Maltese Corporate Service Providers have September deadline to be compliant under new Act

As of 16 March 2021, the new act came into force. Prior to that date, any warranted professional such as a lawyer, notary, accountant, legal procurator, or anyone operating under the ‘De Minis Rule’, that provides corporate services such as directorships, company secretary, registered office, or general incorporations, had until 16 May 2021 to seek authorisation.

 

This authorisation should have been sought from the Malta Financial Services Authority (MFSA) who’s job is to oversee the work and services of company service providers. It applies to any person or entity, offering these services in or from Malta.

 

Why was the reform undertaken?

The authorities sought changes to the existing regime in order to raise standards amongst Malta’s thriving corporate service providers sector. With more international and local businesses coming to Malta each day, it was necessary to improve the level of transparency and professionalism.

 

Head of Conduct Supervision at the MFSA, Emily Benson said that the latest reform was designed to place Malta at the fore of “good international practice with respect to protecting the integrity of the financial system and the border economy from undesired and illegal activity.”

 

The MFSA added in a statement that their aims remain the same, to carry out the “risk-based supervision of Company Service Providers and their level of compliance with the applicable legislative framework.”

 

What else do I need to know?

The new regime creates three different licensing structures, Class A, Class B, and Class C. Each license type refers to a different set of services that the individual or entity is authorised to provide. These measures bring all corporate service providers underneath MFSA supervision as before the changes, some fell below the threshold and scope of the previous act.
 

• Class A: These providers are those who provide services like the formation of companies and legal entities, provision of a registered office, business correspondence, or administrative addresses to a third party.
• Class B: This category refers to those who are authorised to provide or arrange for another person to act as a director, secretary, partner, or similar position in a legal entity.
• Class C: Those that provide all of the services mentioned in Class A and Class B.

 

Other criteria apply including revenue, the number of involvements for each CSP but these should be discussed with your BDO Malta contact for clarification. Similarly, there are a handful of exemptions, but you should seek advice before assuming it doesn’t apply to you.

 

Any CSPs that were already registered as such, didn’t have to apply again as they would be automatically included under the CSP act. The MFSA said they would contact each provider to advise them of what Class of license they fall into.

 

Additionally, all CSPs are now required to appoint key function individuals such as a Money Laundering Report Officer and a Risk Management Officer.

 

All CSPs registered with the MFSA then have until 16 September 2021 to make sure they are in line with all the rules as specified by their respective license class. The MFSA will monitor and supervise all CSPs, be they individuals or entities.

 

What do I do now?

If you provide any of these services or are not sure if the new provisions apply to you, it’s better to be safe than sorry. Contact BDO Malta to speak to a professional member of our team who can advise you on your unique situation. They can also help you ensure you are compliant with all the terms and measures in the new legislation in time for the September deadline.