In the below section, we would like to highlight the main aspects involved with starting a business, and our tasks involved in ensuring that all the requirements are adhered with;
Forming a company or working as a Self-Employed?
The main difference between the two structures is that by having a limited liability company you give your business a corporate identity, whereby you would not be trading on your personal name, but as a business. Moreover it is more appealing to investors since the share capital can be sub-divided amongst the investors. As a shareholder you also have limited liability on your investment.
Having a limited liability company in Malta will require a statutory audit to be prepared each financial year, no matter the level / volume of trading or profits made during that particular financial year. This can prove to be a burden cost for start-ups.
Therefore, if the second option is more appealing to you, i.e. trading as a self-employed, the costs and procedures are less and simpler. If you decide to start as a self-employed, then step 2 below does not apply to you.
Registration Documentation & Share Capital
To form a limited liability company there is the requirement to draft the memorandum and articles of association. These documents are important for registration and by virtue of the objects clause, the allowed activities of the company will be enlisted.
With regards to the share capital, the amount will be determined in the memorandum and articles of association. The minimum amount allowed is €1,200, of which 20% needs to be deposited at the bank. Therefore a bank account in the company’s name needs also to be operative. It is suggested that the bank account would be held with a local bank.
Getting a Tax Identification Number and VAT Registration
One of the requirements by law is that every body of persons being it a self-employed individual or a company have a tax identification number. The tax return needs to be submitted annually. For companies the common practise is that the tax return is submitted once the audited financial statements are prepared, whilst for a self – employed individual, a Profit & Loss Account needs to be prepared and presented with the tax return form.
An important point to be remarked is that non-resident shareholders may avail themselves of tax refunds up to 6/7ths of the corporation tax paid at company level. Upon registration of the company we will guide you on the tax structure to implement to be able to avail yourself of tax incentives to be able to maximise your potential out of the company structure.
Another requirement to start a business in Malta is registering with the VAT department. Depending on the type of trading activity as well as the volume of turnover estimated, we will be guiding you on the VAT Registration type that is suitable.
Hiring Employees – Obtaining PE Number & Registration with Jobsplus
In order to be able to register employees with you as a self – employed or as a company, you need to obtain a PE number through the Inland Revenue Department.
On the other hand, Jobsplus is responsible for all employment registration in Malta. Irrespective of whether you will start a business as a self-employed person or a limited liability company, you need to register employee that will be employed with you, and inform Jobsplus upon termination of such employee from your business.
At MiTo Consultancy we carry out all the above tasks in a timely and efficient manner to ensure that your business operation starts as smoothly and swiftly as possible.