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Employing in Malta

At a glance

Employment in Malta

The most notable of Maltese legislative sources include the Constitution of Malta, the Employment and Industrial Relations Act (EIRA), the Employment Commission Act, the Employment and Training Services Act and EU Regulations and Directives which apply in virtue of the doctrine of direct effect

Regulations made under the EIRA include Wage Regulation Orders which represent administrative regulations which regulate certain conditions of employment for specific sectors. At present, there are 31 different WROs in force.

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Payroll & Tax in Malta

In 2015, Malta made starting business easier by creating an electronic link between the Registrar of Companies and the Inland Revenue Department to facilitate issuance of a tax identification number.

Incentives fall under the following headings: Investment Aid, R&D and Innovation (effected through investment tax credits), Access to Finance, SME Development, Employment and Training, and Enterprise Support.

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Immigration / Work Permits in Malta

Foreign workers are required to have the proper visas and work permits in Malta, as established by immigration laws.  Work permits must be secured for employees, and sponsored by a locally licensed and incorporated entity, which can be a problem for companies just entering the Maltese market.

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Incorporation

Malta’s Companies Act is mainly disciplined by English Law and EU directives, and describes the type of Maltese corporate entities that may be established in the country. There are three main types of business available in Malta and the most important are:

  • Limited liability company;
  • Partnership en nom collectif; and
  • Partnership en commandite.
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GEO Solutions or DIY Employment in Malta?

Companies entering Malta must make a decision whether to use their own resources for a Do-It-Yourself (DIY) approach, or to use a Global Employment Organization to handle payroll and employment responsibilities.  A GEO or Malta Employer of Record solution makes it faster, easier and cheaper to deploy staff if they don’t have a Maltese entity established that can run payroll.

A DIY approach will typically take 6-9 months until there is a properly incorporated WFOE ready to run payroll and cost up to 6 figures if registered capital is required. Shield GEO can deploy foreign staff in 4-6 weeks and local staff in 48 hours. Additionally, Shield GEO is responsible for all compliance issues related to the employment.

Using Shield GEO Employer of Record Services in Malta

Payroll Malta
Management Fee for Employer of Record Services / Monthly Payroll Costs

Please contact us for a quote

Notes

Shield GEO pays the employee on a monthly basis, typically on the last working day of the month although we can adapt to your preferred schedule. Income tax and social security (where applicable) are deducted at source and paid to the local tax authorities.

 
Grossed income Tax Rate (%)
8,500 0
8,501 - 14,500 15
14,501 - 60,000 25
60,001 and over 35%

Income Tax rates
Income Tax rates depend on income level and family situation. Take into account any tax allowances and deductions that employees are entitled to for certain types of expenditure.
The employer deducts income tax and social-security contributions from employees’ wages, daily allowances or other remuneration.

The following individuals do not have to file a tax return: Maltese residents whose total annual income consists solely of income from which tax was deducted at source and individuals who are not taxable.
These two categories of people will receive a tax statement, which can be challenged within 30 days of receipt. All other people must file a return by 30 June.

Tax Returns Supplied

Yes

Employers Social Security and statutory contributions

10% calculated on gross salary

Employees Social Security and statutory contributions

10% calculated on gross salary (withheld)

Corporate Income Tax Rate

35% on taxable profits

Sales Tax

VAT: 18%

Withholding Tax

Interests 35%;

Royalties and other payments 35%

Other Tax

Capital Gain Tax: 7% (provisional tax) or 12% (final tax), calculated on sales price

Work Permits
Business Visas
Others
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