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Malta, formally known as the Republic of Malta, is a European Union island republic made up of an archipelago in the Mediterranean Sea that is regarded to be part of Southern Europe. It is located 80 kilometers (50 miles) south of Sicily (Italy), 284 kilometers (176 miles) east of Tunisia, and 333 kilometers (207 miles) north of Libya. The official languages are Maltese and English, and 66 percent of the contemporary Maltese population can converse in Italian.
Malta has been inhabited since about 5900 BCE. Its central location in the Mediterranean has historically given it great strategic importance as a naval base, with a succession of powers, including the Phoenicians and Carthaginians, Romans, Greeks, Arabs, Normans, Aragonese, Knights of St. John, French, and British, among others, contesting and ruling the islands. The majority of these foreign influences have left their imprint on the country's historic culture.
Malta is the world's tenth-smallest nation in terms of size and fourth-most densely inhabited sovereign country, with a population of around 516,000 spread over an area of 316 km2 (122 sq mi). Its capital, Valletta, is the European Union's smallest national capital in terms of land and population. According to Eurostat statistics from 2020, the Functional Urban Area and Metropolitan Area spanned the whole island and had a population of 480,134, and the United Nations, ESPON, and EU Commission all agreed that "the entire territory of Malta comprises a single urban region." Malta is increasingly referred to be a city-state, and it is frequently included in rankings of cities or metropolitan regions. Malta, along with Cyprus, is one of the two island nations in the Mediterranean.
Malta became a British colony in 1813, operating as a ship's way station and headquarters for the British Mediterranean Fleet. During World War II, it was besieged by the Axis forces and served as a major Allied base for operations in North Africa and the Mediterranean. The Malta Independence Act was approved by the British parliament in 1964, granting Malta independence from the United Kingdom as the State of Malta, with Elizabeth II as its queen. In 1974, the nation became a republic. Since its independence, it has been a member of the Commonwealth of Nations and the United Nations, and it joined the European Union in 2004; it joined the eurozone monetary union in 2008.
Malta has had Christians from the period of Early Christianity, while it was largely Muslim throughout its time under Arab sovereignty, when Christians were permitted. The Norman conquest of Malta by Roger I in 1091 brought an end to Muslim authority. Although Catholicism is the national religion today, the Maltese Constitution provides freedom of conscience and religious worship.
Malta is a popular tourist destination due to its mild climate, numerous recreational areas, and architectural and historical monuments, including three UNESCO World Heritage Sites: the al Saflieni Hypogeum, Valletta, and seven megalithic temples, which are among the world's oldest free-standing structures.
After one year of full-time employment, an employee is entitled to 192 hours of basic leave plus 24 hours in place of the three public holidays that fall on weekends.
So long as there is an agreement with the employer, an employee can carry over up to 50% of their paid leave to the next year.
Malta recognizes 14 public holidays.
The Wage Regulation Order regulates sick leave (WRO). If an employee is not protected by the WRO, he or she is entitled to two weeks of paid sick leave each year. After the two weeks, an employee may be eligible for a Social Security illness payment.
To use sick leave, you must produce a medical certificate.
In Malta, maternity leave lasts 18 weeks and begins four weeks before the due date. It must be taken at least 6 weeks after the birth. For the first 14 weeks, the employer is liable for paying 100% of the salary.
There are no legal mechanisms in place for paternity leave.
Until the kid reaches the age of eight, parents are entitled to four months of paid leave for the birth of a child, adoption, fostering, or general care.
To be eligible, an employee must have worked for at least 12 months in a row.
Employees who are not protected by the Wage Regulation Order are entitled to one working day of bereavement leave.
For employees who are not protected by the Wage Regulation Order, marriage leave is two working days.
In Malta, an employee may be terminated for cause, redundancy, or retirement age. Employers are required to deliver an employment certificate to an employee who has completed at least one month of employment upon request. The employment certificate must include dates of employment and a description of duties. The cause for termination must also be given if the employee demands it.
The notice period is determined by the duration of the employment. There is no notice period required for employment of less than one month. For employment lasting between one and six months, at least one week's notice is required. Minimum two weeks' notice is required for employment lasting six months to two years. A minimum of four weeks' notice is required after two to four years of employment. A minimum of eight weeks' notice is required after four to seven years of employment. A minimum of nine weeks' notice is required after seven to eight years of employment. A minimum of ten weeks' notice is required after eight to nine years of employment. There must be at least eleven weeks' notice after nine to ten years of employment. There must be a minimum of twelve weeks' notice for employees who have worked for more than ten years. Paying the employee in lieu of notice is possible. However, if an employee is on notice and chooses not to work or resigns without giving notice, the employee is required to pay the employer 50% of the wages earned during the notice period.
The probation period is 12 months. During this time period, an employee who has worked for at least one month may be dismissed with one week's notice. While an employee and employer can agree on a shorter probation period, the agreement is binding and must be followed.
There are no statutory laws on severance pay.
In Malta, the standard work week is between 40 and 48 hours, depending on the industry. Employers may require employees to work more than 48 hours per week with their consent. Employers are prohibited from retaliating against an employee who declines to work overtime. If an employee consents to work more than 48 hours per week, the employer is required to provide the required daily and weekly rest periods. Employees have the right to withdraw consent for work exceeding 48 hours per week.
Overtime is regulated in the majority of industries in Malta by the Wage Regulation Order (WRO). Employers who are not covered by the WRO must compensate employees who work more than 40 hours per week at a rate of 50% above the regular rate, averaged over a four-week period or shift cycle determined by the employer.
Malta recently increased its minimum wage by 155 Euros per month beginning in 2020. Employees must now earn 777 Euros per month. Employers must pay their employees in cash or with a check that can be cashed at a Maltese bank. Employees and employers usually agree on a salary payment schedule, such as weekly, biweekly, or monthly.
The government offers universal healthcare, and some businesses provide additional private healthcare insurance.
All workers working 40 hours per week are entitled to 192 hours of paid annual leave, which equates to about four weeks and four working days of paid time off. Sick leave is also provided in Malta in accordance with the appropriate Wage Regulation Order for certain industries. Employees typically get two weeks of sick leave each year, as long as the employer obtains a medical certificate.
One distinctive feature of Malta's benefit rules is that both male and female employees are entitled to four months of unpaid parental leave for the birth, adoption, foster child, or legal custody of a kid until the child reaches the age of eight. To be eligible, all workers must have worked for your business for at least a year.
A business established in Malta is deemed to be both domiciled and resident in Malta, and is therefore taxed on a global scale. A non-Maltese established business with management and control in Malta is liable to Maltese tax on revenue generated in Malta as well as money received in/remitted to Malta.
Income tax is levied at a fixed rate of 35% on corporations. There is no distinct company tax system from income tax.
Income is taxed at graded progressive rates ranging from 0% to 35%. In the event of single people (including married individuals electing for separate computation) for the year of assessment 2021 (year of income 2020), there is a tax obligation of EUR 12,275 on the first EUR 60,000 of income (individuals earning up to EUR 19,500 should save up to EUR 90 tax per annum).
Married couples should pay a tax of EUR 11,095 on their first EUR 60,000 of income (couples earning up to EUR 28,700 should save up to EUR 120 tax per annum).
For sums in excess of these levels, the tax rate is 35% for both single and married taxpayers. The marital rates also apply to single parents, widows/widowers, and split parents, subject to specific circumstances.
In Malta, supplies of goods and services are usually subject to VAT at the standard rate of 18%. Certain supplies, however, may be subject to a reduced VAT rate, such as 7% on eligible accommodation and admission to sporting facilities, and 5% on other supplies such as the supply of electricity, the importation of works of art, collector's items, and antiques, certain confectionery items, certain medical accessories, and certain printed matter (including electronic publications with a downloadable version).
As of May 4, 2020, the discounted cost of 5% was extended to cover protective face masks and visors (but excluding diving equipment).
Employers of foreign nationals in Malta have many alternatives under Malta's immigration legislation. Malta is a member of the European Union (EU) as well as the Schengen Zone. The requirements, processing dates, work eligibility, and perks for accompanying family members differ depending on the kind of visa.
Unless they are visa free due to their country, business travellers to Malta normally utilize a local variant of the Schengen C Visa. The Schengen Area restricts stays to 90 days within a 180-day period.
Foreign nationals visiting Malta for employment must obtain a Single Permit, which includes work and residency authorization. The Single Permit is valid for one year and may be renewed.
Employment contracts may be written or informal, fixed-term or permanent. In Malta, employment contracts are often written and in the local language. Even if an oral agreement exists, the employer must nevertheless furnish the employee with the facts of the job in writing.
At the very least, the employment contract must include:
The work environment
Working hours, overtime, and so on
There is no set length for assignments. This is usually indicated in the employment contract for fixed-term employments.
It takes a great amount of time and effort to learn how to set up a Malta subsidiary. Furthermore, the subsidiary procedure is affected by a number of circumstances, including your location and the kind of subsidiary. We propose that you begin your incorporation procedure in Malta by looking for the ideal city, region, or state for your company's headquarters. The ideal site will have advantageous Malta subsidiary legislation that will make incorporation easier.
Following that, you must decide what sort of entity would best suit your company's objectives. A limited liability company (LLC), a public limited company, a free zone business, a branch office, or a representative office are all choices. Because each corporation has its own set of laws and regulations, you must choose the best company structure for your needs. Companies that need to execute a broad variety of operations, for example, should organize as an LLC, but those that simply need to do a few functions should incorporate as a branch or representative office.
If you wish to form an LLC, as most businesses do, you must take the following steps:
1. Make a note of a distinct firm name.
2. Make a minimum share capital deposit.
3. Become a member of the Companies Registry.
4. Obtain a business license.
5. Obtain a Tax Identification Number for your business (TIN).
6. Make a VAT registration.
7. Get an employer identification number and register your personnel.
8. Employees should be registered with the Employment Training Corporation (ETC).
9. Sign up for data protection.
The subsidiary laws of Malta that you must follow as an LLC vary from the laws of other companies. You must have at least two founders and a minimum share capital of 233 Euros. A company secretary and one director of any nationality who may reside outside of Malta are also required for LLCs.
Because LLCs function in the same way as resident firms, you must adhere to specific financial requirements. For example, you must submit financial statements to the Internal Revenue Service each year, but they are not required to be audited. Although Malta has a high corporation tax rate of 35%, the nation provides many tax breaks that might decrease the burden to 10%.