Market Overview
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Over the years, the islands have served as a geographical vantage point to its many invaders, with architecture and traditions reflecting a wide range of influences. A bi-lingual nation, both English and Maltese are the official languages of the island state.

Back in 1994, Malta issued a series of laws aimed at making Malta attractive to the foreign investor, a strategy that bore great success. Prior to joining the European Union in 2004, Malta revamped its legislative framework to meet compliance with all prevailing EU directives and requirements. This, together with Malta integration of the region’s common currency, the Euro, continued to propel Malta’s economic success. Nonetheless, the sovereign country’s freedom of movement has been amplified upon becoming a member of the Schengen Area, enabling its citizens to move and travel freely to an additional twenty-six countries.

THE LEGAL SYSTEM

Malta has a hybrid legal system, as a result of both common and civil law influences. Malta’s EU membership binds it to transpose all EU directives into domestic law and to abide by regulations issued, and decisions taken, by any of the EU institutions.

THE ECONOMIC AND POLITICAL CLIMATE

Malta enjoys a stable and bi-partisan political scene, which is largely convergent on issues of national and economic importance. Being a parliamentary republic fully adherent to its non-alignment provisos, the country enjoys political neutrality in an international context. Indeed, Malta has very good relationships with its neighboring countries, both to the North and the South of the Mediterranean. It also benefits from a well-established network of bilateral and multi-lateral relationships across the globe.

As a crown colony, the country once relied heavily on British commerce for economic growth. However, that changed with Malta’s independence in 1964 when the foundations for a successful economy were laid down. In fact, the islands’ economy has been incredibly resilient even in times of financial turmoil. It was the only state, alongside Germany, to maintain economic growth during the financial crisis.

Over the past five years, Malta experienced increased economic activity and registered some of the highest GDP growth rates in Europe. In 2017, Malta’s GDP grew by 6.6% and registered a surplus of 3.9%. In 2018, GDP was expected to grow by more than 5% with the surplus estimated to be in the region of 1%. In 2019, Malta is set to remain one of the top performers in the European Union with a projected real GDP growth of 5%, much higher than the average 2.0% expected in the Eurozone.
Malta has additionally maintained a steady level of competitiveness, especially with regards to the cost of living, salaries and property. Whilst maintaining traditional sectors such as manufacturing and tourism, new economic sectors have emerged, namely financial services, iGaming and digital technology, as well as within the pharmaceutical industries. Political stability, and Malta’s economic performance, have resulted in a good quality of life, in turn attracting high levels of Foreign Direct Investment, as well as families and retirees choosing Malta as their place of residence.

BUSINESS ENVIRONMENT AND FDI

Malta is a well sought-after destination for businesses and investors who desire a business-ready European location. As a free-market economy, with no restrictions or legal prohibitions on FDI and no exchange controls, Malta benefits from few obstacles to trade and enterprise. The country does not impose any limitations on the inflow or outflow of funds although, business and trade dealings must be in line with EU and national legislation and regulations.

Alongside its booming economic climate, the islands possess a highly professional and multi-lingual workforce, and adopt a pro-business approach which not only encourages business, but is also attractive for new investment

In fact, in the first half of 2018, the level of foreign direct investment in Malta stood at €176.5 billion. This represents an increase of €8.6 billion over the corresponding period during the previous year. Financial and insurance activities contributed €166.4 billion representing 97.3% of the total stock of FDI in Malta.

MALTA’S SUCCESS STORIES

Malta has always been quick to legislate and to keep up with an ever-changing world and economic and social progress. It recently implemented sound laws and regulations which, while considerate to the needs of the market, allow businesses to operate in a safe yet attractive environment. In turn, the Maltese legislator has molded Malta into an onshore jurisdiction which offers numerous cost-effective opportunities which continue to entice business to its shores.

AVIATION

Malta’s aviation industry is crucial to its development, as it is one of the main sectors responsible for the country’s substantial economic growth. Apart from being a hub for international commerce and travel throughout history, the island was considered as one of the most strategic geographical points during WWII. Throughout the years, we have seen many multinational companies relocate to Malta, such as Lufthansa Technik, VistaJet and EasyJet. Nonetheless, Malta has implemented the Highly Qualified Persons Rules, which have further attracted various aviation executives to relocate their businesses to our shores.

ART & CULTURAL PROPERTY

Malta’s promotion of its arts and culture is at full-speed, thanks to Valletta’s reign as the European City of Culture for 2018. Culture and art are now prevalent on the national agenda and have an immensely important role to play. Indeed, this industry is multi-faceted in nature and addresses the rights of a very wide range of individuals – dealing with artists, art collectors, auctioneers, museum curators and owners of art work, financiers or insurers. Subsequently, art and cultural property touch upon various legislations, including intellectual property laws and taxation laws.

RESIDENCY AND CITIZENSHIP SCHEMES

In 2013, amendments to the Maltese Citizenship Act were passed, allowing one to become a citizen of Malta, provided, of course, that the applicant satisfies the relative conditions of the said Act. These amendments provided for the LN of 2014, which kickstarted the Malta Individual Investor Programme (MIIP). The MIIP regulations provide for affluent persons of impeccable repute to be naturalized and to receive Maltese citizenship, by means of a contribution to the Maltese economy. Therefore, upon obtaining citizenship, the applicant would automatically acquire the status of a European Union citizen and obtain access to 160 visa-free destinations, including the USA.

FAMILIES AND WEALTH

The ever-growing influx of high-net-worth individuals heading to Malta to invest in the country’s extensive investment sectors brought on the demand for sustainable tax planning and legal considerations. Indeed, such a thriving and flourishing sector generally includes trusts law, foundations law and estate management. Malta’s legal system is more than well-catered to suit the needs of HNWs looking to achieve well-established succession, philanthropic and estate planning objectives.

FINANCIAL SERVICES

The Financial Services sector in Malta has grown exponentially in the past twenty-five years, as Malta sought to position itself as the jurisdiction of choice for businesses wanting to set up in a business-friendly EU jurisdiction which embraces innovation. The Malta Financial Services Authority (MFSA), which is the sole regulator for financial services in Malta, maintains a pro-business approach and an open-door policy which has led to the growth of the local capital markets, banking, insurance and investment services industries.

Despite the size of the jurisdiction, the local capital markets are steadily thriving and growing in size, liquidity and sophistication. The Malta Stock Exchange (MSE) offers various listing options for seasoned companies as well as small to medium enterprises seeking to raise finance.

The MSE plays host to numerous equity and debt transactions, providing facilities by means of which securities can be admitted to trading, and subsequently traded over a secure, well-regulated secondary market. There are various listing options through the MSE, namely the Official List, the Alternative Companies List, the Institutional Financial Securities Market, and Prospects - a multilateral trading facility aimed at small to medium enterprises and family businesses. Listing on the MSE main market is not only a cost-effective solution of raising finance, but also affords a European Passport, and the prestige and brand exposure that comes with being listed on a European capital market.

Whilst still relatively small, Malta also offers the possibility to set up securitization vehicles as an alternative means of raising finance.

Malta is also becoming an increasingly popular jurisdiction for investment services firms seeking to offer their services to persons in EU member states under the simplified passporting procedure. It is also gaining traction as a funds domicile, particularly through its home-grown hedge fund structure, the Professional Investor Fund, which itself has gained popularity for its flexibility. Malta also offers the possibility of setting up Alternative Investment Funds (AIFs) and Undertakings for Collective Investment in Transferable Securities (UCITS), as well as has recently set up a bespoke Notified AIF (NAIF) regime. The NAIF, which is a fully EU law-compliant product, provides a fast-track possibility of accessing the market within just 10 days, by shifting the burden of regulation onto the Fund Manager and allowing the fund to be notified to the MFSA.

The local banking and financial institution sector has also evolved from a handful of domestic banks into an industry which operates across all the EU Member States, set up as both ‘brick & mortar’, as well as online. The industry is experiencing renewed vigor since the advent of Fintech, which is reshaping the services which consumers are expecting from credit institutions, electronic money institutions and payment services providers.

Malta’s insurance sector is also steadily growing since Malta’s EU accession and now comprises commercial insurance companies carrying out both general and long-term business, subsidiaries of major international insurance and reinsurance undertakings, Affiliated Insurance Companies (Captives) and Insurance Management Companies. Malta has become a particularly attractive domicile for Captives and Protected Cell Companies and is increasingly being eyed as a potential domicile of choice by UK insurance companies seeking an EU domicile post-Brexit.

FINTECH AND BLOCKCHAIN

The Maltese Government is always on the lookout to excel in emerging industries and to convert the Island into specialized centers of excellence. Throughout 2017-2018, the Malta Financial Services Authority, together with stakeholders, drafted the first regulations of the disruptive technologies of blockchain and cryptocurrencies. Towards the end of 2018, three legislative instruments became effective in regulating cryptocurrencies, referring to virtual financial assets and service providers, distributed ledger technologies, and innovative technology arrangements. A new regulatory authority called the Malta Digital Innovation Technology was also established. The new laws put Malta on the blockchain map with large renowned crypto-exchanges such as Binance, Coinvest and OKEx, as well as other international crypto-based companies, such as Yovo and Neufund, relocating headquarters or opening operations in Malta.

GAMING

The gaming industry in Malta has flourished in just a decade, making the islands the top European jurisdiction for operators. Malta has now become the foremost legal and operational infrastructure in the gaming industry, a success also synonymous with innovation, professionalism, regulation and trust. In 2018, the laws, rules and regulations governing gambling were complete overhauled in order to meet the needs of the ever-growing gaming presence in Malta. Moreover, the Malta Gaming Authority’s (MGA) role was expanded with further discretion in its compliance and enforcement functions, to better achieve regulatory objectives. To remain at the forefront of gaming laws and disruptive technologies, the MGA also launched a Sandbox Framework, pertaining to the use of Virtual Financial Assets (VFAs) and virtual tokens, as well as Innovative Technology Arrangements (ITAs) within the gaming industry as a means of payment for gaming services.

MARITIME

The island’s fate has always been linked to the sea. Due to its strategic location right in the center of the Mediterranean, alongside its deep and sheltered harbors, Malta has the advantage of being a thriving maritime base. In turn, the country has developed an avant-garde variety of integrated maritime services, complemented by numerous dependable marine facilities. Indeed, the Maltese Ship Registry has experienced steady growth over the years and is the 6th largest registry in the world.

Additionally, the Maltese flag is synonymous to a mature and safe jurisdiction with regard to the world of sailing. Vessels bearing the country’s flag are less susceptible to detainment and inspections at foreign harbors, as Malta’s flag belongs to the White List of the Paris and Tokyo MoU. Moreover, the country also offers cost-effective solutions for yacht owners and shipping companies, while at the same time provides state of the art services and infrastructure to a range of vessels. In the first quarter of 2019, the Commissioner for Revenue of Malta issued new guidelines in relation to the calculation of VAT on the leasing of yachts.

SETTING UP IN MALTA

CORPORATE VEHICLES

Business in Malta may be conducted through a number of different vehicles such as partnerships, sole proprietorships, branches of foreign companies, co-operatives, trusts, investment companies with varied share capital (SICAV), protected or incorporated cell companies. The most common vehicle is the limited liability company, whilst partnerships are also popular, although the latter are normally associated with the professional services sector. SICAVs are principally used in investment fund structures and incorporated or protected cell companies popular within the insurance sector.

In addition to the various structuring options, Malta offers an attractive tax regime for carrying out business or the holding of investments through Malta.

COMPANY FORMATION

The ease with which a company can be set up in Malta is a convenient feature of setting up a business here. Provided the requirements of Maltese law are complied with and the necessary due diligence procedures are carried out, a company can be incorporated in as little as 24 to 48 hours from the receipt of documentation.

ADVANTAGES OF SETTING UP IN MALTA

Malta is a popular and reputable destination for both start-ups and well-established businesses that wish to set up HQs, branches, or finance and investment companies in a European jurisdiction. Due to its pro-business approach, the islands are now home to some 70k companies, with 30% of them having been registered in the last 5 years.

As mentioned above, setting up in Malta is a relatively straightforward process. No licenses or permits are required, save for businesses operating within certain sensitive sectors such as pharma, gaming, finance, insurance and medical sectors.

A brief overview of the benefits which businesses in Malta can obtain through setting up in Malta are:

  • competitive set-up and operations costs, which are 20% to 30% lower than in other European business hubs;
  • a fast track company formation process;
  • an English-speaking, highly professional workforce;
  • business incentives by Malta Enterprise (including tax credits, soft loans and training grants);
  • a favorable tax regime and an extensive double taxation treaty network;
  • EU passporting rights for banks and financial services companies.

COMPANY TAXATION

Companies incorporated in Malta are deemed to be resident and domiciled in Malta and are therefore subject to tax on their worldwide income less permitted deductions at the corporate income tax rate of 35%. However, income or gains from qualifying investments may be exempt from tax in Malta under the participation exemption provisions.
Participation Exemption

Income or capital gains derived by Malta companies from qualifying “participating holdings” (PH) may be exempt from tax in Malta at the option of the company.

An investment qualifies as a PH where a Malta company is an equity shareholder in another company and:

(a) holds directly at least 5% (five percent) of the equity shares of such a company, which holding confers an entitlement to at least ten percent of any two of the following (“equity holding rights”): right to vote; profits available for distribution; and assets available for distribution on a winding up; or

(b) is entitled at its option to call for and acquire the entire balance of the equity shares not held by that equity shareholder company to the extent permitted by the law of the country in which the equity shares are held; or

(c) is entitled to first refusal in the event of the proposed disposal, redemption or cancellation of all equity shares of that company not held by that equity shareholder company; or

(d) is entitled to either sit on the Board or appoint a person to sit on the Board of that company as a director; or

(e) holds an investment representing a total value, as on the date or dates on which it was acquired, of a minimum of one million, one hundred and sixty-four thousand euro (€1,164,000) (or the equivalent sum in a foreign currency) and that investment is held for an uninterrupted period of not less than183 days; or

f) such shares are held for the furtherance of its own business and the holding is not held as trading stock for the purpose of a trade.

Equity shares refer to a holding of the share capital in a company which entitles the shareholder to at least any two of the following three rights: the right to vote, the right to profits available for distribution to shareholders and the right to assets available for distribution on a winding up of the company. Capital gains derived from the disposal of such PH may be exempt from tax in Malta. Where Malta holding companies receive dividend income from a participating holding, such income may also be exempt from tax in Malta provided that the company in which the PH is held falls within one of the following safe harbors:

  • it is resident or incorporated in the EU;
  • it is subject to any foreign tax at a rate of at least 15%; or
  • less than 50% of its income is derived from passive interest or royalties .

Where a PH does not fall within one of the safe harbors described above, a company may still opt for such income to be exempt from tax in Malta, if both anti-abuse conditions below are satisfied:

  • the equity shares held in the non-resident company do not represent a portfolio investment; and
  • the non-resident company or its passive interest or royalties have been subject to tax at a rate which is not less than 5%.

TAX REFUNDS

Where the participation exemption does not apply, upon receipt of a dividend, shareholders of a Malta company, or a foreign company which is resident in Malta for tax purposes, are entitled to a refund of all or part of the Malta tax paid at the level of the company on such income. The type and source of income received by the company must be considered when determining the amount of refund which may be claimed. Shareholders of companies that have a branch in Malta, who are in receipt of dividends out of branch profits subject to tax in Malta, are also eligible for the same tax refunds as shareholders of a Maltese company.

Full Imputation System

Malta operates a full imputation system of taxation whereby shareholders in receipt of dividends out of a Malta company receive a credit for the tax suffered at the company level, thus eliminating any further taxation being due on the dividend by the shareholder.

OPPORTUNITIES & FUTURE PROSPECTS

BREXIT

With the UK projected to leave the European Union by 2020, concerns regarding businesses which presently benefit from the EU market and its harmonization are on the rise. With regards to this, the UK financial services industry is weighing out the options related to the maintenance of passporting rights within the EU. Malta is well positioned to attract such business and offers the possibility of re-domiciling all manner of business and licensed financial services operators, including funds and asset managers, insurance operators, banking and electronic money institutions (EMI). Concerns related to Brexit aside, co-locating to Malta for operational aspects is an ideal prospect. Its favorable tax regime, historical and contemporary ties to the UK, the fluent use of the English language, laws based on common law equivalents, portfolio of fund options, and lastly, its stable financial services industry, all point towards a seamless integration.

PROPERTY MARKET

Malta’s tax regime has proven beneficial in many sectors and it undoubtedly features very prominently in the property market. Even despite the decade’s worth of global financial and political turmoil, Malta has continued to feature on the radar of investors interested in investing in Europe’s growing property market. The Maltese property rates, nonetheless, have remained relatively stable throughout the years.

Indeed, the tax regime alongside its favorable environmental climate, has attracted many to move their personal and business affairs to Malta or to invest in Malta. The country’s tax system protects both buyer and seller in property deals and has contributed to maintain the strength and perseverance of the Maltese property market, especially with relation to high-end properties. Moreover, residential prices in Malta saw a roughly 17% year-on-year increase from Q2 2017 to Q2 2018, putting the country in the lead worldwide in relation to house price rankings. In the first quarter of 2018 alone, residential prices had undergone a 3.6% average price increase.

The demand for property and steady price increments are nevertheless supported by a strong growth in disposable income, which continues to benefit from advantageous labor market conditions. Nevertheless, the fact that Malta has a low interest rate make it all the more attractive for investment. In turn, these factors continue to contribute to Malta’s exponential growth in lending for house purchases. Nonetheless, the increase in the foreign work force in Malta and, to a limited extent, the MIIP, have also been supporting demand for housing.

PROSPECTS FOR FAMILY BUSINESSES

Small-to-Medium Enterprises and family businesses lie at the heart of the Maltese economy and the Maltese government is aware of how crucial their contribution is. Intent on fostering the best possible thriving business environment, besides the implementation of a family business legislation which ultimately allows businesses that have a sound business plan to access financial support, the Malta Stock Exchange’s ‘Prospects MTF’ allows SMEs to access finance of between €1 to €8 million.

Therefore, SMEs can confidently seek access to funding without relinquishing ownership or control of their company, through the capital markets, traditionally associated with far higher levels of funding.

FINTECH, BLOCKCHAIN & ARTIFICIAL INTELLIGENCE HUB

Malta implemented groundbreaking legislation in the Blockchain or Distributed Ledger Technology (DLT) field in the shape of a trio of Acts that took force of law in 2018. The Malta Digital Innovation Authority Act (Cap. 591) sets out the basis for the creation of a digital authority, with the remit of regulating innovative technologies. The Innovative Technology Arrangements and Services Act (Cap. 592) sets out the legal basis under which the MDI will regulate such technologies, currently DLT platforms and smart contracts.
The Virtual Financial Assets Act (Cap. 590) regulates the launch of virtual financial assets (VFAs or cryptocurrencies) in or from Malta, as well as those providing services to VFAs, such as advisers, brokers, portfolio managers, or crypto exchanges. The VFA Regulations (S.L. 590.01) provide further guidance on how the act is to be applied in practice.
A national Artificial Intelligence (AI) taskforce has been set up with the vision of making Malta the ultimate AI launchpad, by creating an innovation sandbox and bringing together innovators, business angles, investors and users in a secure environment. No regulation has to date been announced, however the intention with technology with so many potential uses in different fields is for a light touch regime rather than a rigid approach that would stifle the necessary dynamism. The scope of both MDIA and ITAS are expected to include AI in the near future.

WHY MALTA CAN BE THE RIGHT JURISDICTION TO DO BUSINESS

Malta is a popular and reputable destination for start-ups and well-established businesses alike, who wish to set up or co-locate in Europe. Due to its long-standing pro-business approach, the islands are now home to over 70,000 international companies, with 30% of them being registered in the last 5 years.
As mentioned above, setting up operations in Malta is a relatively easy process. In general, no licenses or permits are required, save for businesses operating within certain sensitive sectors such as medical/pharma, gaming, financial services and aviation sectors. Convincingly, businesses in Malta can benefit from;

  • a competitive set-up and operational costs, which are 20% to 30% lower than in other European business hubs;
  • a fast track company formation process;
  • an English-speaking, highly professional workforce;
  • business incentives by Malta Enterprise (including tax credits, soft loans and training grants);
  • 5% net effective corporate tax rates and an efficient double taxation treaty network;
  • EU passporting rights for banks and financial services companies.

Interest or royalties are deemed to be passive when they are not derived directly or indirectly from a trade or business and where such interest or royalties have suffered foreign tax at a rate of less than 5%.

News & Developments
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Press Releases

Illumina/Grail: The Continued Search for the Panacea to the Killer Acquisition Conundrum

Chris Grech has authored a case note in the European Competition and Regulatory Law Review (CoRe). The publication provides a detailed overview of the Court of Justice of the European Union’s judgement in Illumina/Grail, which dealt with the issue of killer acquisitions and the possible way forward in this regard, as well as the principles of legal certainty and predictability in merger control. The case note can be accessed here. Author: Chris Grech
Ganado Advocates - July 8 2025
Corporate and Commercial

Struck-Off but still standing: The legal lifeline for companies

On 27th May 2024, the First Hall Civil Court (Commercial Section) (the ‘Court’) delivered its judgement in the names of ‘Usta Holdings Inc. vs. Ir-Reġistratur tal-Kumpaniji’ whereby the plaintiff, as the sole shareholder of Usta Maritime Co. Ltd (C 43902) (the ‘Company’), requested the Malta Business Registry (the ‘Registrar’) to have the name of the Company restored and placed back on the register after it was previously struck off for failure to abide by its obligations. Facts of the Case The Company was struck off the register on 10th December 2020, by order of the Registrar by virtue of regulation 9(3) of Subsidiary Legislation 386.19, namely the Companies Act (Register of Beneficial Owners) Regulations (the ‘Regulations’). Said Regulations dictate that if a company fails to provide information on its beneficial ownership, the Registrar has the right to inform a company of its default by means of a letter as indicated under regulation 9(2). If said information is not provided to the Registrar within one month from said letter, the Registrar may inform the company and publish a notice in the Government Gazette that upon the expiration of three months from the date of the last publication of said notice, the company’s name shall, unless cause is shown to the contrary or the Registrar is satisfied that there are sufficient grounds not to proceed with the striking off, be struck off the register. Following the striking off of a company as described under regulation 9(3) of the Regulations, all assets held by the company will eventually devolve onto the Government of Malta. The main asset of the Company was a pleasure yacht named the ‘m.y. BEY’ (holder of official number 11767), valued at around eight hundred and twenty thousand Euros (€820,000). In order not to lose their main asset, the plaintiff lodged an application in Court to have the Company reinstated onto the register. The plaintiff admitted that the Company was not in compliance with the Regulations and that the Company had also been in default for a number of years, thus understanding the Registrar’s decision to have the Company struck off as defunct. Additionally, the plaintiff also held that these actions were not done in bad faith nor were they done in an attempt to deceive the Registrar, but these were merely a result of alienation by the corporate services provider as a result of miscommunication with the Company. By means of the plaintiff’s application, it was made clear that they had every interest to have the Company restored, to the point that it had already reached out to the defendant Registrar, its corporate services provider and other affected competent authorities to make the necessary amends. Naturally, the plaintiff wanted to retain the Company’s ownership of the yacht with the goal of having the latter managing it, rather than having it devolve onto the government. As a remedy to Company’s wrongdoing, the plaintiff requested the Court to restore the Company onto the register and that it continues its existence by virtue of regulation 9(4) of the Regulations. The plaintiff also requested the Court to order the Registrar to take all of the necessary actions as required by virtue of the laws linked with the reinstating of a company on the register. Regulation 9(4) of the Regulations, as referenced by the plaintiff in their application, states that if a shareholder or a creditor of a company (or any other interested third-party) feels ‘aggrieved’ by the striking off of the company in question, said shareholder, creditor or interested third-party may submit an application within five years from the date of publication of the striking-off notice. A successful action under regulation 9(4) would result in the company being restored onto the register as if it were never struck off in the first place. This would also apply to the officers of the company, in that they would be reappointed back in office as a result of this regulation. Upon the Court’s order, the Registrar shall then proceed to publish a notice in the Government Gazette or on the website maintained by the Registrar (i.e. the Malta Business Registry’s online portal) and in a daily newspaper circulating wholly or mainly in Malta that the name of the company has been restored to the register. In their reply, the Registrar informed the Court that the Company had never submitted information concerning its beneficial ownership throughout its entire lifetime. The Registrar’s first attempt at making amends vis-a-vis the Company, was in the form of a letter dated 27th July 2020. On 10th September 2020, the Company was one of several companies mentioned in a publication on a local newspaper that were to be struck off the register, subject to no objections being made within three months from said date. The Registrar also reminded the Court of the fact that over the years, the Company had accumulated considerable penalties amounting to over seven thousand Euros (precisely €7,013.50) and were left outstanding as at the time of striking off on 10th December 2020. In its reply, the Registrar stated that if the Company was to be restored back onto the register, it requested that all of the outstanding information and documents concerning beneficial ownership and annual returns, for the benefit of third parties. Considerations of the Court Prior to proceeding to pass its judgement, the Court was informed that the Company had already settled all its outstanding dues, both in terms of penalties and in terms of missing documents/information, as a sign of its good faith and in an attempt to rectify the situation as swiftly as possible. As a result of this, the Court ordered: • the Registrar to reinsert the Company’s name back onto the register within 15 days from judgement, on the basis that all of the requirements of regulation 9(4) of the Regulations were satisfied; • the Registrar to effect all the publications that need to be made in order to have the Company placed back onto the register; • the Registrar to restore the Company back onto the register; and • the Company to be held responsible to cover the expenses incurred by the Registrar in reinstating the Company back onto the register. The Court outlined that the adherence to the prescription period mentioned within regulation 9(4) of the Regulations and the plaintiff’s willingness to rectify the situation were the main drivers of its decision. Concluding Remarks The ability for a company to be revived following its striking off by virtue of regulation 9(4) as discussed above, provides an exception to the widespread understanding that the striking off of a company is considered to be the ‘death’ of a company, with no other form of recourse available. Whereas a company which liquidates itself voluntarily and is eventually struck off is considered to be final due to a lack of an ‘aggravation’ by the Registrar, a company which encounters a situation as described in the case above is given ‘one last chance’ to rectify its failure to abide by its obligations and reverse its striking off. Ganado Advocates is responsible for contributing this law report but was not in any way involved as legal advisor for the parties in the judgment being covered in this law report. This article was first published in ‘The Malta Independent’ on 29/01/2025. Author: Gabriel Debono
Ganado Advocates - July 8 2025
Investment Funds

MFSA clarifies the scope of application of the DORA Framework to VFA Service Providers transitioning towards authorisation under the MiCA Regulation

On the 27th January, 2025, the MFSA released a Circular (the “2025 MFSA Circular”) with an important clarification under Regulation (EU) 2022/2554 (the “DORA Regulation”) pertinent to firms operating within the crypto space. By way of background, on the 26th March, 2024, the MFSA issued a Circular (the “2024 MFSA Circular”) through which the MFSA laid to rest the conundrum which industry had faced in terms of identifying which regime shall be applicable to financial services operators as of the 17th January, 2025 (the DORA Regulation’s application date); you may wish to refer to this publication as a refresher. Annex 1 to the 2024 MFSA Circular included an exhaustive list of the MFSA Authorised Persons which were, and remain, subject to the MFSA’s Guidance on Technology Arrangements, ICT and Security Risk Management, and Outsourcing Arrangements (the “MFSA Guidance Document”), including, by way of example, company service providers and recognised fund administrators. The entities listed in Annex 1 to the 2024 MFSA Circular do not fall in scope of the DORA Regulation. However, the said Annex 1 made no mention of the fate of operators licensed by the MFSA as VFA service providers under the VFA Act (Chapter 590, Laws of Malta (the “VFA Act”)). Against this backdrop, Ganado Advocates sought a clarification on behalf of industry from the MFSA to confirm whether existing operators licensed by the MFSA as VFA service providers under the VFA Act shall or shall not fall in scope of the DORA Regulation between the 17th January, 2025 (the DORA Regulation’s application date), and: the date on which the operator is granted or refused an authorisation as a crypto-asset service provider under Article 63 of Regulation (EU) 2023/1114 (the “MiCA Regulation”); or the 1st July, 2026, being the end of the transitional period referred to in Article 58(3) of the MiCA Act (Chapter 647, Laws of Malta); • whichever occurs first. The 2025 MFSA Circular has now clarified the following: the DORA Regulation applies to, inter alia, crypto-asset service providers as authorised under the MiCA Regulation and issuers of asset-referenced tokens; a VFA service provider authorised under the VFA Act is required to continue following the guidelines set out in the MFSA Guidance Document until the 1st July, 2026, or until the operator is granted or refused an authorisation as a crypto-asset service provider under Article 63 of the MiCA Regulation; and a VFA service provider which receives authorisation from the MFSA as a crypto-asset service provider pursuant to Article 63 of the MiCA Regulation shall, with effect from the date of the receipt of such authorisation: (a) no longer be subject to the MFSA Guidance Document, and (b) qualify as a financial entity under, and become subject to, the DORA Regulation. Complying with the DORA Regulation is a rather complex task which is further compounded by the regulatory and implementing technical standards and guidance documents being released under the DORA Regulation. Ganado Advocates has a DORA-focused team of professionals who are readily available to assist with any queries relating to the application of, and requirements emanating from, the MFSA Guidance Document or the DORA Regulation as may be applicable to your firm. Author: Luigi Farrugia
Ganado Advocates - July 8 2025
Corporate and Commercial

Another Step Forward in Digital Company Law Processes

On the 10th of January 2025, the European Union (EU) published the official text of Directive (EU) 2025/25 (hereinafter referred to as the ‘Directive’) in the Official Journal, which sets out various updates and amendments to Directive (EU) 2019/1151 and earlier frameworks on the use of digital tools and processes in company law. You can access this article by clicking here. The Directive introduces certain key features, such as a multilingual, authenticated EU Company Certificate and a standardised EU Power of Attorney, while also including stricter timelines for domestic company registers to process and publicly disclose company information. This publication aims to identify the main features of the Directive. Improved Company and Branch Incorporations through Digital Mechanisms The Directive introduces targeted updates to further modernize company formation and branch establishment across the EU. While companies can already be incorporated entirely online, the Directive now mandates improved security measures to prevent fraud and enhance reliability, such as advanced identity verification using audiovisual checks and trusted authentication services. In respect of branch registrations, the Directive requires that domestic company registers of Member States ensure that branch registration process can also be completed entirely online, while mandating that such registrations are to be finalised within ten business days, once all necessary documents and fees are submitted. Additionally, branch data should now be included within the EU’s interconnected company register system, which improves accessibility of information. Minimising Administrative Barriers for Cross-Border Transactions A key innovation introduced by the Directive, enshrined in its Article 16b, is the new EU Company Certificate – a standardised document aimed at facilitating cross-border recognition of company information. This electronic certificate shall constitute sufficient evidence, at the time of its issuance, of the incorporation and existence of the company, as well as certain essential company details, including its name, registered office, legal representatives, and other critical information. Such certificate may be obtained at least once per calendar year at no cost. Complementing the above is Article 16c, through which the Directive introduces the EU Power of Attorney – a digital mechanism intended to simplify cross-border representation of corporate entities. By way of a standardised European template, companies may authorise representatives for specific operations in other Member States, without the need to procure an apostille, translation or other similar formalities for authentication or validity. The standard template requires that an outline the scope and details of such representation are inserted, so as to ensure clarity and consistency. Facilitating Document Filing and Authentication The Directive also extends its focus beyond incorporation to the online filing of post-incorporation documents. By reducing the traditional reliance on physical filings, which often leads to delays in registration and increased costs. To meet the Directive’s aims of simplify processes, domestic company registrars are encouraged to adopt advanced electronic controls, such as remote identity verification systems, to minimise the need for in-person interventions. Notwithstanding this, certain robust oversight mechanisms have been included to prevent and combat instances of fraud and misuse. Firstly, all documents filed electronically are to be authenticated using advanced trust services to enhance the security, reliability, and validity of electronic transactions, as prescribed by Regulation (EU) No 910/2014 (the “eIDAS Regulation”). In addition, domestic registrars retain the authority to verify the identity and legal capacity of applicants. In exceptional cases (as may be required for reasons of public interest), such as suspected fraud or identity misuse, domestic registrars may even require the physical presence of applicants. The Maltese Position The Directive enters into force as of the 30th of January 2025, whereas Member States are required to domestically adopt and promulgate the rules set out in therein by 31 July 2027. Locally, the Malta Business Registry (MBR) has already made strides to comply with the standards set out in the Directive, primarily through the launching of its Business Automation Registry Online System (BAROS), wherein users may digitally submit company documentation through a company-linked authorised account on the BAROS website. Notably, it is now a mandatory requirement for Maltese companies to submit their annual accounts online, through BAROS. Additionally, the MBR now accepts company documentation executed via ‘Qualified Digital Signatures’ (QES), which are electronic signatures generated using cryptographic methods designed to be tamper-evident and uniquely associated with the signatory. This allows the MBR to identify the signatory with a high degree of confidence. In fact, QES’ hold the same legal authority and enforceability as handwritten signatures on physical documents. The MBR, through its BAROS platform, provides a QES service free of charge, allowing authorised signatories of company documentation to execute and submit such documentation electronically, provided that they have completed an identity verification process conducted by MBR personnel, in compliance with the standards outlined in the eIDAS Regulation. For further information, please feel free to reach out to Stuart Firman and Benjamin Farrugia who form part of the Corporate Finance and Tax team at Ganado. Authors: Stuart Firman, Benjamin Farrugia
Ganado Advocates - July 8 2025