Raising the Bar: Updated Thresholds Redefine Small and Medium Companies Under Maltese Law now in Force
Understanding the Latest Corporate Sustainability and Company Definition Changes
Introduction
On 26 February 2026, the ‘Various Laws relating to Corporate Sustainability Reporting (Amendment) Act, 2026’ were published to complement the new Corporate Sustainability Reporting Regulations (L.N. 39 of 2026). Read our article on the new Regulations here: https://zeta-financial.com/news/the-corporate-sustainability-reporting-regulations-2026/.
The Act has now been partially brought into force by Legal Notice 61 of 2026, which officially updates the definitions of Large, Medium-Sized, and Small Undertakings under the Companies Act as from 20 March 2026.
Redefining the Scale: What Qualifies as a Large Undertaking?
Previously, a Large Undertaking was any entity exceeding at least two of the following criteria on its balance sheet date:
- Balance sheet total: EUR 20,000,000
- Net turnover: EUR 40,000,000
- Average number of employees: 250
Effective 20 March 2026, these thresholds have been raised to reflect economic growth and inflation:
- Balance sheet total: EUR 25,000,000
- Net turnover: EUR 50,000,000
- Average number of employees: 250
This adjustment widens the scope for businesses that may now fall just below the new Large Undertaking threshold.
The Updated Definition of a Medium-Sized Undertaking
A Medium-Sized Undertaking refers to entities that are not classified as small but do not exceed at least two of the following limits. The updated criteria from 20 March 2026 are:
- Balance sheet total: EUR 25,000,000
- Net turnover: EUR 50,000,000
- Average number of employees: 250
This mirrors the upper range of the Large Undertaking criteria, ensuring clearer differentiation while aligning with contemporary financial realities.
Small Undertakings: A More Inclusive Threshold
Previously, a Small Undertaking was one that did not exceed at least two of the following three limits:
- Balance sheet total: EUR 4,000,000
- Net turnover: EUR 8,000,000
- Average number of employees: 50
From 20 March 2026, the revised definition makes room for growth within the small-business category:
- Balance sheet total: EUR 5,000,000
- Net turnover: EUR 10,000,000
- Average number of employees: 50
This update provides flexibility for smaller companies, easing administrative burdens and reflecting today’s business environment.
Looking Ahead: Practical Implications and Pending Updates
These amendments appropriately account for inflation and general economic expansion, modernising the Companies Act to better reflect current market conditions. They strike a balance between keeping standards aligned with EU norms and supporting smaller enterprises.
However, it is worth noting that the Malta Business Registry (MBR) has not yet updated its Director Declaration Forms to reflect the new definitions. Swift action from the MBR would help ensure full compliance and enhance legal certainty for companies and auditors alike.
Get Expert Guidance on Your Next Steps
If you wish to understand how these new thresholds and sustainability reporting obligations apply to your company or group—or need assistance with sustainability reporting, group structuring, assurance readiness, or implementation—our team is ready to assist.
Contact us today to navigate these important legal updates with confidence.
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Written by Matthew Muscat
This article is intended for general information purposes only and does not constitute tax, legal or other professional advice. It provides a high-level summary of the regulations and reflects our interpretation of the regulations as at the date of publication.
The application and impact of the regulations may vary depending on individual circumstances, and the rugulations are subject to change and to interpretation by the relevant authorities. Accordingly, this article should not be relied upon as a substitute for specific professional advice.
Readers are encouraged to seek tailored advice before taking any action based on the information contained herein