is a form of business preferred by foreign entrepreneurs who want to enter the market in order to provide goods and services in Malta. A Maltese branch
is not considered a legal entity, but it must register with the Maltese Registrar of Companies
. The registration must be performed in a month, at most, after it is incorporated.
The responsibilities for its actions are taken by the foreign company and the capital and assets are provided by it. No minimum capital is required upon registration.
The branches established in Malta usually pay the same income tax as the local companies, however, in most cases, tax facilities are granted.
The advantages of a branch in Malta
The advantages of owning a branch in Malta are numerous:
- financial: lower incorporation costs compared to the subsidiary, no withholding taxes on dividends or interest and royalties as well as the exemption from income payment if the foreign company's country has signed a double tax treaty with Malta
, no minimum share capital requirements, the possibility to refund the taxes.
- higher control for the parent company: many actions of the branch must receive approval from the parent company, so a higher control is possible.
Various articles of the Companies Act
provide all the necessary regulations that a branch must follow in order to be registered with the Registrar of Companies and start its business activities.
The documents and information about the parent company that must be deposited are:
- the authentic copies of the formation deeds, articles or memorandum of association,
- the form of company,
- the name and address of the registrar where the company is registered,
- a list of the persons in charge with the administration of the foreign company.
Mandatory information about the branch includes:
- the name of the branch and its address,
- the activities which will be performed by the branch,
- the name and addresses of the branch’s representatives
a natural person, Maltese resident
Requirements for Maltese branches
The foreign company must register also the balance sheet of the company, a profit and loss account and the audited statements. Any changes that occur in the foreign company’s articles of association or memorandum, as well as changes regarding the officers of the company or the branch’s authorized representative must be submitted to the Registry.
must perform the same activities as the parent company on the Maltese territory. This company will also need to observe the Maltese rules for submitting the annual financial statements as well as the taxation principles
in the country.
Should the parent company wish to end all its activities in Malta, the branch can be dissolved as any other company in the country. The decision to close the branch must be submitted to the Registrar one month before it commences.
There are many sectors in which the branches opened in Malta may activate: having shares in non-resident companies, keeping and leasing goods, banking, insurance, investments, trading activities with residents or non-residents. Many of the above activities are forbidden in other countries or require special licenses.
Foreign companies that want to have a high degree of independence from their Maltese counterpart cab choose to open a subsidiary
– a legal entity that acts separately from the parent company and can perform other business activities.