Malta: Malta Legislative & Tax Regime Changes — Implications for International Business

Malta Legislative & Tax Regime Changes — Implications for International Business

Malta implemented significant reforms in 2025 to company law, the company service provider (CSP) regime, and corporate taxation. These measures aim to modernise administration, improve transparency, and align Malta with EU and OECD standards. The reforms directly impact incorporation, governance, service provision, and tax planning for international businesses.

Corporate Law and Governance

The Companies (Amendment) Act, 2025 (Act XVIII of 2025), introduces extensive updates to the Companies Act (Cap. 386). Article 212, which previously defined the “exempt company,” has been repealed. Such companies are now considered private companies, subject to limited transitional relief under Article 212a. Amendments to Article 72 allow non-cash allotments not exceeding €50,000 to be supported by a directors’ declaration, removing the need for an expert report as otherwise required by Article 73.

Further changes clarify the position of usufructuaries in Article 123, confirming rights to dividends and meeting participation. Article 329A introduces an obligation to notify the Malta Business Registry (MBR) of pledges over shares, thereby ensuring encumbrances are publicly recorded. Article 325B establishes a simplified dissolution process for inactive private companies with assets not exceeding €5,000 and no outstanding liabilities, provided inactivity extends for twenty-four months. Additionally, Article 69A requires companies to maintain an actively monitored registered email address, with Registrar communications sent to that address considered valid service.

The Register of Beneficial Owners Regulations were amended through Legal Notice 127 of 2025, which extended reporting obligations to entities formed by cross-border conversions, mergers, and divisions. In its Public Notice of 10 July 2025, the MBR confirmed that these amendments have come into effect, aligning Malta with the requirements of Directive (EU) 2018/843.

Company Service Providers

The Company Service Providers Act (Cap. 529) was amended by Act X of 2025, which took effect on 1 May 2025. The Act now categorises three types under Article 3. Restricted CSPs must merely notify the Malta Financial Services Authority (MFSA). Limited CSPs need to register, subject to predefined activity limits. Full-service CSPs require licensing under Article 4 and are subject to prudential and fitness and propriety tests. A circular issued by the MFSA on 20 May 2025 confirmed that notifications for Restricted CSPs were due by 16 July 2025. The reforms aim to apply regulation proportionately while enhancing AML and governance standards under Articles 7 to 10.

International Tax Regime

The most significant fiscal reform is the Final Income Tax Without Imputation Regulations, 2025, issued under Legal Notice 188 of 2025. Regulation 3 allows companies to opt into a 15 per cent final tax at the corporate level instead of Malta’s traditional imputation system under Articles 48–51 of the Income Tax Act (Cap. 123). Regulation 5 states that the election must be maintained for at least five years, while Regulation 6 requires a dedicated Final Tax Account to record income subject to the regime. Although the final tax offers greater certainty, it may be less advantageous than the refund model, where shareholder refunds reduce the effective rate below 15 per cent.

Through Act XIV of 2025, Malta transposed the administrative provisions of the EU Minimum Tax Directive, enabling the Commissioner for Revenue to collect information relevant to OECD Pillar Two. Although Malta has not yet implemented a domestic top-up tax, multinational groups with Maltese subsidiaries must already prepare for reporting.

Malta’s treaty network, now encompassing over eighty jurisdictions, continues to offer valuable tax planning opportunities. The Convention between Malta and Curaçao, ratified by Legal Notice 212 of 2024 and coming into effect on 1 September 2024, introduced reduced withholding tax rates and OECD-compliant anti-abuse clauses.

Implications for International Clients

The reforms streamline both incorporation and dissolution processes while implementing stricter compliance requirements, such as pledge registration, beneficial ownership disclosures, and electronic notices from the Registrar. CSPs must assess their activities against the updated framework and adhere to reinforced AML regulations. Taxpayers need to carefully compare the new 15 per cent final tax regime with the imputation system and model outcomes. Multinational groups should continue developing their Pillar Two reporting infrastructure despite the lack of a domestic top-up tax. Malta’s treaty network and EU membership maintain the jurisdiction's attractiveness, provided investors meet substance and governance standards.

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Reference/Citation

• Companies Act (Cap. 386 of the Laws of Malta), as amended by Act XVIII of 2025.
• Company Service Providers Act (Cap. 529 of the Laws of Malta), as amended by Act X of 2025.
• Income Tax Act (Cap. 123 of the Laws of Malta), relevant Articles 48–51.
• Legal Notice 127 of 2025, Register of Beneficial Owners (Amendment) Regulations.
• Legal Notice 188 of 2025, Final Income Tax Without Imputation Regulations, 2025.‍
• Legal Notice 212 of 2024, Convention between Malta and Curaçao (Double Taxation Treaty).