INTERVIEW: Incorporations of companies in Malta – Benefits and challenges
Mr. Conrad Meli from Fairwinds Management Limited answers to our questions about company formations and discusses the benefits and challenges of Malta .
The taxation system of Malta is one of the main reasons why someone chooses Malta to incorporate their business. What are the most significant advantages of Malta’s tax system and what discerns it from other countries in Europe.Malta’s fiscal framework has contributed to its growth, thus making Malta a popular choice for business owners to incorporate their company here. Our system is a full imputation tax system which eliminates double taxation. The extensive double tax treaty network means that with proper planning and structuring, companies can achieve considerable fiscal efficiency in Malta.
What other benefits does Malta offer to potential investors interested to set up a business in Malta?Malta has a lot to offer business wise. It is not only ideal to set up a company here, but also to run the full operations of a business. For instance, everyone in Malta is fully fluent in English language, and the island has a very good IT infrastructure and an excellent educated workforce, making Malta attractive for a company to operate their head offices. In addition, Malta is politically stable and has a good geographical location connecting it to the rest of world with many daily flights. Moreover, it offers a safe environment for individuals and families who want to relocate here.
What are the most available legal forms and requirements of company formation in Malta?The most popular legal form of a company is a Limited Liability Company (Ltd) with the status of a private company. The requirements for a Malta company formation are of standard form, and the documentation needs to be submitted to the Malta Business Registry (MBR). Briefly, to form a company one would need to submit a Memorandum and Articles of Association, pay the share capital of the company, provide a registered office in Malta, assign director/s and company secretary to the company, and provide all the necessary satisfactory due diligence documents for all members of the company. Once the company is open, it will require to apply for a VAT and tax number and opening of a bank account to start operations.
Do you believe the measures the government has taken to promote Malta as a business center are sufficient or is there anything more that could be done in order to attract further investments to the island?The government assists well in promoting Malta as a financial hub and is always on the forefront to create new opportunities for investors. In most recent years, this can be seen through a focus on business areas for the pharmaceutical industry, blockchain, AI and more. Creating such opportunities and by going stronger and in honesty on promotional campaigns, we believe this can solidify investments opportunities to the islands.
What kind of companies, chooses Malta to incorporate their business, do you see any tendency among certain fields?In the past ten years we have seen various businesses establishing themselves in Malta. Certainly, we have seen and assisted many startups. We meet many young entrepreneurs with intentions of rapid growth of which many turn out to be very successful. Digital affiliate marketing companies and other online businesses are also very popular businesses incorporated in Malta in the most recent years.
How do corporate formations and investments in Malta get affected from exogenous factors, such as the war in Ukraine, the pandemic, the Brexit etc.?Undoubtedly events such as the war in Ukraine, the pandemic and Brexit has brought uncertainty to many businesses and individuals alike worldwide. However, probably due to our history, the Maltese are very resilient, and this makes us address these challenges quickly and positively. I believe that no matter what struggles and obstacle we come across, Malta is always ready for business.
As we see there is strong competition among firms that offer company formation services in Malta; do you believe that there’s adequate work for all as the market you are dealing with is global? What should a potential investor seek for before choosing a service provider offering company formation services?Indeed, there are many corporate services providers in Malta however we believe that there are few who distinguish themselves from others. Our forte is certainly that Fairwinds Management Limited is also an accounting firm, so apart from corporate services and legal advice we offer accounting and administration services. This makes us unique as we can service a client throughout the business lifeline, providing various business solutions to the newly formed company, removing any headaches of finding other service providers. This is a strong point for a potential investor in choosing a corporate service provider.
What’s your personal prediction about the corporate sector of Malta 10 years from now? Do you expect any radical changes?Recently the government announced a plan to redraft Malta’s tax system. Following this announcement stating that Malta’s tax system will be scrapped and new one installed by 2025, we foresee radical changes coming along in our industry as this will be a major overhaul which might damage the flow of businesses into Malta. We have faced many challenges in the recent years, one major being Malta’s FAFT’s grey listing, but we remain positive the government will make the right move in this aspect.
Conrad Meli, FCCA, MIA, CPA, is a Director of Fairwinds Management Limited. Mr Meli is a Certified Public Accountant with years of experience in the accounting, taxation, and corporate services industry. He is also a Fellow of the Association of Chartered Certified Accountants (ACCA) and a Member of the Malta Institute of Accountants. He speaks fluently Maltese, English and Italian languages. Mr Meli can be contacted directly via email on firstname.lastname@example.org or on +356 7909 3681.