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Pursuant to amendments to the Companies Act, the Companies Act (Shipping and Aviation Cell Companies) Regulations (the “Regulations”) allow for the incorporation of cell companies that conduct shipping or aviation business. The Regulations also allow for the conversion of an existing company that conducts shipping or aviation business into a cell company. To understand what is meant by shipping or aviation business, please click here.

A cell company may create one or more cells within itself for the purposes of segregating and protecting cellular assets. Each cell has distinct assets and liabilities and can therefore be used to carry out separate and distinct business from the cell company and from the other cells.

The Regulations cement Malta’s position as a leading jurisdiction in the shipping and aviation business. Shipping and aviation companies are able to segregate their assets and liabilities into various cells, which are considered to be a distinct patrimony from the core company and the remaining cells, whilst taking full advantage of the cost benefit of maintaining one company as opposed to several. Importantly, a creditor of one particular cell only has recourse to the assets of that particular cell and not the remaining cells or the core company. As a result, the insolvency of one particular cell has no impact on the remaining cells or the core company itself.

Cell companies have been regulated under Maltese law for some time and are used by insurance companies under the Companies Act (Cell Companies Carrying on Business of Insurance) Regulations, and also by securitisation vehicles and investment companies with variable share capital under the Securitisation Act. The Second Schedule to the Civil Code also allows for the use of segregated cells by foundations and associations.

Salient features

A cell company is a single legal person, and the creation of a cell does not create, in respect of that cell, a legal person separate from the cell company. This means that each cell is therefore bound to transact by means of the cell company.

The assets of a cell company are either cellular assets or non-cellular assets. Cellular assets are the assets of the company attributable to a cell, and they must be kept separate and must be identifiable from non-cellular assets in the company. By implication, non-cellular assets are assets which are not attributable to a particular cell and are therefore attributable to the core company.

A cell company may, in respect of any of its cells, create and issue cell shares, the proceeds of the issue of which shall be comprised in the cellular assets attributable to the cell in respect of which the cell shares were issued. Cellular dividends can be paid in respect of the cell shares out of the profits attributable to that particular cell only, and not from the profits attributable to any other cell in the company, or from the non-cellular profits of the company.

Cellular assets are only available to the creditors of the relevant cell, and who are thereby entitled to only have recourse to the cellular assets attributable to that cell. Moreover, cellular assets are absolutely protected from the creditors of the cell company who are not creditors of that cell. Accordingly, such creditors are not entitled to have recourse to the cellular assets attributable to that cell.

Where any liability arises which is attributable to a particular cell, only the cellular assets attributable to that cell shall be used to satisfy the liability, and any cellular assets not attributable to the relevant cell shall not be used to satisfy the liability. Any liability not attributable to a particular cell shall be the liability solely of the company’s non-cellular assets, provided that apportionments may be made out of the assets attributable to the individual cells towards the costs of the day-to-day administration of the cell company.

To read more about the benefits of cell companies, click here.


This document does not purport to give legal, financial or tax advice. Should you require further information or legal assistance, please do not hesitate to contact Dr. Nicholas Valenzia and Dr Joshua Chircop.