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.
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.
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.
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:
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.
|Management Fee for Employer of Record Services / Monthly Payroll Costs||
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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.
|Tax Returns Supplied||
|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
Royalties and other payments 35%
Capital Gain Tax: 7% (provisional tax) or 12% (final tax), calculated on sales price