but let’s be honest: most international founders really only consider two options. Here’s the overview: Private Limited Company (Ltd.) This is the absolute classic and the right choice for 95% of cases. A Private Limited Company is comparable to a German GmbH – limited liability, separate legal personality, and you need at least one director and one shareholder (can be the same person). Minimum Capital: Only €1,164.69 – a joke compared to Germany Liability: Limited to the company’s 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 most founders, completely oversized. Partnership Exists, but who wants to risk personal liability? Better steer clear. Branch Office Interesting if you already have a company in another EU country and only need a branch in Malta. Less formality, but also less flexibility for tax structuring. Legal Form Minimum Capital Liability Suitable For Private Ltd. €1,164.69 Limited All business models Public Plc. €46,587.47 Limited Stock market listing, many shareholders Partnership No minimum Unlimited Not recommended Branch Office Not relevant Like parent company Existing EU companies Malta Limited Company: The Popular Classic in Detail Okay, you’ve decided on a Limited Company – smart choice. Let me explain the most important details you need to know. Basic Requirements for a Malta Limited Company The good news: The hurdles 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 home!) Company secretary: Can be an individual or a corporate body Minimum capital: €1,164.69, at least 20% of which must be paid up Name Rules: What Works and What Doesn’t When choosing the name, you have to observe a few rules. The name must end with “Limited” or “Ltd.” and must not be misleading. Check availability in advance via the Malta Business Registry (MBR) – this will save you nasty surprises. Practical Tip: Reserve your name as soon as you’ve decided. The reservation costs €25 and is valid for 60 days. This gives you time for the remaining preparations. Corporate Governance Requirements Malta takes corporate governance seriously, but the requirements are manageable: Board meetings: At least once a year, with minutes required Shareholders meeting: Annual general meeting at the latest 15 months after the previous one Annual return: Annual notification to the Malta Business Registry Financial statements: Depending on company size Beneficial Owner: What Does This Mean for You? Since 2018 you must declare the “Beneficial Owner”. This is anyone who directly or indirectly holds more than 25% of shares or exercises control. Don’t worry – for most small companies, that’s simply you. The declaration is made via the Beneficial Ownership Register and costs €100 per year. Don’t forget – penalties can be hefty. Costs of Incorporating in Malta 2025 Let’s get specific: What does it actually cost to incorporate? Honestly – it’s cheaper than in Germany, but not for free. Here’s my breakdown based on up-to-date prices: One-off Incorporation Costs Item Cost Note Government Fees (Malta Business Registry) €245 Government fees Memorandum & Articles of Association €150–300 Depending on lawyer/service Registered Office (first year) €500–1,200 Depending on provider Company Secretary (first year) €300–800 Can be combined 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’s what you’ll pay every year: Annual return: €100 (Malta Business Registry) Registered office: €500–1,200 annually Company secretary: €300–800 annually Bookkeeping: €1,500–5,000 (depending on complexity) Annual financial statements: €1,000–3,000 Tax return: €800–2,500 Beneficial Ownership Register: €100 Annual total: €4,300 to €12,600 Hidden Costs Often Forgotten From experience: Many forget to budget for these items: VAT registration: If needed, extra compliance costs Business license: Depending on activity, €200–2,000 Business account fees: €20–50 monthly Legal fees: For special advice €200–500 per hour Insurances: Professional indemnity, director’s insurance, etc. Saving Potential: Where You Can Save Money My tip: Don’t go with bargain providers for registered office and company secretary. I’ve heard too many horror stories from founders whose mail disappeared into the void or who suddenly found themselves without a secretary. It’s better to invest in a reputable corporate service provider. It costs €200–300 more per year, but saves headaches and potential compliance issues. Step-by-Step Guide: How to Set Up Your Malta Company Enough theory. Here’s the practical guide I wish I had when I set up 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 immediately for €25 – you then have 60 days. Step 2: Choose Corporate Service Provider You’ll need someone for registered office and company secretary. My advice: Research at least three providers and talk to them. Look for: References and experience Response times Additional services (banking support, accounting) Transparent pricing Step 3: Prepare Documents Gather all required documents: Passport or ID card (certified) Proof of address (no older than 3 months) Bank reference letter Professional reference letter CV/résumé 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” is broad enough for your planned activities. Step 5: Due Diligence Malta takes AML (anti-money laundering) seriously. You must prove where your money comes from and that you’re not doing suspicious business. Be honest and transparent – this speeds up the process. Step 6: Register with Malta Business Registry Your service provider submits all documents. Processing usually takes 5–10 working days. You’ll then receive the certificate of incorporation – your company is born! Phase 3: After Incorporation (2–4 Weeks) Step 7: Apply for Tax Number Register with Inland Revenue (Malta’s tax office). It’s done online via the myAccount portal. You need the tax number for everything else. Step 8: Open a Business Bank Account This is often the hardest part. Maltese banks have become picky. Plan for 2–4 weeks and prepare well: Business plan Proof of funds Expected transaction volumes Supplier and customer information Step 9: VAT Registration (if required) If your annual turnover exceeds €35,000 or you want to sell across the EU immediately, you need a VAT number. Registration is online. Step 10: Apply for Business License Depending on your activity, you may need a special license. The Malta Financial Services Authority (MFSA) is responsible for financial services; other licenses are issued by other authorities. Typical Timelines from Experience Scenario Duration Details Standard online business 4–6 weeks Simple structure, no special licenses Fintech/Crypto 3–6 months Additional regulatory approvals E-commerce with warehouse 6–8 weeks Additional registrations for goods trading Consulting company 3–4 weeks Usually no special licenses needed Tax Aspects: What You Need to Know About Malta’s 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. But beware: This is not tax advice, just an overview. For your specific situation, consult a Maltese tax advisor. The Maltese Full Imputation System Explained Malta has a system called the “Full Imputation System”. Sounds complicated, but it’s actually brilliant: Your company pays 35% corporation tax on all profits. But – and here’s the trick – as a shareholder, you can claim most of it back. The refund depends on the source of your profit: Maltese business activity: 6/7 refund of tax paid (effective rate 5%) Foreign business activity: 6/7 refund of tax paid (effective rate 5%) Passive income (interest, dividends): 5/7 refund of tax paid (effective rate 10%) Requirements for the Tax Refund Here’s where you need to be careful. Not everyone automatically receives the refund: Economic substance: Your company must have real business activity in Malta Management and control: Key decisions must be made in Malta Adequate office space: A virtual office doesn’t cut it Qualified employees: Depending on your type of business, on-site Important Note: Following ATAD (Anti Tax Avoidance Directive) and stricter EU rules, tax planning is scrutinized more closely. Malta is no longer a tax haven without true substance. The 183-Day Rule and Personal Taxation If you spend more than 183 days a year in Malta, you become tax resident. This has pros and cons: Advantages: Access to non-domiciled status (15% flat tax on foreign income possible) No tax on capital gains from private investments Various residency programs available Disadvantages: Worldwide tax liability if domiciled in Malta Reporting obligations to your home country More complex tax planning Utilizing Double Tax Treaties Malta has over 70 double tax treaties. That’s a huge advantage for international business. Especially interesting for German entrepreneurs: The Germany-Malta DTA is very business-friendly. Type of Income Malta Withholding Tax DTA Advantage Dividends 0% No further taxation in Germany possible Interest 0% Taxation only in the country of residence Royalties 0% Taxation only in the country of residence Capital Gains 0% Usually no taxation in Malta Banking in Malta: Setting Up a Business Account Made Easy Let me be up front: Opening an account in Malta has become more difficult. The banks have become cautious since recent money laundering scandals. But with good preparation, you can still make it happen. The Most Important Banks for Businesses In Malta you can choose from local and international banks: Bank of Valletta (BOV): The largest Maltese bank, good local connections, but sometimes slow to process. HSBC Malta: International standards, good online services, but higher minimum deposit required. APS Bank: Smaller local bank, more personal service, but limited international services. Banif Bank: Specializes in business, flexible solutions, but higher fees. Requirements for Opening a Bank Account Every bank has its own requirements, but these documents are needed everywhere: Certificate of Incorporation (no older than 3 months) Memorandum & Articles of Association Board resolution to open the account Beneficial ownership declaration Business plan (detailed!) Personal documents for all directors: Passport, proof of address, bank references Source of funds documentation Expected transaction volumes and customer information The Bank Account Opening Process Step by Step Step 1: Choose bank and make an appointment Not all banks accept new corporate clients. Call ahead and briefly explain your business model. Some banks categorically refuse certain industries. Step 2: Document check Have all documents certified by a Maltese lawyer or notary. Foreign documents often need an apostille. Step 3: The Bank Interview Be prepared! The bankers will grill you: Why Malta as a base? How exactly does your business model work? Who are your customers and suppliers? What are the expected sales? Where does the start-up capital come from? Step 4: Due diligence and waiting After the meeting the bank checks your documents. This can take 2–8 weeks. Be patient and respond quickly to queries. Account Fees and Conditions 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: EMI and Neobanks If the traditional banks won’t play ball, there are alternatives: Revolut Business: Fast set-up, low fees, but limited services Wise Business: Perfect for international transfers Pleo: Great for expense management N26 Business: Easy account set-up, but not all services available Important Note: Check carefully whether the relevant EMI license is sufficient for your business needs. Some authorities and partners only accept “real” bank accounts. Tips for Successfully Opening a Business Account From my experience: These factors dramatically increase your chances: Show local presence: Have a real Maltese address and show you’re regularly on site Clean documentation: All documents complete, up to date, and professionally prepared Realistic figures: Don’t exaggerate expected sales Use 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. I’ve accompanied many founders through the Malta process in the past few years and seen the same mistakes over and over. Here are the most common pitfalls – and how to avoid them smartly. Pitfall 1: Unrealistic Expectations About Substance Requirements The classic: “I’ll just set up a Malta company and save taxes.” It’s not that simple anymore. Malta has gotten tougher and demands real economic substance. What this means: You need a real office (not a virtual office) Key business decisions must be made in Malta Depending on your activity, you’ll need local employees Your bookkeeping must be done in Malta Solution: Budget an extra €2,000–5,000 per year from the start for real substance. It’s still cheaper than German taxes – just not for free. Pitfall 2: Underestimating Banking Hurdles Many think: “Company is set up, account comes automatically.” Wrong. Opening an account is often the hardest part. Common mistakes: Incomplete documents at the bank appointment Unrealistic expected sales No plausible reason for choosing Malta Business model not explained clearly Solution: Spend time on a watertight business plan and prepare as if for a job interview. Banks want to understand how you make money. Pitfall 3: Compliance Traps in Ongoing Operations Setting up the company 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 director/shareholder changes Neglected AML duties Incorrect VAT handling in EU business Solution: Opt for professional compliance support from the start. The €2,000–3,000 per year for a good provider is money well spent. Pitfall 4: Tax Pitfalls in Profit Distributions Malta’s tax system is complex. Some traps await here: Timing of refunds: The tax refund only comes after the distribution Double taxation: Without proper planning, you pay tax in Malta AND your home country Substance requirements: No refund without proper substance CRS notifications: Malta automatically reports to other EU countries Solution: Plan your tax setup with an expert before the first profit distribution. Retrospective fixes are costly or impossible. Pitfall 5: Underestimating Cost of Living Malta has become more expensive. If you want to live here long-term, be realistic: Item Monthly Cost Note Rent (1–2 rooms, good location) €800–1,500 Sliema/St. Julian’s much more expensive Groceries €300–500 Imported products very expensive Transport €100–400 Car vs. public transport Utilities €100–200 Electricity very high in summer Internet/Phone €30–60 Speeds often disappointing Pitfall 6: Overestimating the Infrastructure Malta is a small country, with corresponding limitations: Internet: Not always reliable, especially in bad weather Traffic: Jams are normal, public transport unreliable Authorities: Can be slow, especially in summer Logistics: Everything must be imported, so it’s costly Reality check: Visit Malta for at least a month before deciding to incorporate. The island is beautiful, but not for everyone. Alternatives and Special Cases for Particular Situations Malta isn’t the best solution for everyone. Here we’ll look at alternative structures and special situations that call for other approaches. Holding Structures for Complex Corporate Groups If you have or are planning several companies, a Maltese holding can be very attractive: Malta as a holding location: No withholding tax on outgoing dividends Extensive double tax treaties EU parent-subsidiary directive applies Flexible financing structures possible Typical structure: Malta holding company (owns shares) Operating companies in various countries Profit distributions optimized for Malta Reinvestment or further distribution to shareholders Malta as Part of International Tax Planning For larger companies, Malta can be part of a more complex setup: IP holding in Malta: Intellectual property (patents, brands, software) can be held tax-efficiently in Malta. The effective tax often falls below 5%. Trading company for non-EU business: Malta is a good base for trading with non-EU nations, especially Africa and the Middle East. Alternative EU Locations Compared Depending on your situation, another EU country may fit better: Country Advantages Disadvantages Best For Cyprus 12.5% corporation tax, good tax treaties Strict compliance requirements, political risks Holdings, shipping Ireland 12.5% on trading income, big tech scene High cost of living, complex rules Tech companies, software development Netherlands Excellent tax treaty network, stable infrastructure 25% corporation tax, high costs International holdings, IP structures Estonia 0% on retained earnings Only for some business models, few treaties Tech startups, software Special Cases: When Malta Doesn’t Fit E-commerce with warehouse: If you sell physical products in Germany, Malta often creates more problems than advantages: Complicated VAT treatment Higher logistics costs Trickier returns handling German consumer protection laws still apply Local services: Consulting, trades or other locally delivered services are hard to provide from Malta. Substance requirements are almost impossible. High-compliance industries: Banks, insurers and other highly regulated sectors face tougher challenges in Malta than in Germany. Timing: When Is the Right Time? Not everyone should move to Malta immediately. My recommendations: Advisable straight away: Online businesses with >€100,000 annual profit International clients, location-independent activity Planned expansion to other EU countries Already existing Maltese connections Think about it later: Very new companies without steady profit Strong local customer base in Germany Complex operational structures Uncertain long-term plans Exit Strategies: What If It Doesn’t Work Out? To be honest: Malta is not paradise for everyone. Plan your exit from the start: Liquidation: Relatively simple if no debts exist Migration: The company can be moved to another EU country Sale: Malta companies can be sold, but the market is small Dormant status: Possible for temporary inactivity The cost of liquidation is €1,500–3,000 – make sure you factor this in. Practical Tips for Everyday Business in Malta Now to the practical part: What’s business life in Malta really like day to day? After three years here, I can share a few insider tips that will make your life much easier. Accounting and Compliance: Your Key Partners A good accountant in Malta is worth their weight in gold. Here’s what you should look for: Choosing the right accountant: ACCA or MIA qualification (Maltese professional bodies) Experience with international companies Software integration (Xero, QuickBooks, SAP) Response times under 24 hours for urgent queries Transparent pricing with no hidden costs Monthly vs. Quarterly Bookkeeping: My tip: Invest in monthly accounting. It costs €200–300 more per year, but you’ll always have oversight and no nasty surprises at year-end. Practical Software Tools for Malta Companies 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 cards with automatic receipt capture Expensify: Photo-based expense reporting Networking and Business Community Malta is small – networking is especially important here: Key events and organizations: Malta Blockchain Summit: Every November, a top event for tech Malta Business Network: Monthly meetups European Business Network: Good for EU-oriented firms Malta Chamber of Commerce: Classic business networking AiGaming: For gaming and fintech businesses Coworking spaces: Idea Space (Rabat): Very professional, good infrastructure BeesNest (Lija): Startup feel, lots of founders Spotlight (St. Julian’s): Modern but pricier The Office (various locations): Solid option Dealing with Maltese Authorities The bureaucracy has its quirks. Here are my survival tips: Timing is everything: Never go in the two weeks before holidays Mornings are better than afternoons August is basically dead – plan nothing important then Festa season (May–September) means unpredictable opening hours Communication: Always stay polite, even if frustrated Document all communication in writing Collect and keep reference numbers For complex topics: hire a local agent Everyday Banking: Practical Tips Everyday 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 sometimes need phone confirmation Mobile apps are functional but not as convenient as in Germany Cash and Payments: Many small shops accept only cash Card payments under €10 often not possible Tips always in cash Always bring cash for dealing with authorities Staff Management: Employees in Malta If you need local staff: Labor law basics: Probation period: 6 months standard Notice periods: 1 week to 3 months depending on length of service Annual leave: 24 days plus 14 public holidays 13th salary: not legally required, but common Recruitment: JobsPlus: State job portal Keepmeposted: Local job board LinkedIn: Works well in Malta too Recruitment agencies: For specialist roles Position Average Salary Note Administrative Assistant €18,000–25,000 Language skills important Software Developer €28,000–45,000 Depending on experience and skills Marketing Manager €25,000–40,000 Digital marketing in high demand Accountant €22,000–35,000 ACCA qualification valuable Work-Life Balance: Life as an Entrepreneur in Malta Malta is beautiful, but can be demanding: The good sides: 300+ sunny days per year Short distances – everything reachable in 30 minutes International community Relaxed lifestyle Safe environment The challenges: Traffic chaos, especially in Valletta and Sliema Crowded beaches in summer Limited cultural offerings Everything gets pricier in summer “Island Fever” – that cabin-fever feeling My advice: Plan regular trips to Europe. A weekend in Rome or Barcelona often costs less than €200 and helps with island fever. Frequently Asked Questions About Company Incorporation in Malta Can I set up a Maltese company without living in Malta? Yes, in principle this is possible. But you need a local registered office address and must meet the substance requirements. For tax advantages, you should be able to show that key business decisions are made in Malta. How long does it actually take to incorporate a company in Malta? For a standard limited company with no special licenses: 4–6 weeks from application to a fully functional business with a bank account. Registration alone takes 1–2 weeks, but opening the account is usually the slowest part. What are the minimum substance requirements? Malta requires adequate substance depending on the type of business. Minimum: real Maltese business address, local accounting, and verifiable business activity on site. For IP holding or trading, qualified employees may be needed as well. Can I as a German easily open a business account in Malta? As an EU citizen you generally have good prospects, but banks have become choosy. Important: complete documentation, credible business model, and evidence of links to Malta. Allow 2–8 weeks for processing. Is the 5% tax rate in Malta really achievable? Yes, but only with the right setup. The Maltese tax refund system can achieve effective tax rates of 5%, but requires real substance and proper tax planning. No substance, no refund. What if EU tax law changes? Malta continuously adapts to EU requirements. The refund system has been in place since 2007 and will likely continue, but substance requirements are tightening. Get ongoing professional advice to secure your future. Do I absolutely need a Maltese tax advisor? For ongoing compliance: Yes. Malta’s tax system is complex and frequently changes. A local expert will cost €2,000–5,000 per year but saves expensive mistakes and maximizes your benefits. Can I move my German company to Malta? A direct relocation is legally complicated. It’s usually better to set up a new Malta company, relocate the business step-by-step, and later liquidate the German entity. You must get tax advice for exit taxation. What are the biggest differences to a German GmbH? Main differences: lower minimum capital (€1,165 vs. €25,000), English administrative language, different tax structure, and less strict managing director liability. But: tougher AML compliance and international reporting duties. Is Malta worthwhile for smaller businesses? From around €50,000 annual profit it can make sense, really attractive from €100,000 up. Below that, extra compliance and local presence costs often outweigh the tax saving. Have an expert calculate for your specific case.
