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Borg Galea & Associates

Statutory Audit Malta: New 2025 Rules Could Cut Your Compliance Cost in Half

Since December 2025, qualifying companies can replace their full statutory audit with a review engagement — saving 30–50% on professional fees. Enter your details and we will tell you which route applies to your company.

  • Warranted auditors registered with the Accountancy Board of Malta
  • 2025 exemption thresholds now recognised for income tax purposes
  • Review engagement option saves qualifying companies 30–50% vs a full audit
  • We handle planning, fieldwork, reporting and Registry filing end to end

Over 500 audits delivered for Malta companies across every sector.

Which Audit Route Fits Your Company?

Free consultation. No obligations.

Established

Practice

Proven

Track Record

ISA

International Standards

Warranted

Practising Auditors

Your Contacts

Andrew Fenech

Andrew Fenech

Business Development Manager

Adrian Pavia Dimech

Adrian Pavia Dimech

Audit Principal

Tatiana Muscat

Tatiana Muscat

Audit Manager

Warranted by the Malta Accountancy Board

ACCA & MIA Certified Professionals

Corporate Member of FinanceMalta, MIT & IFSP

Fully GDPR & AMLD-Compliant

Who Must Have a Statutory Audit Under Malta Law?

Under the Companies Act (Cap. 386), nearly every limited liability company registered in Malta must have its annual financial statements audited by a warranted auditor. This applies to private companies, public companies and groups alike.

The obligation sits in two pieces of legislation. Article 185 of the Companies Act sets out the general audit requirement, while the Income Tax Management Act (Cap. 372) historically demanded an auditor's report alongside every tax return — even if the Companies Act granted an exemption. That conflict was resolved in December 2025.

Exemptions exist, but they are narrow. Public companies, entities regulated by the MFSA, companies listed on a regulated market and parent companies of non-small groups cannot claim any exemption regardless of their size. For everyone else, the question comes down to whether you meet the small company thresholds.

Audit Exemption Thresholds: Do You Qualify as a Small Company?

To qualify for audit exemption or the review engagement alternative, your company must satisfy at least two of the three criteria below for two consecutive financial years.

CriterionThreshold
Annual net turnoverNot exceeding €5,000,000
Balance sheet totalNot exceeding €2,500,000
Average number of employeesNot exceeding 50

Source: Article 185(2) of the Companies Act (Cap. 386), as recognised for income tax purposes by Legal Notice 139 of 2025, effective 1 December 2025. Meet all three = fully exempt. Meet two of three = review engagement option. Meet fewer than two = full statutory audit required.

Not sure where your company falls? Send us your details and we will check for you — no charge.

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Review Engagement vs Full Audit: Which One Do You Need?

A review engagement conducted under ISRE 2400 provides limited assurance on your financial statements. The auditor performs inquiries and analytical procedures but does not carry out the detailed transaction testing, controls evaluation or physical verification that a full audit requires.

The practical difference is significant. A review typically takes less time and costs 30 to 50 per cent less than a statutory audit. The conclusion wording changes from a positive opinion (“the financial statements present fairly”) to a negative assurance statement (“nothing has come to our attention that causes us to believe the financial statements are materially misstated”).

A review engagement is appropriate when your company meets at least two of the three small company thresholds for two consecutive years and is not an excluded entity type. It will not suit every situation — lenders, investors or group auditors may still require reasonable assurance from a full audit. If you are unsure which route applies to your company, we can assess your position and advise accordingly.

How a Statutory Audit Works: Four Stages From Planning to Filing

A well-run audit follows a clear sequence. Here is what to expect when you work with our team.

01

Planning and Risk Assessment

We study your business, assess risk areas, set materiality levels and agree on a timeline. You receive a detailed audit plan before any fieldwork starts.

02

Fieldwork and Testing

Our team works through your accounts methodically — testing balances, verifying transactions, reviewing controls and documenting findings as we go.

03

Reporting and Audit Opinion

We discuss findings with management, obtain representation letters and issue a signed audit report that meets all ISA requirements and statutory obligations.

04

Filing with the Malta Business Registry

Audited accounts must be filed within 42 days of your AGM. We coordinate the filing to ensure you meet the deadline and avoid penalties.

Find Out What Applies to You

Why Companies Choose Borg Galea for Their Audit

Warranted Practising Auditors

Our auditors hold practising certificates issued by the Accountancy Board of Malta under the Accountancy Profession Act (Cap. 281). You are working with legally qualified professionals, not just accountants.

Full ISA Compliance

Every engagement follows International Standards on Auditing. No shortcuts, no modified approaches — the same standards used across the EU.

Clear Timelines, Kept

We agree on deadlines during planning and stick to them. You receive your signed audit opinion when you need it, not weeks after your filing date.

IFRS and GAPSME Expertise

Whether your company reports under full IFRS or the General Accounting Principles for Smaller Entities, our team handles both frameworks with equal confidence.

Get Your Free Assessment

Statutory Audit Malta: Common Questions Answered

In most cases, yes. The Companies Act (Cap. 386) requires nearly all limited liability companies to have their financial statements audited annually. Exemptions exist only for companies that meet specific size thresholds, and certain entity types — public companies, MFSA-regulated firms, listed entities and parent companies of large groups — can never claim an exemption.
Under Article 185(2) of the Companies Act, a company qualifies as small if it meets at least two of three criteria for two consecutive financial years: annual net turnover not exceeding 5 million euro, balance sheet total not exceeding 2.5 million euro, and average employees not exceeding 50. Companies meeting all three are fully exempt. Those meeting two of three can opt for a review engagement instead.
Before December 2025, the Income Tax Management Act required an auditor's report regardless of any Companies Act exemption. Legal Notice 139 of 2025 removed that conflict. Companies qualifying for exemption under the Companies Act are now also recognised as exempt for income tax purposes, and review engagements are accepted where the company meets two of three thresholds. This is a significant practical change — previously, the tax requirement forced many exempt companies to get a full audit anyway.
A review engagement under ISRE 2400 provides limited assurance on your financial statements through inquiries and analytical procedures. It is less extensive than a full audit and typically costs 30 to 50 per cent less. It is available to companies that meet at least two of the three small company criteria for two consecutive years.
Potentially, under Legal Notice 101 of 2019. Newly incorporated companies may be exempt for their first two accounting periods if all shareholders are individuals holding educational qualifications at MQF Level 3 or higher. If you opt for a voluntary audit during this period, you can claim a 120 per cent tax deduction on the fee, up to 700 euro per year.
For a typical small-to-medium company with well-maintained records, expect four to ten weeks from planning through to a signed report. The biggest variable is the quality of your accounting records and how quickly management can respond to queries during fieldwork.
Less than most directors expect. We send a detailed information request before fieldwork begins, so your team can prepare in their own time rather than scrambling during the audit itself. Most of our work happens off-site. On-site time, where needed, typically amounts to two to five days depending on company size. We coordinate schedules during planning so the audit does not collide with your busiest periods.
Fees depend on the size and complexity of your company — turnover, transaction volumes, number of entities, reporting framework and quality of accounting records all factor in. We quote a fixed fee during the planning stage so there are no surprises. For qualifying companies, a review engagement typically costs 30 to 50 per cent less than a full audit. Contact us with your details and we will provide a tailored quote within one working day.
Annual accounts and the auditor's report must be filed within 42 days of the Annual General Meeting at which the accounts are approved. The AGM itself must be held within 10 months of the financial year end. Late filing attracts penalties that can reach over 2,300 euro per return.
The Malta Business Registry imposes financial penalties that accrue over time and can exceed 2,300 euro per late return. Directors may be held personally liable. Persistent non-filing can also trigger striking-off proceedings and make it difficult to obtain a certificate of good standing.
IFRS (International Financial Reporting Standards) is the full set of international accounting standards, mandatory for listed companies and commonly used by larger entities. GAPSME (General Accounting Principles for Smaller Entities) is a simplified framework permitted for qualifying small companies in Malta. The choice of framework affects the complexity and disclosure requirements of your financial statements.
It depends on the group. A parent company cannot claim small company status unless the group as a whole qualifies as a small group under the same two-of-three threshold test. Even if the holding company itself is below all three thresholds, group-level figures control whether an exemption applies.
Check Your Company’s Position

Get Clarity on Your Audit Obligations

Tell us about your company and we will confirm whether you need a full audit, qualify for a review engagement or are fully exempt. No obligation, no fee for the initial assessment. We typically respond within one working day.

You will speak with

Andrew Fenech

Andrew Fenech

Business Development Manager

Adrian Pavia Dimech

Adrian Pavia Dimech

Audit Principal

Tatiana Muscat

Tatiana Muscat

Audit Manager

  • Free initial consultation
  • Response within 24 hours
  • No obligations whatsoever

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+356 2703 7012info@borggalea.com

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