Malta’s youth enterprise rules

A youth enterprise is a private limited liability company with separate legal personality. It may only be formed by natural persons who are 16 or 17, resident in Malta at all times, and acting in their own name. During their period of eligibility, members may sign the memorandum and articles and act jointly as the enterprise’s legal and judicial representatives. The company’s name must include “Youth Enterprise” or “YE”, it must qualify as a small enterprise and register under article 11 of the VAT Act, and its objects cannot include acting as a holding entity.

The authorised share capital must be between €100 and €20,000. On formation, each member must contribute €100 as fully paid-up share capital, and every member has equal voting rights regardless of contribution. Incorporation also requires the signed memorandum and articles, proof of paid-up capital, permission from parents, guardians or tutors, mentor appointment details, identity and residence information, and a declaration confirming that the members are not involved in a competing youth enterprise and have no conflict of interest.

Every youth enterprise must have an approved mentor in place at registration and throughout its life. The mentor must be at least 25, resident in Malta, have at least five years’ experience in a commercial area, not be registered under the Protection of Minors (Registration) Act, and be approved by the governing entity through the register of mentors. The mentor supports strategy, compliance, budgeting, and skills development, but does not hold an executive role or take part in day-to-day management or voting unless needed to break a deadlock. The mentor must act with reasonable skill, care, and diligence in the best interests of the youth enterprise and its members and, if acting in good faith and in line with the law, is not personally liable for the enterprise’s debts.

The regime combines flexibility with control. Youth enterprises must file annual basic accounts, submit training returns every six months, and ensure that each member completes at least 20 hours of training each year in business, compliance, or financial literacy. They cannot employ staff, members are not treated as employees and remain eligible for the students’ maintenance grant, licensable activities are restricted unless minors may lawfully obtain the approval, and dividends may be declared only on the mentor’s recommendation and not above the amount recommended. Certain core information is public, while fuller records may be disclosed to specified authorities for anti-money laundering, tax, and other regulatory purposes.

The regime is temporary by design. Members may withdraw or be expelled in defined cases, shares may be transferred only to existing members, and once all original members turn 18 they must start converting the youth enterprise into a commercial partnership under the Companies Act or cease holding office. If no conversion is started and the business is inactive or no longer eligible, the Registrar may begin a striking-off process. For founders, families, and advisers, the key takeaway is clear: Malta is creating a practical, supervised way for young people to test business ideas early, build real commercial skills, and operate through a recognised corporate structure.