New Option to Close Inactive Maltese Companies – The “Simplified Dissolution Procedure”

Over the past years, many international entrepreneurs have incorporated companies in Malta – often for tax or structural purposes. However, not all companies did remain active in the longer term.
Until recently, business owners who wanted to close their Maltese entity had only two options: a formal liquidation or a strike-off initiated by the Malta Business Registry (MBR).

Since July 2025, there is now a third and simplified procedure, which is particularly attractive for inactive companies: the Simplified Dissolution Procedure.

1. Traditional Liquidation (Voluntary Winding Up)

The voluntary liquidation is the classical and formal method of dissolving a Maltese company under the Companies Act (Cap. 386, Articles 265 et seq.).
The shareholders pass an extraordinary resolution for dissolution and appoint a liquidator, who then realises assets, settles liabilities, and completes the formal closure with the MBR.
While this process is legally robust, it is time-consuming and relatively costly, especially for companies that have been inactive for years.

2. Strike-Off (“Defunct Company Procedure”)

Under Article 325 of the Companies Act, the Registrar of Companies may remove a company from the register ex officio if it appears that the entity is no longer carrying on business or is no longer in operation.
This administrative process is often triggered when annual returns are not filed or statutory fees remain unpaid.
A director, company secretary, or authorised CSP may notify the Registrar of such inactivity.
The strike-off procedure is administrative and straightforward, but it is not suitable for companies with assets or outstanding debts.

3. New Since July 2025: The Simplified Dissolution Procedure (Art. 214A Companies Act)

With the introduction of the Act XVIII of 2025, Malta has implemented the new Simplified Dissolution Procedure – a streamlined and cost-effective way to dissolve inactive, debt-free companies.

Key requirements include:

• The company has been incorporated for at least six months.
• During the last six months before the application: no change of name, no business activity, no employees other than officers, no outstanding penalties or filings, and no pledged shares.
• The company has no assets and no liabilities.
• The application is submitted jointly by all directors – no liquidator is required.

This new procedure provides a legally secure, fast, and affordable alternative to a full liquidation — ideal for companies that have long ceased operations but remain on the registry.
It significantly reduces administrative costs and processing time, offering a practical solution for business owners who simply want to close an inactive entity in a proper manner.