Running a company in Malta has just become easier! With the new Audit Exemption Rules, 2025, many startups and small businesses can now bypass the full audit requirement (in certain cases), saving time, money, and effort. Here’s a straightforward breakdown with simple examples to make things clear.
When Do the Rules Apply?
- Most rules apply to accounting periods starting 1 January 2024.
- Rule 6 (the micro-entity exemption) applies to accounting periods beginning 1 January 2025.
Rule 3: No Audit for Newly Formed Companies
If you’ve recently started a company in Malta, you can skip a full audit for the first two years, as long as:
- All shareholders are individuals (not companies).
- Each shareholder has at least an MQF Level 3 qualification or higher (an intermediate level of education under the Malta Qualifications Framework (MQF). It is typically comparable to post-secondary qualifications (such as advanced secondary school certificates, vocational diplomas, or equivalent training) and shows that the learner has developed practical skills, knowledge, and understanding to work or continue to higher studies (Level 4).
- The company was formed within 3 years of obtaining that qualification.
- Annual turnover does not exceed €80,000.
Example:
Anna and Lucca, who both completed an MQF Level 4 in business management, start a graphic design firm in Valletta in 2024. With €60,000 annual revenue, they qualify for the exemption, avoiding audits in their first two years and saving significant fees.
Rule 4: Incentive If You Still Choose an Audit
Even if you’re exempt, you may still opt for an audit to boost credibility with banks or investors. The advantage? A 120% tax deduction on audit costs, up to €700 annually for the first two years.
Example:
Marco, a tech founder, qualifies for the waiver but chooses an audit to attract investors. Thanks to the 120% deduction, he reduces taxable income by €720 – earning a reward for being extra transparent.
Rule 5: Shareholder Changes Remove Exemption
If ownership changes and new shareholders don’t meet the qualification requirements, the audit waiver is revoked immediately.
Example:
Maria and John, both accountants, launch a consulting firm. In year two, they sell shares to a friend without qualifications. From then on, the company loses its exemption.
Rule 6: Micro-Entities Get Major Relief (from 2025)
From 2025, micro-entities under the Companies Act enjoy lighter audit requirements. To qualify, your company must meet at least two of the following:
- Turnover ≤ €93,000
- Assets ≤ €46,600
- ≤ 2 employees
- If all three are met → No audit or review required.
- If two are met → Only a light review report is needed instead of a full audit.
Example:
Martin’s working in a commission-based construction, energy, and power grid sector (huge revenues there) as a negotiator and deal-maker. His Malta (Micro) Co. is receiving monthly commissions.
His business reports €2,000,000 (two million euros) annual turnover, €3000 in assets (his iPhone and laptop), and employs 1 person – himself. His office is his laptop and phone. Meeting two conditions (assets + employees), he only needs a review report, not a full audit.
Rule 7: Shipping Companies
Firms registered under the Merchant Shipping Act may also avoid audits if they meet specific thresholds in shipping regulations.
Example:
BlueWave Ltd, a small shipping management company, stays within turnover and staff limits, so it benefits from the exemption despite being in a regulated industry.
Rule 8 & 9: Groups and Non-Resident Companies
- If your company is part of a small consolidated group, exemptions still apply.
- If registered in Malta but operating abroad, eligibility is based only on Malta-based activities.
Main Point
The Audit Exemption Rules 2025 aim to support:
- Startups → avoid audits in early years.
- Micro-entities → focus on business, not red tape.
- Small groups & shipping companies → enjoy more flexible obligations.
But keep in mind: even if exempt from audits, companies must still prepare accurate financial statements and file tax returns.
Malta is making business ownership easier. Whether running a creative studio, or trading company, these rules cut down hassle and open space for growth.
Curious to learn more? We’d love to hear from you!