Act XVIII of 2025 brought about various changes to the Malta Companies Act, one of the more significant being the provisions permitting the Minister to make regulations for the formation, constitution, authorisation and regulation of cell companies and the possibility of existing companies to convert into a cell company. Malta was unique within the European Union in that it made provision for the incorporation of cell companies. However, prior to these amendments, such companies could only be incorporated in Malta to undertake specific activities such as shipping and aviation. With effect from 7th August 2025 all companies can now adopt a cell structure.
What is a cell company?
A cell company is a type of corporate structure that allows a single legal entity to be divided into separate, legally distinct parts called cells. Each cell has its own assets, liabilities, and contracts, which are legally ring-fenced from the others. That means if one cell experiences losses, creditors can’t go after the assets of other cells or the company’s core.
What are the main benefits of cell companies?
The core benefit is the clear and obvious ‘ring-fencing’ of corporate assets and the fact that this is done at a legislative level. Under the law, the assets and liabilities of a company can be segregated into different cells and, where one of those cells enters into a transaction, a claim by any person in connection with that transaction will only apply to that particular cell’s assets, thus typically, a creditor of a cell will have no right of recourse to the cell company’s other assets or to the assets of any other cell that may exist.
Correspondingly, investor returns of one cell are not affected by any negative returns within any other cell. Each cell pays its dividends based on its own assets, liabilities and profitability.
What are the different types of cell companies?
- Protected Cell Company (PCC) –
- Has a core that holds certain assets and contracts.
- Each cell is a legally distinct but not a separate legal entity, instead, it is part of the PCC structure and therefore cannot contract or sue independently but operates under the “umbrella” of the PCC’s board and licence.
- Often used in insurance for captive arrangements or segregating different clients’ risks.
2. Incorporated Cell Company (ICC) –
- Each cell is its own legal entity with its own Memorandum and Articles and separate registration.
- Provides an extra layer of legal separation compared to a PCC.
- Each incorporated cell deal with third parties in its own right.
Why are cell companies popular in insurance?
In the insurance sector, cell company structures allow multiple clients to operate under a single licensed entity while maintaining complete segregation of their assets and liabilities. Each client benefits from the efficiency of shared regulatory and operational frameworks, while enjoying robust asset protection—delivering the advantages of independent ownership within one regulated platform.
What other sectors are cell companies used in?
Cell company structures (both Protected Cell Companies – PCCs and Incorporated Cell Companies – ICCs) are widely used across industries where risk segregation, cost efficiency, and regulatory streamlining are valuable. Sectors where they are commonly used are maritime and aviation investment funds and asset management, pension schemes and employee benefits, capital markets and structured finance.
Navigating Malta’s laws doesn’t need to be complicated. At Vertex Alliance, we make it simple. Get in touch with our team for further information or to see how we can help your business: Kenneth Camilleri (CEO), kcamillleri@valtd.com and Michelle de Maria (Corporate & Tax Manager), mdemaria@valtd.com.
