Independent Contractor Hiring Guide: Malta

# Independent Contractor Hiring Guide: Malta It has established Malta as a nexus of the iGaming, fintech, and digital nomad communities. As a country, to the global firms, this Mediterranean island presents an extremely educated workforce with a high level of English speaking that is closely integrated in the European single market. Nonetheless, the small size of Malta and the specific regulatory setting dictates that the process of contracting workers in Malta is more of a delicate undertaking than in bigger jurisdictions. In the case of small organizations or HR managers working in growing businesses, an independent contractor model is a great option to stay agile as Maltese talent is engaged. It has to be done safely though, which means having to cross a tricky line between a Contract of Service (employment) and Contract for Service (independent contracting). This guide will fully analyse the Maltese regulatory environment in 2026 to enable you to hire independent contractors in Malta with all the legal assurance and the operational efficiency. ## Unique Considerations for Managing Contractors in Malta The legal system of Malta represents the peculiar mixture of the British Common Law and the Civil Law systems. In the case of labor, the Employment and Industrial Relations Act (EIRA) is the governing structure. Although EIRA mainly safeguards workers, it has certain clauses that ensure that the businesses do not avoid these provisions by evading them by claiming false self-employment. ### Important Considerations When Hiring Contractors in Malta The legal status of the worker is the first thing that a foreign entity is going to worry about. In the case of Malta, the Department for Industrial and Employment Relations (DIER) and the Commissioner for Revenue are extremely aware of the issue of disguised employment. A contractor is supposed to be legally a self-managed business organization that provides services to a number of clients, has its own financial risks, and provides its own infrastructure. Moreover, the official language of all business and legal affairs in Malta is English, as opposed to most other countries of the EU. This makes the process of contract formation easier and hassle-free because certified translations are not needed to get the contract drafted and the issue of employing certified translations to facilitate the hiring process is always a nightmare in Italy or France. This ease of access, however, also implies that Maltese labor inspectors will have an easy time examining your documentation when they conduct an audit. ### The Statutory "5-out-of-8" Rule Legal Notice 106 of 2012 (the Employment Status National Standard Order) is the most imperative unique consideration in Malta. In comparison to the countries that use vague case law, the Maltese statutory test is very strict. The contractor is considered to be an employee when a working relationship satisfies at least five of the following eight elements: * Income Dependency: The contractor has at least 75% of his/her yearly earnings with one customer in a duration of one year. * Control: The client decides the nature of work to be done and the location and manner of work performance. * Equipment: The client supplies the equipment, software, or materials needed to perform the task (e.g. provision of a MacBook or licensed access to proprietary software). * Working Time: The contractor shall work to a schedule or a minimum number of work set by the client. * Non-Substitution: The contractor may not delegate or get others to do the work on his/her behalf without prior specification. * Integration: The contractor is a part of the company structure, they are included in performance reviews or they are presented as a member of staff on business websites. * Core Activity: This work of the contractor is not a marginal service but a part of the business goals of the company. * Similarity to Employees: The contractor executes identical or similar work as that which is executed by existing or previous employees under a contract of service. When your engagement generates five or more of these points then the DIER can redesignate the worker and you must give all the retroactive benefits of a full-time employee, such as social security, vacation leave, and statutory bonuses. ## Challenges of Hiring Contractors in Malta While Malta is business-friendly, there are several hurdles that companies face when they hire contractors from Malta. ### 1. Misclassification Concerns and Penalties The 8-point examination is strict and inflexible. The hardest factors to avoid are the "integration" and "control" factors that remote companies have to deal with. When you incorporate a Maltese contractor in your daily Slack stand-ups, assign a company email address to him, and make him report to a manager, as any other team member does, you are running a high risk. The punishments are not simple administrative punishments, but financial. The employer would have been paying you the 10% Employer Social Security Contribution, which will be interest free as long as the contract is valid. Moreover, the employee might assert the entitlement to the compulsory Government Bonus (that is paid after every three months) and the 13th month wage, which are the standards of Maltese labor legislation. ### 2. VAT Implications When Hiring Contractors The VAT rates in the country of Malta are also one of the main considerations of freelancers as of 2026. A resident contractor should have a VAT registration once their turnover is more than €35,000. * Article 10 Registration: To the bigger contractors who pay the standard 18% VAT. * Article 11 Registration: For small undertakings who are VAT-exempt but still have a registration number. In the case of a foreign company, the "Reverse Charge" scheme normally comes into effect, therefore, the contractor does not impose Maltese VAT on you provided that you are registered as a business. But in order to deduct the cost, you should make sure that the invoice of the contractor complies with EU requirements (their VAT number and the name of your company) legally. Losses in the proper tracking of these invoices can result in the tax audit in your home jurisdiction. ### 3. Hiring Issues: Talent Competition and "iGaming Inflation" Due to the small size of the Maltese population (around half a million inhabitants), the local talent market exhibits extreme competition. The huge iGaming and Fintech companies are known to scoop the most talented, spiking up market price. This complicates the situation where foreign companies cannot be assured to hire contractors in Malta unless they are willing to pay top rates. More so, the specialized technical talent is usually headhunted even before they can even post themselves in freelance portals. This is in competition with local companies providing high end office perks and Mediterranean lifestyle benefits. ## How to Find Contractors in Malta To successfully hire independent contractors in Malta, you need to look beyond global platforms like Upwork, which have relatively low penetration among top-tier Maltese professionals. * Keepmeposted & Castille Resources: These are the most popular local job portals. Keepmeposted is excellent for generalist roles, while Castille is the "go-to" for high-end IT and Finance contractors. * Jobsplus: This is the government recognized employment agency. Although they are more specialized in the conventional employment market, its specialized list of vacancies is followed by many contractors seeking opportunities based on projects. * Tech.mt & The Hubs: There are a number of innovation hubs in Malta such as SmartCity and LifeSciences Park. It can be directly introduced to niche freelance talent through engaging with local industry bodies such as Tech.mt. * LinkedIn & Networking: Maltese business is small and relationship-driven. LinkedIn direct outreach is the most effective, although a mutual connection or a mention of a local project would help to achieve a much better response rate. ## How to Pay Contractors in Malta Malta belongs to the Eurozone and the SEPA (Single Euro Payments Area) and therefore the payment process by European companies is simple. Currency conversion and transfer fees, however, may become a problem with companies that are not based in the EU (e.g., US or Canada). ### Requirements for a Compliant Payment When you pay independent contractors in Malta, you must ensure the invoice includes: * Contractor's Tax ID and VAT Number (even if they are under the €35k threshold, they should have an Article 11 number). * Sequential Invoice Number and Date of Issue. * Detailed Service Description linked to specific deliverables. * IBAN starting with "MT". Ensure the bank account name matches the business name on the contract. ### Social Security Responsibility Contractors in Malta unlike the employees will be liable to the contributions of their own Class 2 Social Security. It is about 15 percent of their net earnings, and paid in three parts all through the year (April, August, and December). You are not withholding these taxes as the entity in charge of hiring. Nevertheless, you are advised to add a statement in your contract to claim that the contractor has the sole responsibility of meeting their tax and social security obligations in order to avoid being secondarily liable. ## How to Convert a Contractor into an Employee in Malta When a project turns out to be long term or the contractor turns out to be important to your operations, the ultimate solution would be to transform them into a full time employee and get the surety of your Intellectual Property (IP) and long term loyalty. ### The Conversion Process * Terminate the B2B Agreement: Provide notice according to the terms of your service contract. * Draft a Maltese Employment Contract: This is firmly regulated. It needs to contain the obligatory statement of terms of the statutory government bonus, annual leave (at the moment, 200 hours per annum with the 40-hour week), and 6-month probation. * Register with Jobsplus: Within the first day of employment you have to register with Jobsplus submitting an Engagement Form. In case you are a foreign company which has no entity you will have to employ an Employer of Record (EOR) to do this. * Tax Registration: You would have to register a PE Number (Permission to Employ) with the Commissioner of Revenue before you can start withholding Final Settlement System (FSS) taxes and social security. ## The Fastest and Safest Way to Hire International Contractors A company oriented towards growth can have a big administrative burden when it comes to managing the specific test of 5-out-of-8 and the updates of 2026 VAT.For organizations that want to hire independent contractors in Malta without the risk of an audit or the hassle of local tax laws, using a Contractor of Record (CoR) platform is the most effective solution. ### Why Use a Platform like Mellow? Mellow is designed to bridge the gap between global companies and local regulations. By using Mellow to manage your Maltese contractors, you gain: * Pre-Vetted Localized Contracts: We have pre-written contracts that are formulated so that they would not generate the 8-point test, and they would still have a still-clean boundary of a Contract for Service. * Automated Invoicing & Compliance: Mellow collects compliant VAT invoices on your behalf, ensuring your accounting records are audit-ready for 2026 standards. * Consolidated Global Payouts: Pay your international contractors with one click of any currency they want. Mellow is the one converting and making sure that the Maltese contractor gets the Euros directly. * IP Shield: We offer a very strict legal template that provides the transfer of all the intellectual property produced by the contractor as the legal and irreversible transfer to your company in order to avoid gray zones that are usually the results of simplistic freelance agreements. ## Conclusion Hiring contractors in Malta is a high reward and strategy that enables your business to access the world-talent pool that has profound knowledge on the digital industries. Respecting the 5-out-of-8 test, applying the modern management tools, you can avoid the risks that are hidden but actually existing in the Maltese labor market and concentrate on what is really important in your life, the success of your project.