Author: Sarah Grima, Associate
These FAQs are the first part of a two-part series regarding the procedure and requirements at law concerning the continuation (or re-domiciliation) of companies, in terms of the Continuation of Companies Regulations (the “Regulations”).
Company continuation (or re-domiciliation) is the process by which a company that is incorporated or registered in one jurisdiction, transfers its seat of incorporation or registration to another jurisdiction, without the need to be wound up or liquidated.
The Regulations govern both (i) the continuation into Malta of a foreign company as well as (ii) the continuation outside Malta of a Maltese company.
Part 1 of these FAQs shall consider the process of continuation (or re-domiciliation) into Malta.
What are the eligibility requirements for a foreign company to be registered as being continued in Malta?
- The foreign entity requiring to be continued in Malta must be a body corporate registered or incorporated in an approved country or jurisdiction;
- The foreign entity requiring to be continued in Malta must be a body corporate that is similar in nature to a Maltese company;
- The law of the jurisdiction where the foreign entity is registered must allow for companies to be continued in another jurisdiction;
- The Memorandum and Articles of Association or the constitutive documents of the foreign entity must expressly allow for the foreign entity to be continued in another jurisdiction.
What is the procedure for the continuation of a company in Malta, and what are the documents involved?
A request to the Registrar of Companies in Malta must be made by the foreign company, for the latter’s registration as a company continued in Malta, and this by means of a prescribed form, which must be accompanied by the following documentation:
1. A resolution of the foreign company authorising it to be registered as being continued in Malta;
2. The statute of the foreign company, revised as necessary so as to include all the requirements for the registration of a company in Malta in terms of the Companies Act (Chapter 386 of the Laws of Malta);
3. A certificate of good standing issued by the competent authority of the country in which the foreign company was incorporated or registered (the foreign jurisdiction), or such other documentary evidence in respect of the foreign company, which shall show, to the satisfaction of the Registrar of Companies in Malta, that the foreign company is in compliance with the registration requirements of the foreign jurisdiction;
4. A declaration signed by at least 2 directors of the foreign confirming:
- the name of the foreign company and the name under which it proposes to be continued in Malta;
- the jurisdiction under which the foreign company is incorporated;
- the date of incorporation of the foreign company;
- the decision to have the foreign company registered as continuing in Malta;
- that formal notice has been given to the relevant authority in the foreign jurisdiction of the foreign company’s decision to be registered as continuing in Malta, together with evidence of such notification;
- that no proceedings for breach of the laws of the foreign jurisdiction have been commenced against the foreign company.
5. A declaration signed by at least 2 directors of the foreign company confirming that the company is solvent and that the directors are not aware of any circumstances which may negatively affect such solvency in a material manner within the next 12 months;
6. A list of the directors and company secretary of the foreign company;
7. Any other information which the Registrar of Companies in Malta may require.
Are there any additional requirements applicable in the case of licensed companies?
Yes. Where the foreign company carries on a business, which if conducted in or from Malta, would require a license or authorization to be carried out in Malta, and such foreign company is licensed or authorized by a competent authority in the foreign jurisdiction, it must:
- provide evidence of the consent by the foreign competent authority that the foreign company can be registered as being continued in Malta; and
- obtain a licence or other authorization from the competent authority in Malta before commencing operations.
Are there any additional requirements applicable in the case of public companies?
Yes. Where the foreign company is a public company, the following additional documents are required:
- the most recent prospectus (where the foreign company has offered its shares or debentures to the public);
- the consent by the foreign competent authority that the foreign company is allowed to register as being continued in Malta (where the foreign company is quoted on a recognized stock exchange);
- evidence of the current membership of the foreign company.
Are there any additional requirements applicable in the case of companies in which the shares are held by a foreign nominee or trustee?
Yes. A foreign nominee or trustee holding shares in a foreign entity, the latter of which intends to be registered as continued in Malta, must obtain authorisation in Malta to be able to act in such capacity on the company to be continued in Malta.
In addition, the foreign nominee or trustee must:
- be in possession of a valid licence or authorisation to act as trustee, issued by the relevant regulatory authority in an approved jurisdiction; and
- pay an annual authorisation fee of €1,164.69 to the Malta Financial Services Authority.
It is relevant to note that the requirement for authorisation in the case a foreign nominee or trustee as set out above, shall not apply where the shares in such foreign company do not have any special voting rights and do not exceed, in the aggregate, EUR 2.33 in nominal value.
Is a fee payable for the registration of a company as being continued in Malta?
Yes, the registration of a company as being continued in Malta is subject to a statutory registration fee, which varies depending on the amount of the authorized share capital of the foreign company to be continued in Malta.
The minimum fee is €245 (which is applicable to companies having an authorised share capital not exceeding €1,500) while the maximum fee is €2,250 (which is applicable to companies having an authorised share capital exceeding €2,500,000).
At what point will the Company be considered to be re-domiciled to Malta?
Once the Registrar of Companies in Malta is satisfied that the prescribed form and supporting documents submitted are in accordance with the Regulations, the Registrar shall issue a Provisional Certificate of Continuation. With effect from the date of the Provisional Certificate of Continuation, the company shall be deemed to be a company registered under the Companies Act.
Within a period of 6 months from the date of the issue of the Provisional Certificate of Continuation, the company must submit documentary evidence to the Registrar of Companies in Malta showing that it has ceased to be a company registered under the foreign jurisdiction and must return the Provisional Certificate of Continuation, following which the Registrar of Companies in Malta shall issue a Certificate of Continuation, dated as at the date of the Provisional Certificate of Continuation, confirming that the company has been registered as continuing in Malta.
Can a request for registration be refused by the Registrar of Companies in Malta?
Yes. The Registrar shall refuse a request for the registration of a foreign company as being continued in Malta if:
- the dissolution or winding up or insolvency proceedings in respect of the foreign company have commenced;
- a liquidator or special administrator of the foreign company or a receiver of its property has been appointed;
- a scheme or order in relation to the foreign company exists whereby the rights of creditors are suspended or restricted;
- any proceedings for breach of the foreign country’s laws have been commenced against the foreign company (not being proceedings arising out of an event which on the date of the occurrence thereof did not constitute such a breach).
Part 2 of these FAQs will consider the process for the continuation of companies outside Malta. Look out for Part 2 next week!
Should you require any further information or assistance on the matter, please do not hesitate to reach out to Sarah Grima personally on email@example.com.
©Fenech & Fenech Advocates 2021
Disclaimer │ The information provided on this Update does not, and is not intended to, constitute legal advice. All information, content, and materials available are for general informational purposes only. This Update may not constitute the most up-to-date legal or other information and you are advised to seek updated advice.