When an international business considers expanding into Malta, one of the first questions is how best to establish a local presence.
While incorporating a Maltese company is often the first option that comes to mind, it is not the only one. Depending on the nature of the business and its objectives, registering a branch of an existing overseas company may be a simpler and more suitable alternative.
But what exactly is a branch? Why would a business choose this structure, and what does the registration process entail?
What Is an Overseas Company Branch?
A branch allows an overseas company to carry out business activities in Malta without having to establish an entirely new legal entity.
In simple terms, it is an extension of the foreign company rather than a separate Maltese company. The overseas parent remains the legal entity behind the branch and is ultimately responsible for its activities and liabilities.
This means that a branch does not have its own shareholders, share capital or a separate board of directors. Instead, it operates under the name and corporate structure of its overseas parent.
Why Choose a Branch?
For businesses looking to enter the Maltese market, a branch can offer a practical way of establishing a local presence without changing their existing corporate structure.
It allows the overseas company to carry out activities in Malta while retaining ownership and control within the parent company.
This structure may be particularly attractive to businesses that already operate internationally and wish to extend their activities into Malta without the need to incorporate and maintain an additional subsidiary.
How Do You Register a Branch in Malta?
An overseas company must register its branch with the Malta Business Registry (MBR) within one month of establishing a place of business in Malta.
The registration process involves several steps.
First, the company must determine the details of its Maltese branch, including the proposed branch name, its address in Malta and a description of the activities it intends to carry out locally.
The required corporate documentation must then be collected. This includes the overseas company's constitutional documents, details of its directors and other relevant officers, as well as information about the individuals authorised to represent the company.
An important requirement is the appointment of at least one individual resident in Malta who is authorised to represent the overseas company in relation to its Maltese branch. The extent of that individual's authority must also be specified.
Once the registration application has been submitted to the MBR, reviewed and accepted, the branch will be registered in Malta and can proceed with its intended operations.
How Can BDO Malta Help?
Choosing the right structure when entering a new market is an important decision.
At BDO Malta, we guide businesses through the registration process, helping them establish a presence in Malta as smoothly and straightforwardly as possible.