CONTINUATION OF COMPANIES REGULATIONS

SUBSIDIARY LEGISLATION 386.05

CONTINUATION OF COMPANIES REGULATIONS

26th November, 2002

LEGAL NOTICE 344 of 2002, as amended by Legal Notices 352 of 2003,

181 and 186 of 2006, and 425 of 2007.

The title of these regulations is the Continuation of

Companies Regulations.

(Regulation 5)

-

Banking Act, Cap. 371

-

Financial Institutions Act, Cap. 376

-

Financial Markets Act, Cap. 345

-

Insurance Business Act, Cap. 403

-

Insurance Brokers and other Intermediaries Act, Cap. 404

-

Investment Services Act, Cap. 370

-

Malta Financial Services Authority Act, Cap. 330

(1) Any reference in these regulations to the Act is a

reference to the Companies Act and, subject to the provisions of

subregulation (2), the provisions of article 2 of the Act shall also

apply to these regulations.

(2)

In these regulations, unless the context otherwise requires -

"approved country or jurisdiction" means such country or

jurisdiction as may be established from time to time by guidelines

issued by the Registrar;

''Authority'' means the Malta Financial Services Authority;

"instrument of continuation" includes any document or

certificate confirming that a company has been registered as

continuing in an approved country orjurisdiction other than Malta.

PART I

Continuation in Malta of a Foreign Company

A body corporate formed and incorporated or registered

under the laws of an approved country or jurisdiction other than

Malta which is similar in nature to a company as known under the

laws of Malta, hereinafter in these regulations referred to as a

"foreign company" may, provided that there is a provision in the

law of that country or jurisdiction authorizing it to do so, and

provided it is also authorized to do so by its charter, statutes or

memorandum and articles or other instrument constituting or

defining the company, hereinafter referred to as the constitutive

document, request the Registrar to be registered as being continued

in Malta under the Act.

A request by a foreign company for registration as being

continued in Malta shall be made to the Registrar in the manner and

form prescribed by him and shall be accompanied by

(a) the resolution or equivalent document of the foreign

company authorising it to be registered as being

continued in Malta, and, if the instrument is not

written in the English language, a translation thereof in

the English language, certified to be a correct

translation in such manner as may be prescribed; the

resolution or equivalent document has as far as

practicably possible, to be in such manner, by such

constituted body and with such majority as would be

CONTINUATION OF COMPANIES

the equivalent, under the laws of the country or

jurisdiction of formation and incorporation or

registration, and according to its constitutive

document, of an extraordinary resolution under the

laws of Malta;

(b) a copy of the revised constitutive document of the

foreign company including all the requirements

necessary for the registration of a company in Malta in

accordance with the provisions of the Act;

(c) a certificate of good standing or equivalent document

in respect of the foreign company issued by the

competent authority in which the foreign company was

formed and incorporated or registered or other

evidence to the satisfaction of the Registrar that the

foreign company is in compliance with the registration

requirements of that authority, and, if the instrument is

not written in the English language, a translation

thereof in the English language, certified to be a

correct translation in such manner as may be

prescribed;

(d) a declaration signed by at least two directors of the

foreign company, unless the Board of Directors is

composed of one, or, where that foreign company does

not have directors, by at least two persons vested with

the administration or the representation of the foreign

company to be registered as continued in Malta,

confirming

(i)

the name of the foreign company and the name

under which it is being continued;

(ii) the jurisdiction under which it is incorporated;

(iii) the date of incorporation;

(iv) the decision to have the foreign company

registered as continuing in Malta;

(v) that the foreign company has given formal

notice to the relevant authority of the country or

jurisdiction where the foreign company was

formed, incorporated or registered of its decision

to be registered as continuing in Malta in

accordance with the procedure laid down by law;

and, together with the declaration, there shall be

annexed evidence of such notification;

(vi) that no proceedings for breach of the laws of the

country or jurisdiction of incorporation have

been commenced against such foreign company,

unless such proceedings arise out of an event

which on the date of the occurrence thereof did

not constitute such a breach;

(e)

(i)

a declaration signed by at least two directors of

the foreign company, unless the Board of

Directors is composed of one, or, where that

foreign company does not have directors, by at

least two persons vested with the administration

or the representation of the foreign company,

confirming the solvency of the foreign company

and that they are not aware of any circumstances

which could negatively affect in a material

manner, the solvency position of the company

within a period of twelve months;

(ii) any director of the foreign company, or the

persons vested with the administration or

representation of the foreign company, making a

declaration of solvency under subparagraph (i)

without having reasonable grounds on which to

make this declaration shall be guilty of an

offence and liable on conviction to a fine (multa)

of not more than forty-six thousand and five

hundred and eighty-seven euro and forty-seven

cents (46,587.47);

(f)

a list of directors of the foreign company as well of the

company secretary, if any, or of the persons vested

with the administration or the representation of the

foreign company, where that foreign company does not

have directors or a company secretary;

(g) such material as the Registrar may require to satisfy

himself that -

(i)

such request is permitted by the laws of the

country or jurisdiction in which the foreign

company has been formed and incorporated or

registered; and

(ii) the consent of such number or proportion of the

shareholders, debenture-holders and creditors of

the foreign company as may be required by the

laws of the country or jurisdiction of formation

and incorporation or registration to such request

has been obtained;

(h) the registration fees set out in the Companies Act

(Fees) Regulations, relating to the registration of

commercial partnerships, which fees shall apply

mutatis mutandis to foreign companies requesting to

be registered as being continued in Malta.

In addition and without prejudice to the requirements of

regulation 4, the following requirements shall also apply to foreign

companies carrying out a licensable activity and public companies

Licensed Companies

(1)

(a) Where the foreign company carries on, in or

from the country or jurisdiction of its formation

and incorporation or registration, a business

which, if conducted in or from within Malta,

would require to be licensed or authorized under

any of the Acts set out in the Schedule, and the

foreign company is licensed or authorised by a

competent authority in that country or

jurisdiction, evidence of the consent of that

competent authority that the foreign company

can be registered as being continued in Malta

shall be required, and, if the instrument is not

written in the English language, a translation

thereof in the English language, certified to be a

correct translation in such manner as may be

prescribed;

(b) Notwithstanding the license or authorization by

the foreign competent authority, all foreign

companies intending to carry on a licensable

activity in or from Malta shall require a licence

or other authorization in terms of law from the

competent

authority

in

Malta

before

commencing operations.

Public Company

(2) Where the foreign company is a public company -

(a) if the foreign company has offered its shares or

debentures to the public, the most recent

prospectus or equivalent document complying as

nearly as may be with the requirements of the

Act shall be required; and

(b) if the foreign company is quoted on a recognised

stock exchange, evidence to the satisfaction of

the Registrar of the consent of the relevant

authorities of that exchange to the foreign

company being registered as being continued in

Malta shall be required, and, if the instrument is

not written in the English language, a translation

thereof in the English language, certified to be a

correct translation in such manner as may be

prescribed; and for the purposes of this

paragraph "recognised stock exchange" means a

stock exchange recognised by the relevant

authorities in the country or jurisdiction in

which the foreign company is incorporated;

(c) such evidence of the current membership of the

foreign company, or the method and form of

recording such membership, authenticated in

such manner as the Registrar may require, as the

Registrar accepts as adequate for compliance

with the requirements of this regulation in

respect of a list of members of that foreign

company.

(1) The provisions of this regulation shall apply to a

foreign company which is to be registered as continued in Malta,

the shares of which are held by a foreign nominee or trustee on

behalf and in the interest of other persons entitled to the beneficial

ownership thereof, hereinafter referred to as ''a foreign trustee''.

(2) No foreign trustee shall act as trustee in Malta in relation to

shares in foreign companies which have applied to be registered as

continued in Malta unless such foreign trustee is authorised to act

as a trustee in Malta.

(3)

(a) The Authority may authorise a foreign trustee to act as

a trustee in Malta solely in relation to shares in foreign

companies which have applied to be registered as

continued in Malta, in so far as such foreign trustee,

prior to acting as trustee in respect of such foreign

companies -

(i)

has applied in writing to the Authority for

authorisation;

(ii) is in possession of a valid licence or

authorisation to act as trustee issued by the

relevant regulatory authority in an approved

jurisdiction; and

(iii) pays to the Authoriy an annual authorisation fee

of one thousand and one hundred and sixty-four

euro and sixty-nine cents (1,164.69).

(b) An application under this regulation shall outline the

proposed trustee activities and shall be accompanied

by such information as may be required by the

Authority.

(c) The Authority, in granting authorisation, may impose

any restrictions or conditions it deems fit.

(d) The Authority shall be entitled to monitor the activities

of the foreign trustee in Malta as the Authority deems

fit and shall require the foreign trustee to provide the

Authority from time to time with such information as

the Authority considers necessary.

(e) Where the foreign trustee fails to comply with any

request for information made by the Authority in the

exercise of its functions under these regulations, the

Authority may revoke the authorization of such foreign

trustee forthwith.

(4) The requirement for authorisation under this regulation

shall not apply to a foreign trustee acting as trustee in respect of

one or more shares in a foreign company where such shares do not

have any special voting rights and they do not exceed in the

aggregate two euro and thirty-three cents (2.33) in nominal value

or its equivalent in any other currency.

(5) No foreign trustee shall be in violation of the provisions of

this regulation provided -

(a) he obtains authorisation to act as trustee in Malta

under article 51A of the Malta Financial Services

Authority Act; the Investment Services Act or this

regulation; or

(b) transfers the shares held in the foreign company to a

person who is so authorised,

within fifteen days of the date of the provisional certificate of

continuation issued in terms of regulation 6.

(6) A breach or non-observance by a foreign trust of any

provision of this regulation relating to the authorisation of such

trustee to act as a trustee in Malta shall not in any manner prejudice

the validity or enforceability of a trust or affect the duties and

responsibilities of such trustee in terms of applicable law or of the

registration of the company as continued in Malta.

(7) Authorisation under this regulation to act as a trustee shall

constitute an authorisation for the purposes of article 51A(9) of the

Malta Financial Services Authority Act and shall be deemed to

satisfy the requirements of the said article 51A(9) and of article

127(10) of the Act.

(8) Any authorisation issued in terms of this regulation, and

any renewal thereof, shall remain in force until such time as the

foreign trustee remains in possession of the valid licence or

authorization referred to in subregulation (3)(a)(ii) and until such

time as may be determined by the Authority in virtue of any

provision of any law relating to the regulation of trustees.

The documents referred to in regulations 4 and 5 shall be

delivered for registration to the Registrar who, being satisfied that

they comply with the provisions of these regulations and the Act

shall provisionally register them and certify under his hand that the

company is provisionally registered as continuing in Malta as from

the date of registration, which date shall be indicated in the

Provisional Certificate of Continuation. Upon the issue of such

Provisional Certificate of Continuation the company shall be

deemed thereafter to be a company provisionally registered under

the Act.

With effect from the date of the Provisional Certificate of

Continuation issued by the Registrar in accordance with regulation

6

(a) the company to which the provisional certificate of

continuation relates -

(i)

shall continue to be a body corporate

incorporated under the Act under the name

designated in the declaration referred to in

regulation 4(d), and shall be deemed as

provisionally registered in Malta for all

purposes of law;

(ii) is subject to all the obligations and capable of

exercising all the powers of a company

registered under the Act;

(b) the constitutive document as revised in accordance

with regulation 4(b) is considered as the Memorandum

and Articles of Association of the company;

(c) the registration of a foreign company under Part I of

these regulations shall not operate -

(i) to create a new legal entity;

(ii) to prejudice or affect the continuity of the

company;

(iii) to affect the property of the company and such

company shall retain all its assets, rights

liabilities and obligations;

(iv) to render defective any legal or other

proceedings instituted or to be instituted, by or

against the company ; or

(v) to release or impair any conviction, judgement,

ruling, order, debt, liability or obligation due or

to become due or any cause existing against the

company or against any member, director,

officer or persons vested with the administration

or the representation of the company.

(1) Where shares in a foreign company which is to be

continued in Malta in terms of these regulations are subject to a

pledge, charge, assignment by way of security or other similar

security, hereinafter referred to as ''pledge'', in the country or

jurisdiction where the foreign company was formed and

incorporated or registered, such pledge shall continue to be valid

a n d e ff e c t i v e u n d e r t h e l a w s o f M a l t a , a n d f o l l o w i n g t h e

registration of the company as continued in Malta shall be fully

enforceable as a pledge of shares in terms of article 122 of the Act

subject to the following conditions

(a) that the pledge has been validly created in writing as a

right of security and preference over shares under the

laws of the country or jurisdiction where the foreign

company was formed and incorporated or registered;

(b) that the pledge is valid and effective as of the date of

issue of the provisional certificate of registration in

Malta;

(c) that a notice of pledge be delivered to the Registrar for

registration in terms of article 122(2) of the Act within

fourteen days of the date of issue of the provisional

certificate of registration in Malta.

(2)

A pledge of shares as mentioned in subregulation (1) -

(a) shall continue to be regulated by the law chosen by the

parties and such law shall apply to all the rights,

including rights of enforcement thereof, and

obligations of the parties thereto, except to the extent

the pledge is enforced in Malta in which case the

relevant provisions of article 122 of the Act shall

apply;

(b) shall continue to be subject to any submission made by

the parties to the jurisdiction of any foreign court or

arbitration which submission shall be valid and

effective and shall remain fully in force.

(3) The party delivering the notice of pledge to the Registrar in

Malta in terms of this regulation shall also notify the other party to

the pledge agreement by serving him with a true copy of the said

notice within fourteen days of notification to the Registrar.

(4)

On termination of the pledge, a notice of termination of the

pledge shall be delivered to the Registrar for registration in

accordance with the provisions of article 122(15) of the Act.

Within a period of six months from the date of the issue by

the Registrar of the Provisional Certificate of Continuation, the

company shall submit documentary evidence to the Registrar that it

has ceased to be a company registered in the country or jurisdiction

where it had been initially formed and incorporated or registered.

Failure by the foreign company to provide such documentary

evidence shall grant the Registrar the discretion to

(a) either strike the name of the company off the register

and inform the relevant authority of the country or

jurisdiction concerned that the company is not

registered in Malta;

(b) or upon reasonable cause being shown allow a further

period of three months prior to striking the name of the

company off the register.

Upon presentation to the Registrar of proof of the company

having ceased to be a company registered in the country or

jurisdiction where it had been initially formed and incorporated or

registered and upon the surrender to the Registrar of the

Provisional Certificate of Continuation, the Registrar shall issue a

Certificate of Continuation confirming that the company has been

registered as continuing in Malta.

No request for the registration of a foreign company as

being continued in Malta may be granted if -

(a) the dissolution or winding up of the foreign company

has

commenced

or

insolvency

proceedings,

arrangements, compositions, recovery proceedings or

any other analogous proceedings have been

commenced by or against the foreign company;

(b) a liquidator or special administrator of the foreign

company or a receiver of its property has been

appointed;

(c) there is any scheme or order in relation thereto

whereby the rights of creditors are suspended or

restricted;

(d) any proceedings for breach of the laws of the country

or jurisdiction of incorporation have been commenced

against such foreign company, not being proceedings

arising out of an event which on the date of the

occurrence thereof did not constitute such a breach.

PART II

Continuation outside Malta of companies incorporated in Malta

A company registered under the Act may, where the laws

of an approved country or jurisdiction so allow, upon obtaining the

consent of the Registrar, apply to the proper authority of such

country or jurisdiction selected to have the company registered as

continued as if it had been incorporated under the laws of that other

country or jurisdiction; and on the date of the instrument of

continuation the company shall become a company under the laws

of that other country or jurisdiction and shall be subject to such

laws as permitted or required by that other country or jurisdiction.

A request by a company for the consent of the Registrar to

be continued as a company outside Malta under the laws of an

approved country or jurisdiction shall be made to the Registrar in

the manner and form prescribed by him and shall be accompanied

by a declaration signed by at least two directors of the company,

unless the Board of Directors is composed of one, containing

(a) the name of the company and the name, if different,

under which registration in the approved country or

jurisdiction is being sought;

(b) the place of proposed registration of the company and

the name and address of the competent authority in

that approved country or jurisdiction;

(c) the date on which it is proposed to establish domicile

in the relevant approved country or jurisdiction.

No company may request the Registrar for his consent

under regulation 12 unless -

(a) an extraordinary resolution of the shareholders of the

company was approved in accordance with the

memorandum or articles of association of the company

authorising such request. The extraordinary resolution

shall be delivered to the Registrar for registration;

(b)

(i)

the company has delivered to the Registrar for

registration a declaration signed by at least two

directors of the company, unless the Board of

Directors is composed of one, confirming the

solvency of the company and confirming that the

directors are not aware of any circumstances

which could negatively affect in a material

manner the solvency position of the company

within a period of twelve months;

(ii) any director of a company making a declaration

of solvency under subparagraph (i) without

having reasonable grounds on which to make

this declaration shall be guilty of an offence and

liable on conviction to a fine (multa) of not more

than forty-six thousand and five hundred and

eighty-seven euro and forty-seven cents

(46,587.47);

(c) where the company carries on in or from Malta any

licensable activity, the company provides to the

Registrar evidence of the consent of the competent

authority in Malta to the company continuing in

another country or jurisdiction;

(d) where the company is a public company quoted on a

recognized investment exchange, the company

provides to the Registrar evidence of the consent of the

said exchange and of the listing authority in Malta to

the company continuing in another country or

jurisdiction;

(e) payment has been made of all fees and penalties due

under the Act; and

(f)

the prescribed fee has been paid for.

The Registrar shall not give his consent to a company

requesting to be continued in another country or jurisdiction unless

he is satisfied that -

(a) the requirements of regulation 12 have been complied

with;

(b) no proceedings for the dissolution of the company,

insolvency proceedings, arrangements, compositions,

recovery proceedings or any other analogous

proceedings have been commenced by or against the

company in Malta or elsewhere;

(c) any pledgee of shares in accordance with the Act has

given his consent in writing to the intended

continuation of the company in another country or

jurisdiction; and

(d) the company at the time of such request is not in

breach of any of its duties or obligations under the Act.

(1) In addition to the requirements of regulation 14, the

Registrar shall not give his consent for the continuation of the

company in another approved country or jurisdiction until the lapse

of three months from the date of the publication, in the Gazette and

in a daily newspaper circulating wholly or mainly in Malta, of a

notice relating to the extraordinary resolution referred to in

regulation 13(a).

(2) During the aforesaid period of three months any creditor of

the company whose debt existed prior to the publication of the

notice referred to in subregulation (1) may, by sworn application,

object to such continuation and, if he shows good cause why it

should not take effect, the Court shall either uphold the objection or

allow the continuation of the company on sufficient security being

given.

Upon an instrument of continuation continuing the

company in another country or jurisdiction being issued by the

relevant authority of the said country or jurisdiction, the company

shall forthwith deliver to the Registrar a copy of the instrument of

continuation and the company shall be deemed to have ceased to be

a company incorporated in Malta from the date when its

continuation in that other country or jurisdiction takes effect, and

the Registrar shall strike the name of the company off the register

Provided that nothing in this regulation shall -

(a) take away or affect the jurisdiction of any court in

Malta to hear and determine any proceedings

commenced therein by or against the company before

it ceased to be a company registered in Malta;

(b) affect the property of the company;

(c) render defective any legal or other proceedings

instituted or to be instituted, by or against the

company; or

(d) release or impair any conviction, judgement, ruling,

order, debt, liability or obligation due or to become

due or any cause existing against the company or any

other person.

The Registrar shall keep a register of all companies that

obtained his consent to register as being continued in another

approved country or jurisdiction. The register shall contain a record

of the name in which the company is registered as being continued

as well as all relevant details.