Maltese legislation provides various solutions to companies registered in a foreign jurisdiction to re-locate to Malta. One of the more attractive and practical of these is that a company being ‘continued’ in (or ‘re-domiciled’ to) Malta. In such cases, one of the various requisites to be satisfied in order for the continuing company to obtain a final Certificate of Continuation from the Malta Registry of Companies (“MROC”) is that it must be authorised to continue into another jurisdiction by a provision in the law of the country or jurisdiction of its registration. Unfortunately, some jurisdictions have no legislation regulating this possibility and this may pose obstacles to the relocation of a company to Malta, unless one resorts to the more conventional cross-border merger procedure.
A recent development has been the issuance by the MROC of a Certificate of Continuation to a French company despite the fact that French law has no legislation expressly permitting the continuation of companies. The MROC took the novel approach of relying on a legal opinion issued by French legal counsel which confirmed, inter alia, that the continuation process was possible under French law. The opinion is based on Article 49 and 54 of the Treaty on the functioning of the European Union and on a wide interpretation of article L210-3 of the Code du Commerce and article 1837 of the Code Civil. The MROC’s decision in this case may represent a precedent for the continuation into Malta of other companies incorporated in the EU in similar circumstances.
It is notable that the MROC has proceeded in this manner. The decision of the MROC to issue a Certificate of Incorporation in this particular context appears to be in line with the general approach being taken at the EU level to the implementation of the principle of freedom of establishment. Indeed, the European Court of Justice itself, most recently in the VALE case (C-378/10 – whose factual background is admittedly quite different to that of the French company which is the subject of this note), has pronounced itself in favour of a cross-border relocation of a company’s seat and upheld the freedom of establishment in practice. Moreover, a wider European-based approach appears to be in the pipeline as the EU has again launched discussion on the cross-border transfers of registered offices of companies with the intention of eventually making proposals in this respect.
GANADO Advocates has recently participated in this process locally and although it appears that no legal instruments exist at the moment, the initiative is there.