How to Register a Company in Malawi
You are probably very excited right now about the journey of your life as you plan to start your company.
But at the same time, just thinking about the processes of starting a company can be daunting, especially if you do not know anything.
This article focuses on the process of registering a company as well as the types of taxes you must pay once you have registered your company.
After reading this article, your fears about starting a business will be gone.
Currently, company registration in Malawi is done online.
All the documents required for company registration, such as those listed below, can be completed automatically by simply filling in the required information online.
- CONSENT AND CERTIFICATE OF A DIRECTOR OR DIRECTORS OF A PROPOSED COMPANY
- CONSENT OF A SHAREHOLDER OR SHAREHOLDERS OF PROPOSED COMPANY
- A MEMORANDUM OF ASSOCIATION OF A COMPANY LIMITED BY SHARES
- ARTICLES OF A PRIVATE COMPANY LIMITED BY SHARES
Process of Company Registration
Now let’s look at the first step on how to register your company.
First, create your account by visiting: https://mbrs.gov.mw
Click “CREATE ACCOUNT”.
The process and fee structure are not different for both “Citizen” and “Non-Citizen”.
The two are separated so that the system requests either the National ID number for Citizen or Passport number for Non-Citizen.
Once you create an account, you will be able to do the following, for example;
- Business Registration
- Company Incorporation
- Trustees Incorporation
- Reservation of A Name
If you are not ready to register, you can reserve the name of your company so that no one can take it.
Please note that company names that are already in use cannot be registered and those that have ‘MALAWI’ in the company name need to get approval from the Office of President and Cabinet.
As said earlier, this article focuses on company registration, so our main focus will be on ‘Company Incorporation’.
Here you will need to upload a softcopy of your ID, so make sure you have it ready in advance.
After you have filled in all the required fields, the document will be auto-generated as a PDF.
You have to print the document, sign it and upload the scanned copy again before you can proceed to the next page.
It is therefore recommended that you register in an environment where you can print and scan.
This process requires a lot of scanning and printing of the required documents. Therefore, you should register in an environment where you can print and scan.
What You Need to Prepare for Registration
- ID softcopy
- Printer
- Scanner
Once you complete all the required fields and register, you will be issued with an Application Number, which you should take to the FDH Bank at the registration office and pay the registration fee.
NEW REGISTRATION FEES (EFFECTIVE FROM 13 AUGUST 2020)
| SOLE PROPRIETORSHIPS | MK10,000 |
|---|---|
| PARTNERSHIP | MK10,000 |
| LIMITED COMPANY | MK75,000 |
| TRUSTEES | MK50,000 |
| RENEWAL BEFORE 30 DAYS FROM EXPIRY DATE | MK10,000 |
| RENEWAL AFTER 30 DAYS FROM EXPIRY DATE | MK30,000 |
| FOREIGN COMPANIES | MK250,000 |
Regardless of your capital, the nature of your business, or the size of your company, you will be required to pay a fixed fee of MK75,000 for “Company Registration”.
Once this payment is completed, the “Examiner” here will change to “Registered” and you will be able to download your Certificate.
Registration is said to take 36 hours.
Your company registration is now complete.
TAXES
Understanding taxes can also be a headache-inducing process.
All registered companies are required to pay taxes.
Therefore, you should know in advance what taxes you will have to pay and how much they will be.
Here are three taxes that are relevant to all businesses in Malawi
VAT (VALUE ADDED TAX)
VAT is a tax on consumption expenditure, imposed on the “value added” generated at various stages of the production and distribution chain.
The standard rate of VAT in Malawi is 16.5% except for those that are exempted or zero-rated according to the 1st schedule and the 2nd schedule of the Taxation Act.
PAYE (PAY AS YOU EARN)
PAYE is a method of collecting income tax on an employee’s earnings.
Employers deduct PAYE when the payments are made.
It is called ‘Pay As You Earn’ because it can be weekly, fortnightly, and monthly payments.
Withholding TAX
Withholding tax is an advance payment of income tax that is deducted from certain payments.
It applies to a system under which a person due to make a payment to another person is under the obligation to retain or withhold part of that payment for tax purposes.
Although Withholding tax is not a system of taxation, it is a method of collecting income tax using a debtor as a tax collector.
Therefore, the tax withheld or retained is the recipient’s tax and must be remitted to MRA.
