Malta Leads the Way: Successful Implementation of EU Mobility Directive
What is the Mobility Directive?
Directive (EU) 2019/212, known as the Mobility Directive, was published by the European Union on the 27th of November 2019, seeking to introduce a harmonised framework for cross-border mergers, conversions and divisions of limited liability companies in the EEA.
The Mobility Directive was transposed into Maltese Law on 31st January 2023 through the Cross-Border Divisions of Limited Liability Companies Regulations, the Cross-Border Conversions of Limited Liability Regulations and the Cross-Border Mergers of Limited Liability Companies Regulations.
The Cross-Border Mergers of Limited Liability Companies Regulations
The Regulations apply to cross-border mergers of limited liability companies formed both in the EU as well as in any other approved country or jurisdiction, provided that at least one of the merging companies or the company resulting from the merger is a Maltese company.
In particular, the Regulations set out provisions concerning the procedure and formalities relating to the merger, the protection of creditors and the rights of employees.
The Cross-Border Divisions of Limited Liability Companies Regulations
The Regulations apply to cross-border divisions of limited liability companies formed both in the EU as well as in any other approved country or jurisdiction, provided that at least 1 of the dividing companies is a Maltese company.
In particular, the Regulations set out the procedure and formalities relating to the division, both when the company being divided is registered in Malta as well as when Malta is to be the jurisdiction of a recipient company. It also regulates the protection of creditors and the rights of employees.
The Cross-Border Conversions of Limited Liability Company Regulations
The Regulations apply to cross-border conversions of limited liability companies formed both in the EU as well as in any other approved country or jurisdiction, provided that Malta must be either a departure jurisdiction or a destination jurisdiction.
In particular, the Regulations set out the procedure and formalities relating to conversions, both when Malta is the departure jurisdiction as well as when Malta is the destination jurisdiction. The Regulations also provide for the protection of creditors and the rights of employees.
The Regulationsā€™ Success
The Malta Business Registryā€™s Annual Report for 2023 showcases the Regulationsā€™ success. In fact, in 2023 alone, 20 cross-border mergers, 20 conversions and 2 divisions took place. The MBR also confirmed that a draft Legal Notice has been prepared which will introduce certain amendments to the Regulations to ensure further legal certainty in cross-border mobility operations