Malta and the audit requirements

Interestingly, Malta has recently introduced provisions to begin relaxing Audit requirements for certain companies.

With the introduction of the Companies Act (Audit Exemption) Regulations, 2019 by virtue of Legal Notice 101 of 2019.

A company registered in Malta shall now be exempted from the requirement of having its annual accounts audited in respect of its first two accounting periods if the following criteria are satisfied:

(a)  annual  turnover  of  the  company  does  not  exceed eighty-thousand  euro  (€80,000)  or  a  pro-rata  amount  if  the relevant accounting period is a period other than twelve months;

(b)  all shareholders  of  the  company  are  qualifying shareholders;  

(c)  an  application  in  the  form  set  out  in  the  First Schedule to the regulations is made to the Registrar within six months from of the end of the relevant accounting period

Provided this exemption shall no longer be applicable if there is a change in the shareholding of the company as a result of which  the  shareholders  of  the  company  will not  all  be  qualifying shareholders.

What is the meaning of Qualifying Shareholder for the purposes of the new rules? 

An individual who has completed his/her educational studies at least at MQF Level 3 or an equivalent level as recognised by the Malta Qualifications Recognition Information  Centre  as  established  by the Mutual Recognition of Qualifications Act, and who have completed such studies on a date being not earlier than three years from the date of the registration of the company.

(MQF or the Malta Qualifications Framework is a framework seeking to assist in making the Maltese qualifications system easier to understand and review, and more transparent at a national and international level. It is also a referencing tool that helps to describe and compare both national and foreign qualifications to promote quality, transparency and mobility of qualifications in all types of education. It is mainly referenced to the European Qualifications Framework (EQF) as well as to other non-European qualifications frameworks.

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