Glossary

Glossary of Malta Company Formation Terms

A

Annual Return
A statutory filing submitted to the Malta Business Registry each year, confirming the company’s registered details: directors, shareholders, registered office, and share capital. Due within 42 days of the company’s anniversary date. Failure to file triggers penalties and can result in strike-off.

Articles of Association
The internal regulations governing how a Maltese company is managed. Drafted alongside the Memorandum of Association and submitted to the MBR at incorporation. Can be customised within the limits of the Companies Act, Cap. 386. Together, these two documents form the company’s constitutional document.

Authorised Share Capital
The maximum amount of share capital a company is permitted to issue under its Memorandum of Association. In Malta, the legal minimum for a private limited company is €1,164.69. Only 20% must be paid up at incorporation. The authorised amount determines the MBR registration fee.

AML (Anti-Money Laundering)
The regulatory framework requiring companies and service providers to identify, assess, and prevent money laundering activity. In Malta, AML obligations derive from EU directives and are enforced by the MFSA and the Financial Intelligence Analysis Unit (FIAU). KYC document collection is the primary AML mechanism at company formation stage.

B

BAROS Platform
The Malta Business Registry’s official digital filing system for electronic company registration. Electronic submissions via BAROS are processed within 24 to 72 hours and attract a lower government fee than paper filings. BAROS enables fully remote company registration without physical presence in Malta.

Beneficial Owner
Any individual who ultimately owns or controls a company, directly or indirectly. In Malta, any person holding more than 25% of shares or voting rights must be declared as a UBO (Ultimate Beneficial Owner) and registered with the MBR. Disclosure is mandatory under EU anti-money laundering directives.

Board of Directors
The governing body of a Maltese company, responsible for management decisions, statutory compliance, and overall corporate governance. A private limited company requires at least one director. No residency or nationality requirement applies, though holding structures seeking tax efficiency under post-BEPS rules may benefit from appointing resident directors.

Branch (Overseas Company)
A legal presence in Malta established by a foreign company without creating a separate legal entity. The branch remains legally and financially dependent on the parent company, which bears full liability for all branch obligations. Must register with the MBR and file the parent company’s audited accounts annually.

C

Cap. 386
The Companies Act, Chapter 386 of the Laws of Malta. The primary legislation governing the formation, operation, and dissolution of all companies registered with the Malta Business Registry. Based on English company law principles, adapted for EU regulatory requirements. All Maltese companies are incorporated under Cap. 386.

Certificate of Incorporation
The official document issued by the Malta Business Registry confirming that a company has been legally incorporated. Issued within 3 to 7 business days of a complete electronic filing. This document is the legal birth of the Maltese company and is required for bank account opening, VAT registration, and regulatory licence applications.

Commissioner for Revenue
The Maltese tax authority, officially the Office of the Commissioner for Revenue, formerly known as the Inland Revenue Department. Responsible for corporate tax assessment, collection, and processing of shareholder tax refund claims. Refund claims are submitted to this authority following dividend distribution by a Maltese company.

Company Secretary
A mandatory appointment for every Maltese company under Cap. 386. Responsible for maintaining statutory registers, filing annual returns, managing board minutes, and ensuring the company meets its regulatory obligations with the MBR. The company secretary must be a qualified individual or corporate entity. Cannot be the same person as the sole director.

Companies Act
See Cap. 386.

D

Director
The individual or corporate entity responsible for managing a Maltese company. A private limited company requires at least one director. No nationality or residency restriction applies under Maltese law. Directors are appointed in the Memorandum of Association and their details are filed with the MBR. For holding structures, appointing resident directors may support substance requirements.

Double Taxation Agreement (DTA)
A bilateral treaty between Malta and another country that determines which jurisdiction has the right to tax specific types of income. Malta has concluded over 80 DTAs, covering the UK, Germany, France, the UAE, Singapore, and China, among others. DTAs are relevant for dividend flows, interest, royalties, and capital gains between jurisdictions.

Due Diligence
The identification and verification process required of all directors, shareholders, and beneficial owners before a Maltese company can be incorporated. Includes certified passport copies, proof of address, source of funds documentation, professional references, and UBO questionnaires. Mandatory under Maltese AML law and enforced by MFSA-licensed service providers.

E

Effective Tax Rate
The actual percentage of corporate profit paid in tax after all available reliefs and refunds are applied. In Malta, a company pays 35% corporation tax on its profits. Non-resident shareholders can claim a 6/7ths refund on tax paid on trading income, reducing the effective rate to approximately 5%. This is a refund mechanism, not a flat rate.

EMI (Electronic Money Institution)
A regulated financial institution authorised to issue electronic money and provide payment services. EMI providers such as Revolut Business, Wise Business, and Verifo offer remote account opening with EU IBAN access, often within days of a company’s Certificate of Incorporation. Commonly used by founders as a faster alternative to traditional Maltese bank accounts while a full bank application progresses.

EU Parent-Subsidiary Directive
An EU directive eliminating withholding tax on dividend payments between parent and subsidiary companies within the EU, provided minimum shareholding thresholds are met. Maltese companies benefit from this directive as full EU members, making Malta an efficient holding jurisdiction for European group structures.

European Company (SE — Societas Europaea)
A supranational corporate form created under EU Regulation 2157/2001. Allows a company to operate across multiple EU member states under a single legal framework and transfer its registered office to any EU member state without dissolution or re-incorporation. Requires a minimum share capital of €120,000 and at least two shareholders.

Exempt Company
A specific category of private company under Maltese law that qualifies for reduced regulatory obligations, including exemption from the statutory audit requirement, subject to meeting size and ownership criteria under Cap. 386. Not to be confused with tax-exempt status.

F

FIA (Foreign Income Account)
One of the five tax accounts through which Maltese corporate profits are routed. The Foreign Income Account holds foreign-source income, which is eligible for the 6/7ths or 5/7ths shareholder refund depending on whether double taxation relief has been claimed. For international holding and IP structures, FIA classification is the critical factor determining refund eligibility.

FIAU (Financial Intelligence Analysis Unit)
Malta’s national authority responsible for receiving, analysing, and disseminating financial intelligence to combat money laundering and terrorist financing. FIAU guidance informs the AML obligations of MFSA-licensed service providers, including those delivering company formation services.

FITWI (Final Income Tax Without Imputation)
An alternative corporate tax regime introduced in Malta in 2025. Companies electing FITWI pay a flat 15% corporate tax with no subsequent shareholder refund mechanism. Mutually exclusive with the standard 35% plus refund system. Relevant for founders who prefer predictable tax costs over the refund cycle. Regime selection requires qualified tax advice.

Form BO1
The official MBR form used to declare the Ultimate Beneficial Owners of a newly incorporated Maltese company. Mandatory at incorporation. Records details of any individual holding more than 25% of shares or voting rights, directly or indirectly.

Form K1
The official MBR consent form signed by each director at incorporation, confirming acceptance of the directorship role. Submitted as part of the incorporation package alongside the Memorandum and Articles of Association.

Foundation (Private)
A legal structure governed by the Second Schedule to the Civil Code and the Foundations Act (Cap. 518), used for asset protection, estate planning, and charitable purposes. A private foundation in Malta has a separate legal personality, is not owned by shareholders, and is administered by administrators appointed by the founder. Distinct from a company and a trust.

Full Imputation System
The mechanism underpinning Malta’s corporate tax framework. Tax paid by the company is imputed to shareholders when dividends are distributed, entitling non-resident shareholders to claim a refund of part or all of the tax paid at company level. The fraction of the refund depends on the type of income and the tax account from which distributions are made.

G

General Partnership (En Nom Collectif)
A partnership structure under Maltese law in which all partners bear unlimited joint and several liability for the partnership’s debts and obligations. Holds its own legal personality distinct from its partners. Requires a minimum of two partners, who may be individuals or corporate entities. Governed by Cap. 386.

Governance
The system of rules, practices, and processes by which a Maltese company is directed and controlled. Includes board composition, director responsibilities, shareholder rights, and compliance with Cap. 386 and MFSA requirements. For holdings and regulated entities, governance quality directly affects substance assessments and licence renewals.

H

Holding Company
A company whose primary purpose is to own shares in other companies rather than to trade directly. In Malta, holding structures can benefit from the participation exemption on dividends and capital gains received from qualifying subsidiaries, and from Malta’s network of over 80 double taxation agreements. Post-BEPS substance requirements apply.

I

Incorporation
The legal process of forming a company under Maltese law. Involves preparing and submitting the Memorandum and Articles of Association, KYC documentation, and payment of share capital to the Malta Business Registry. Upon approval, the MBR issues a Certificate of Incorporation. Standard private limited companies are incorporated within 3 to 7 business days via the BAROS platform.

Interest and Royalties Directive
An EU directive eliminating withholding tax on interest and royalty payments between associated companies in different EU member states. Applicable to Maltese companies, making Malta an efficient jurisdiction for IP holding structures and intra-group financing arrangements.

Issued Share Capital
The portion of authorised share capital that has been formally allocated to shareholders. At incorporation, at least 20% of the minimum authorised share capital must be issued and paid up. Distinct from authorised share capital, which represents the maximum that can be issued.

K

KYC (Know Your Customer)
The identity verification process applied to all directors, shareholders, and beneficial owners as part of Maltese AML obligations. Standard KYC documentation includes a certified passport copy, proof of residential address (issued within three months), a bank or professional reference letter, and source of funds documentation. Collected before incorporation can begin.

L

Limited Liability
The legal principle under which the personal liability of shareholders is capped at the amount they have invested in the company. Shareholders of a Maltese private limited company are not personally liable for the company’s debts beyond their share capital contribution. This is the primary reason over 95% of new Malta formations use the private limited company structure.

Limited Partnership (En Commandite)
A partnership structure consisting of at least one general partner with unlimited liability and at least one limited partner whose liability is capped at their capital contribution. Commonly used for investment funds, private equity structures, and family office vehicles. Partners are taxed individually in their home jurisdictions on their share of partnership income.

Ltd (Private Limited Company)
The standard corporate vehicle for Malta company formation. Governed by Cap. 386, functionally equivalent to a UK Ltd or a French SARL. Offers limited liability, a single shareholder minimum, no residency requirement for directors, and access to Malta’s full imputation tax system and 6/7ths shareholder refund. Accounts for over 95% of new Malta incorporations.

M

Malta Business Registry (MBR)
The official authority responsible for the registration and administration of all companies incorporated in Malta. Formerly known as the Maltese Registry of Companies. Processes incorporation filings, annual returns, and corporate change notifications. Electronic filings are submitted via the BAROS platform and processed within 24 to 72 hours.

Malta Financial Services Authority (MFSA)
The single regulator for all financial services activities in Malta, established under Chapter 330 of the Laws of Malta. Responsible for licensing company service providers, banks, investment firms, insurance companies, iGaming operators (jointly with the MGA), and crypto-asset service providers. Any entity delivering regulated formation or fiduciary services in Malta must hold an MFSA licence. Equitrust Group holds an active MFSA licence.

Malta Startup Residence Programme
A dedicated pathway allowing non-EU founders to obtain Maltese residency on the basis of establishing and operating a startup in Malta. Relevant for non-EU entrepreneurs seeking a legal basis to reside in Malta while operating their company, without the need for standard employment or investment-based residency routes.

MBR
See Malta Business Registry.

Memorandum of Association
The founding document of a Maltese company, submitted to the MBR at incorporation. Sets out the company name, registered office address, objects, share capital structure, details of initial shareholders and directors, and the company secretary. Together with the Articles of Association, it constitutes the company’s constitution under Cap. 386.

MGA (Malta Gaming Authority)
The regulatory body responsible for licensing and supervising gaming activities in Malta, including online gaming, sports betting, and casino operations. An MGA licence is required for any company operating iGaming activities in or from Malta. The MGA licence application is a separate process from company formation and runs in addition to MBR registration.

MFSA
See Malta Financial Services Authority.

MiCA (Markets in Crypto-Assets Regulation)
The EU regulatory framework governing the issuance and provision of services related to crypto-assets, applicable across all EU member states including Malta. Maltese companies providing crypto-asset services must obtain authorisation under MiCA, supported by a VFA Agent licensed by the MFSA. MiCA compliance is separate from company formation.

MTA (Maltese Taxed Account)
One of the five tax accounts in Malta’s corporate tax system. The Maltese Taxed Account holds locally sourced trading income that has been subject to Maltese corporate tax. Distributions from the MTA entitle non-resident shareholders to claim the 6/7ths refund, reducing the effective tax rate on trading income to approximately 5%.

O

Office of the Commissioner for Revenue
The Maltese tax authority responsible for corporate tax assessment, income tax, VAT, and the processing of shareholder refund claims. Formerly known as the Inland Revenue Department. Shareholders submit their 6/7ths or 5/7ths refund claims to this office following dividend distribution. Refunds must legally be processed within 14 days of a valid claim, though in practice expect 2 to 4 months.

P

Participation Exemption
A tax relief available to Maltese holding companies on dividends and capital gains received from qualifying subsidiary holdings. Where the participation exemption applies, distributions from subsidiaries may be exempt from Maltese corporate tax entirely, and shareholders may be entitled to a full refund of any tax paid. Qualifying conditions relate to the size and nature of the holding.

PE Number (Provisional Earnings Number)
A reference number issued by the Office of the Commissioner for Revenue to a newly registered Maltese company, required for payroll and employer tax compliance. Applied for alongside or shortly after the Tax Identification Number following incorporation.

PLC (Public Limited Company)
A Maltese company structure that allows shares to be offered to the public and listed on the Malta Stock Exchange. Subject to stricter governance requirements than a private limited company, including mandatory detailed financial reporting, a minimum of two directors, and a minimum authorised share capital of €46,587.47 with 25% paid up at incorporation. Used by larger enterprises seeking public investment or exchange listing.

R

Registered Office
A mandatory legal requirement for every Maltese company. The address in Malta to which all official communications, legal notices, and regulatory correspondence are directed. Must be a physical Maltese address registered with the MBR. Equitrust Group provides registered office services as part of its company administration offering.

Redomiciliation
The transfer of a foreign company’s registered office to Malta without dissolution, liquidation, or interruption of operations. Existing contracts, banking relationships, ownership structure, and legal history carry over intact. Timeline: 4 to 8 weeks, depending on deregistration speed in the outgoing jurisdiction. Governed by Cap. 386.

Refund Mechanism
See Full Imputation System and 6/7ths Refund.

S

SE (Societas Europaea)
See European Company.

Share Capital
The total value of shares issued by a Maltese company to its shareholders at or after incorporation. The legal minimum authorised share capital for a Maltese private limited company is €1,164.69, of which only 20% (approximately €232.94) must be paid up at incorporation. Share capital can be denominated in EUR, USD, GBP, or CHF.

Shareholder
An individual or entity that holds shares in a Maltese company. A private limited company requires at least one shareholder. There is no restriction on the nationality or residency of shareholders. Non-resident shareholders are the primary beneficiaries of Malta’s 6/7ths tax refund mechanism following dividend distributions.

6/7ths Refund
The standard shareholder refund available on dividends distributed from a Maltese company’s trading income. After the company pays 35% corporation tax, non-resident shareholders are entitled to reclaim 6/7ths of the tax paid at company level, reducing the effective tax burden to approximately 5%. Applies to income held in the Maltese Taxed Account (MTA) or Foreign Income Account (FIA). The 5/7ths refund applies to passive income such as interest and royalties.

Substance Requirements
The demonstrable operational presence a company must maintain in Malta to support its tax residency claims and treaty access, particularly under post-BEPS international standards. For holding and IP structures, substance typically involves local director appointments, board meetings held in Malta, proper accounting records maintained locally, and proportionate local expenditure. The level of substance required varies by structure and activity.

T

Tax Identification Number (TIN)
A reference number issued by the Office of the Commissioner for Revenue to a newly incorporated Maltese company, required for all tax filings including corporate income tax returns and VAT. Applied for after the Certificate of Incorporation is issued. Processing typically takes 3 to 7 business days.

Tax Return
The annual corporate tax filing submitted by a Maltese company to the Office of the Commissioner for Revenue, reporting taxable profits and calculating the corporation tax due at 35%. Filed after the company’s financial year-end. The tax return is also the trigger document for initiating the shareholder refund cycle following dividend distribution.

Trust
A legal arrangement governed by the Trusts and Trustees Act, Cap. 331, under which a trustee holds and manages assets on behalf of one or more beneficiaries. Used in Malta for asset protection, estate planning, family wealth structuring, and multi-generational transfers. Requires a trustee licensed by the MFSA. Distinct from a company and a foundation.

Trustee
An MFSA-licensed individual or entity that holds and administers trust assets on behalf of the beneficiaries, in accordance with the terms of the trust deed and the Trusts and Trustees Act, Cap. 331. Equitrust Group acts as licensed trustee for Malta trusts and private foundations.

U

UBO (Ultimate Beneficial Owner)
Any individual who ultimately owns or controls more than 25% of the shares or voting rights of a Maltese company, directly or indirectly. UBO information must be declared on Form BO1 at incorporation and maintained in the MBR’s Beneficial Ownership Register. Mandatory under EU AML directives. Failure to disclose carries significant penalties.

UBO Questionnaire
A due diligence document completed by all beneficial owners at company formation stage, providing details of identity, source of funds, business background, and the nature of the proposed corporate activity. Required by MFSA-licensed service providers as part of the AML compliance process. Collected by Equitrust Group before incorporation begins.

V

VAT (Value Added Tax)
Malta’s standard VAT rate is 18%, one of the lower standard rates in the EU. Companies supplying taxable goods or services in Malta, or making intra-EU B2B supplies, must register for VAT with the Office of the Commissioner for Revenue. VAT registration is applied for after incorporation and typically takes 3 to 7 business days. VAT returns are filed quarterly or monthly depending on turnover.

VFA Agent
A Malta-licensed intermediary required by law to accompany any application for a Virtual Financial Assets licence under Maltese VFA legislation and the EU MiCA framework. All companies seeking to provide crypto-asset services in or from Malta must engage a licensed VFA Agent as part of their regulatory application. This is a separate process from company formation.

W

Withholding Tax
A tax deducted at source on payments such as dividends, interest, or royalties made from one entity to another. Malta does not levy withholding tax on dividends, interest, or royalties paid to non-resident shareholders or entities. This exemption applies regardless of whether a double taxation agreement is in place, making Malta particularly efficient for cross-border income flows.