Malta's tax system looks intimidating on paper, a 35% corporate rate is one of the higher headline figures in the EU, until you understand the refund mechanism sitting underneath it. Once you do, the effective rate for most trading companies drops to around 5%. Here's what it takes to start a business in Malta in 2026.
1. Which business structure fits you?
Before you register anything, it helps to know what you're actually choosing between.
- Sole trader. Operating as an individual with no separate legal entity. Simple, but rarely used by international founders since it doesn't access the refund system described below.
- Private Limited Liability Company (Ltd). The standard vehicle for over 95% of international founders setting up in Malta. Single-member companies have been allowed since 2003, with no nationality or residency requirement for shareholders.
2. Register your business
You register with the Malta Business Registry (MBR). The government registration fee starts at €245 for share capital up to €1,500, and minimum share capital for a private company is €1,164.69, with at least 20% paid up at incorporation. Every Ltd needs a mandatory company secretary, typically a Malta-resident individual or corporate entity, and a registered Malta office address. Professional formation fees on top of the government fee typically run €1,500 to €4,000, since most founders work through a licensed Corporate Service Provider to handle the Memorandum and Articles of Association, due diligence documents, and bank liaison.
3. Register for tax and VAT
Once incorporated, you register the company with the Commissioner for Revenue for corporate income tax, and separately for VAT if you'll be trading. If you plan to hire, you'll also register as an employer with Jobsplus to get a PE (Employer) number.
4. Check licenses and permits
Malta doesn't issue a single national business license. What you need depends on your industry: financial services and gaming are separately regulated (by the MFSA and MGA respectively), and other regulated professions carry their own authorization requirements.
5. Understand Maltese taxes
Malta's standard corporate income tax rate is 35%, applied at the company level. Here's the part that actually matters: under Malta's full imputation system, when the company distributes a dividend, shareholders can claim a refund of 6/7ths of the tax the company already paid. In practice, this brings the effective tax rate on trading income down to roughly 5%, a mechanism that's fully compliant with EU law and has been in place for years, not a loophole.
VAT is 18% standard, with reduced rates of 7% and 5% for specific goods and services, and some items zero-rated. VAT registration becomes mandatory above €35,000 in turnover for goods or €20,000 for services.
6. Stay compliant
Every Malta Ltd manages three main compliance pillars each year: the Annual Return filed with the MBR confirming company details, VAT returns on whatever schedule your registration requires, and an Annual Audit, mandatory regardless of company size. Managing the annual tax refund claim itself is also an ongoing task, since the 6/7ths refund isn't automatic; it has to be claimed by the shareholder after the dividend distribution.
Malta business costs at a glance
| Item | Cost |
|---|---|
| MBR registration fee (capital up to €1,500) | €245 |
| Professional formation fees | ~€1,500 to €4,000 |
| Minimum share capital, private Ltd | €1,164.69 (20% paid up) |
| Corporate tax, headline rate | 35% |
| Corporate tax, effective rate after 6/7ths refund | ~5% |
| VAT, standard rate | 18% |
| VAT registration threshold | €20,000 services / €35,000 goods |
Frequently asked questions
What's the effective corporate tax rate in Malta?
The headline rate is 35%, but Malta's 6/7ths shareholder refund system brings the effective rate on trading income down to roughly 5% once dividends are distributed.
How much capital do I need to start a company in Malta?
Minimum share capital is €1,164.69, with at least 20% paid up at incorporation.
How much does it cost to register a company in Malta?
The government registration fee starts at €245, but most founders pay €1,500 to €4,000 all-in once professional formation and Corporate Service Provider fees are included.
Is an audit mandatory for a Malta company?
Yes. Every Malta Ltd needs an Annual Audit regardless of company size.
Is the Malta 6/7ths tax refund automatic?
No. It has to be actively claimed by the shareholder after each dividend distribution, not applied automatically.
Fees and rates above come from the Malta Business Registry and the Commissioner for Revenue as of 2026, and they do change over time, so double check before you file. None of this is legal or tax advice. Talk to a Malta-qualified accountant or lawyer about your specific situation.