The Company Service Providers Act, Cap 529 of the Laws of Malta, as revised by Act L of 2020, extends the requirement of authorisation to persons that had previously been exempted from authorisation and supervision from the Malta Financial Services Authority (the “MFSA”) to provide Company Service Provider (“CSP”) services. The revised regime strives to comply with the principle of proportionality and to take a risk-based approach when regulating different natural persons and legal entities to which it applies. The differences posed by the various risk profiles are reflected in the following classes:
Class A
Authorised to provide the following services to third parties:
a. Formation of companies or other legal entities; and/or
b. 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.
Under Threshold Class A
Authorised to provide only the following service to third parties:
a. Formation of companies or other legal entities.
Class B
Authorised to provide the following services to third parties:
a. Acting as or arranging for an individual to act as a director or company secretary, a partner in a partnership or in a similar position in relation to other legal entities.
Under Threshold Class B
Authorised to provide the following services to third parties:
a. Acting as or arranging for an individual to act as a director or company secretary, a partner in a partnership or in a similar position in relation to other legal entities.
Class C
Authorised to provide any of the above CSP services as per Class A and B and therefore:
a. Formation of companies or other legal entities;
b. 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;
c. 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.
Criteria for Under Threshold Classes
The CSP Rules outline the specific criteria which have to be satisfied by a CSP in order to qualify for one of the ‘Under threshold classes’. If the CSP does not fall within the parameters set for the under threshold classes, the CSP will be automatically classified by the MFSA as a ‘over threshold’ CSP.
Under Threshold Class A
The criteria by which a CSP, individual or civil partnership in possession of a warrant, will be considered to be classified as Class A ‘under threshold’ are as follows:
a. The person is a natural person or a civil partnership in possession of a warrant, or equivalent, to carry out the profession of advocate, notary public, legal procurator, or certified public accountant;
b. The revenue generated through the offering of CSP services does not exceed:
i) 35% of the total revenue from the provision of professional services; or
ii) EUR 100,000
whichever is higher.
The method of calculating revenue for this under threshold class is explained in the CSP Rules issued by the MFSA.
Under Threshold Class B
The criteria by which an individual CSP, will be considered to be classified as Class B ‘under threshold’ are as follows:
a. The total number of involvements/engagements as director and/or company secretary in a company or equivalent role in another legal person does not exceed ten (10) involvements;
b. Involvements with entities which are licensed, recognised, or otherwise authorised by MFSA shall not be counted;
c. Involvement of the same person within the same group of companies shall only count as one single involvement.
Other methods of calculating the involvements for this under threshold class is explained in the CSP Rules issued by the MFSA.
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The information contained in this write up is provided for general informational purposes only. It does not, and is not intended to, constitute legal advice on any subject matter. You should not act or refrain from acting on the basis of any content included in this write up without seeking legal or other professional advice for your particular situation.
