EEIG is a vehicle for businesses in Malta | KPMG | Malta

Formation of the European Economic Interest Group (“EEIG”) in Malta

EEIG is a vehicle for businesses in Malta

European Economic Interest Group (“EEIG”) is a new type of entity available in Malta which can facilitate for your pan-European business ventures

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The EEIG is a vehicle for businesses in Malta designed to provide entities with a platform to establish and maintain links with companies in other Member States without losing company's individual identity and independence.

It is worth noting that an EEIG may be formed by groups or associations consisting of not less than two and not more than twenty persons. For the purposes of the Regulation members of the grouping may be:

  1. Companies and other bodies corporate which have been constituted or incorporated in accordance with the law of the Member State and which have their registered office and central administration in a Member State;
  2. Natural persons who carry on any industrial, commercial, craft or agricultural activity or who provide professional or other services within the EU.

It is worth noting that an EEIG has its obligations guaranteed by the unlimited and joint and several liability of its members.

The formation of an EEIG is a relatively easy process in Malta and is regulated under subsidiary legislation 386.08 of the Companies Act, the European Economic Interest Grouping Regulations (The “Regulations”).

There is no legal requirement as to the initial capital and the official address may be anywhere in the EEA. 

Activities of an EEIG

Activities of an EEIG can be any economic activities as long as they are ancillary to the economic activity of the EEIG members. It is worth noting that since the economic activity of an EEIG can only be that of the ancillary nature the EEIG cannot:

  1. exercise, directly or indirectly, a power of management or supervisions over its members own activities or over the activities of another undertaking;
  2. directly or indirectly, hold shares in a member undertaking, provided
    that the holding of such shares is possible when necessary for the achievement of the objects of the grouping and if done of its members` behalf;
  3.  employ more than five hundred people; and
  4.  be a member of another EEIG.

Management of an EEIG

Under the Regulations an EEIG can be managed by one or more persons,
either individual or body corporate, provided that where the person managing the EEIG is a body corporate, such body corporate has designated one or more natural persons to represent it.

Also, each member of an EEIG shall be entitled to one vote, unless the contract of formation provides for otherwise, provided that in no case any member of an EEIG shall hold the majority of votes in the EEIG.

A unanimous decisions of the members of the grouping shall determine the
conditions for the appointment and removal of the manager together with his powers, unless the formation contract provides otherwise.

It is worth noting that in so far as the contract does not provide that the grouping shall be validly bound only by two or more managers acting jointly, the representation of a grouping is vested in each of the managers severally.

A unanimous decisions by the members of the grouping shall be required to:

  • alter the objects of a grouping;
  • admittance of new members to the grouping;
  • alter the numbers of votes allotted to each member;
  • alter the manner on which decisions are taken;
  • extend the duration of grouping;
  • alter the contribution by any member to the financing of the grouping;
  • alter any other obligations of the member, unless otherwise provided in the contract;
  • make any alterations to the contract of the grouping not covered under the applicable regulation.

Registration Fees

The registration fee for the formation of an EEIG is €1,000.

Taxation of an EEIG

The EEIG is not itself subject to tax in Malta, as the members of the EEIG would be taxed in accordance to their law depending on their domicile and place of establishment. However, an EEIG may be elected to be treated as a company for income tax purposes, in which case, the provisions of the Maltese tax laws that are applicable to companies would also be applicable to the EEIG. 

© 2017 KPMG, a Malta civil partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

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