On the 13th October 2020, the Parliament of Malta sat for the second reading of the Company Service Providers (Amendment) Bill (the “Bill”) which is to effect the amendments envisaged by the Malta Financial Services Authority in its feedback statement dated 9th April 2020 (“MFSA”). Below is a synopsis of the most important changes delineated in the Bill.
The Bill proposes that the existing exemption for warranted professionals to provide corporate services without being authorised, will cease upon the passing of 8 months from the enactment of the amending act.
A new article will be introduced in the Company Service Providers Act (the “Act”) which will provide that exempt professionals will only be able to continue offering their services for 8 months after the enactment of the amending act and only if the following conditions are satisfied:
- They apply for authorisation within 2 months from the coming into effect of the amending act and are authorised by the MFSA as an under-threshold within 8 months; or
- They apply for authorisation within 2 months from the coming into effect of the amending act and they are granted a provisional authorisation as an over-threshold or Class C CSP within 8 months.
The criteria by which a service provider would be considered to be an over-threshold or under-threshold Company Services Provider (“CSP”) shall be provided for in the rules still to be issued by the MFSA.
Already registered CSPs
With regards to already authorised CSPs, they will not be required to register again with the MFSA and are deemed to be continuing as authorised persons. Nevertheless, they will be subject to a classification process whereby they will be classified as either “Class A”, “Class B”, or “Class C” as provided for in the feedback statement.
Those entities who have requested to be registered as CSPs that however have not yet been registered by the Authority shall notify the Authority that they wish to continue with their application. If this notification is not sent within 3 months of the coming into force of the amending act, the Authority will treat such application as revoked. These entities will also be subject to the classification process.
The amending act will also introduce, by means of a new schedule, the three classes through which CSPs will be classified. The classes are the following:
Class A CSP: A company service provider authorised to provide, by way of its business, the following services to third parties:
- formation of companies or other legal entities; and/or
- 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 authorised to provide, by way of its business, the service 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 authorised to provide, by way of its business, all the services of a CSP.
The above information reflects the Bill as provided in the second reading and therefore such information may change according to the upcoming deliberations in parliament.
Feel free to contact us if you require any further information on the legal framework for Company Service Providers.