Company and Corporate Law

Company law (or corporate law) is a branch of commercial law, and more specifically, a branch of the law of business organisations. A limited liability company (Ltd.) enjoys a legal personality which is separate and distinct from that of its shareholders. The liability of the shareholders is limited to the amount, if any, of the unpaid shares respectively held by each of them. In Malta, limited liability companies are subject to fast incorporation, and are regulated by the Maltese Companies Act of 1995. A private company’s members are limited to fifty (50) and restrictions apply to the right to transfer its shares. Moreover, a private company is prohibited from offering invitations to

the public to subscribe for any shares or debentures of the company. The minimum authorized share capital of such type of company is €1,164. On the other hand, a public company is a company which does not qualify as a private company. As opposed to a private

company, it may offer shares or debentures to the public, however, in order to do so, such company must be is registered and its prospectus must be published. The authorized share capital of a public company is €46,587.47.

As a rule, two or more shareholders can form a private limited liability company with the minimum share capital of €1,164, and not less

than 20% of the nominal value of each share taken up shall be paid up on the signing of the memorandum and articles. An exception to

the rule is the ‘single member company’, which can be formed entirely by one individual and is an ideal alternative to sole tradership

(trading in one’s own name). Other alternatives to the limited liability company are partnerships (general or limited) and other legal

persons such as associations. LexVirtualis™ can advise you as to the most suitable vehicle to cater for your business needs.

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 nominal value of

each share taken up shall be paid up on the signing of the memorandum. The paid-up share capital must be deposited into a bank

account in Malta prior to registration.

What are the advantages of forming a company in Malta?

• Fast incorporation – can be done entirely online (circa 48 hours under normal circumstances)

• The minimum authorized share capital for a private limited liability company is €1,164 which may be 20% paid up (minimum is €240)

• Low registration fees and maintenance costs - Small companies may submit abridged balance sheets and abridged profit and loss statements.

• Written resolutions signed by all shareholders are acceptable in lieu of convening an Annual or Extraordinary General Meeting.

• Beneficial tax system - full-imputation system. Although companies are taxed at 35% of their chargeable income, a shareholder of the said company would be entitled to a refund of any tax paid by the company depending on its source of income, ie. of 5/7ths (10% effective tax rate), 6/7ths (5% effective tax rate) or 7/7ths (0% effective tax rate) of income tax already paid by the said company.

• Full tax exemptions for holding companies and exemptions on duty on documents for companies which operate internationally.

• No withholding taxes or duties on profit repatriation

• Malta is an EU member State and a party to numerous double taxation treaties

LexVirtualis™ can assist you with legal and practical advice relating to:

• Consultation, due diligence, planning

• The formation and incorporation of a company – reservation of company name, drafting of the Memorandum and Articles of Association, registration with the Registry of Companies (MBR), registration with the Commissioner for Revenue (Income Tax and VAT), applying for a trade license, opening a bank account as well as other legal and administrative work involved in getting the company up and running.

• Share transfers

• Shareholders’ Agreements

• Mergers and Acquisitions

• Liquidations, winding up and striking off.

Through appointing our affiliated fully-licensed corporate services provider, LexVirtualis™ is able to offer a complete range of corporate services for local and foreign companies of varying scale and from a diverse array of industries.

These include:

• Corporate directorship

• Company secretarial services

• Re/domiciliation and registered office services

• Back office services

• Company maintenance and compliance

• Due diligence

• Anti-Money Laundering and Counter-Terrorist Financing

LexVirtualis™ can offer advice and assistance with company law from at any stage of the process. Contact our specialists at LexVirtualis™ and find out more about company formation in Malta

For further information about how LexVirtualis™ can help you with your law requirements kindly contact us on