The governance of a Maltese company is about far more than ticking boxes. Under Maltese law, a company must be properly managed and administered by its officers, namely its directors and company secretary, whose roles are governed by the Companies Act, Chapter 386 of the Laws of Malta. In addition, where these services are provided in or from Malta by way of business, the regulatory framework established under the Company Service Providers Act, Chapter 529 of the Laws of Malta must also be considered.

Taken together, these laws make it clear that a company is expected to be more than a legal entity existing on paper. A Maltese company should have genuine governance structures, real decision-making processes, proper record-keeping, and effective oversight. In today’s regulatory and compliance environment, it is increasingly difficult to justify the existence of a company that lacks demonstrable administration, direction, or a legitimate commercial purpose.

The office of company secretary in Malta

The office of company secretary is a statutory role and not merely an administrative support function. Most Maltese companies are required to appoint a company secretary, and the Companies Act provides that the office must generally be held by a natural person, except in circumstances where a body corporate is permitted to act in that capacity in accordance with the law, including where it is appropriately authorised under the relevant legislative framework. The position therefore forms an important part of a company’s governance structure.

At its core, the company secretary’s role is to ensure the smooth and orderly administration of the company throughout its life cycle. This includes maintaining corporate records, supporting the board of directors, organising meetings, and preparing or filing statutory documentation. The company secretary is also expected to maintain the minute books of general meetings and board meetings, the register of members, the register of debentures, and any other registers or records required by the board.

In practice, the company secretary sits at the crossroads of governance and compliance. The role often involves ensuring that meetings are properly convened, minutes and resolutions are accurately recorded, and corporate filings are submitted in accordance with the Companies Act. While the secretary does not replace or override the board’s authority, the office plays a key role in helping the company meet its ongoing legal obligations.

The Companies Act also places responsibilities on directors in relation to this office. If the office becomes vacant, directors are responsible to re-fill the vacancy within the period prescribed by law. This highlights the importance of the role and confirms that it cannot simply be left unoccupied or treated as a formality.

Eligibility is equally important. Article 142 of the Companies Act outlines several circumstances in which a person may not be appointed or continue to act as a director or company secretary. These include cases where a person is interdicted or incapacitated, an undischarged bankrupt, convicted of certain offences, a non-emancipated minor, or subject to a disqualification order. The law therefore associates the office with trust, competence, and reliability.

The statutory role of directors under Maltese law

If the company secretary serves as the company’s compliance and governance anchor, the directors remain the primary body responsible for its management and administration. Directors are entrusted with managing the company’s affairs and are expected to act within the powers granted by the company’s memorandum and articles of association, as well as the Companies Act itself. More importantly, they are expected to act in the company’s interests, exercise due care and diligence, and ensure compliance with the company’s legal obligations, including those relating to record-keeping, filings, governance procedures, and the overall administration of the company.

The Companies Act demonstrates just how broad these responsibilities can be. Directors are involved not only in commercial decision-making but also in safeguarding the company’s legal standing. Their responsibilities extend to matters such as appointing company secretaries, overseeing the maintenance of company records, approving annual returns and financial statements, conducting meetings, and implementing corporate decisions. The expectations are clear: directors are expected to direct and manage, not merely lend their names to a company.

The importance of the office is further reflected in the eligibility and disqualification rules. Article 142 applies equally to directors, while the Companies Act also provides for disqualification orders in certain circumstances. These provisions underline the legislator’s intention to ensure that companies are managed by individuals who are fit to hold positions of responsibility.

From both a practical and legal perspective, the office of director in Malta can therefore be understood as involving the following core governance and statutory functions:

• Direction and management of the company’s affairs in accordance with the Companies Act and the company’s constitutive documents;
• Oversight of statutory compliance, including the maintenance of company records, regulatory filings, and governance procedures;
• Appointment and supervision of the company secretary, together with the obligation to fill any vacancy within the applicable statutory period;
• Participation in genuine corporate decision-making through board meetings, resolutions, and the formal exercise of corporate powers; and
• Ensuring that the company is administered by fit and proper persons in line with the eligibility and disqualification requirements of the Companies Act.

Maltese law therefore leaves little room for the concept of the “figurehead director”. The statutory framework assumes that directors perform a real role, carry real responsibilities, and may be held accountable where those responsibilities are not properly discharged.

The relevance of the Company Service Providers Act

The role of directors and company secretaries in Malta must also be viewed within the context of the Company Service Providers Act, Chapter 529. This legislation regulates the provision of company services and designates the Malta Financial Services Authority as the competent authority responsible for authorisation and supervision in this area. The Act is primarily aimed at ensuring appropriate regulatory oversight, particularly in relation to governance, compliance, and anti-money laundering standards.

This becomes particularly relevant when directorship or company secretarial services are provided as part of a professional service offering rather than on an isolated basis. Following amendments highlighted by the MFSA in 2025, the framework distinguishes between different categories of persons providing such services. It also recognises certain circumstances where individuals may not be acting by way of business but may nevertheless be subject to notification requirements as Restricted Company Service Providers. The MFSA specifically noted that Article 3B introduced a notification obligation for individuals providing directorship and/or company secretary services where the activity is not carried out by way of business.

As a result, acting as a director or company secretary can no longer be viewed as a purely private arrangement with no regulatory implications. The legal framework has become increasingly structured, and anyone providing such services should carefully consider whether authorisation, registration, notification, or an exemption is required under Chapter 529 and its subsidiary legislation.

Corporate substance in Malta: why a Maltese company must be more than a shell

Although neither the Companies Act nor the Company Service Providers Act places the concept of a “shell company” at the heart of its framework, the combined effect of these laws, together with modern governance expectations, points towards clear principles whereby a Maltese company should have genuine substance and should not exist merely as a legal wrapper.

This distinction is particularly important in practice. A company with substance will generally have directors who actively exercise management functions, a company secretary who performs the compliance responsibilities attached to the office, properly maintained registers and minute books, and documented decisions supported by real meetings or valid written resolutions. It will also have a structure that reflects a genuine business, holding, investment, or commercial purpose. These are all characteristics that align with the governance model envisioned by the Companies Act.

A shell company, on the other hand, is often characterised by the opposite. It may have nominal appointments, little evidence of board activity, inadequate documentation, and an over-reliance on the company’s legal existence without any meaningful governance behind it. Such arrangements can present risks from a regulatory, compliance, and corporate governance perspective. A company that cannot clearly demonstrate how it is managed and administered may find it difficult to show that its officers are genuinely carrying out the roles they formally occupy.

The importance of substance is therefore not merely a question of reputation. It serves a practical legal purpose. Active directors, effective company secretarial support, documented management decisions, and well-maintained records all contribute to the company’s legal integrity. These elements strengthen the company’s position when dealing with registries, regulators, banks, auditors, counterparties, and, where relevant, foreign authorities assessing whether the company is genuinely operated as a Maltese corporate vehicle.

From a governance perspective, substance in Malta should generally include the following:

Real board oversight and decision-making rather than purely nominal directorships;

• A functioning company secretary role supported by proper maintenance of statutory records and filings;
• Organised corporate records, including minutes, registers, and resolutions demonstrating how the company is run;
• Compliance with the Company Service Providers framework where directorship or company secretarial services are being provided in or from Malta; and
• A genuine commercial, holding, or investment purpose supported by actual governance and administration rather than a company existing solely on paper.

Substance should therefore not be viewed only through a tax or international compliance lens. It is equally a natural consequence of good corporate governance. A company that takes its governance and administrative obligations seriously is generally better positioned to withstand scrutiny and operate effectively within the Maltese legal framework.

Conclusion

Under Maltese law, neither directors nor company secretaries are simply names on a corporate structure chart. Both are officers with clearly defined roles within the governance framework established by the Companies Act. The company secretary plays a vital role in compliance, record-keeping, and procedural governance, while the directors are responsible for the company’s management, oversight, and overall administration. Where these functions are provided as professional services, the Company Service Providers Act introduces an additional layer of regulatory oversight.

The broader message is straightforward. A Maltese company should be established and maintained as a real operating entity, not as a legal façade. In today’s regulatory environment, the difference between a well-governed company with genuine substance and a company that exists merely on paper is increasingly significant. A company that is properly directed, properly administered, and properly documented is not only more compliant; it is also more credible, more resilient, and ultimately more consistent with the principles underpinning Maltese corporate law.

About the Author

This article has been authored by Senior Manager - Business Development, Sacha J. Farrugia.