The Malta Financial Services Authority (“MFSA”) has launched a public consultation on a proposed regulatory framework for aircraft financial leasing companies. The initiative introduces a more proportionate, notification-based supervisory regime aimed at strengthening Malta’s position as an aviation finance hub.
Policy Rationale
At the core of the proposal is the introduction of a proportionate regime for aircraft financial leasing companies meeting defined eligibility thresholds. Rather than being subject to full licensing, qualifying entities would be entered on a newly established “List of Aircraft Financial Leasing Companies” maintained by the MFSA under the Financial Services Register.
Entities on the List would become “notified persons”, operating under a notification regime rather than full authorisation. As part of broader reforms with the Malta Financial Services Advisory Council (MFSAC), eligible aircraft and engine lessors would not need a financial services licence but would simply be notified to the MFSA and entered on the List.
Scope of Permitted Activity
The framework would apply to lessors carrying out, in or from Malta, the activity of financial leasing in relation to aircraft and aircraft engines. This would cover leasing arrangements involving assets registered in the National Aircraft Register under the Aircraft Registration Act (Chapter 503 of the Laws of Malta), as well as aircraft or engines registered in any other jurisdiction.
This broad scope is intended to capture cross-border leasing structures while maintaining Malta as the regulatory nexus for qualifying activity.
Eligibility, Admission and Operational Criteria
To qualify under the new regime, a company must:
-
Be established in Malta.
-
Conduct only aircraft financial leasing activities.
-
Hold minimum assets of at least EUR 100 million (or equivalent), satisfied through:
- a. ownership of aircraft and/or aircraft engines; or
- b. equivalent financial resources.
-
Submit a formal written notification to the MFSA in line with applicable requirements.
-
Be confirmed by the MFSA as entered on the List within 20 working days following a complete and compliant filing.
-
Appoint a Due Diligence Service Provider (DDSP) to carry out initial and ongoing assessments of the fitness and properness of:
- beneficial owners;
- board members;
- senior officials; and
- key service providers.
The MFSA further proposes that licensed Corporate Services Providers (other than under-threshold CSPs) may act as DDSPs, subject to the Authority being satisfied that such providers have adequate resources, systems and sector-specific expertise.
Ongoing Regulatory and Compliance Obligations
Once admitted to the List, notified entities would be subject to limited and proportionate ongoing obligations, including basic regulatory reporting requirements under a dedicated rulebook. These would include, among other matters, information on the jurisdictions in which the lessor’s clients are incorporated, maintain branches or otherwise conduct business.
Notified companies would also be required to comply with AML and CFT obligations, including the appointment of a MLRO.
To ensure full alignment with Malta’s AML/CFT framework, the MFSA proposes targeted amendments to the Prevention of Money Laundering and Funding of Terrorism Regulations (S.L.373.01). Regulation 2(1)(b) currently captures only financial leasing by licensed financial institutions. Since aircraft financial leasing under the new regime would operate on a notification basis, notified lessors would otherwise fall outside scope. The amendment would extend the definition to include notified aircraft financial leasing, formally recognizing companies on the List as AML/CFT subject persons under Maltese and EU law.
The existing Article 3A exemption under the Financial Institutions Act (Chapter 376 of the Laws of Malta), which provides a licence exemption for entities conducting financial leasing of aircraft or ships financed exclusively by regulated counterparties, would continue to apply. Companies not meeting the criteria for either the exemption or the new regime would still require licensing.
Rulebook
The MFSA proposes issuing a dedicated set of “Aircraft Financial Leasing Companies Rules” to regulate, in greater operational detail, both entry requirements and ongoing obligations applicable to lessors admitted to the List.
Proposed Amendments
The MFSA has outlined amendments to the Financial Institutions Act and related subsidiary legislation, including:
-
introducing an additional exemption specific to aircraft financial leasing;
-
establishing a new legislative instrument, the Financial Institutions Act (List of Notified Financial Leasing Companies) Regulations, to govern the notification regime;
-
modifying the Financial Institutions (Fees) Regulations to introduce notification and annual renewal fees; and
-
amending the Prevention of Money Laundering and Funding of Terrorism Regulations to capture notified aircraft financial leasing companies.
Consultation
The consultation documents invite feedback from industry stakeholders and interested parties. Submissions should be made by 9 February 2026. Responses will inform the MFSA’s finalization of the framework, which aims to enhance Malta’s competitiveness through a streamlined and proportionate regulatory approach while preserving robust oversight.
For further information, please contact: legal@bdo.com.mt