Business-focused individuals are increasingly flocking to Malta to take advantage of the pristine Mediterranean weather and laid-back lifestyle, while reaping the rewards of the multiple entrepreneurial advantages the small island nation provides modern businesses.
Are you considering Malta to start your new business? Before a business owner opts to start a business in Malta, it’s essential to ask yourself: ”How much does it cost to rent an office space in Malta? What are some of the costs to expect?” Without asking yourself these key questions before making the move, your business could be facing financial discrepancies before operations have begun. The demand for office space in Malta is ever increasing: As more business owners start a business in Malta, office space is becoming imperative, and expensive.
SOHO Office Space will guide you on the costs to expect when choosing an office space in Malta, and why a serviced office space solution with SOHO may be the best decision for your business.
Why is finding a good office space important for your business?
Many small businesses owned by entrepreneurs and freelancers have likely started out of the comfort of their own homes. As operations begin to scale as your business grows, a home office may not necessarily cut it once employees begin to be on-boarded into the enterprise. Business owners experiencing growth should consider the importance of finding a good office space for your business, and the effects it can have on its operations; Staff needs, further development and growth of the business, and the mission of the company are all important factors for a business owner to consider when opting to transition the business operations into an office space.
Needs of your staff
Many factors go into running a business, and a good office space for employees to operate from can make a world of difference on your business success journey. Based on your business activities, an office space where employees can collaborate and create can be essential for the development of your business.
Listening to the needs of your staff is fundamental for business: The success of a company largely relies on how well your staff works together. By creating a workspace for employees to easily communicate, motivate, and collaborate, workflow becomes streamlined while creating a socialized experience for staff.
Goals and mission of your business
As your business scales and your brand becomes more realized, clients will likely want to meet and see your headquarters as the business relationship develops. By opting for an office space for your company, business owners have the perfect opportunity to display the goals and mission of the business. A good office space for your business will provide an instant experience for clients as they receive an inside look into the essence of the company.
Pay attention to your budget
When looking for a good office space for your business, it’s important to pay attention to your budget. If you want your business to be easily accessible, a more central location would be ideal for setting up shop, however you’re likely to pay higher fees. If your business is scaling fast, you want to consider an office space which provides the most flexibility, as moving frequently can be quite costly for business. A business owner needs to determine what they can realistically afford in an office space before committing to a space. The success of your business is ultimately based on cash flow, so it’s essential to consider how office rent fits into the budget.
Serviced offices or coworking spaces are a cost-effective solution businesses on a budget should consider when opting for an office space for their business activities.
Development and growth of your company
As your enterprise thrives, a business owner needs to consider the importance of finding a good office space for business. As your client list grows, so will the number of persons you’ll employ. When looking for the right office space it’s essential to consider if the space can grow with you; The space shouldn’t be unrealistic for the current size of your business, but should provide the option to scale within the office space in the forthcoming future. A good office space can provide your staff with the tools to develop themselves professionally while positively contributing to the development and growth of your company.
Why should you start your business in Malta?
Malta is a strategic location for starting a business due to the numerous incentives offered towards entrepreneurs and business owners;
Known for its rich history of entrepreneurship, relatively low living costs, tax incentives and foreign investment, and a global network of embassies and consulates, there is an undeniable attraction business owners have towards starting a business in Malta.
Rich history of entrepreneurship in Malta
It’s not just the luxurious Mediterranean lifestyle which attracts entrepreneurs to Malta; For several years, Malta’s advantageous tax system has offered entrepreneurs the opportunity to start businesses in Malta, injecting cash flow into the island’s economy. Malta has had a forward-thinking approach to technology and business, leading the country to become among the fastest growing economies in the European Union in recent years.
With next-generation industries such as gaming and fintech thriving, Malta also supports excelling finance, shipping, aviation, and tourism sectors; The Maltese economy is overwhelmed with opportunity.
Low living costs
As global inflation is on the rise, Malta’s cost of living has increased in recent years, but still remains quite manageable for entrepreneurs looking to relocate their business to the Mediterranean.
For adults over the age of 18, the national minimum salary is €182.83 weekly; For individuals who are renting a home or apartment, the highest monthly expense to be expected is rent. This can be managed based on the location one is renting: St. Julian’s, a central, business district has among some of the highest rents on the island, whereas Birzebuggia, a more rural locality in the most southern area of Malta, will incur a notably lower rent.
When compared to other cities in the European Union, the capital Valletta ranks as follows in terms of overall cost of living:
- Cost of living in Valletta is 9% cheaper than in Helsinki
- Cost of living in Valletta is 23% cheaper than in Paris
- Cost of living in Valletta is 28% cheaper than in Dublin
Global network of embassies and consulates
Malta has one of the highest rates of expatriates in the entire European Union. At the end of September 2020, it was reported that more than 69,919 expatriates were living and working in Malta; From this number, it was estimated that 31,513 were citizens from nations in the European Union, whereas 38,406 were third country nationals (TCNs). With so many expatriates living and working in Malta, it is no surprise the country hosts 25 embassies and high commissions, 59 consulates, and one other representation on the island. The majority of embassies and consulates on the island belong to fellow European Union nations, however the list also includes embassies and consulates belonging to China, Panama, Canada, Malaysia, United States, and Qatar; a true testament to the rich history of business in Malta.
Tax incentives for foreign investors
Malta has been long-known for its low, attractive tax rates for foreign companies when compared to the remaining European Union member states, resulting in foreign businesses flocking to the island. The Maltese government has heavily promoted foreign investment over recent years, attracting heavy-weight foreign investors in droves, making Malta one of the top destinations for investors in the world.
Some tax incentives for foreign investors currently include:
- “Full Imputation Tax System” for Shareholders of Maltese companies: Dividends distributed to shareholders will not be subject to personal tax as the corporation has already paid the taxes due on profits. This prevents double taxation on the dividends usually incurred in the traditional tax system. Australia, New Zealand, and Malta are the only countries world-wide which implement the full imputation tax system;
- A tax refund is applied on the corporate tax rate, applicable at 35%;
- ‘High Net Worth Individuals’ schemes are available for foreign citizens wishing to receive residence in Malta by means of various relocation schemes;
- Incentives on investments under the Business Promotion Act, Malta Enterprise Act, and Business Promotion Regulations.
Read more about Malta’s tax system
Top 10 most business friendly countries
When determining a business friendly country, a business owner needs to consider what aspects suggest the country to be business friendly. When defining a ‘business friendly country’ there are numerous factors which lead to such a title, however one should consider: the ease of doing business, the corporate tax rates, corruption, and cheap manufacturing costs (sector dependent). See the top 10 business friendly countries ranked below:
#1 – Switzerland
- GDP: $732 Billion
- 100 Anti-Corruption score
- 94.7 Not Bureaucratic score
- 77.2 Transparent government practice score
- 60.7 favorable tax environment score
- 0.1 cheap manufacturing cost score
#2 – Panama
- GDP: $60.7 Billion
- 31.4 Anti-Corruption score
- 85.6 Not Bureaucratic score
- 3.4 Transparent government practice score
- 100 favorable tax environment score
- 42.3 cheap manufacturing cost score
#3 – Canada
- GDP: $1.74 trillion
- 100 Anti-Corruption score
- 97.4 Not Bureaucratic score
- 90.4 Transparent government practice score
- 20.1 favorable tax environment score
- 0.1 cheap manufacturing cost score
#4 – Denmark
- GDP: $348 billion
- 99.9 Anti-Corruption score
- 96.3 Not Bureaucratic score
- 100 Transparent government practice score
- 15.6 favorable tax environment score
- 0.3 cheap manufacturing cost score
#5 – Sweden
- GDP: $534 billion
- 100 Anti-Corruption score
- 99.7 Not Bureaucratic score
- 90.4 Transparent government practice score
- 17.2 favorable tax environment score
- 0.2 cheap manufacturing cost score
6. New Zealand
7. Norway
8. Ireland
9. Finland
10. Netherlands
How to set up a company in Malta?
Malta has many benefits for entrepreneurs looking to set up their business on the island. Setting up your company in Malta can be done so in a few relatively simple steps. Follow our step-by-step guide on setting up your company in Malta:
Step 1: Select your Company Type
Entrepreneurs looking to set up their business in Malta have a choice of 4 types of companies:
1. Limited Liability Companies
There are two types of Limited Liability Companies; 
- The Private Limited: Private Limited companies are prohibited from offering shares or debentures to the Public. Members are limited to 50 persons. The company name is followed by the suffix ‘Ltd’ or ‘Limited;’
- The Public Limited: Public Limited companies are permitted to offer shares or debentures to the Public. Company names are followed by the suffix ‘Plc.’
2. General Partnership
Suitable for small-to-medium sized enterprises.
– En Nom Collectif: In which a partnership is made of two or more members, where one member must either be an individual or a corporate body;
– En Commandite: More commonly referred to as a Limited Partnership, Members of the company own Limited Liability.
3. Single Proprietorship
Also known as a Single Member Company, the ownership of the company is held by one member.
4. Overseas Company
A business located outside of Malta, but has a branch located in Malta.
Step 2: Select your Company Name
Your company name is the very first impression your business makes, so it’s essential to select a company name that:
- Reflects your business activities accurately
- Does not related to a pre-existing corporate body
- Does not contain any offensive language
Step 3: Prepare the Necessary Documentation
In order to proceed with setting up your company in Malta, you now need to gather all of the relevant documentation required by the Registrar of Companies Association of Malta. Firstly, you will need to prepare the Memorandum of Articles and Association.
The Memorandum must include the following information of the enterprise:
- The type of company;
- Identification of the Members (persons or corporate body);
- The company name;
- The registered address of the company in Malta;
- Objective of the company;
- Amount of authorized and issued share capital;
- Number of shares, full description of shares paid out to whom in what amount, and the rights attached to each share;
- Identification details of Directors, Shareholders, and the Company Secretary;
- Details of persons who are vested with the legal and/or judicial representation of the company;
- Period affixed if any for the duration of the company;
- The Articles of Association is a document which must detail the internal regulations of the company.
Further documentation required must support proof of a paid share capital. Depending on the company’s authorized share capital, the enterprise will be subjected to an additional fee for registration.
Step 4: Gain a Certificate of Company Registration
Once the necessary documentation provided in Step 3 has been approved by the Registrar of Companies Association of Malta, a Certificate of Registration will be issued to the enterprise. This document will provide proof the company exists and is authorized to conduct business in Malta.
Step 5: Register for a Maltese VAT Number
Once receiving the Certificate of Registration for your company, you must then register your company to pay Value Added Tax (VAT) at the local rate of 18%. 
The procedure for registering for a VAT Number varies on the type of company registered, and whether the applicant is in possession of a Maltese issued Identification Number, or a Foreign issued Identification Number.
To apply for a VAT Number, applicants typically need the following documentation:
- An application form submitted through a registered practitioner with an Authorization Letter;
- The company’s legal Director self-registers through e-ID;
- Identification documents of the Practitioner’s or the company’s legal Director’s;
- A valid Identity/Residence card (if in possession of one) and Document Numbers.
The process for a successful VAT registration application should take no longer than a few business days.
Once receiving your company’s VAT Number, your business is able to begin conducting operations in Malta. Business owners will need to be mindful of Annual Returns & Accounts which are to be submitted either digitally or physically each annum.
How much does it cost to rent an office space in Malta?
When renting an office space in Malta, a business owner needs to consider several factors that go into operating and maintaining a workspace, such as:
- Monthly Rent;
- Relocation costs;
- Purchasing and/or Leasing of office furniture and equipment;
- Extra fees;
- Utility bills;
- Maintenance and/or Repair costs;
- Daily cleaning;
These overheads can add up when your business is solely absorbing all of the costs. Business owners looking for a cost effective solution should consider a serviced office space or coworking provider.
SOHO Office Space is Malta’s leading serviced office and coworking provider, with a business community of over 500+ Members. When opting for a workspace membership at SOHO, business owners can take comfort that all of the noted overheads associated with an office space are shouldered by SOHO Office Space.
Business owners who choose a workspace membership with SOHO Office Space are able to focus on their business matters at hand, while SOHO organizes opportunities to invest in your work-life balance:
- Regular breakfast and lunch catering;
- Meeting room conveniences;
- Weekly networking & community events;
- Free gym & sauna;
- In-house bar;
- Padel courts;
- Games rooms;
And much more.
Is an office space worth buying?
If you’re debating on whether to buy an office space for your business, there are several factors to take into account before taking the plunge. While purchasing an office space can provide the appeal of ownership, over the long-term the property could become an investment of substantial value. On the other hand, total ownership of the space leaves a business owner the sole responsibility to maintain the office space, daily cleansing, utility bills, and repair costs: The costs of buying an office space can quickly add up.
How do you calculate rent for office space?
Calculating the rent of an office space comes down to two main factors: location and usable square footage. When opting for an office space in central areas or up-and-coming business districts, a business owner can expect to be exposed to higher price tags on office space. For business owners on a budget, one can opt to set-up shop in a neighboring locality of booming business districts, allowing for a more flexible price range while remaining close to amenities and other businesses.
Commercial office space rents are typically calculated via the price per square foot multiplied by the total square footage of the workspace, then divided by 12 to give the monthly space rent. This is a good starting point to allocate the minimum budget required for office space, where additional costs may then be added on.
Conclusion
As more business owners open businesses in Malta, the demand for office space will remain at the forefront. When searching for the most cost-effective workspace solution for your business, it’s important to consider all factors available: buying or leasing an office space, or renting a workspace from a serviced office space or coworking provider.
SOHO Office Space is the best choice for entrepreneurs looking to start a business in Malta that require a workspace solution that’s budget friendly. Take comfort that your business success remains the top priority, while SOHO arranges the pesky overheads and upkeep of the workspace. Tap into a wide range of amenities and benefits to provide yourself and your staff an ideal work-life balance in a business-friendly environment. Surrounded by like-minded individuals, your business will prosper in a serviced office solution with SOHO.
Contact the SOHO Team today to receive your customized workspace quote. Leave a lasting impression on clients with a workspace solution with SOHO Office Space.