Formation of Trading Companies in Malta

It is no secret that Malta has been one of the most popular destinations for foreign investors looking to open a company. The low costs associated with formation and maintenance make it an ideal spot. Malta has become a popular destination for company establishments with many benefits. The formation of a trading company in Malta is one of the ideal options for investors.

You will need professional guidance if you are thinking about starting or expanding your business into international waters like Malta. Endevio offers comprehensive Malta trading company formation services that will make setting up your business in this jurisdiction straightforward.

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What are trading companies?

Trading companies are generally engaged in commercial or economic activities to sell goods. From a broader perspective, trading companies are involved in import and export operations, purchasing products, and reselling the same to consumers.

Trading companies typically source their products from multiple suppliers and sell them to various customers. This type of business model allows trading companies to benefit from economies of scale and take advantage of opportunities in the marketplace. A trading company might be part of a holding company that owns several different businesses in different industries.

Malta Trading Companies

Malta Trading Companies are onshore companies registered under the Maltese Companies Act. These companies are taxable at the rate of thirty-five per cent (35%). Shares of these companies may be held by individuals or through a holding company. Shareholders are entitled to a tax refund of 6/7ths of the tax paid by the Malta trading company. At the shareholder level, this effectively reduces the tax rate to around five per cent (5%).

Formation of Trading Companies in Malta – The Benefits

Malta is a hub for trading, with companies able to conduct any business activity outside or within the country. Trading companies in Malta can also engage with many different industries. Besides the favourable net tax rates for trading companies incorporated in Malta, such companies also benefit from the following:

  • Low incorporation and maintenance costs
  • No withholding tax on payment of dividends, interest or royalties
  • No controlled foreign company legislation or transfer of pricing rules
  • No thin capitalisation rules
  • No exit taxes
  • No wealth taxes
  • No payroll-based tax or trade tax
  • More than 80 double taxation treaties signed

Opening a Trading Company in Malta

To open and register a trading company in Malta, all the company formation or incorporation steps must be accomplished. We will assist you in complying with the following steps:

Minimum Share Capital

A minimum share capital of EUR 1,200 is required, twenty per cent (20%) of which must be paid up.

Preparation of Documents

Several documents are needed for the formation of a trading company in Malta. These documents include the Memorandum and Articles of Association, due diligence documents, and proof of the paid-up share capital.

Appointment of Director, Secretary, and Auditor

The company’s director and secretary should be appointed. A holding company in Malta should also select an auditor registered in Malta.

EORI Registration

If the trading company is involved in cross-border transactions, an EORI registration is needed.

Acquiring a Trading Licence

Foreign investors looking to establish a trading company in Malta must comply with legal requirements. It is necessary to identify the company structure under which the trading company will operate. Familiarisation with legal frameworks such as the Trading Licences Regulations and Trading Licences Act is also necessary. Certain trading activities such as wholesale and retail and manufacture and sale of food and beverages require trading licences. Forming trading companies for import and export also require other necessary permits.

Acquiring a trading licence requires the following documents:

  • A filled-up application form containing:
    • Company details
    • Applicant’s ID
    • VAT Registration Number of the company
  • Other special permits and conditions required by legislation
Are you thinking about setting up a trading company in Malta? Are you feeling apprehensive or unclear about the process? We can help you.

Set Up your Malta Trading Company with Endevio

The Endevio assists clients with the entire trading company formation process in Malta. We provide additional services, including directorship, company secretary, fiduciary shareholding, registered office, payroll, accounting, tax and VAT services. Our team of experts can guide you through the process and answer any questions.  

Contact us to get started.