Malta Limited Partnership (partnership en commandite or Malta LP) is a tax transparent entity but has legal personality. It can enter into contracts in its own name. Malta LP is an onshore entity registered in Malta. Partnerships are by their nature legally and fiscally more flexible than companies and can give rise to interesting tax planning opportunities. Limited Liability Companies (Malta Ltd. companies) are the preferred vehicles for operating businesses, both in the local and international context. However, partnerships are subject to less regulatory obligations when compared to limited liability companies.
Malta LP may opt to be treated as a tax transparent vehicle. Malta LP is an attractive planning instrument, when the beneficiaries of partners are not residents in Malta. Particularly, should the tax authorities in the country of residence of the partners and beneficiaries recognise the Malta LP as owner of all income attributable to the Malta LP – such that the partners/ beneficiaries would only be chargeable to tax in their respective countries of residence after a distribution by the Malta LP of Partnership earnings/ income, capital gains or property in their favour. This is how Malta trusts and foundations work for non-resident beneficiaries when they opt for tax transparency.

If Malta LP is tax transparent, there is no Malta tax issues even if the income is remitted in Malta. The income of tax transparent Malta LP is always subject to be taxed at the personal level of each partner (not at LP level).

Key features about tax transparent Malta LP:

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• Malta LP is a separate legal entity, however treated as a tax transparent vehicle in Malta.

• Financial statements need not to be filed in Malta (subject to certain conditions).

• Tax returns need not to be filed in Malta.

• Partnerships are not required to file annual returns with the Registry of Companies.

• Audit is not required (subject to certain conditions).

• VAT registration is possible in Malta. If a Limited Partnership performs trading activities within the EU it is obliged to register for a VAT number.

• If registered for a VAT, the Malta Limited Partnership must file VAT returns quarterly in Malta. In this case, VAT returns are the only tax forms that need to be submitted in Malta.

• Malta LP accounting needs to be done for Partners

• No corporate income tax is paid in Malta by the Malta LP.

• Partnerships are subject to less regulatory obligations when compared to limited liability companies.

• Option to be taxed as a company.

• Very easy and straightforward liquidation procedure.

 

One can appoint two General partners one of which is a Limited Liability Company and the other one is an individual. The Individual could thus guarantee the unlimited obligations of the partnership and therefore partnership will NOT fall under the requirement to prepare and file audited annual accounts with the authorities.

Partnership company does not need to file the audited accounts in Malta or supply
Financial Statement to the authorities if there is one individual General Partner.

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About the structure of the Limited Partnership in Malta:

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• Malta LP consists of one or more partners, called general partners, and one or more partners, called limited partners.

• The liability of the limited partners is limited to the amount, if any, unpaid on their contribution to the partnership.

• Both individuals and legal entities may be partners.

• The administration and representation of LP is vested in the general partners.

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