Are you considering setting up your business in Malta? Great decision! Malta offers unbeatable advantages for international entrepreneurs, from low effective tax rates to a Mediterranean lifestyle and highly skilled, multilingual workforce. However, the key to a successful start lies in choosing the right partner: a licensed Company Service Provider (CSP).
What is a CSP in Malta?
CSPs are entities or individuals that offer a wide range of corporate services. These services are provided professionally and systematically, targeting both local and international clients. CSPs play a crucial role throughout a company’s lifecycle, from incorporation to ongoing management and compliance with regulatory requirements.
Regulation and standards for CSPs in Malta
CSPs in Malta are regulated by the Malta Financial Services Authority (MFSA), a financial and corporate regulatory body that ensures CSPs maintain high standards in practice and compliance. CSPs must meet MFSA standards, obtain the necessary licenses, and adhere to Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) regulations.
New obligations and regulations
With the enactment of the Malta Company Service Providers (Amendment) Act 2020 on March 16, 2021, and the new framework for CSPs, all CSPs in Malta must now comply with stricter regulations. This includes adhering to new risk management rules, appointing key personnel such as a compliance officer and an anti-money laundering officer, and maintaining a risk register. A licensed CSP ensures all these requirements are met, protecting your business from hefty fines and penalties.
Avoiding Fines and Penalties
The new regulations also include an increase in maximum administrative fines from €25,000 to €50,000. This means businesses that fail to comply with the new rules can face significant financial penalties. A licensed CSP ensures your business meets all new legal requirements, avoiding fines.
Risk-based monitoring
The MFSA has introduced a risk-based supervision system, where CSPs are monitored based on their risk profile. A licensed CSP ensures your business maintains a low-risk profile by taking all necessary risk mitigation measures. This protects your business from more intensive and frequent oversight by the authorities.
Beware of Unlicensed Providers in Malta
Unfortunately, many companies in Malta do not have a CSP license. These companies are not required to conduct compliance checks and do not offer legal advice or support. This can lead to significant legal and financial risks for your business. Therefore, make sure to engage with a licensed CSP to ensure you receive the necessary support and advice.
Risks of Not Using a Licensed CSP in Malta
Legal Compliance
Without the support of a licensed CSP, you risk serious legal issues. . Ignorance of local laws and regulations can lead to legal pitfalls that could be costly for your business. Avoid fines and penalties by ensuring all legal obligations are met.
High Tax Back Payments and Legal Consequences
One of the biggest risks of using unlicensed providers or incorrect advice is the danger of high tax back payments. These firms often do not provide correct advice and establish companies in Malta without real economic substance. This can lead to your home country’s tax authorities not recognizing your Maltese company, resulting in significant back taxes and even criminal consequences, including imprisonment. A licensed CSP ensures your company formation meets legal and tax requirements, protecting you from these severe consequences.
Time and Cost Wastage
Using unlicensed providers or managing your corporate affairs independently can lead to significant time and cost wastage. Without the expertise of a CSP, you spend unnecessary time on administrative tasks that could be better invested in growing your business. Additionally, hidden costs and inefficient processes can drive up your expenses.
Lack of Professional Management
Without the support of an experienced CSP, you lack the professional management essential for effective corporate governance. This can lead to organizational chaos, missed deadlines, and ultimately a loss of business efficiency. This can lead to organizational chaos, missed deadlines and ultimately a loss of business efficiency. Do not rely on random help; opt for professional support to focus on your core activities.
Risks of Non-Compliance with AML and CTF Regulations
Compliance with AML and CTF regulations is crucial for any business. Without a licensed CSP, you might unknowingly violate these regulations, leading to severe legal consequences and loss of business reputation. A CSP ensures your business takes all necessary measures to minimize these risks.
How to Verify if a Company is a Licensed CSP in Malta
Before entrusting your company formation in Malta to a provider, ensure they are truly licensed. The simplest way to verify this is through the official register of the MFSA Financial Services Register (MFSA): https://www.mfsa.mt/financial-services-register/ Go to the MFSA Financial Services Register and enter the company name. If the results show “Authorization Class A or B or C CSP,” you can be assured that the company is licensed and trustworthy. Trust only a genuine CSP for maximum security and professional support from the start!
Different License Types for CSPs in Malta
In Malta, Company Service Providers (CSPs) are licensed according to a classification system that defines their specific services. There are three main categories:
- Class A CSPs are authorized to incorporate companies or other legal entities and offer registered offices, business addresses, or administrative addresses and related services.
- Class B CSPs may act as directors, company secretaries, partners in partnerships, or similar positions in other legal entities or arrange such positions for third parties.
- Class C CSPs are authorized to offer all services of Classes A and B.
During the application process for approval, an applicant is classified by the MFSA into one of the three classes (Class A, Class B, or Class C). This classification ensures that CSPs meet the corresponding legal requirements based on their service offerings. A licensed Class C CSP like Dr. Werner & Partners (DW&P) offers comprehensive services from company formation to management and administrative tasks, ensuring your business success in Malta.
Our Services as a CSP in Malta
To avoid all these risks and ensure your business is successfully established and operated in Malta, we at Dr. Werner & Partners (DW&P), as a licensed CSP, offer a comprehensive range of services. Our decades of experience, commitment to legal security, and personal support guarantee you a professional and worry-free company formation and management. Here are some of the key services we offer:
Company Formation Malta
- Company Registration: Assistance with registration and incorporation to ensure compliance with local legal requirements.
- Document Preparation: Creation and submission of necessary documents, such as the memorandum and articles of association.
- Name Approval: Process of selecting and approving a unique company name with the relevant authority.
Director and Secretariat Services
- Provision of Directors: Provision of professional local directors to ensure the company meets relevant requirements.
- Company Secretariat: Provision of secretarial services, including maintaining statutory registers, filing annual returns, and complying with corporate governance standards.
Provision of a Registered Office
- Physical Address: Provision of a local registered office address required by law, where official documents and notices can be sent.
- Business Address: Provision of business addresses for daily operations and correspondence.
You can find out more about our services here: https://www.drwerner.com/en/services/
Conclusion: Trust a Licensed CSP – Your Future in Safe Hands
The decision to establish a business in Malta is a smart move, but it needs to be well thought out. Without the support of a licensed CSP, you expose yourself to significant risks: legal issues, high tax back payments, inefficient management, and loss of business opportunities are just some of the possible consequences.
Unlicensed providers can jeopardize your business future. You risk not only fines and criminal consequences but also the credibility and growth of your business. Ensure your company is on solid ground and avoid these potential disasters.
At Dr. Werner & Partners (DW&P), we are more than just a service provider – we are your partners for success. Our licensed experts offer you tailored solutions to meet your specific needs. With our decades of experience, legal security, and personal service, we guarantee you a professional and worry-free company formation and management.