Malta, an idyllic island country located in the Mediterranean Sea, has become a great attraction for tourists and entrepreneurs alike.
Known for its strategic location in the middle of the Mediterranean, strong economic environment, and friendly business approach, Malta offers substantial advantages to both established enterprises as well as startups.
Before you set up shop in this picturesque country, there are a few things to consider regarding the legalities of starting a business and the process of registering one.
Why Is Malta A Good Destination For Businesses?
Aside from its beauty and island-style living, Malta has numerous other benefits that have made it a popular location for startups.
Location: Malta has access to not only Europe, but North Africa and the Middle East too. This gateway to multiple countries and markets would be beneficial to businesses who plan to expand globally.
EU Membership: The country is part of the European Union, which would make it easier for businesses to integrate into the EU market. Moreover, Malta follows EU regulations regarding businesses which offers consistency for all business operations.
High Quality Of Life: Malta is known for its superb standard of living. Coupled with its warm climate and lively culture, it has always appealed to business professionals.
Language: While the locals speak Maltese, English is actually the official language which can be a huge drawcard for foreigners planning to conduct business there.
Are There Opportunities For Startups In Malta?
Malta offers an incredibly strong environment for startups, due to its government support, location and competitive tax rates. These are the industries where startups tend to do exceptionally well.
Finance and FinTech: Malta’s regulations are favourable for blockchain and cryptocurrency businesses, making it an ideal location for startups in this sector.
Tourism and Hospitality: The country sees hundreds of thousands of tourists every year, drawn in by its island escapes and history. There are certainly ample opportunities in this industry to accommodate the year-round tourism.
Education and Training: As more foreigners make the move to Malta, there is an increasing need for international schools and educational programs to accommodate their families.
iGaming and eSports: This industry is taking off in quite a few countries, but especially in Malta due to its solid government support.
Tax Regulations In Malta
One aspect of Malta that is particularly enticing to entrepreneurs is its tax system.
Corporate Tax: The standard corporate tax rate is currently set at 35%. However, if you are a foreign-owned businesses, you are eligible for a 5% tax rate through tax refunds.
VAT: The Value Added Tax (VAT) rate in Malta is 18% but this can be lower for certain products and services.
Tax Treaties: Another drawcard is that Malta has signed double taxation agreements with more than 70 countries worldwide to support conducive conditions when it comes to international business.
Visa Requirements For Foreigners
It is possible for foreigners to start a business in Malta, as long as they meet the country’s visa requirements.
EU/EEA Citizens: These individuals do not require a visa to be able to work in or own a business in Malta. If they plan on staying in the country for longer than a 3 month period, they are required to register as residents.
Non-EU Citizens: For people who are not citizens of the European Union, they will need to obtain a business visa for short-term stays. If they wish to stay for a longer period of time, they will need an employment license along with a residence permit.
Malta is a nation that embraces innovation, so start-up visas are available to entrepreneurs with new and exciting ideas.
How To Set Up A Business In Malta
The process for starting your business in Malta is a fairly straightforward one, and can take between one to two weeks from start to finish.
Step 1 – Select Your Business Structure: Firstly, you will need to choose whether you want to operate as a sole trader, partnership or limited liability company.
Step 2 – Register Your Business Name: Once you have chosen your desired name, you can submit your request to the Malta Business Registry (MBR).
Step 3 – Get Your Tax Number: You will need to register your business with the Inland Revenue Department to be able to receive your tax identification number (TIN).
Step 4 – Open Your Bank Account: The next step is to set up a business bank account in Malta and deposit your minimum share capital if required. This is usually €1,165 for private limited companies.
Step 5 – Register For VAT: If your industry requires it, you will need to register for VAT with the Maltese VAT Department.
Step 6 – Acquire Licenses and Permits: To find out if you require any additional licenses or permits, check with the Malta Enterprise.
Step 7 – Employ Staff: If you need to hire employees, you need to register them with JobsPlus which is Malta’s employment agency.
Starting A Business In Malta
Setting up a business in Malta can be highly advantageous to entrepreneurs with its pro-business environment and favourable taxes. Additionally, the high quality of living and friendly culture makes this vibrant Mediterranean nation one of the top destinations in Europe to live and work in.
Best of luck!
