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Malta

Branches

Updated 07/2012

Legal requirements

The provisions applicable to branches and subsidiaries are contained in the Companies Act.

Secondary establishments

The Companies Act covers the following types of secondary establishments:

  • establishment of a branch or place of business in Malta by an oversea company;
  • setting up and registration of a limited liability company to act as subsidiary company within the structure of a group of companies.

Overseas Companies

The Companies Act covers the provisions concerning 'oversea companies' (or bodies corporate, incorporated outside Malta) which establish a branch or place of business within Malta.

In particular, Section 385 of the Companies Act details the documents which must be delivered to the Registrar of Companies for registration within one month of the establishment of the place of business.

Legally independent

Subsidiary Companies

A 'subsidiary undertaking' is registered with the Registrar of Companies as a limited liability company operating within a group of companies. Usually the parent company which heads the group of companies:

  • has a majority of the members' voting rights in the subsidiary undertaking; or
  • has the right to appoint or remove a majority of the members of the board of directors or persons entrusted with the administration of the subsidiary company, and is also member of the subsidiary company; or
  • has the right to exercise a dominant influence over the subsidiary undertaking of which it is a member, pursuant to a contract entered into with that undertaking or to a provision in that undertaking's memorandum or articles of association; or
  • is a member of the subsidiary company and controls, pursuant to an agreement with other members of that subsidiary undertaking, a majority of members' voting rights in that undertaking; or
  • holds a participating interest in the subsidiary company and actually exercises a dominant influence over that undertaking or it manages the subsidiary undertaking on a unified basis together with it.

The Companies Act also covers the procedures of conduct applicable for such companies.

Many of the requirements and procedures for opening a secondary establishment are the same as for starting up a business.

Administrative procedures

Preliminary procedures

Branch

Overseas companies which establish a branch or place of business within Malta, must within one month, deliver to the Registrar for registration:

an authentic copy of the Memorandum and Articles of Association or other constiutional documents of the oversea company;

  • a list of Directors and company secretary, or if none  then a list of persons who administer the oversea company. In the case of a body corporate, applicants must provide information on the registered or corporate name and registered or principal office;
  • a return containing;
  • the name of the branch or place of business if different from the name of the overseas company;
  • the address of the branch or place of business established in Malta;
  • the activities to be carried out by the branch or place of business;
  • the names and addresses of one or more individuals resident in Malta authorised to represent the overseas company and the extent of their authority;
  • a return containing information on the legal form of the company and the identity of the register and the number with which the company is registered.

The Registrar of Companies must also be notified of any alterations to the memorandum or articles of association of the company or to the Directors or company secretary or persons vested with the administration or the representation of the company, or to the names or addresses of the individuals who represent the company in Malta. The notification must be delivered within 1 month from any such alteration.

Subsidiary Company

A memorandum of association must be entered into and subscribed by at least two persons, and a certificate of registration is issued before a company can be validly constituted.

The Companies Act provides an indication of the information which must be included in the memorandum of association, this includes:

  • whether the company is public or private;
  • the name and residence of each of its subscribers;
  • the name of the company;
  • the company's registered office in Malta;
  • the objects of the company;
  • the amount of authorised capital (share capital with which the company proposes to be registered), its division into shares of a fixed amount, the number of shares taken up by each of the subscribers and the amount paid up in respect of each share and the rights attaching to the shares of each class where the share capital is divided into different classes;
  • the number of directors, the name and residence of the first directors and, where any of the directors is a body corporate, the name and registered or principal office of the body corporate;
  • the name and residence of the first company secretary or secretaries;
  • the period, if any, fixed for the duration of the company.

The memorandum and articles must be delivered for verification by and registration to the Registrar. The company shall come into existence and shall be authorised to commence business as from the date of registration, indicated on the certificate.

All the requirements necessary for the registration of a company are set out in full in the Guide to the Registration of Companies which can be downloaded from the MFSA website.

Registration

Many of the requirements and procedures for opening a secondary establishment are the same as for starting up a business.

Regular duties

Branches

In the case of branches, every overseas company shall within 42 days from the period of ten months after the end of the relevant accounting reference period make out and deliver to the Registrar a balance sheet, a profit and loss account and the notes to the accounts which the directors would be required to make out and lay before the company in a general meeting.

The overseas company must notify the Registrar of Companies of any changes to its statute or to the management and direction of the branch.

Limited Liability Companies

In the case of limited liability companies, every company must hold an annual general meeting - every general meeting other than an annual general meeting shall be an extraordinary general meeting.

The company must notify the Registrar of Companies of any changes to the Memorandum and Articles of Association.

A company shall table the annual accounts for approval by the board of directors and the balance sheet shall be dated and signed on behalf of the board by two directors of the company.

The company directors shall deliver to the Registrar for registration a copy of the company's annual accounts together with a copy of its auditors' report and the directors' report accompanying the annual accounts, within forty-two days from the end of the period for laying of annual accounts. The company shall also submit to the Registrar of companies an annual return.

Exemptions

Companies are classified as "small companies" if on their balance sheets they do not exceed the limits of two of the three following criteria:

  • balance sheet total: EUR 2,562,310.74;
  • turnover: EUR 5,124,621.48;
  • average number of employees during the accounting period: 50.

These "small companies" may draw up abridged balance sheets and abridged layouts of profit and loss accounts and abridged notes to the accounts.

If a Private companies on its balance sheet dates does not exceed the limits of two of the three following criteria, shall be exempted from the provisions relating to auditors and from the requirement to draw up an auditor's report:

  • balance sheet total: EUR 46 587.47;
  • turnover: EUR 93 174.94;
  • average number of employees during the accounting period: 2.

These companies may also draw up abridged balance sheets and abridged layouts of profit and loss account and abridged notes to the accounts.

The Services Directive: One-stop shops

The Services Directive is a European law that aims to make life easier for businesses that wish to provide services in the European Union – in their home country or abroad. The Directive defines the rules that apply to entrepreneurs wishing to establish a business or perform temporary services in the EU/EEA area (the 27 EU member states, plus Iceland, Liechtenstein and Norway). It obliges member states to eliminate unnecessary bureaucracy, simplify formalities for businesses and make public administrations more efficient.

For the implementation of the Directive, each member state had to set up ‘Points of Single Contact (PSC)’, e-government portals which help businesses complete their administrative procedures on-line. The PSCs provide comprehensive information on all administrative matters related to setting up or expanding a services business in a given country. This includes for example:

  • Which licences, notifications or permits do I need to obtain to start a business (at home or abroad)?
  • What do I need to do when I want to offer my services abroad on a temporary basis?
  • What do I need to do to apply for a licence? Which authority is responsible?
  • Are the licences subject to a fee? What kinds of deadlines apply?
  • Which acts and decrees apply in my sector?
  • What do I need to do to establish, for instance, a restaurant or a shop? Or to work as a tour operator in another country without actually setting up a company?
  • Where can I turn for personalised advice and further information?

With the PSCs, you no longer need to approach various authorities one by one!! The PSC allows you to find all relevant information and to send in your online applications to the responsible authority through one single contact point, the PSC. You can complete your administrative formalities electronically through the PSC. Just contact the PSC of the country that you want to do business in.

All PSCs are part of the European EUGO network; through a central website you can easily access all PSCs in Europe. Of course, the services of the PSCs are optional. You may always address yourself directly to the relevant authorities, too.

Programmes

Malta Enterprise supports the development of enterprises through a new set of incentives for the promotion and expansion of industry and the development of innovation.

Help & advice

Help & advice

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