The company service providers (amendment) act, 2020 came into force on March 16, 2021, under Legal Notice 96 of 2021. It amends the provisions of the company services provider act, chapter 529 of the Laws of Malta (as amended by the amendment act, the ‘CSP act’). The Malta Financial Services Authority (MFSA) has amended the conduct of the business rulebook for CSP’s looking at the transactions by retail clients and competence and knowledge of the staff at the CSP.

While there has been no change to the type of services composing 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.

Classes for Company Service Providers

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:

Class A CSP

A company service provider authorised to provide, by way of its business, the following services to third parties: (i) formation of companies or other legal entities; and, or (ii) provision of a registered office, 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 a similar position concerning other legal entities.

Class C CSP 

A company service provider authorised to provide, by way of its business, all of the services above.

In terms of ongoing obligations, there are new risk management rules to implement. These extend beyond the traditional focus on money laundering and combating terrorist financing risk and require CSPs to conduct appropriate risk assessments, maintain adequate risk management policies, have a risk officer (who must be independent unless certain conditions are met) and keep a risk register in relation to their clients.

Furthermore, in terms of the amendment act, the MFSA is now empowered to revoke any authorisation it has issued where a CSP is found liable by the Financial Intelligence Analysis Unit (FIAU) for a serious, repeated or systematic breach of the prevention of money laundering act and, or any regulations issued thereunder.

Auditors of CSPs are now to immediately advise the MFSA of any matter they become aware of in that capacity which would, among other things, lead to a serious qualification or refusal of the auditor’s report on that CSP’s accounts or which constitutes a material breach of legal or regulatory requirements.

The maximum administrative penalty which the MFSA may impose for any breach or failure to comply with any measures imposed by it has doubled from €25,000 to €50,000.

Papilio Services – Company Service Provider

Papilio Services have reformed and amended the way that clients are on-boarded and dealt with in accordance with the new legislation. If you require our services from Malta company formation services to managing an ongoing business, we will be here to help. Contact us below and we will arrange a free consultation to discuss your business matters as well as your requirements then create a solution to assist your business.

    By checking the box, you agree to receive communication from Papilio Services in accordance with our Privacy Policy.