The Recent Amendments to the Company Service Providers Act

The Recent Amendments to the Company Service Providers Act

On 16^th May 2025, the Malta Financial Services Authority (the ‘Authority’) published amendments to the Company Service Providers Act[1](the ‘Act’), which were introduced through Act X of 2025, in order to fortify its ongoing effort to enhance proportionality within the regulatory framework applicable to Company Service Providers (‘CSPs’). Together with the amendments to the legislative framework and new provisions to the Act, the Authority has also introduced some minor amendments to the existing Company Service Providers Rulebook[2] and further introduced a new Rulebook applicable to Limited Company Service Providers[3].

Updates - What do the changes involve?

The main amendments to the Act are intended to further refine the provision of directorship and company secretary services (the ‘Relevant Services’) mainly impacting the Class B CSP category.

A key amendment being introduced to the CSP legislative framework is the Notification requirement. This requirement is intended to address the category of service providers who albeit not acting by way of business are carrying out and/or providing limited directorship and/or company secretary services. Prior to these amendments, this category of persons was exempt from the requirement of obtaining a license from the Authority. As a result, this category had been identified in the Maltese financial sector on which the Authority had very little or no visibility.

To address this shortcoming, the newly introduced Article 3(B) of the Act requires such individuals, who are referred to as Restricted Company Service Providers, to notify the Authority of the fact that:

• s/he acts as a director and, or a company secretary in a company and, or a partner in a partnership and, or holds a similar position in relation to other legal entities; and
• does not act or hold any position as referred to in the above paragraph ‘by way of business’; and
• that s/he meets the requirements established in the rules issued by the Authority in the CSP Rulebooks. These requirements are the hereunder:
• the individual must not have more than five (5) involvements as director and, or company secretary in a company and, or a partner in a partnership and, or a similar position in relation to other legal entities; and
• the individual must not have involvements in more than two (2) groups of companies as per the definition in the CSP Rulebooks.

Furthermore, the Authority also provided additional clarity on the phrase ‘by way of business’. It has now been clarified that for a person to be acting by way of business, s/he must:

• hold oneself out as providing company services inter alia by soliciting the services on offer to members of the public; or
• provide company services on a regular and habitual basis.

If any one of these two conditions are satisfied, and the individual is also directly or indirectly in receipt of remuneration or other benefits for the provision of such services, that person is deemed to be providing the service ‘by way of business’.

On the other hand, the Authority’s interpretation of when an appointment is not deemed as ‘by way of business’ remained unchanged and refers to individuals who provide the Relevant Services as described in the Act as a direct result of:

• an employment agreement; or
• the holding of a direct/indirect beneficial interest in the company; or
• family relations; or
• when appearing as director and/or company secretary to corporate clients as part of one’s employment with an authorised CSP.

Applying the above criteria, individuals who do not qualify as Restricted Company Service Providers are not required to fulfil the notification requirement.

These changes must also be read in conjunction with the new amendments made to the Company Service Providers (Exemption) Regulations[4]. The latter have been extended to include exemptions where individuals provide the Relevant Services to:

• Entities which are licenced, registered, or otherwise authorised by the MFSA (or authorised by an overseas regulatory authority in a recognised jurisdiction) and the parent thereof; and
• Entities whose financial instruments have been admitted to listing on a regulated market in Malta in terms of the Financial Markets Act (or admitted to listing on a regulated market by an overseas regulatory authority in a recognised jurisdiction).

In these cases, individuals providing directorship and/or company secretary services that qualify under any of these two categories and who would otherwise have been obliged to adhere to the notification requirement, are automatically exempted from such notification obligation.

Going Forward

Individuals who qualify as Restricted Company Service Providers and who are not eligible for any of the exemptions in terms of the Company Service Providers (Exemption) Regulations, are required to submit the Notification Form to the MFSA.

The submission for existing engagements must reach the Authority no later than 16^th July 2025, being two (2) months from the effective date of the legislative amendments.

The Notification Form must include information in relation to the positions that such individuals are currently occupying or intend to occupy.

For new engagements, individuals who start to qualify as Restricted Company Service Providers must submit the Notification Form within fourteen (14) days of the commencement of their qualification.

 Author: Dr. Brandon Meli

 Dingli & Dingli Law Firm is closely monitoring the developments to the CSP framework and if you are interested in how these developments will affect you or require advisory in respect of the relevant notification requirements, feel free to reach out to Dr. Meli on brandon@dingli.com.mt

[1] Chapter 529 of the Laws of Malta, https://legislation.mt/eli/cap/529/eng/pdf

[2] https://www.mfsa.mt/wp-content/uploads/2021/03/Company-Service-Providers-Rulebook.pdf

[3] https://www.mfsa.mt/wp-content/uploads/2025/05/Limited-Company-Service-Providers-Rulebook.pdf

[4] Subsidiary Legislation 529.02 of the Laws of Malta, https://legislation.mt/eli/sl/529.2/eng