Choosing the Right Business Structure in Malta: LTD, Holding Company & More

Malta has quickly become a prime location for entrepreneurs wanting to establish a business in a strategic, tax-efficient, English-speaking jurisdiction. With its EU membership, favorable tax laws, and modern infrastructure, Malta offers a solid foundation for international ventures. However, before you dive into the opportunity, one of the most critical decisions you’ll need to make is choosing the right business structure.

In this post, we’ll guide you through the main business types available in Malta, particularly focusing on Limited Liability Companies (LTD), Holding Companies, and others, so you can make an informed decision. Whether you’re planning your first company registration in Malta or expanding your business globally, we’ve got you covered.

Why Malta?

Malta is not just another island in the Mediterranean. It’s a global business hub, known for its regulatory stability, business-friendly tax system, and access to EU markets. For international entrepreneurs, opening a company in Malta offers access to a skilled workforce, robust legal frameworks, and a thriving financial services ecosystem.

So, whether you're looking at Malta for operational expansion, IP structuring, investment holding, or tech innovation, it all starts with choosing the right company structure.

Key Business Structures in Malta

Let’s break down the most common types of companies you can establish in Malta and which one might be best suited to your business goals.

1. Private Limited Liability Company (LTD)

This is by far the most popular business type among foreign investors and entrepreneurs looking to register a company in Malta. A Private Limited Liability Company (LTD) limits the liability of shareholders to the value of their share capital. It’s ideal for small to medium-sized businesses across industries.

Key features:

• Minimum one shareholder and one director

• Minimum share capital of €1,165 (only 20% needs to be paid up)

• Limited liability protects personal assets

• Ideal for trading, consulting, IT, and eCommerce businesses

For most entrepreneurs, this is the go-to structure for company formation in Malta. It strikes a balance between flexibility, legal protection, and tax benefits.

2. Holding Company

If your primary goal is to hold assets, such as shares in other companies, intellectual property, or real estate, a Holding Company may be more suitable.

Malta’s tax regime is especially favorable to holding companies because of:

• Full imputation system: Avoids double taxation

• Refundable tax credit mechanisms

• An extensive network of double taxation treaties

This type of company is commonly used by investors and multinationals for international tax planning and investment management. Holding companies are often used in tandem with LTDs, especially in group structures.

3. Public Limited Company (PLC)

A PLC is suitable for larger businesses that may want to raise capital from the public. It requires a minimum share capital of €46,587, of which at least 25% must be paid up. This is not a typical choice for startups or small businesses, but it can be the right path if you're planning to go public.

4. Sole Trader and Partnerships

For freelancers or very small teams, you could consider registering as a sole trader or setting up a partnership. However, these offer no limited liability and provide fewer tax planning advantages. They are easier and cheaper to set up, but come with higher personal risk.

While this might work for local service providers, international entrepreneurs usually opt for LTD or holding structures to better align with global strategies.

Also Read: Procedure for Company Registration in Barbados

What to Consider When Choosing Your Structure

Choosing the right business structure isn’t just a legal formality—it affects how you pay taxes, raise funding, manage risks, and even how clients perceive your business.

Here’s what we recommend you consider:

1. Business Goals: Are you looking to trade internationally? Hold investments? Raise funds? Different structures serve different purposes.

2. Risk Profile: If you're dealing with liabilities or large-scale transactions, limited liability is essential.

3. Tax Efficiency: Malta’s tax system is generous but complex. Choosing the right setup can make a massive difference to your bottom line.

4. Ownership and Control: Some structures require more governance or allow for more flexible shareholding arrangements.

5. Future Plans: If you plan to scale or bring in investors, your structure should allow for that growth.

The Company Registration Process in Malta

Once you've chosen your structure, the process to register a company in Malta is relatively straightforward but you must comply with local laws. Here's an overview of what to expect:

1. Choose a company name and reserve it.

2. Draft the Memorandum and Articles of Association outlining your business activities, shareholding, and governance.

3. Deposit the minimum share capital with a local bank.

4. Submit documentation to the Malta Business Registry (MBR).

5. Obtain a tax identification number (TIN) and register for VAT if required.

6. Set up a registered address in Malta.

Professional assistance is strongly recommended to ensure full compliance with corporate, tax, and regulatory obligations. We can help guide you through each step of opening a company in Malta.

Also Read: Requirements to Start a Business in Hungary

Tax Advantages You Should Know

Malta’s corporate tax rate is officially 35%. However, the full imputation system allows shareholders to claim significant refunds on dividends. For example, the effective tax rate for many companies can be reduced to just 5%, especially for trading companies with non-resident shareholders.

Other benefits include:

• No withholding taxes on dividends, interest, and royalties paid to non-residents

• Access to EU directives and over 70 double taxation treaties

• Exemptions for holding companies on capital gains and dividend income under certain conditions

This is one of the biggest reasons foreign entrepreneurs pursue company formation in Malta.

Final Thoughts

Opening a company in Malta can be a strategic move for entrepreneurs looking to expand globally. The business structure you choose will have a lasting impact on how your company operates and grows. For most entrepreneurs, a Private Limited Company (LTD) offers a great balance of flexibility, tax benefits, and legal protection. However, if you're managing investments or intellectual property, a Holding Company may better suit your needs.

Whatever your goals, understanding your options and getting the right guidance is key. We’re here to help you navigate the journey, from choosing the best structure to full support with company registration in Malta.

FAQs

1. How long does it take to register a company in Malta?
Typically, it takes 2 to 5 working days after submitting all the required documentation. Delays can occur if compliance checks take longer.

2. Can non-EU residents open a company in Malta?
Yes, Malta welcomes foreign investors. Non-EU residents can fully own a Maltese company, and the process is quite streamlined for international founders.

3. Do I need a physical office in Malta?
Yes, your company must have a registered office address in Malta. However, this can be provided by service providers if you're not planning to set up a full office right away.