Our core business activity is the formation, management, and day-to-day administration of Malta companies, which includes company administration, international tax planning advice, accounting, book-keeping, secretarial services, and audit support. Over the years, we have acquired and developed vast and in-depth knowledge and experience by assisting non-resident clients with their accounting and tax planning needs.
After setting up your company in Malta, one of the most important and challenging tasks is finding a suitable accounting firm or accountant. It is wise to hire an experienced accounting firm to manage your books and taxes in Malta. The process of picking the right firm requires some preparation and know-how. With many service providers in the marketplace and the internet, it may seem a difficult process, but it does not have to be.
With this article, we help you to meet this challenge and give a few tips for the process.
Firstly, ask for advice from your corporate service provider. Many corporate service providers provide accounting services or are happy to refer you to an accountant or an accounting firm. Note that providing corporate services is a regulated activity in Malta, which means that only licensed service providers can help you with setting up a company setup and supporting services. Make sure you do your due diligence and run background checks on your candidates to ensure reliability.
Secondly, you must decide whether you sign up with an accounting firm with numerous accountants on the payroll or hire an individual accountant.
Since we get numerous requests every week for accounting services, we have developed a thorough understanding on this topic. For various reasons, we are also handling transfers of customers from other accounting firms and service providers to us.
Here is what you need to know and consider when hiring an accounting firm for your Malta company.
1 The human factor in accounting is important.
The most important quality that non-resident clients seek is a human touch and smooth communication. Prepare your questions and concerns and meet candidates online or in person. Describe your business, financial goals, and vision. Find out how they are wired. Choose two or three candidate firms and speak to them. How do you find them? Are you on the same page? How do you feel about them after the first meeting? Since you are entrusting this firm with your finances, you must ensure that you like them. Our decisions are emotional and be reminded that people do business with people they like.
2 Comfort of communication.
Specify communication channels and hours with your accountant. The days of using just phone calls and email for efficient communication are gone. If you use WhatsApp or Viber, make sure there is a match. If you have an urgent question, what is the time horizon you may expect the answer? In case you are a high-tech savvy Millennial, and your accountant is from the Boomers generation, make sure she has some experience in communicating with Millennials. Make sure she speaks your language literally and metaphorically. You want to have some match in communication channels to feel comfortable.
3 Find out if they have relevant experience.
Do you need an accountant with definitive knowledge or experience in a given industry or a specific business? Find out if they have relevant experience. For example, a few of our clients are using Malta Co. as a Fiscal Unit, which makes the corporate structure easy to run and tax efficient. The accounts of a Fiscal Unit must be consolidated into the accounts of its parent company. Make sure your accounting firm has experience in this.
You can read a deep dive article on Malta Fiscal Unit here.
If your Malta Co. is part of an international structure, this is where international taxation and international tax planning kicks in. Your accountant must be fluent in international tax, know how to take advantage of foreign participation exemption rules, understand how foreign tax relief works and how to benefit from it, and be aware of the advantages of the foreign tax credit method. Why? It saves you money. Malta’s corporate tax system provides a lot of planning opportunities. Make sure your accounting firm speaks the language of international tax planning. Choose an accountant who is proactive about money saving, supporting to assist you to save money, not just manage it.
A few of our clients hold private equity holdings in foreign subsidiaries using Malta as a holding company jurisdiction. In case Malta is your holding jurisdiction for foreign subsidiaries, make sure your accountant has this experience.
4 Do you need bookkeeping or tax planning services?
Whilst accounting may seem a boring subject of crunching numbers, when it comes to international tax, it is nothing but boring. Malta’s corporate tax system can be utilized for international trading, holding, investing, finance, royalties, or mergers. Make sure your accountant is proficient in relevant EU tax directives like the EU Parent Subsidiary Directive, Interest and Royalties Directive, VAT Directive, and Tax Merger Directive. Find out if your accountant knows how to benefit from Malta’s international tax treaty network. The knowledge and experience in a wonderful world of international tax planning may save you tons of money. A professional accounting firm guides you in making wise choices while assuring tax and regulatory compliance.
5 Find out what software they use.
Is it user-friendly and easily understandable? Does it have a mobile application?
In case you already use your own preferred accounting program, can it be matched with the accounting firm’s accounting software, if you insist. Are they flexible to do it? Is your accountant willing to learn and master your accounting software if need be?
Using state of the art technology saves time and money. Find out what technology they use and how does it work for you. How does it make your life easier, and cooperation with your accountant more efficient? How does it save you money? For instance, can you upload accounting documents easily? Does the system enable you to raise invoices efficiently? Does it enable cloud sharing?
8 Remote accounting is a must.
With cloud accounting, you can work on your real-time data directly with your accountant from any location.
9 Storage of data, and security.
How is data protected?
If your Malta Co. has employees on a payroll, you need an accountant with this experience and accounting software supporting payroll accounting and tax compliance.
11 Tax and regulatory compliance.
You need a local professional who knows the ropes and keeps you out of trouble. Find out if your accounting firm has experience with Revenue Rulings and is fluent in communication with the local tax authorities.
Make sure your accounting firm has a professional indemnity insurance.
13 Professional associations.
You may find it beneficial that your chosen accounting firm is a member of a professional association like International Tax Planning Association or some international federation or association of accountants.
All Malta companies must be audited. Make sure your accountant works with a
reliable auditor or audit firm.
15 Payment for accounting services.
What methods of payments your accounting firm accepts and supports? Bank transfer, Stripe, PayPal? Find out the options and see if it meets your needs.
16 Engagement letters and agreements.
Make sure you have a written engagement letter or agreement in place with the chosen accounting firm.
17 We save the best for the last: the fees.
Less is more does not work here. Like lawyers, accountants sell their time. The hourly rates vary. The more professional and experienced the accountant the higher the rate. However, a professional accountant using state of the art software and technology is highly efficient, which saves you time and money. When it comes to international tax planning, tax compliance, and saving your hard-earned money, it is worthwhile to pay a little more and hire a top-notch professional to do the job. Along the road, you will see where that extra euro goes. It is your money at stake here, don’t focus on fees only. We have seen this time and time again: choosing the cheapest service provider may turn into a very expensive experience.
Most accounting firms have fixed monthly, quarterly, or annual fees for non-resident customers. If your accounting exercise takes more time, this is charged extra on top of agreed periodic fees. Clients and their needs are different, so is the time spent on each client different. For example, we have a customer who pays more than EUR 10 000 annually for accounting because of the complexity of and time spent on the exercise. Make a budget for your accounting fees and negotiate a deal on an agreeable amount for both sides, depending on the specific requirements of your business.
Why 1st Step?
Accounting requires knowledge of local and international laws and regulations. This is a competence that we have curated over many years in business. 1st Step’s expert team has many years of combined experience — understanding the specifics, local and international laws, and regulations. Malta has a beneficial corporate tax system. We know how Malta works best for you, and how it can be best utilized for efficient corporate structuring to your benefit.