Malta Merchant Shipping Companies

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Important Notice to Shipping Companies registered under the

Malta Merchant Shipping Regulations

In February of this year (2020) amendments were enacted to the Merchant Shipping (Shipping Organisations – Private Companies) Regulations, S.L. 234.42 via Legal Notice 31 of 2020, making it mandatory for companies registered under these regulations to prepare and submit audited financial statements to the Malta Business Registry (MBR). The shareholders and directors of all companies established under the Merchant Shipping Regulations should take note of this obligation. Swathes of provisions present in the Companies Act have been transposed into the Merchant Shipping Regulations (MSR). The governance and reporting regulatory regime for MSR companies is now largely similar to that of private limited liability companies established in terms of the Companies Act.

The first filing for MSR companies shall be that for the financial year ending in 2020. The penalties in case of default and requirements have been brought in line with the Companies Act provisions. This means that submission is to be made within 42 days from the end of the period allowed for the presentation of the annual financial statements as prescribed by article 182 of the Companies Act. Article 182 prescribes that annual financial statements are to be presented for approval to the shareholders general meeting ten months after the end of the relevant financial year.

Where a company’s first accounting period is more than 12 months from the date of incorporation, the period allowed for the approval of a company’s annual accounts in a shareholders’ meeting shall be reduced by the number of days by which the said accounting period is longer than twelve months. The period shall, however, not be reduced to less than 3 months after the end of the accounting period.

One of the notable variations to the provisions of the Companies Act relates to the criteria that define a small company. Under article 185 of the Companies Act small companies are exempt from including a directors’ report with the financial statements.

In order to qualify as a small company, a company registered under the Merchant Shipping Regulations has to meet two of the following three criteria.

  1. Balance sheet total not more than EUR6,000,000 (EUR 4,000,000 for companies registered under the Companies Act);
  2. Turnover not more than EUR12,000,000 (EUR 8,000,000 for companies registered under the Companies Act);
  3. Not more than fifty employees.

The requirement for a parent holding company to prepare consolidated accounts is also applicable to companies registered under Merchant Shipping Regulations, unless the parent company qualifies as a ‘small group’. In order to qualify as a small group the holding company needs to satisfy at least two of the following three criteria.

  1. Aggregate balance sheet total not more than: EUR6,000,000 net or EUR7,200,000 gross;
  2. Aggregate turnover not more than: EUR12,000,000 net or EUR14,400,000 gross;
  3. Not more than 50 employees.

The numbers in the above criteria need to be calculated as an aggregate of the data from all the companies in the group.

MSR companies incorporated before to 21st February 2020, are not required to notify the Registrar of Companies in cases where the financial year end is not 31st December. Such companies are nonetheless required to file the financial statements within the statutory period from financial year end.

In the case of MSR companies incorporated after the 21st February 2020 where the financial year end is not 31st December, the appropriate notification needs to be sent to the Registrar.

The following provisions, amongst others, previously only applicable to companies formed under the Companies Act, are now also applicable to companies formed under the Merchant Shipping Regulations.

  • Content, form, signing and approval of accounts;
  • Obligation to prepare consolidated accounts;
  • Directors’ responsibilities;
  • Disclosures required in notes to accounts;
  • Directors’ report and contents;
  • Auditors report and reporting;
  • Currency for reporting and share capital;
  • Penalties

It is the responsibility of the directors of companies registered under the Merchant Shipping Regulations to ensure that accurate and complete accounting records are kept for their companies. These records should enable the preparation of financial statements that are compliant with International Financial Reporting Standards (IFRS). These audited financial statements need to be submitted in a timely fashion to the MBR in 2021 or later depending on the circumstance of the company. The new regulations are silent on the subject of accounting records for years previous to the 2020 year-end. Such prior records are however essential for the proper preparation of financial statements as prescribed by the regulations and directors would be well advised to ensure that preceding records are well organised and accessible as far as practicable.


DM Europe and Marinelli Accountants can provide Accounting, Preparation of Statutory Financial Statements or Audit services for your Malta company registered under the Merchant Shipping regulations. Please contact David Marinelli or send an email to <>.

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