Malta updates its FDI screening framework: Key amendments under Bill no. 172

Malta has introduced targeted amendments to its foreign direct investment (FDI) screening regime through Bill No. 172 – National Foreign Direct Investment Screening Office (Amendment) Act, 2026. The changes refine the scope of the regime, strengthen institutional capacity, and align Malta more closely with EU Regulation 2019/452. The updated framework aims to provide greater clarity, more predictable outcomes, and enhanced oversight of investments involving sensitive sectors.

The amendments reflect Malta’s experience administering the regime since 2020 and respond to the European Commission’s call for more consistent and effective screening across Member States. They also address practical challenges encountered by the Screening Office and market participants.

The amendments introduce a more precise approach to determining when an investment must be notified. Notification is now required primarily where an investment concerns one of the sensitive activities listed in the Schedule to the Act, including:

• critical infrastructure
• critical technologies and dual use items
• supply of critical inputs
• access to sensitive information
• media pluralism

The revised provisions refine the activity‑based triggers already contained in the Act, particularly by clarifying when post‑transaction changes, such as shifts in ownership, control, or business activity, must be notified. This amendment aligns the Act with the approach already adopted in practice by the Screening Office and reduces unnecessary notifications.

A statutory definition of “portfolio investment” is introduced. A portfolio investment is defined as an investment made solely for financial return, without any intention to influence management or control. The definition applies to both listed and unlisted securities and clarifies the treatment of passive holdings, providing greater certainty for institutional investors and asset managers. Such investments fall outside the scope of the FDI screening regime.

The Bill updates the governance framework of the Screening Office, including through the establishment of a formal FDI Board responsible for directing its affairs.

The governance framework is updated to clarify:

• the composition and appointment of the Board
• terms of office
• removal and resignation procedures

These updates align the Office’s governance with best practices for regulatory bodies and enhance accountability and operational clarity.

The Bill formalises the integration of the Screening Office within the Malta Business Registry (MBR). This consolidation aims to enhance coordination between company registration and investment screening functions and improve oversight of changes in shareholding and control. The integration strengthens the Office’s ability to identify notifiable transactions and monitor post transaction developments.

The Screening Office is granted enhanced powers to request information from both public authorities and private entities, supporting more robust assessments of ownership structures, influence, and potential circumvention risks.

The Bill also updates the enforcement framework, including:

• clearer notification thresholds
• more consistent supervisory expectations

In certain cases, notification obligations may also arise following completion, particularly where there are subsequent changes to ownership, control, or the activities of the target undertaking.

Investors should review upcoming transactions, assess ownership structures for third-country exposure, and integrate FDI screening earlier into deal planning.

The Bill clarifies the information required in a notification and the Office’s ability to request supplementary documentation. These refinements support continuity with the existing regime and provide greater certainty for transactions already in progress.

Although the Bill focuses on domestic amendments, the reform must be viewed within the broader EU landscape. Across the Union, Member States are strengthening their FDI screening mechanisms in response to evolving geopolitical and technological risks. Key trends include:

• increased scrutiny of third-country investors
• more assertive enforcement practices across Member States
• enhanced cooperation through the EU FDI Screening Mechanism
• growing focus on critical technologies, supply chain resilience, and data-driven sectors

Investors operating across multiple jurisdictions should expect greater convergence in supervisory expectations and more coordinated reviews at EU level.

Bill No. 172 introduces targeted but significant refinements to Malta’s FDI screening regime. The amendments enhance legal certainty, strengthen institutional capacity, and align the framework more closely with EU standards. The updated framework reinforces Malta’s commitment to maintaining an open investment environment while safeguarding national and EU strategic interests. Investors and advisors should ensure that due diligence processes and internal governance frameworks reflect the updated requirements.