What is the minimum share capital needed for Business in Malta?
The short answer is: It depends! It depends on the type of entity chosen from the options, the Maltese legal framework offers. For separate legal entities, these are mainly companies and partnerships. The most common types are the private limited companies and the public limited companies. Both types of company structures need a minimum share capital in order to be able to begin the business activities. The principal legal framework for registration of companies in Malta is the Companies Act of 1995 (the “Act”). The business activities commence with the certificate of incorporation, issued by the Malta Business Registry (“MBR”).[1]
Private limited companies in Malta
Private limited companies are the most popular among small/medium sized entrepreneurs looking to start a company in Malta. The minimum requirements for this type of company are:
- at least one shareholder at the time of business registration;
- one director and a secretary in accordance to the Act;
- the minimum share capital of approximately EUR 1,200 that can be denominated in any currency;[2]
- a registered address in Malta which is required for the whole duration of business.
When incorporating a private limited company in Malta, the minimum share capital must be fully subscribed, but only 20% must be paid up. It is good to know that:
- it is possible to pay for the share capital in any currency or, after a specific procedure required, even other valuable assets, like crypto and real estates.[2] When an allotment through section 73(4) of the Act is done in crypto, an expert has to insert the details of the blockchain crypto provider in the ‘expert’s report’ and provide slips in relation to the deposit of the cryptocurrency;
- the shareholders will be held liable for the company’s debts and obligations to the extent of their capital contributions;
- the shares of the Maltese private limited company cannot be traded on the stock exchange.
Public limited companies in Malta
In the case of the Maltese framework, public limited companies shall have at least two shareholders which are liable for the company’s debts and obligations to the extent of their contribution. The minimum share capital required when incorporating a public limited company is approximately EUR 47,000. The minimum share capital can be denominated in any currency. It must be submitted, but only 25% must be paid upon registration. In contrast to private limited companies, the shares of Maltese public companies can be traded on the stock exchange.
In order to register a public or private limited company in Malta, the founding members will have to submit:
- the Memorandum and Articles of Association of the company,
- copies of the identification documents of the shareholders, and
- a bank account statement, as proof that the minimum share capital was deposited.[3]
The memorandum and articles of association of a company can be signed by the shareholders or by their attorneys in Malta and do not need to be notarised. Any further documents needed for incorporation will be prepared by us.
Minimum share capital for a branch in Malta
Branches in Malta are incorporated as limited liability companies. However, there is no need to consider the minimum share capital for such structure.[4] This is one of the most important advantages of opening a branch in Malta. In terms of incorporation matters, a branch can be established with a declaration made by the parent company expressing the intention of setting up the branch and thus accepting the liabilities of the branch. Also, the Articles of Association, the Memorandum of Association and identification documents of the owners are necessary. It is important to note that in the case of branches, there are several tax exemptions, amongst which the absence of withholding taxes for dividends, royalties, and interests and protection by the double taxation treaties signed by Malta with countries worldwide in order to avoid paying taxes twice.
Minimum share capital for partnerships
In general, there are no requirements for the share capital of partnerships in Malta. However, if the liability of the partnership or certain partners shall be limited, a structure involving a private limited company could be considered. In such case, evidently the share capital requirements for the company must be met.
Minimum share capital for sole traders
If you are looking to commence business as a sole trader, you do not need to worry about the minimum share capital, as Maltese legislation does not impose any. A sole proprietorship is the simplest form of business in Malta that needs minimal requirements, like having the needed licenses or permits for running the activities. It is good to know that the sole trader is the only one responsible for the debts and liabilities in the firm.
In addition to the initial capital contributions, you should by all means take into account the ancillary start-up costs, which we will be happy to inform you about in a free, non-binding individual meeting, to answer your queries.
You may ask: “What’s the next step for me?” – Well, it’s time to take action. Whether you’re a seasoned entrepreneur or a budding business enthusiast, Malta offers a diverse range of opportunities for you.[5] So, seize the moment and explore the potential that this thriving business environment has to offer. Let’s embark on this exciting journey together – the future of your business starts now. Contact us and make your mark in Malta!
[1] We will navigate you through the incorporation process in Malta, as described here.
[2] Art. 72 section (3) defines the minimum amount of share capital to be paid up while Art. 73 defines the scope for denominable assets.
[3] The MBR published a list of requirements.
[4] ‘Chapter I – Provisions as to establishment of branch or place of business in Malta’, Art. 384 – 389 of the Act regulates the implementation of a subsidiary in Malta.
[5] The Maltese government offers a bunch of subsidies and supports for foreigners commencing business, which we would be happy to assist you in the application process.
