van Cutsem Wittamer Marnef & Partners​ LEADING GLOBAL NETWORK MACKRELL INTERNATIONAL IN CHAMBERS GUIDE AS FOR EIGHTH YEAR RUNNING.

Corporate

Company Formation

Maltese legislation offers a variety of business vehicles and our team of talented professionals can guide you in choosing the legal form that best suits your business model and assist you through the incorporation process.

A limited liability company is the legal form that is most commonly used in Malta. It can be incorporated as a private limited liability company (Ltd.) or as a public liability company (p.l.c.).

A private company restricts the shareholders’ rights to transfer their shares, limits the number of shareholders to fifty and prohibits any invitation to the public to subscribe for any shares or debentures of the company.

A public company may offer shares or debentures to the public in line with the applicable laws and regulations and by issuing an offering document or prospectus.

A private company in Malta may be incorporated as an exempt company and qualifies for certain advantages, if specific conditions are contained in its Memorandum and Articles of Association (the “M&A”).

An investment company in Malta can take the form of a SICAV (an investment company with variable share capital) or INVCO (an investment company with fixed share capital). These companies are normally used for the formation and registration of collective investment schemes in Malta.

Incorporation of a company

The incorporation of a company in Malta is regulated by the Companies Act, Cap 386 of the laws of Malta  (the “Act”). A company is validly constituted in terms of the Act once the M&A and the relevant documentation are presented to the Malta Business Registry (the “MBR”).

The Memorandum of Association of a private company shall contain certain information, including the following:

  • The name of the company;
  • The registered office of the company;
  • The objects of the company;
  • The proposed amount of share capital, the number of shares subscribed by each shareholder, and the amount paid up for each share;
  • The name, residence and identification number of each shareholder and, in case of a corporate shareholder, the name, company registration number, and registered office of the corporate shareholder;
  • The number of the directors;
  • The name, identification number and residence of the first directors and, in case of a corporate director, the name, company registration number, and registered office of the corporate director;
  • The name, identification number, and residence of the first company secretary or secretaries.

The Articles of Association, on the other hand, shall outline the internal rules of the company.

Incorporation Process

A company in formation may reserve its preferred company name with the MBR. The proposed name is reserved by submitting a request to the MBR, which if approved, is valid for three (3) months, unless it is renewed.

The share capital should also be deposited in the name of the company in formation, in a bank account or in an account held by the authorised corporate service provider, and proof of such deposit shall be submitted to the MBR with the rest of the relevant documents.

Moreover, a copy of an official identification document should be provided to the MBR in respect of each shareholder, director, legal and judicial representatives, and company secretary. Additional documentation is required in case of individuals or entities that are nationals of, or located in, a non-EU country. When incorporating a new company, the Form BO1 should also be filed if any of the shareholders of the proposed company is a body corporate.

Once the above-mentioned documentation is registered, the MBR issues a certificate of registration as proof that the company has been incorporated under the laws of Malta and is authorised to commence its business starting from the date of registration.

As authorised service providers, we can handle the drafting of the M&A, the completion of supporting documents, the submission of the relevant documentation, and liaising with the MBR for the company to be registered. Once the M&A is ready and duly signed, and all the relevant documentation is collected and completed, the registration of a new company normally takes between 24 to 48 hours.

Capital requirements

The minimum authorised share capital of a public company is EUR 47,000 while the minimum authorised share capital of a private company is EUR 1,200. In the case of a public company, not less than 25%, and in the case of a private company, not less than 20%, of the share capital shall be paid up on the signing of the M&A.

The authorised share capital needs to be subscribed by at least two shareholders, unless the company is registered as a single member company, subject to the limitations attached to single member companies.

Registration fees

The fees payable to the MBR for the registration of a company vary based on the company’s authorised share capital and on whether the registration is made in paper format or in electronic format. Such fees range from EUR 100 (for the minimum amount of share capital in case of an electronic registration) to EUR 2,250 (for an authorised share capital exceeding EUR 2,500,000 in case of a paper format registration).

Corporate Administration

Running a business requires a lot of work and time. We can help you remain focused on the business development while we handle, prepare, collect, and submit the relevant acts, forms, documents, agreements, and resolutions required for the company to be in good standing.

We can also assist you with any corporate structure amendments, regulatory submissions, or other applications, such as:

  • Change in company name;
  • Change in company registered office;
  • Changes among directors, company secretary, legal or judicial representatives of the company;
  • Change in memorandum and articles of association;
  • Transfer and transmission of shares;
  • Increase of the share capital;
  • Submission of annual returns;
  • Submission of BO forms;
  • Tax and VAT registration;
  • PE number registration;
  • Book-keeping.

Our team can also assist you with a wide range of back-office services and administration services. These ancillary services include, but are not limited to ordering of certificates, corresponding with tax and other authorities in Malta, obtaining notarisations and apostilles, corresponding with service providers, handling correspondence with third parties, ordering local and foreign couriers etc.

Company Secretarial

Every company incorporated or otherwise established in Malta is required to have in office a company secretary who has sufficient knowledge and experience to discharge its functions. The company secretary is to be appointed by the board of directors of the respective company and the board shall assess whether the company secretary possesses sufficient knowledge and expertise.

Subject to the Memorandum and Articles of Association of the respective company, the company secretary is generally responsible for recording the minutes in writing of all the board of directors, general and extraordinary meetings of the company and maintaining the minute book of the company. Moreover, the company secretary shall ensure that proper notices and agendas are provided in a reasonable time to the respective attendees of the meetings.

Apart from the minute book, the company secretary shall ensure that the company maintains registers listing the shareholders, directors, officers and ultimate beneficial owners of the company.

The company secretary is also generally responsible for handling the submissions of company resolutions, accounts, reports and annual returns amongst any other documents to the MBR as required.

We can assist you by acting as company secretary of your Maltese company, thereby handling the above obligations.

Registered Office

All companies which are established or continued in Malta are required to have a registered office address located in Malta. This ensures that any official correspondence sent by the competent authorities is received by the relevant company. Furthermore, the registered office of a company acts as a central record-keeping facility for the company.

Any changes to the registered office of the company shall be communicated to the MBR immediately.

We can assist you by providing you with our address to be designated as the registered office of your company. Apart from providing you with a registered office address, we will also handle and forward as necessary any correspondence received at the registered office while ensuring that your affairs are kept confidential at all times.

Fiduciary Services

Malta has a well-established sector of fiduciary services regulated by the Malta Financial Services Authority (the “MFSA”). Zerafa Trustees is authorised by the MFSA in terms of Trust and Trustees Act to provide fiduciary services.

Our fiduciary services include acting as mandatory in the holding of assets (including shares) on your behalf governed by a mandatory services agreement. When acting as fiduciary shareholder, we are bound by law to protect your interests and to act in line with your instructions, including when we are vested with the ownership of your assets.

We take our fiduciary obligations very seriously and we strive to ensure the highest standards applicable when administering your assets. We abide by our duty of confidentiality and provide our clients discretion and peace of mind. We also guarantee the segregation of your assets which will not be affected by any claim of third parties against us or against other clients.

Domiciliation Services: Establishment of a Branch

The Act allows for a company registered in another member state to establish a branch in Malta, subject to the communication of certain disclosure requirements. In order for a company registered in another member state to establish a branch in Malta, a number of submissions are to be made to the MBR. Initially, the company shall submit notorised and apostilled copies of its charter, statutes or memoranda and articles, or any other equivalent constitutive documents of the company. Should the constitutive instrument be in a language other than the English language, a certified translation of the instrument in English should also be attached.

Furthermore, the company shall provide the MBR with a list of the representatives, directors and/or company secretary or any other persons vested with the administration of the overseas company. The list should include the name, surname, identification or passport number, usual residential address, nationality and business occupation of the directors and company secretary or any other person vested with administration.

The company shall provide additional details to the MBR indicating the following:

  1. The name under which the branch or place of business is carrying on its activities, where different from the name of the overseas company;
  2. The address of the branch or place of business established in Malta by the overseas company;
  3. The activities to be carried out by the branch or place of business established in Malta;
  4. The names and addresses of one or more individuals resident in Malta and authorised to represent the overseas company; and
  5. Details of the extent of the authority of the representative residing in Malta.

Additionally, once the branch is established in Malta, the overseas company shall inform the MBR of any alterations made to the already submitted documents, including any changes relating to the individuals directing or representing the company. Moreover, overseas companies shall submit to the MBR their accounts within twelve months from the end of every accounting period.

We can assist you with establishing a branch or a place of business in Malta by handling the above processes on your behalf.

Domiciliation Services: Continuation of a Company in Malta

The Maltese legal framework provides for the possibility of foreign companies to establish themselves in Malta by way of continuation by virtue of the Continuation of Companies Regulations, S.L. 386.05. Through this method, the foreign company may establish itself in Malta without having to go through the liquidation process in the jurisdiction where it is currently operating.

As established by law, a company which intends to continue its business operations in Malta is required to be incorporated or registered under the laws of a country which provide for companies to be structured in a similar manner to that provided for in the Act. The laws of the foreign country and the constitutive documents forming the company must also permit the possibility of the continuation in Malta.

Furthermore, a company which intends to be continued in Malta shall revise its constitutive document in a manner which reflects the requirements of the Act while also including the changes relevant to the process of continuation such as the change in address.

Prior to applying to the MBR to be continued in Malta, a company shall ensure that it has given a formal notice to the competent authority of the foreign country of its intention of continuing in Malta. Moreover, the company shall ensure that it is not currently part of proceedings relating to any breach of laws of the jurisdiction in which it is presently incorporated.

Once the aforementioned requirements are adhered to, the company may proceed to apply to the MBR by submitting the following documentation:

  1. A resolution or equivalent document of the company authorising it to be registered as being continued in Malta;
  2. A copy of the revised constitutive document of the foreign company;
  3. A certificate of good standing in respect of the company issued by the foreign competent authority;
  4. A declaration signed by at least two directors of the company confirming the name of the company and the respective name under which it is being proposed to be continued, the jurisdiction under which it is incorporated, the date of registration, the decision to have the foreign company registered as continuing in Malta, that the company has given formal notice of its decision to the foreign competent authority, and that no proceedings against the company are currently ongoing;
  5. A declaration signed by at least two directors confirming that the company is solvent; and
  6. A list of the representatives and officers of the company.

The MBR may also demand the company to provide additional evidence or information prior to officially registering the company as continued in Malta.

We can assist you with the required procedures and submissions should you wish to have your company continued in Malta from another jurisdiction.

Domiciliation Services: Continuation of a Company outside of Malta

By virtue of the Continuation of Companies Regulations, companies registered under the Act may apply to the competent authority of a foreign jurisdiction in order to have themselves registered as continued therein as if they been incorporated under the laws of such foreign country.

For the purposes of determining whether the process of continuation may be initiated, the Maltese company must ensure that the laws of the foreign jurisdiction in which it wishes to be continued permit the continuation of a Maltese company. Moreover, the company shall also ensure that it is solvent for continuation to be possible.

Should the Maltese company be presently carrying any licensable activity, the company must also request the consent of the Maltese competent authority prior to being able to continue in another jurisdiction. Similarly, if the company is a public company quoted on a recognised investment exchange, the consent of the respective exchange and the Maltese listing authority must be obtained.

Moreover, any extraordinary resolutions of the shareholders, annual returns and accounts of the company which have not been filed are to be submitted for registration to the MBR.

Thereafter, the Maltese company must request the consent of the MBR to be continued as a company outside Malta. In requesting the MBR’s consent, the company shall ensure that a declaration is provided to the MBR stipulating the name of the company under which it is proposing to be continued, the jurisdiction of proposed registration, including the name and address of the foreign competent authority, and the date on which it is expected to establish domicile in the relevant foreign country.

We can assist you with the procedures and submissions required to be communicated to the MBR and authorities in Malta, as applicable, should you wish to have your company continued outside of Malta.

Liquidations – Voluntary Winding Up

The shareholders of a company may decide to voluntarily wind up the company, by virtue of an extraordinary resolution passed by the members entitled to attend and vote at general meetings. Such decision to commence the liquidation process triggers the winding up of the company. In a voluntary winding up, a liquidator is required to be appointed by the shareholders, who takes control over the company and its representation and assumes the powers of the directors as from the date of the decision for the dissolution and winding up of the company.

The liquidator is appointed in order to liquidate the assets of the company, pay the creditors, and distribute any proceed to the shareholders. For this reason, the liquidator draws up an exhaustive list of assets and liabilities of the company. The liquidator has the authority to carry on the business of company for its beneficial winding up and may institute or defend any action or other legal proceedings in the name of the company. If the liquidator becomes aware that the company will not be able to pay its debts within the period stated in the Declaration of Solvency made by the Directors, the liquidator shall summon a meeting of the Creditors and the procedure becomes a creditors’ voluntary winding up.

As soon as the affairs of the company are fully wound up, the liquidator shall make an account of the winding up, showing how the winding up has been conducted and how the property of the company has been disposed of and shall draw up a scheme of distribution indicating the amount due in respect of each share from the assets of the company. Where applicable, the liquidator shall cause the account to be audited by an auditor appointed by ordinary resolution of the company, or in default by the court. The liquidator shall call a general meeting of the company for the purpose of laying before it the account and scheme of distribution, if any, together with the auditors’ report, and giving any explanation thereof. Upon receiving the account and the scheme of distribution, if any, together with the auditors’ report, the Registrar of Companies shall forthwith register them and on the expiration of three (3) months from the publication of the notice referred, the Registrar of Companies shall strike the name of the company off the register, unless an action to defer the striking off of the company has been brought.

In a voluntary winding up, the Directors shall file at the MBR, together with the notice of dissolution, a declaration of solvency declaring that they have made a full inquiry into the affairs of the company, and that they have formed the opinion that the company will be able to pay off its liabilities in full within the period specified in the declaration, which period shall not exceed twelve (12) months. The declaration of solvency should also contain a statement of the company’s assets and liabilities made up to a date not earlier than the date of the declaration by more than three (3) months.

We can assist you with the voluntary winding up of your Maltese company through the following services:

  1. Submission of registry forms and other required documentation to the MBR;
  2. Assisting in sourcing liquidator which shall be appointed;
  3. Coordination and communication with all parties involved in the wind up of a company or asset;
  4. Assistance with post-liquidation operations.
Banking Introductions

Opening a bank account in Malta is a time-consuming process due to significant due diligence documents that the credit institutions require in order to proceed with opening of a corporate bank account.

Having actively assisted regulated players in the financial services sector, our team members have the necessary knowledge and expertise to guide you through the process to satisfy the AML requirements of the bank with regards to the due diligence on you and your source of wealth and source of funds.

We would be happy to make the necessary introductions and guide you through the process.

Directorship Services

The duties of directors under Maltese law may be classified under two categories:

  1. General duties – arising out of the Act or out of the juridical nature of directors under general principles of law; and
  2. Specific duties – Arising primarily out of the Act.

The duties of the directors of general nature include the obligation of the directors to act honestly and in good faith in the best interests of the company, to promote its well-being, to exercise due care, diligence and skill, to not engage in self-dealing, and to not misuse their powers.

Directors under Maltese law are also subject to specific duties that arise out of the Act, which are mostly of administrative nature, which duties are backed by sanctions in the form of penalties enforceable by the Registrar of Companies against the directors personally. These statutory specific duties may be classified under six categories of duties relating to the following:

  1. Keeping of statutory registers and minute books;
  2. Filing of returns and documents;
  3. Board and general meetings;
  4. Record-keeping and financial statements;
  5. Liquidation of the company;
  6. Miscellaneous duties, such as the power to authenticate documentation of the company, the obligation to deliver the certificate of shares allotted, transferred or transmitted, and the obligation to provide the auditors with the necessary information and explanations. The directors and all officers of the company also have other duties to perform in the case their company is being investigated to ensure such investigation is not hindered.

The general principle under the Act, subject to significant exemptions laid therein, is that the personal liability of the directors for any breach of duty is joint and several. The principle is that directors are expected to act collectively as a board and therefore the liability for breach of duty shall be borne in solidum.

We can assist you, or put you in touch with experienced and knowledgeable individuals who can assist you, with the management of companies to ensure the company operates in line with Maltese law. Any appointed director shall conduct a thorough and comprehensive assessment of the company and its activities to ensure the appointed director is conversant with the activities of the company to be able to carry out its duties as a director effectively and to be able to properly exercise independent judgment.

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