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moreAt RSM Malta we recognize the need to cater for client concerns by providing a structure that will meet each client’s requirements. The array of business organisations available under Maltese legislation facilitates the identification of potential solutions suited to our clients’ needs.
Maltese law provides for the following business organisations – each with their own features and benefits:
Limited Liability Companies
The limited liability company is by far the most commonly used business entity in Malta and is regulated by the Companies Act. Maltese law provides for the registration of public and private companies – the primary difference between the two are the limitations to the number of shareholders and the restrictions applicable to the ownership in shares of private companies. Private companies are more suitable for small and medium sized businesses and are therefore the primary business entity resorted to in Malta. A limited liability company is registered on the submission of the Memorandum & Articles of Association to the Registrar of Companies together with ancillary documents and the relevant fee.
Maltese law also provides for the possibility of redomiciling a company that has been registered and incorporated under a regime of a foreign country to Malta – in terms of the Continuation of Companies Regulations. Redomiciliation offers the possibility of companies to maintain their legal personality intact while being regulated in a separate jurisdiction. All rights and obligations in existence in the previous jurisdiction will continue to exist once the company is continued in Malta. This provides the advantage of not having to renegotiate vital contracts or liquidate an existing company only to setup a new company carrying out the same business.
RSM Malta offers professional assistance on all aspects of the registration of limited liability companies in Malta – ranging from the reservation of the proposed company name to the drafting of the relative constitutive documents to the actual registration of the company.
Throughout the life of the company, our team of corporate service professionals assist with the maintenance and compliance of the relevant obligations with the Companies Act – ensuring the timely preparation and filing of the relevant forms, returns and resolutions.
Commercial Partnerships
Maltese law also provides for the regulation of commercial partnerships with different features that may be used in different situations. Commercial partnerships are also regulated by the Companies Act which provides for the Partnership en nom collectif and the partnership en commandite.
The former type of partnership is comprised of at least two general partners who would provide a contribution to the partnership and the relationship of which will be regulated by a partnership deed. The general partners are liable for the obligations of the partnership with all of their assets – present and future. The only limitation that the partnership en nom collectif offers is that creditors of the partnership must first seek to settle their dues against the assets of the partnership before turning on the partner’s estate.
Whereas the partnership en commandite is comprised of at least one general partner and a number of limited partners. The general partner is liable for the obligations of the partnership with all of his assets while the limited partners will be liable up to their contribution. The partnership en commandite can have its capital divided into shares and will be treated as a company for fiscal purposes. Both the partnership en nom collectif and the partnership en commandite are transparent entities for tax purposes.
Our corporate services team have the necessary expertise and experience to set up of such partnerships while ensuring their full compliance with the applicable legislation.
Branches of Foreign Companies
Certain business operators may prefer to carry out business in different jurisdictions through the same legal entity – this may be done by setting up a branch of the operating company in more than one jurisdiction. Maltese law also permits the registration of branches of foreign companies in Malta. This concept structure is known as an oversea company in terms of the Maltese law.
The foreign company would have to appoint a local representative who will be vested with the representation of the branch in Malta together with an office or place of business situated in Malta. Branches are treated the same as companies registered in Malta for tax purposes while branches of foreign companies would have to prepare audited financial statements with respect to their activities carried out in Malta. Branches of foreign companies may also benefit from the advantageous refund system that Malta offers while foreign companies may transfer their fiscal residency to Malta through their place of management and control benefiting from specific advantages that Malta has to offer – for more information about the fiscal implications of such companies visit our tax section.
Whereas the partnership en commandite is comprised of at least one general partner and a number of limited partners. The general partner is liable for the obligations of the partnership with all of his assets while the limited partners will be liable up to their contribution. The partnership en commandite can have its capital divided into shares and will be treated as a company for fiscal purposes. Both the partnership en nom collectif and the partnership en commandite are transparent entities for tax purposes.
RSM Malta will be able to assist at every step of your operations in Malta from the initial registration throughout the life of the company or branch in Malta – both from a corporate aspect and also from a tax aspect.
Trusts & Foundations
Although Malta is a civil law jurisdiction, the Maltese legislator was open to the common law concept of trusts when the possibility of setting up a trust in Malta was introduced in the early nineties albeit in a restricted and limited manner. The Maltese legislator based the law of trusts on fiduciary obligations – a concept that was present in Roman law – whereby one would owe certain duties to protect the interests of another person.
In a trust, property is transferred from the owner (settlor) to a person who shall deal with said property (trustee) in line with the instructions established in the trust the trustee for third parties (beneficiaries). The trustee would be the legal owner of the property throughout the duration of the trust or until said property is alienated. The trustee is deemed to have fiduciary obligations vis-à-vis the settlor to deal with the property in terms of the trust deed for the benefit of the beneficiaries. In order to provide trustee services and due to the fiduciary nature of the office, a trustee must be licensed by the Malta Financial Services Authority in terms of the Trusts and Trustees Act.
Although foundations have been available in Malta for quite some time, recent amendments provide for better regulation offering greater certainty to the institute. A foundation is an organisation that has separate legal personality that consists in the foundation assets. Therefore the assets and liabilities of the foundation are separate and distinct from the estates of the founders, beneficiaries or administrators. As foundation administrators have fiduciary obligations towards the beneficiaries, they too require licensing in terms of the Trusts and Trustees Act.
Foundations in Malta are generally limited to the private benefit of persons and prohibited from carrying out commercial activities. However, it is possible for a foundation to own assets from which it will derive passive income – such as shares, intellectual property and similar assets. Due to versatility of Maltese law, it is possible to convert a foundation to other entities including a trust in order to ensure that the structure that one may have remains a valid and beneficial option even in the light of personal or legal changes.
RSM Malta’s team of professionals may help establish and administer Maltese trusts and foundations for clients, ensuring the highest level of integrity and guaranteeing peace of mind and certainty.