Companies and commercial partnerships are formed under the Companies Act.
The first step to take when setting up a business in Malta is to choose its legal structure. Entrepreneurs can choose either to do business in their own name according to the provisions of the Commercial Code, or to operate through a separate entity created by them.
Legal forms for businesses
The limited liability company is the most common form of business structure and has two essential features:
- the creation of a separate legal person distinct from that of its members;
- the limitation of liability of its members to the amount, if any, left unpaid on its shares.
The business owner and at a minimum one partner may choose to form a partnership en nom collectif for the exercise of one or more acts of trade. While this partnership also has a separate legal personality, its members do not enjoy the benefit of limited liability since the obligations of the partnership are guaranteed by the unlimited joint and several liability of all the partners.
The partnership en commandite (or limited partnership) has a separate legal personality. This partnership has two types of partners:
- the general partners, who assume unlimited responsibility for the obligations of the partnership;
- the limited partners, whose liability is limited to the amount, if any, left unpaid on their contribution.
To succeed, a new business needs a sound commercial strategy and secure financing.
Some standard requirements to be completed when setting up a business are the same as when opening a branch.
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.
You can carry out your formalities online via Mygov.mt.
Procedures to follow for registration depend on the business structure.
Registering a limited liability company
Founding members must subscribe to a memorandum of association which, when signed, is submitted to the Registrar of Companies who verifies it for compliance with the necessary acts before registering it.
The articles of association, a separate document relating to the internal management of a company, may also be registered with the memorandum.
Registering partnerships en nom collectif or en commandite
The founding partners enter into an agreement called the deed of partnership which contains the essential rules on how the partnership should operate. The deed is signed by all the partners and submitted to the Registrar of Companies for registration.
Social security registration
All information related to social security registration can be found at the Department of Social Security.
The Value Added Tax Department is situated in Birkirkara, and offers lots of services, among which are the request for a new VAT number and ordering of Fiscal Receipt Books.
The Government of Malta's employment and business page offers services including import/export and trading licenses, levies and price verification. It provides a list of organisations and links to the various services offered by the Employment and Training Corporation, the VAT Department and the Malta Financial Services Authority.