An analysis of the continuation of companies in Malta

Abstract

This thesis will examine the laws related to the Continuation of Foreign Companies in and out of Malta implemented through the Continuation of Companies Regulations Legal Notice 344 of 2002 and as amended through Legal Notice 352 of 2003. The scope is to highlight not only the legal consequences of having companies shifted from one jurisdiction to another, but also the practical consequences. The approach taken will meticulously focus on the procedure involved, scrutinizing scrupulously the requirements that the said companies must satisfy so as to be allowed to proceed. Attention will be dedicated to understanding what advantages these companies aim to achieve by having the company continued rather than liquidated and set up afresh. Each chapter is intended to review specific issues that, in the author's opinion, are imperative in order to grasp a proper understanding of the subject. The opening section is intended to provide the reader with a brief overview of how the notion of re- domiciliation developed focusing mainly on the period from when the offshore financial regime came into being, up till the 1994 amendments The following chapter will delve into a detailed analysis of LN 344 of 2002 and LN 352 of 2003 so as to elucidate the procedure that applicant companies must abide by in order to re-domicile into or away from Malta. The intention is to highlight the endless list of requirements that companies are expected to satisfy in order to be allowed to shift their seat of administration. Being that the European Union plays an import role in Malta's economy, the author deemed it fit to scrutinize how Malta's accession into the European Union has affected the procedure of re-domiciliation. The approach taken is meant to place at the core of the analysis, some of Europe’s basic policies such as the establishment of a European Single Market and the freedom of movement and establishment. The objective is to demonstrate how Europe is indirectly contributing towards facilitating the idea of having companies, unreservedly, continue in other jurisdictions. The fourth chapter is intended to offer an evaluation of the tax implications surrounding the notion of re-domiciliation. This examination is supposed to analyse one of the main reasons companies consider shift their offices. In the author’s opinion the thesis would not be complete without an overview of how re-domiciled companiesare taxed and what advantages they tend to benefit from. Final chapter is meant to provide the reader with a brief assessment of how domiciliation is being utilized in other jurisdictions. Emphasis will be placed on the procedural aspect of how it is applied and why the latter tends to be consistent in most jurisdictions. The goal is to establish whether the re-domiciliation procedure applied in Malta is comparable to that used in foreign jurisdictions.