As of 3rd March 2020, with the introduction of Act V of 2020 which amended various financial services laws including the Companies Act, there is the possibility of setting-up Cell companies also within the areas of maritime and aviation, which up till now, was commonly used in the insurance sector.

Of particular importance is the introduction of Article 84E to the Companies Act, which permits the minister responsible for the registration of commercial partnerships to make regulations regarding Cell companies carrying on or engaged in the shipping or aviation business, defined as:

  1. The ownership, operation under charter, lease or otherwise, administration and management of any ship or of any aircraft or aircraft engine and the carrying on of all ancillary financial, security, commercial and other activities in connection therewith;
  2. The activities of a parent company and, or the company which holds shares or other equity interests in undertaking, whether Maltese or otherwise, where any one or some of these undertakings is established solely or mainly for the carrying out of any one or more of the activities referred to here above and the carrying on of all ancillary financial, security, commercial and other activities in connection therewith;
  3. The holding of shares or other equity interests in any undertaking, whether Maltese or otherwise, established solely or mainly for the carrying on or carrying out of any one or more of the activities referred to in this definition and the carrying on of all ancillary financial, security, commercial and other activities in connection therewith;
  4. The raising of capital through loans, the issue of guarantees or the issue of securities by an undertaking when the purpose of such activity is to achieve the objects or activities stated in the preceding sub-paragraphs for the undertaking itself or for any other undertaking within the same group; or
  5. The carrying on of such other objects or activities within the maritime or the aviation sector and related or connected matters which the Minister may, on the advice of the Malta Financial Services Authority, from time to time prescribe by regulations.

The terms “group”, “parent company” and “undertaking” have the same meaning as is given to them in the Companies Act.

The objective for the setting up of cell companies in the shipping or aviation business is to provide for segregation and protection of the cellular assets of the company including segregated accounts, compartments or units including extending the concept of legal liability despite not creating a separate legal personality for each cell within the said type of company.

Furthermore, the Regulations require that separate records, accounts, statements and all prescribed documents are kept distinct and separate in order to show the assets and liabilities of each Cell in the same company.

The creditors of a particular Cell should only be able to avail themselves of the assets of that particular Cell and should not reach to other Cells to cater for the debts due by that particular Cell.

In default of the above and in case any party succeeds by any means whatsoever in using any cellular assets attributable to any Cell of the Cell Company to satisfy a liability not attributable to that Cell, the Regulations further provide for rules through which the affected Cell may be reimbursed for the losses suffered and the party shall be liable to pay a sum equal to the value of the benefit thereby obtained by him.

Cells companies are distinguished from other companies through the inclusion of the words “Mobile Assets Protected Cell Companies” or “MAPCC” in their name when registering at the Malta Business Registry to reflect their status. Indeed, the Memorandum and Articles of Association of the Cell Company must specifically designate its status as a Cell Company.

Cells companies may also be the result of a conversion of a company. Upon such conversion, as per resolution of the company’s directors, the company shall, within forty days from such conversion, attribute company assets to a particular Cell and, within fourteen days from the resolution notify the Registrar stating all details of the assets being attributed to a particular Cell (cellular assets).

Following the attribution of assets by the Cell Company to one of its Cells, the interest of an owner in a registered aircraft or ship, shall be noted accordingly alongside the consent provided by the mortgagee or registered security holder.

Different from the cellular assets are the non-cellular assets formed by the assets which belong and are owned by the Cell Company. Once again, it is an essential requirement that directors of an MAPCC maintain a clear and identifiable distinction between both cellular and non-cellular assets.

The Regulations further introduce the definitions of cell shares as the shares created and issued by a Cell Company in respect of one of its Cells the proceeds of which – cell share capital – form part of the assets of that specific Cell. Conversely, the proceeds of the issue of shares other than these dedicated cell shares form the non-cellular assets of the Cell Company.

In this respect, a Cell Company may issue cellular dividends by reference to the cellular assets and liabilities or the profits attributable to that particular Cell. When determining whether or not profits are available for the purpose of issuing a cellular dividend, no account shall be taken of the financial position of any other Cell of the relevant MAPCC, or of the MAPCC’s non-cellular assets.

Moreover, an MAPCC and its Cells shall comply with the provisions of the Companies Act (Register of Beneficial Owner) Regulations which shall be applicable mutatis mutandis to the Cell Companies and to their Cells.

The benefits of operating in the shipping and aviation sector into cell companies in a nutshell. 

Due to the high volume of companies being set up every day, as well as the compliance requirements introduced over the course of the past years, the possibility to set up new Cells under the same company will give directors of companies conducting shipping or aviation business the ability to be quick in their corporate structuring, and set up Cells expeditiously, as needed, for a fraction of the costs which setting up new companies would entail.

The use of this structure by companies operating in the shipping and aviation field offers major benefits:

  1. Further to the transfer of assets from a company carrying out shipping or aviation business to a dedicated Cell, the assets and liabilities arising out of the activities of a specific Cell, exclusively belong to that Cell. This means that its assets are separated from the assets and liabilities of other Cells and that they cannot be used to satisfy liabilities which cannot be attributed to that particular Cell;
  2. Easier management deriving from having only one board of directors and one set of Memorandum and Articles of Association both for the Cell companies and for all its Cells. In fact, notwithstanding that a Cell Company may have created one or more Cells, the Cell Company still remains a single legal person and the Cells so created do not enjoy a separate legal personality from the Cell Company;
  3. Tax optimisation: the Cell Company and its Cells benefit from the Malta full imputation tax system;
  4. One operative licence is required for an entire Cell Company even though it has individual Cells;
  5. The insolvency of one particular Cell has no impact on the remaining Cells or Cell Company;
  6. Individual Cells are easier and quicker to close down than a regular company.

Contact Dr Sarah Galea or any other member of IURIS Malta if you require further information or assistance or send us an email on