A more integrated institutional set-up
One of the Bill’s clearest changes is institutional. The National Foreign Direct Investment Screening Office would form an integral part of the Malta Business Registry, while remaining a separate section within it. The Bill’s own Objects and Reasons say this is intended to create one coherent structure and to clarify notification requirements.
Stronger governance through a new FDI Board
Governance would also change materially. The Bill would establish an FDI Board to direct and be responsible for the affairs of the Office. The Board would have between five and seven members, including a Chairperson, appointed by the Minister for renewable terms of up to three years. The Bill also sets out fit-and-proper and eligibility criteria, removal and resignation rules, Gazette publication requirements, secretary arrangements, quorum rules and voting procedures.
Notification obligations that can arise after closing
The Bill is especially important for transaction planning because it widens when notification may be required. Notification would remain necessary for planned foreign direct investments affecting activities listed in the Schedule to the Act. But it would also be required where, after an investment in Malta has been carried out, the investor plans to change the business activity to one affecting a scheduled activity, where ownership changes so that at least 10% is held by a foreign investor, or where direct or indirect controlling interest in the company or group company passes to a foreign investor. In practical terms, the screening lens would no longer stop at signing or closing.
A clearer distinction for portfolio investment
The Bill would also add an express definition of “portfolio investment”. It describes portfolio investment as investment in securities, including bonds, shares and similar instruments, made for financial investment purposes and without any intention to influence the management or control of the company. That distinction helps separate passive financial holdings from foreign direct investments that may fall within the screening regime.
Broader information-gathering powers and accountability
The Office’s information-gathering powers would also be reinforced. When conducting the relevant processes, the Office would be able to obtain further information and statements from any person involved in a foreign direct investment, including public and private entities or authorities. The Bill would also apply the 'Holders of Public Office and Public Entities (Responsibility) Act' to the Chairperson, other Board members, and the officers and employees of the Office.
What this means for businesses and investors
The direction of travel is clear. Malta is proposing a more integrated and more closely governed FDI screening framework, with notification triggers that can extend beyond the initial investment. For businesses, that means FDI analysis may need to start earlier in the deal cycle and continue after completion, especially where later changes to business activity, ownership or control are in play.
Contact us
