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31 January 2023 – Deadline for Transposition of EU Mobility Directive into Maltese National Law

Tomorrow, the 31st of January 2023, is the deadline for the transposition by Member States of the EU’s Mobility Directive setting out changes to the current rules regulating cross-border mergers of limited liability companies and introducing rules for cross-border conversions and divisions – with these cross-border conversions, mergers and divisions being collectively referred to in the Directive as cross-border operations.[1]

The purpose of the Mobility Directive is to create a harmonised legal framework on cross-border operations within the internal market thereby assisting companies and firms in the exercise of their fundamental freedom of establishment.

The Mobility Directive recognises the importance of involving all stakeholders of a company in cross-border operations and ensuring protection of employees, creditors and members (specifically minority members) of companies within the internal market. The involvement of employees is identified as being particularly important for ensuring that companies within the internal market undertake a long-term and sustainable approach in relation to cross-border operations.

The involvement of stakeholders is achieved through a number of requirements set out in the Directive, including, inter alia, the preparation and publication of a comprehensive draft terms of the proposed cross-border operation, in certain instances the preparation by the administrative or management bodies of the companies involved of a report for members and employees explaining and justifying the legal and economic aspects (including an explanation on the implications for employees) of the cross-border operation, a three-month creditor contestation period and the voting and approval of the cross-border operation by members in general meeting.

Notably, companies in liquidation are not permitted to undergo cross-border operations in terms of the Mobility Directive. Member States are also permitted to extend this exclusion to other liquidation proceedings, such as insolvency and/or preventative restructuring proceedings, irrespective of whether or not these proceedings fall within the scope of that Member State’s national insolvency framework. Furthermore, Member States are free to decide whether to require companies undergoing a cross-border operation to make a solvency declaration in relation to the company’s ability to meet liabilities post-operation, including whether or not any inaccurate or misleading declarations attract personal liability.

We hope and anticipate that companies across the EU will take advantage of this long-awaited Mobility Directive. As for the transposition of this Directive, we await to see how Malta adopts the measures envisaged in the Directive, including their effect on existing national laws regulating company amalgamations and divisions and permitting the re-domiciliation of companies.[2]


[1] Directive (EU) 2019/2121 of the European Parliament and of the Council of 27 November 2019 amending Directive (EU) 2017/1132 as regards cross-border conversions, mergers and divisions.

[2] Part VIII (Title II) and Part IX of the Companies Act (Cap. 386 of the Laws of Malta) and the Continuation of Companies Regulation (S.L. 386.5).