Statutory Audit in Malta: What Directors Need to Know in 2026

For years, Malta stood out in the European Union as the country where almost every company needed a full audit, whatever its size. That is no longer strictly true. For accounting periods beginning on or after 1 January 2025, Legal Notice 139 of 2025 brought in a genuine audit exemption for the smallest companies.

The catch is in the numbers. The thresholds sit so low that most trading companies will never reach the exemption. For the great majority of Maltese companies, the statutory audit is still an annual fact of life. This article sets out what the law now asks, who has to comply, and what a statutory audit is worth beyond the filing.

What the law now requires

Malta’s audit obligation sits in Article 185 of the Companies Act. For private companies it now works as a three-tier test, measured against three figures: a balance sheet total of EUR 46,600, turnover of EUR 93,000, and an average of two employees over the period.

• A company that stays under all three needs neither an audit nor a review.
• A company that crosses one of the three can file a lighter review report, prepared under ISRE 2400, in place of a full audit.
• A company that crosses two or all three still needs a full statutory audit, signed by a registered auditor.

Read those figures again. A balance sheet of EUR 46,600 and turnover of EUR 93,000 are small. Any company trading in earnest passes them quickly, and once it crosses two of the three, the full audit applies. The exemption is real, but it was written for dormant and micro companies, not for a working business.

Some companies cannot use it at all. Public companies, entities licensed or regulated by the MFSA, and the parent companies of large groups must be audited regardless of size.

There is one further relief for new companies. A company set up from 1 January 2024 can waive the audit for its first two accounting periods if its turnover stays under EUR 80,000, its shareholders are all individuals holding a qualification at MQF Level 3 or above, and it was formed within three years of that qualification. It is a narrow door, aimed at graduates starting out.

Who signs the audit

A statutory audit in Malta can only be signed by a registered auditor: the holder of a practising certificate in auditing issued by the Accountancy Board, or an approved audit firm. The profession is governed by the Accountancy Profession Act and overseen by the Accountancy Board, which also runs quality assurance over the work auditors produce.

The audit itself follows the International Standards on Auditing, the same standards used across the European Union. This is not a local checklist. It is the international framework, applied in Malta, which is part of why a Maltese audit opinion carries weight with banks, investors, and regulators abroad.

Two ways to report the numbers

Before an audit can happen, the accounts have to be drawn up under a recognised framework. Malta allows two: IFRS as adopted by the EU, and GAPSME, the General Accounting Principles for Small and Medium-Sized Entities. GAPSME is the default for small and medium companies and is lighter to apply. Larger companies and public-interest entities must use full IFRS. Choosing the right framework is the first decision, and it shapes everything the auditor then reviews.

The audit, the filing, and the tax return

The audit does not stand on its own. It feeds a chain of deadlines. A private company must approve its accounts within ten months of its financial year-end, then file them, with the audit report, at the Malta Business Registry within a further 42 days. The audited figures also underpin the corporate tax return filed with the Malta Tax and Customs Administration, because the taxable profit is built on the audited accounts. A late or weak audit holds up everything downstream.

Missing the deadlines carries a cost. Penalties build up at the Registry, and the company and its directors are jointly liable for them. Late annual filings can run to over EUR 2,300 per return, with daily amounts on top, and repeated breaches can lead to a director being disqualified. The audit is not the thing to leave to the last week of the tenth month.

What the audit is actually for

So far this reads as pure obligation. It does not have to be. A statutory audit done well is the one time each year that an independent, qualified outsider looks hard at how the business runs. That is worth more than the signature on the report.

A good auditor tests the controls behind the numbers: who can approve a payment, how stock is counted, whether the person who records the cash is the same person who banks it. The findings usually arrive in a management letter alongside the accounts. For a director, that letter is the useful part. It shows where a control is weak, where money could go missing, and where a process is slower or costlier than it needs to be. The accounts confirm the year that has gone. The management letter helps the year ahead.

Seen that way, the audit stops being a tax on being in business and starts being a yearly health check that the law happens to require.

How Zenco Partners can help

Zenco Partners provides audit and assurance built around the company in front of us, not a standard template. Our work covers external and statutory audits for standalone companies, groups, and consolidated structures; independent audit opinions under the International Standards on Auditing; internal control design and testing; agreed-upon procedures on specific transactions or balances; grant audits for EU-funded and national programmes; and operational reviews that look at how a function actually performs.

For companies we already advise on tax and corporate structure, the audit sits within a single advisory relationship, with people who already know how the business is built. For a confidential discussion, email info@zencopartners.com or message us on WhatsApp at +356 7921 2598.

This article is for informational purposes only and does not constitute legal, tax, or financial advice. Professional advice should be obtained before taking any action based on the contents of this article.