Start a Business in Malta: Why Malta Is the Ideal Destination for Entrepreneurs

Malta, the Mediterranean gem known for its thriving economy, strategic EU location, and business-friendly environment, has become one of Europe’s most attractive destinations for entrepreneurs and investors alike. Whether you’re a European digital nomad, an expat exploring new markets, or an established company looking to expand, learning how to start a business in Malta could be one of your smartest financial moves.

In this comprehensive guide, we’ll walk you through everything you need to know, from legal requirements and tax advantages to startup support and incentives offered by Malta Enterprise.

Key Benefits of Starting a Business in Malta

Malta offers a combination of a vibrant economy and a tranquil political atmosphere, a labor force that speaks English and complete access to the European Single Market. These are the determining factors that transform the island into an ideal location both for business formation and business growth.

• Strategic EU Location: Located at the crossroads of Europe, North Africa, and the Middle East, Malta is the gateway to the major international markets.
• Attractive Tax System: Through corporate tax refunds, the effective tax rate can be reduced to as low as 5%, thus making Malta one of the most competitive jurisdictions in the EU.
• Stable Financial & Legal Framework: All our operations are fully compliant with EU directives as well as international standards.
• Skilled Workforce: A highly educated and multilingual labor force who are not only proficient in English but also in Italian, Arabic, and French, most probably.
• Support for Startups: Malta Enterprise offers a range of support programs that provide funding opportunities, mentorship and certain tax incentives, helping to foster innovation and entrepreneurship across selected sectors.

Benefits of Starting a Business in Malta

Understanding the Business Environment in Malta

The economy of Malta is largely driven by the services sector, which has notably strong areas such as financial services, iGaming, fintech, blockchain, shipping, and tourism. The government has been concentrating on diversifying the economy through these different sectors over the past few years.

The island of Malta has been ranked as one of the easiest places to do business in the European Union due to:

• Efficient online company registration facilitated by the Malta Business Registry (MBR).
• Clear legal and financial regulations that are available to the public.
• Help from organizations like Malta Enterprise and Business First Malta.

Steps to Start a Business in Malta

Let’s explore the practical process of starting a business in Malta, from initial planning to registration and operation.

1. Choose the Right Business Structure

Your first step is to decide which legal entity best fits your goals. The most common types are:

• Private Limited Liability Company (Ltd): the most popular option for both locals and foreigners.
• Public Limited Company (Plc): suitable for larger operations planning to list on the Malta Stock Exchange.
• Sole Proprietorship: for small individual ventures.
• Partnerships (General or Limited): for joint ventures and shared ownership.

Tip: Most foreign investors prefer setting up a Limited Liability Company for its flexibility and liability protection.

2. Register Your Company with the Malta Business Registry

To legally start a business in Malta, you must register your company through the Malta Business Registry (MBR).

Requirements include:

• Company name approval.
• Memorandum and Articles of Association.
• Details of directors, shareholders, and company secretary.
• Registered office address in Malta.
• Minimum share capital (€1,165 for a private company).

The process can be completed online and, in straightforward cases, may be finalized within 2–3 business days.

3. Obtain a Tax Identification Number (TIN)

Every business must apply for a Tax Identification Number from the Commissioner for Revenue. If your annual turnover exceeds €35,000, you’ll also need to register for VAT.

VAT in Malta:

• Standard rate: 18%
• Reduced rates: 5% and 7% for specific sectors (e.g., tourism, health, culture)

4. Open a Business Bank Account

A corporate bank account in Malta is mandatory for managing your company’s finances. Local banks and international branches offer robust online banking services.

You’ll typically need:

• Certified company documents
• Business plan and proof of address
• ID of directors and shareholders

Practical process of starting a business in Malta

5. Apply for Necessary Licenses or Permits

Depending on your industry, you may need additional permits. For example:

• Financial services firms require MFSA authorization.
• iGaming companies must be licensed by the Malta Gaming Authority (MGA).
• Tourism or hospitality businesses may need permits from the Malta Tourism Authority.

6. Register for Employment and Social Security

If you plan to hire employees, register with JobsPlus and Social Security Department to comply with labor and insurance obligations.

Malta has strong worker protections but also offers flexible labor policies, making it business-friendly while ensuring fair conditions for employees.

Starting a Business in Malta as a Foreigner

One of the most appealing aspects of the Maltese business ecosystem is its openness to international investors. Starting a business in Malta as a foreigner is straightforward, thanks to clear legal frameworks and the country’s pro-business policies.

For EU/EEA/Swiss Citizens

You can freely live and work in Malta without restrictions. Company formation is identical to that for locals.

For Non-EU Citizens

You’ll need to obtain a residence permit or visa if you plan to stay long-term. However, you can still own and manage a Maltese company remotely, provided you meet compliance requirements.

Popular options include:

• The Global Residence Programme (GRP) provides a special tax status for high-net-worth individuals seeking residence in Malta, and is not directly connected to company formation or startup activity.
• The Malta Startup Residence Programme is ideal for founders and entrepreneurs seeking long-term relocation while running their startup in Malta.

Foreigners benefit from:

• 100% foreign ownership allowed.
• Repatriation of profits permitted.
• Access to Malta’s double taxation treaties (over 70 countries).

Starting a business in Malta as a foreigner is straightforward

Malta Enterprise Start-Up Incentives

The Malta Enterprise agency is one of the main pillars that support new ventures and innovation-driven companies. If you are a start-up in Malta or a company that wants to do some cross-border business, funding and other options for getting support are there for you to tap.

Key Malta Enterprise Start-Up Programs

1. Start-Up Finance Scheme

• Certain Malta Enterprise schemes may offer financial support in the form of grants or repayable assistance, depending on the project’s scope, development stage and eligibility criteria.
• Major focus areas are technology, energy, and the production of goods.

2. Business Start Scheme

• Gives seed money for creative ideas; it can cover up to 50% of the eligible costs of the project.

3. Start-Up Residency Programme

• A programme for non-EU business persons who want to move and manage a business in Malta.

4. R&D and Innovation Grants

• Financial support for companies investing in research, product development, and technology.

Eligible startups may reduce operational costs by leveraging the funding and resources available through Malta Enterprise.

Taxation and Financial Incentives

Malta offers a highly competitive tax regime, one of the main reasons entrepreneurs choose to start a business in Malta.

Corporate Tax System

• Standard rate: 35%
• Through Malta’s shareholder refund system, many companies may achieve an effective tax rate of around 5–10%, depending on the type of income and corporate structure involved.
• Malta may exempt dividends, interest and royalties paid to non-residents from withholding tax, provided the relevant statutory conditions are satisfied.

Other Advantages

• Access to 70+ double taxation treaties.
• No capital gains tax on transfers of shares in certain conditions.
• Tax credits for startups under the Malta Enterprise incentive programs.

Malta offers a highly competitive tax regime

The Growing Start-Up Scene in Malta

Malta’s startup ecosystem is gaining international recognition, particularly in sectors such as:

• Fintech and Blockchain: The world’s first jurisdiction to regulate DLT and virtual assets.
• iGaming and Esports: One of the EU’s largest online gaming hubs.
• Maritime and Logistics: Leveraging its port infrastructure for global trade.
• Digital Health and AI: Supported by government grants and university partnerships.

Coworking spaces and startup accelerators, like Business First Malta, Zeta, and Takeoff Incubator, provide mentorship and networking opportunities for startup businesses in Malta ventures.

=> Learn more: The Gaming & Casino License is available in Malta

Living and Working in Malta

Beyond its tax and business advantages, Malta offers an exceptional quality of life — sunny weather year-round, Mediterranean cuisine, and a safe, family-friendly environment.

Entrepreneurs appreciate:

• English-speaking population
• Reliable digital infrastructure
• Affordable housing and transport
• Active expat and business community

This combination of lifestyle and opportunity makes Malta a top choice for entrepreneurs worldwide.

Tips for a Successful Start-Up Business in Malta

1. Consult a Local Expert: Local corporate service providers should be your go-to for compliance and tax optimization purposes.
2. Leverage Malta Enterprise: Make your application for grants in time; the competition for getting funds is usually vigorous.
3. Build Local Networks: Become a member of a business community and a co-working space like The Hub or SOHO Malta.
4. Plan for Growth: Access EU markets easily and efficiently using Malta as your base.
5. Stay Compliant: Submit your annual returns and keep your Malta Business Registry status up to date.

Conclusion

The decision of where to go next with your new idea will definitely not be a problem if you opt for Malta; starting a business in Malta offers an attractive combination of opportunity, accessibility and economic stability. The small island nation is literally a green light for sustainable growth coming straight from the generous tax incentives and startup-friendly programs under Malta Enterprise.

Malta can be an excellent choice for many entrepreneurs, particularly those operating in service-based or innovation-driven sectors. However, if you are a foreign investor, Malta is your doorstep to the world. The country’s thriving business environment, cutting-edge logistics, skilled workforce and welcoming attitude to entrepreneurs and start-ups make it simple for you to convert your idea into a successful startup in Malta.

For investors and entrepreneurs seeking guidance on Malta offshore company formation, trusted service providers like Offshore Company Services can streamline the process, from company registration to compliance and banking solutions. With expert support, you can focus on growing your business while navigating Malta’s legal and regulatory framework efficiently.