By means of Act No. L of 2020, the Government of Malta has published an Act to amend the Company Service Providers Act (Chapter 529 of the Laws of Malta). The provisions of the Act are not yet in force and they shall come into force on such date or dates as the Minister responsible for Finance and Financial Services may establish by means of a notice in the Government Gazette.
An important amendment to the Act is that persons will no longer be registered but will with effect from the date of coming into force of the Act be instead authorized by the MFSA.
The following are the salient amendments to the Act.
Authorization to persons regulated by foreign authorities
Persons having a license, registration or authorization to provide company services issued by the authorities of a foreign approved jurisdiction shall not be subject to any authorization from the MFSA. Such persons must however notify the MFSA in writing of their intention to provide company services in Malta at least 90 days (increased from 45) prior to the commencement of their activities in Malta. The MFSA will confirm in writing that it does not object to such activities.
Cancellation of an authorization
The MFSA has been granted the power to cancel authorization to an authorized person if such a person is found liable by the FIAU for a serious, repeated or systematic breach of the Prevention of Money Laundering Act and any of its regulations.
Any person whose authorization has been cancelled shall within sixty days ensure that the services are transferred to another authorized person. Authorized persons that request a cancellation of their authorization must first ensure that their services are transferred to another authorized person before the Authority can accede to their request to cancel such authorization.
Auditors of Corporate Services Providers
Auditors of authorized persons have the duty to inform the MFSA of any facts which (a) are likely to constitute a material breach of the legal or regulatory requirements applicable to authorized persons (b) can gravely impair the authorized person’s ability to continue as a going concern and (c) is likely to lead to a series qualification or refusal of the audit report on the accounts of such authorized person.
Administrative penalty
The maximum administrative penalty has increased from Eur25,000 to Eur50,000.
Authorization to persons who so far have been exempt from registration under the Act
Persons in possession of a warrant to carry out the profession of an advocate, notary public, legal procurator or certified public accountant, shall not be required to obtain authorization from the MFSA. They will however no longer be considered to be exempt from the requirement to be authorized following the expiration of eight months from the first date of the coming into force of the amendments.
Persons who prior to the coming into force of the amendments were offering the services of a CSP and who were not required to be registered, may only continue to offer such services after the expiration of eight months after the coming into force of the said amendments if:
- they have applied for authorization within two months from the date of coming into force of the amendments and have been authorized by the MFSA as an under-threshold CSP within eight months from such date in which the amendments came into force; or
- they have applied for authorization within two months from the date of coming into force of the amendments and have been provisionally authorized by the MFSA as an over-threshold or Class C CSP within eight months from such date in which the amendments came into force subject to the submission of any additional information as may be required by the MFSA and payment of any additional fees as may prescribed
The MFSA shall within twelve months after granting provisional authorization notify such person of its decision whether or not to grant or refuse authorization.
Persons who are already registered as CSPs under the Act
Persons who are already registered as CSPs prior to the coming into force of the amendments, shall be considered to be authorized persons. The MFSA will be notifying such persons of their classification and are not required to submit any application to the said authority.
Persons who are waiting for registration from the MFSA
Persons who have already submitted an application to become a registered CSP prior to the coming into force of the amendments, but whose application has not yet been determined by the MFSA, shall notify the Authority in writing, whether they will be continuing with the said application or whether they wish to withdraw their application. If an applicant does not notify the MFSA within 3 months of the date of coming into force of the amendments, such application is deemed to have been withdrawn.
Authorized persons will with effect from the date on which the amendments to the Act will come into force be classified into one of three different classes as follows:
Classification of Corporate Services Providers
Corporate Service Providers will be classified into three classes, Class A, B or C. In the case of Class A and B, the MFSA will also determine whether the person is over or under threshold as per rules which have just been published by the MFSA.
Class A CSP
A company service provider authorized to provide, by way of its business, the following services to third parties: (i) formation of companies or other legal entities; and, or (ii) provision of a registered office, a business correspondence or administrative address and other related services for a company, a partnership or any other legal entity.
Class B CSP
A company service provider authorized to provide, by way of its business, the services to third parties of acting as, or arranging for another person to act as director or secretary of a company, a partner in a partnership or in a similar position in relation to other legal entities.
Class C CSP
A company service provider authorized to provide, by way of its business, all of the services of a company service provider specified under article2(1) of the Act in the definition of “company service provider”.
