The company service providers (amendment) act, 2020 (referred to as the ‘amendment act’ in the following text) came into force on March 16, 2021, by virtue of Legal Notice 96 of 2021.
It serves to amend the provisions of the company services providers act, chapter 529 of the Laws of Malta (as amended by the amendment act, the ‘CSP act’). The Malta Financial Services Authority (MFSA) has also launched the updated rulebook for company services providers (the ‘rulebook’) in this respect.
The revamp which the new CSP act and rulebook have brought about cannot quite be fully summarised within a few pages but the result is largely one where the applicable rules cast a much wider net by extending to all types of legal persons and not just companies, removing previously applicable exemptions and de minimis rules, and impose farther reaching ongoing obligations and heftier penalties for non-compliance in a bid to raise standards within the sector.
CSPs already registered with the MFSA as of March 16 are considered to be authorised under the new CSP act but will still be classified in accordance with the classes described below and will need to comply with the amended regime. CSPs which were not previously registered, but which are no longer exempt, have set time periods within which to apply for authorisation.
Existing CSPs – including the ones who were previously exempt – must, therefore, take a good and close look at the revised regime to properly digest the new intricacies applicable to their operations. There is a pressing need for all CSPs to regularise their position within the time frames that have been set and this will prove challenging, particularly to the smaller CSPs whose systems might not yet be geared to the levels of ongoing compliance now envisaged. Those in doubt as to what their new obligations may be in this regard are encouraged to seek timely legal advice
While there has been no change to the type of services constituting CSP services in terms of the CSP act, there has been a shift from a system of registration with the MFSA to a system of authorisation and classification. In terms of the reform, existing CSPs and new applicants for the provision of company services will now be classified by the MFSA into one of the following three classes, depending on which of those services are offered:
(a) Class A CSPs are those providing:
i. formation of companies or other legal entities; and/or
ii. a registered office, business correspondence or administrative address and other related services for a company, a partnership or any other legal entity.
(b) Class B CSPs are those 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.