In a bid to promote foreign investment, Malta offers a wide range of incentives to investors starting a business in Malta. This explains why there is a large influx of foreign companies opening their branches in Malta. Furthermore, the fact that Malta has business-friendly corporate laws—and is an active member of the European Union, makes it a perfect and strategic investment destination. It's also the ideal gateway to the EU for non-EU investors.
Although foreign branches in Malta are not considered legal entities, they are mandated to register with the Maltese Registrar of Companies. As a general rule, the registration procedure should be completed within a month after incorporation. It is not obligatory for branches registering in Malta to have a minimum share capital. However, the foreign company will be held responsible for all the responsibilities of the branch in Malta and it should provide the capital and assets needed.
What is required to register a branch in Malta?
The following documents should be presented the Registrar of Companies at least a month prior to the opening the branch being set up.
- a copy of the Certificate of Incorporation of the parent company
- a copy of the parent company’s Memorandum & Articles of Association
- a copy of the Certificate of Good Standing of the parent company
- a Malta branch representative – personal bank reference letters, professional references and a certified true passport copy for the branch representative are required
- a secretary to the branch – required to be an individual and not a corporate body
In addition to the above, the applicant should also register the balance sheet of the company (a profit and loss account along with audited statements.) In case of amendments o the memorandum or articles of association and changes regarding the leadership or the representative of the company, the Registry office should be notified. The same applies when the parent company wants to dissolve a branch in Malta, they should notify the Registrar of Companies first.
For foreign companies who want to experience a better degree of freedom, a subsidiary would be their best shot. The difference between a branch and subsidiary is that a branch is simply an extension of the parent company—therefore each and every part of its activity is governed by the parent company. On the other hand, a subsidiary is an independent company that has the right to make its own decisions.
7 reasons why you should open a branch in Malta
- The process of incorporation of a branch in Malta is relatively one of the easiest compared to other countries.
- The incorporation costs are very low, you don’t have to pay withholding taxes dividends or interest and royalties.
- Malta has a vast network of double taxation agreements with various companies and jurisdictions across the world. It’s even better if your country signed a double tax agreement with Malta—you won’t have to pay income tax among other taxes covered by the DTA.
- It is not obligatory to set up a physical presence so long the corporation appoints a local representative for its branch.
- Malta is a politically and economically stable country and setting up your branch in Malta can help you set foot in the European Union with ease.
- Malta boasts of having one of the most well-educated and well-trained labor force which follows a strong and disciplined work ethic.
- Modern ICT infrastructure, Malta is one of the few countries with a Smart city.
To learn more about how to form a branch in Malta, reach out to SIGTAX. Our team of accountants, lawyers, and consultants stay au courant with the latest business trends and regulations in Malta. They can also help with legal counsel on how to set up a company in Malta including giving a profound understanding of the nations’ tax system. Thus, you can be confident that you will get relevant info which guides you to do everything the right way and in your favor.
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