Dormant Malta Limited: Overview and Costs

It is not uncommon for clients of DW&P Dr. Werner & Partners to incorporate a Malta Limited but refrain from using it immediately. There can be several reasons for this. Perhaps operations in the home country need to be wound down first, or projects need to be planned and agreed upon with potential partners before they are routed through the Malta entity. Nevertheless, there are objective reasons that speak in favour of early incorporation, even if the company is not required immediately.

Credibility and Market Presence

Existing companies offer a greater degree of security and credibility. While we generally do not recommend or use "shelf companies," the external perception of a Malta Limited is often better if it has already been established on the market for some time.

If you are a service provider serving only one major client with little public visibility, this might be less relevant. However, for those with multiple clients or suppliers, the longevity of a Malta Limited can have a positive reputational effect.

Obligations and Substance Requirements

A dormant company generally has fewer obligations. Although a company in Malta is often established to benefit from the tax refund system, as long as business operations have not commenced, there is no turnover and consequently no tax liability to the Maltese tax authorities.

Furthermore, setting up a physical permanent establishment (substance) is not required until you actually start invoicing through the Malta Limited. I have discussed the high importance of substance in Malta in previous articles.

The Cost Factor

The most pressing question for entrepreneurs regarding this topic is, naturally, the cost. As mentioned, even a dormant company must fulfill certain bureaucratic and accounting duties. While the workload is significantly lower than for an active company, you should budget approximately EUR 1,200 for full-service maintenance.

As illustrated, these are not "sunk costs" but rather an investment that pays off in the long run and enhances your corporate standing.