EU Mobility Directive facilitating cross-border company relocation becomes law

The EU Mobility directive became part of Maltese law on 7th February 2023. This harmonised the legal framework for the cross-border movement of limited liability companies within the EU, increasing competitiveness and growth opportunities.  

This directive is set to benefit small and medium-sized enterprises in particular, as it reduces the cost of changing countries for operations. The legal framework will also equally apply to companies which are formed in other recognised jurisdictions outside of the EU.

This will aid both public and private limited liability companies incorporated in one EU member state to conduct a cross-border mobility operation to or with any other EU member state.

The Directive is expected to enhance competitiveness and reduce costs and administrative burdens, especially for companies having limited financial resources, thus offering greater productivity advantages as a result of economies of scale, and above all, providing adequate protection to shareholders, workers, and creditors of the involved companies.

Malta Business Registry Chief Executive Officer and Registrar Dr Geraldine Spiteri Lucas remarked that the new legal initiatives in place will encourage businesses to venture in the international markets whilst ensuring that the operation of the company and the employees are safeguarded throughout.

“In an ever-changing world, the algorithm of businesses is constantly changing, and the transposition of the Mobility Directive caters to this scenario; that is by ensuring a sense of flexibility when it comes to business operations, something that has long been the essence of Malta’s Companies Act, and on the other hand, it ensures to safeguard employees,” stated Dr Spiteri Lucas. 

Minister for the Economy, European Funds and Lands Silvio Schembri remarked that 28 cross-border companies have been registered in Malta by end of 2022.

“The new regulations will encourage free movement, strengthen Malta’s stance in mitigating money laundering, and most importantly voice employees’ concerns when the company is considering a cross-border mobility operation whilst safeguarding their interests,” stated Minister Schembri.