On May 16, 2025, Malta enacted Act X of 2025, introducing significant amendments to the Company Service Providers Act (Cap. 529), marking a key milestone in strengthening and refining the regulatory framework governing company service providers (CSPs) in Malta. These changes, driven by the Malta Financial Services Authority (MFSA), aim to enhance proportionality, transparency, and oversight, particularly focusing on individuals providing directorship and company secretary services.
The amendments follow an extensive review initiated by the MFSA in 2024 to address gaps in the regulatory framework, especially concerning individuals who provide limited company services without formally operating "by way of business." Previously, certain categories of service providers, such as those offering directorship or secretarial roles on a non-commercial basis, were exempt from registration or notification requirements, resulting in limited regulatory visibility.
Key Amendments Introduced by Act X of 2025
1. Introduction of a Three-Tier Classification System
The Act introduces a more nuanced classification of company service providers, replacing the one-size-fits-all approach with three distinct categories:
- Company Service Providers (CSPs): Entities or individuals fully authorised under Article 3 of the Act, subject to the comprehensive CSP Rulebook and regulatory requirements.
- Limited Company Service Providers (LCSPs): Natural persons providing directorship and/or company secretary services by way of business but limited to no more than 10 involvements at any time. LCSPs are now required to register with the MFSA under Article 3A(2), a lighter regulatory regime compared to full authorisation.
- Restricted Company Service Providers (Restricted CSPs): Individuals providing such services not by way of business, holding up to 5 involvements across a maximum of two corporate groups. These persons must notify the MFSA of their activities under Article 3B, introducing a new notification requirement where none existed before.
2. Registration and Notification Requirements
- Registration for LCSPs: Those qualifying as Limited CSPs must submit a registration form to the MFSA. This formalises their status and subjects them to a regulatory framework, including compliance with AML/CFT obligations.
- Notification for Restricted CSPs: Individuals who fall within the Restricted CSP category must submit a notification form via the MFSA's LH Portal by July 16, 2025 (two months from the effective date of the amendments). This notification enables the MFSA to monitor and maintain oversight over these previously unregulated service providers.
3. Exemptions and Clarifications
The Act clarifies exemptions from registration or notification, including individuals providing services:
- Under employment arrangements.
- Holding direct or indirect beneficial interests in the companies concerned.
- Related by family to the beneficial owners.
- Employed by authorised CSPs.
Additional exemptions apply to services provided to entities regulated or authorised by the MFSA or equivalent overseas regulators, or companies listed on regulated markets.
4. Enhanced Governance and Compliance
The amendments also introduce provisions to improve governance standards, including restrictions on directors of companies with outstanding penalties, reinforcing accountability within Maltese companies.
Supporting Regulatory Updates
Alongside the legislative changes, the MFSA has updated the Company Service Providers Rulebook and introduced a new rulebook specifically for Limited Company Service Providers, outlining detailed compliance, governance, and reporting obligations tailored to the new classifications. The MFSA has also issued guidance notes and circulars to assist affected individuals and entities in understanding and complying with the new requirements.
Conclusion
These reforms embody a strategic approach to regulatory practices, ensuring that Malta upholds high standards in alignment with international anti-money laundering (AML) and counter-financing of terrorism (CFT) commitments. These changes aim to enhance transparency and mitigate the risks associated with the anonymous or informal provision of company services.
Act X of 2025 substantially modernises Malta's Company Service Providers Act by implementing a tiered regulatory framework that more accurately reflects the scale and nature of the services provided. This advancement reinforces Malta's reputation as a jurisdiction that is well-regulated, transparent, and compliant with international standards for corporate services.
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