Launching A Compliant Start-up In Malta

Coming up with the perfect idea for a start-up in Malta feels a lot like reaching the top of a mountain, but don’t pop the champagne bottles just yet – that’s just the very first step in your entrepreneurial journey.

We have already talked about the importance of due diligence and taking care of the legal side of things in previous posts, but today we’re going to dig a little deeper into the labyrinth-like world of compliance.

First things first: what is compliance? You’ll definitely hear this word from time to time when you’re setting up your business. In its broadest sense, ‘compliance’ refers to your ability to operate according to a set of rules and/or laws; it’s basically doing what you need to do to make sure everything is above board.

In the world of finance, compliance can be said to work on two levels:

  1. Compliance with any external rules or regulations applicable to a business or organisation as a whole
  2. Compliance with internal structures created and imposed to align with any external rules or laws

Why is it so important to do things the right way in terms of compliance?

Even though legal compliance is central to starting a real business, you’d be surprised to know how many new companies shoot themselves in the foot by ignoring or forgetting about this part of the process. The benefits of being compliant far outweigh the risks, which include anything from a hefty fine to jail time. Long story short: don’t skip out on compliance, ladies and gentlemen. It’s a pricey mistake to make and when you’re just starting out, every euro counts.  

Getting Started with Compliance

At NM Group, our lovely team of experts know exactly what to do when it comes to launching a fresh new business and helping it get the best possible start right here in Malta. Our advisors are second to none when it comes to taking care of the technical side of starting a business. It’s our job to make sure your success is built on solid ground so that you can enjoy long-term success–that’s why we cover everything from compliance to payroll, legal advice, funding, and beyond. When it comes to compliance procedures specifically, the most important points to cover include:

  • VAT registration: any person or entity who carries out commercial activity must be registered with the VAT department – even if you are exempt.
  • VAT reporting: if you are charging VAT then you also need to keep a record of this. VAT reporting must be carried out monthly.
  • MFSA: if you would like to register your venture as a company, then this must be done through the MFSA.
  • Tax payments and NI: being your own boss means having to pay your own taxes and national insurance, along with that of your employees.
  • Audits: By law, every company registered in Malta must engage an external entity to carry out a financial audit.
  • Jobsplus: You as well as your employees must be registered with Jobsplus

These are just a few important processes that our team can take care of to make your life easier and put your start-up en route to success. If you’re looking to learn more about launching a start-up in Malta or simply want some advice on how to make sure you’re following the letter of the law, get in touch with one of our consultants today!

Setting up as a freelancer in Malta

Setting up as a freelancer in Malta

The life of a freelancer seems to be synonymous with freedom, flexibility and the empowerment that comes with being your own boss. That is of course all true, but as we already know (thanks to the Spiderman franchise), ‘with great power comes great responsibility’. Being your own boss is fantastic, but only if all your paperwork is in order before you start bringing in those euros. The last thing you want to deal with when you are getting your operation off the ground is some sort of hefty fine or awkward conversation with the Tax Man. Not to worry – today, we’ll take a look at some key points to keep in mind when you’re setting up as a freelancer in Malta.

First things first

Before you do anything, you need to register with Jobs Plus (formerly ETC) as self-employed – full or part time depending on the intensity of the work you plan to take on. Registering is straightforward – just head over to their forms page and print the one entitled ‘Self-employment engagement form’ according to your preferred language. When you’re done with that, send it to the address included in the form.

Pay your dues

When you’re employed by a company, your National Insurance (NI) and tax is sorted out for you. If you’re registered as full-time self-employed, you’ll need to take care of your own NI and tax. Tax is due each year, and you’ll need to fill out a tax return form with information including your profits or losses, along with any income you may have earned.

Did you know? If you work as part-time self-employed, you can benefit from a preferential tax rate of 15% on the first €12,000 of profit earned.

Don’t forget about VAT

VAT stands for Value Added Tax and applies to specific products and services, so when you’re setting up your business make sure you check whether or not you’re exempt from that. If you are selling something within the scope of VAT, then make sure you’re charging for VAT. Getting a VAT book is a must if you’re offering good and/or services to non-VAT registered individuals – whereas you only need to issue an invoice if your clients are registered individuals.

Top Tip: If you make less than €20,000 a year in sales through your freelance work, you qualify as VAT exempt and are registered as such.

Keep those receipts/invoices

That’s right, ladies and gentlemen – remember to keep all of your receipts and invoices. Why? Well, the money you spend on business lunches, driving around from client to client, and buying the equipment you need to work can all be expensed. If you’re eligible, you might be able to claim a tax credit through Malta’s Micro Invest scheme. Want to know more about that? Just get in touch with one of our advisors!

Good to know: Gozitans and businesses with female majority ownership benefit from higher thresholds in the Micro Invest scheme!

Be prepared

Just because you’re your own boss now doesn’t mean you should work without a business plan or check your progress as you go along. Create a plan complete with goals and targets for yourself – always, of course, making sure they’re realistic to help you stay motivated.

Signed, sealed, delivered

This bit might sound tedious, but it’s probably one of the most crucial parts of setting up a business. If you want to make sure you’ll get paid, it’s important to draft a little something called a ‘work contract’. For smaller jobs, it might feel a little superfluous, but when you’re working on a €500 contract and you’re still waiting to be paid three months after completion, you’ll be glad you protected yourself in writing.

Follow your finances

This one applies to your day-to-day life, but you should be even more organised when it comes to your freelance work. Keep track of your invoices and stay on top of how much money is coming in and going out, and you’ll be fine. A proper invoicing system like Xero will make this super straightforward, so set that up ASAP.

If you’re looking for guidance regarding all things freelance, just give us a call! Our team of experts have all the information you need to help you get your business off the ground. Get in touch today!

How to Make Your Start-up Work in Malta

You have a great idea for a start-up in Malta – but will it work?

“The best way to predict the future is to create it.” – Peter Drucker

When it comes to starting your own business, stumbling across that perfect moment of inspiration (the moment where you’ve uncovered that golden idea that’ll set you apart from everyone else) – that’s just the beginning of what could turn into a really successful start-up. It is already a well-known fact that the perfect mix of creativity, vision, originality, determination and hard work are essential if you want to get your start-up off the ground. But how much do you know about the little details behind it all?

First Steps: Turning Ideas into Action

So what’s a ‘good idea’ and how do you make it work? We’ve all heard the expression ‘there’s no such thing as a bad idea’, and while that might be true, not all ideas work when it comes to building a business from scratch. There are various factors that make an idea ‘good’ – or rather, viable – but the best way to know if yours could work would be to ask yourself some serious questions, and answer them as honestly as possible. Once you’ve done that, start turning your dream into reality and get in touch with us! Here are a few questions to get you started:

  1. What are you offering your customers or clients?
  2. Does your business or product solve a problem? If yes, how?
  3. Does your idea do something to change the status quo?
  4. Are there other businesses offering a similar service or product?
  5. What makes you different?
  6. Can you list 5 key benefits of your product or service?
  7. Why should customers choose you?
  8. Can you ‘sell’ your idea in 30 seconds or less? Give it a shot!
  9. Have you analysed your potential strengths, weaknesses, opportunities, and threats? (this is known as SWOT analysis)
  10. Is your idea financially viable?
  11. Is it financially worthwhile?
  12. How much capital do you need to get your business off the ground?
  13. What will it take to break even or make a profit in the first year?
  14. Do you require bank financing/facilities?
  15. Have you considered the cashflow aspect of the project?
  16. Are there any potential investors around? If so, how will you pitch your idea to them? What makes your idea profitable in their eyes?
  17. Have you identified potential distributors or partners who you can trust?
  18. Can you get your social media presence up and running, or do you need help?

Next: Making It Official

Once you’ve got your ideas on paper and a clear plan for your start-up, the next big step is making it all official. Like with most ‘official’ things in this world, company incorporation or registration involves its fair share of paperwork, bureaucracy and legal jargon that can be difficult to get through alone and efficiently. As a fully-licensed corporate services provider, we’ll be there to guide you through the process and advise you on everything required to get your great idea registered through all the right channels, making the process as stress free as possible for you and ensuring that you get the correct corporate structure the first time round!

Lift Off: Taking Care of Business

There are quite a few important details to take care of before you unveil your brand-new company to the world. If you’re starting a new business in Malta, we can help you find the right bank to open accounts with, make sure you’re eligible to register under the Malta Tax Refund System, and take care of your annual returns – of course, these are just a few key processes that our team can do to make our clients’ lives easier. Once you’re up and running, our highly-experienced advisors can help you to manage the financial side of your operation, including:

  • financial and cashflow projections
  • local and EU funds

Additionally, you will need to keep track of performance and take corrective action when necessary. We can provide you with relevant and actionable guidance so as to ensure the long-term success of your business.

As you go along, you will also need to make sure that your company abides by legal obligations to report to local authorities, including the MFSA, and the VAT and the Inland Revenue Departments. We’ll be there to assist you with the full compliance of your business with the relevant regulations.

If you have any questions about opening a start-up in Malta, get in touch with one of our advisors today!