As already mentioned, 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.
A remote payroll system is where a foreign company, i.e. a non-resident company, payrolls a resident employee in Malta. Under Maltese Law, companies registered in other countries are allowed to obtain a license to do business and have employees in the country.
In some cases, a company will register their business in Malta under one of the forms available: Limited liability company, Partnership en nom collectif; and Partnership en commandite; but prefer to have another company administering its payroll. This can be accomplished through a payroll provider.
It is important to note that the company, as the Employer of Record, is still fully responsible for compliance with employment, immigration, tax and payroll regulations. But the payroll calculations, payments and filings can all be outsourced to the payroll provider.
Larger companies with a commitment to Malta may wish to run their own local payroll for all employees, foreign and local. In order to accomplish this, they will have to complete incorporation, register the business and then hire the necessary staff. There will be a need for in country human resources personnel who have the background needed to manage a Maltese payroll, and can fulfil all tax, withholding, and payroll requirements.
This approach carries significant cost and requires some knowledge of local employment and payroll regulations. The company will need a local accounting firm and potentially legal counsel to ensure full compliance with Maltese employment laws.
Companies can outsource the employment and payroll of their staff in Malta to a GEO, like Shield GEO. This is possible for both foreign workers and Maltese nationals. This is the easiest, fastest and safest way to payroll staff in Malta.
Shield GEO manages all aspects of payroll for workers in Malta, including taxes, withholding, social security payments and other statutory requirements. Shield GEO becomes the Employer of Record and employs the staff on behalf of the client.
Staff are paid monthly with tax and social security deducted at source and paid to local authorities. Shield GEO will invoice the client monthly in advance of the payroll date. The invoice consists of the Total Cost of Employment (Base salary + Employers Statutory Contributions + Additional statutory contributions) and a Management Fee. Shield GEO provides the employees with payslips.
Read more about outsourced payroll and employment through Shield GEO.
|Corporate Income Tax ?||
35% on taxable profits
|Income Tax Rate ?||
|Sales Tax ?||
|Withholding Tax ?||
Royalties and other payments 35%
|Employee Social Security (EE SS)||
10% calculated on gross salary (withheld)
|Employer Social Security (ER SS)||
10% calculated on gross salary