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Re-domiciliation/Continuation of Companies
Maltese law enables the continuation of companies at two levels namely:
- Companies registered in Malta to be continued in another jurisdiction, and
- Companies registered in another jurisdiction, to be continued in Malta.
Legal effects of continuation
Re-domiciliation, or continuation, signifies that a company may retain its already existing status as a body corporate, in the new jurisdiction where it is continued. In effect, no new legal entity is created and this arrangement is intended to ensure that nothing prejudices or affects the continuity or continued operation of the company. That is to say, the company retains all its assets and liabilities and remains bound by all obligations incurred as from the date of its incorporation in the first jurisdiction.
There are a number of jurisdictions, other than Malta, that have similar legislation in place. Indeed it would not be possible to continue a company in any one jurisdiction unless there are other jurisdictions that have enacted provisions in their legislation to allow such “transactions”.
Continuation of Companies legislation has existed in the United States and Canada for very many years and in a number of other jurisdictions such as the Isle of Man, Gibraltar, Bermuda, Cayman Islands, BVI, Bahamas, Jersey & Guernsey, to name a few.
Continuation of a company in Malta does not affect any legal or other proceedings instituted or to be instituted by or against the company. In addition, continuation does not operate to release or impair any conviction, judgement, ruling, order, liability or obligation due or to become due or any cause existing against the company or against any member, director, officer, or persons vested with the administration or representation of the company.
Why Malta?
A number of essential characteristics differentiate Malta from almost all small country economies with finance sectors. The most important is that Malta is an onshore, rather than an offshore jurisdiction. Its finance sector laws are aligned to EU directives and its banking supervision relationships are directly linked to structures like the Basle Convention and other mainstream international supervisory regimes. It is also playing an important role in the development of global regulatory policy and Malta's Minister of Finance now represents Commonwealth countries on an OECD task force of 13 countries.
Malta tax legislation has proved to be attractive to organisations involved in international trading or business activities and the tax treatment applicable would depend on the nature of activities being carried out by the company and the allocation of income to the different taxed accounts existing under Malta tax law.
Continuation in Malta is excluded only in exceptional cases, particularly where:
- Proceedings for dissolution/winding-up/insolvency or proceedings of a similar nature, have been commenced by or against the company;
- A liquidator or special administrator has been appointed;
- There is a scheme or order whereby creditors' rights are suspended or restricted;
- Proceedings for breach of law have been commenced against the company (not being in relation to some event which at the date of the occurrence thereof did not constitute a breach of law).
A body corporate that is continued in Malta under these provisions will enjoy all benefits available under Maltese legislation.
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