Allotment of Shares in Malta 2026: A Director’s Guide

By the EGM Assurance Editorial Team · Last reviewed June 2026 · 14 min read

At some point in a company’s life, the directors will need to issue new shares. The reason might be to bring in an investor, to inject fresh capital, to reward a key person, to convert a shareholder loan into equity, or to restructure ownership. This is the allotment (or issue) of shares: the creation and allocation of new shares in exchange for consideration. It is a routine corporate action, but one governed by specific requirements in the Companies Act, Getting the sequence wrong, whether by issuing shares the company had no authority to issue, overlooking pre-emption rights, or filing late, can render the issue defective or expose the directors to challenge.

This guide explains, for directors of Maltese companies, how to allot and issue new shares correctly. It covers the fundamental distinction between authorised and issued share capital, who has the authority to issue shares and what resolutions are needed, the pre-emption rights of existing shareholders, the consideration for which shares may be issued (cash and non-cash, including the simplified route introduced in 2025), the treatment of share premium, the step-by-step process, the Malta Business Registry filings, and the tax and practical points that follow. It reflects the position in Malta as at June 2026, including the amendments made by Act XVIII of 2025.

The focus here is the issue of new shares, which increases the company’s issued share capital. That is a different transaction from a transfer of existing shares between parties, which is covered in our separate guide on share transfers; and where the consideration is a shareholder loan being converted to equity, our capitalisation guide covers that specific case in depth.

1. Authorised versus issued share capital: the essential distinction

Before any allotment, a director needs to understand two figures that are often confused. Both appear in the company’s memorandum of association, and the difference between them determines what steps an allotment requires.

Authorised share capital

The authorised share capital is the maximum nominal value of shares the company is permitted to issue under its memorandum. It is a ceiling, set in the constitutional documents. A Maltese private company must have an authorised share capital of not less than €1,164.69; a public company not less than €46,587.47. The company cannot issue shares beyond this ceiling without first amending the memorandum to raise it.

Issued share capital

The issued share capital is the portion of the authorised capital that has actually been allotted to shareholders. It can equal the authorised capital, or be less, but it can never exceed it. When a company allots new shares, it increases its issued share capital. The first question is always whether there is enough unissued authorised capital to accommodate the new shares.

Why the distinction drives the process

The two-tier structure produces a simple decision rule. If the company has enough unissued authorised capital to cover the new shares, the allotment increases only the issued capital, a comparatively straightforward step that does not require amending the memorandum. If the new shares would take the issued capital above the authorised ceiling, the company must first increase its authorised capital, which does require a memorandum amendment (and therefore an extraordinary resolution). Establishing which of these situations applies is the starting point of every allotment.

The first question in any allotment is arithmetic: does the company have enough headroom between its issued and authorised capital to accommodate the new shares? If yes, you are increasing issued capital only, with no memorandum amendment needed. If no, you must first increase the authorised capital by amending the memorandum, which is an extraordinary-resolution matter. Check this before anything else, because it determines the whole procedure.

2. Who has the authority to issue shares?

A company cannot issue shares simply because the directors decide to. The authority to issue rests, by default, with the shareholders, and the Companies Act sets out how it is exercised and how it may be delegated.

The default: an ordinary resolution of the shareholders

An increase in the issued share capital of a company is decided by an ordinary resolution of the shareholders, meaning a resolution passed by members holding more than 50% of the voting rights represented at the meeting, unless the memorandum or articles require a higher majority. For a private company, this can be, and usually is, done by written resolution signed by all the shareholders rather than at a convened meeting.

Delegation to the board

The Companies Act allows the shareholders to delegate the authority to issue shares to the board of directors, provided the memorandum or articles expressly permit it. Where this is done, the general meeting authorises the directors, by ordinary resolution, to issue shares up to a maximum specified amount. That authorisation is valid for a maximum of five years and can be renewed for further five-year periods. Importantly, the granting of this authority to the board is itself one of the matters the Act treats as requiring an extraordinary resolution. So while the directors can then issue within their mandate, the initial delegation to them is a higher-threshold decision.

Increasing the authorised capital

Where the allotment requires the authorised capital to be raised first, that is an alteration of the memorandum, which requires an extraordinary resolution. This is passed by members holding not less than 51% of the nominal value of the shares conferring the right to vote (or a higher threshold if the articles so provide), at a meeting of which proper notice of the extraordinary resolution was given. In a private company this too can be achieved by unanimous written resolution.

A frequent error is for directors to issue shares assuming they have the authority when they do not, either because the authorised capital is already fully issued, or because the power to issue was never validly delegated to the board. Before issuing, confirm two things: that there is unissued authorised capital, and that whoever is passing the resolution (shareholders or board) actually holds the authority to do so under the Act and the company’s own memorandum and articles.

3. Pre-emption rights: the existing shareholders’ protection

Pre-emption rights are the right of existing shareholders to be offered new shares first, in proportion to their existing holdings, before the shares are offered to anyone else. They exist to protect shareholders from having their percentage ownership diluted without the chance to maintain it. The Maltese position differs between public and private companies, and this is a point many general summaries get wrong.

Public companies

For public companies, pre-emption is a statutory right: where shares are to be allotted for consideration in cash, they must first be offered to existing shareholders on a pre-emptive basis, in proportion to the capital they hold. The right can be withdrawn or restricted, but only by extraordinary resolution and subject to the safeguards in the Act. This statutory pre-emption does not apply to the company’s own shares.

Private companies

For private companies, there is no mandatory statutory pre-emption right imposed by the Act. Instead, pre-emption rights are a matter for the company’s memorandum and articles, and in practice they are very commonly written into the articles of private companies, precisely because shareholders in a closely held company value protection against dilution. Where the articles contain pre-emption provisions, they must be followed on an allotment (offering the new shares to existing members first) unless the shareholders waive them. Because these rights are so often present, a director planning an allotment in a private company should always check the articles before assuming shares can be issued straight to a new investor.

Do not assume a private Maltese company is free of pre-emption rights just because the Act does not impose them. Most private companies’ articles contain pre-emption clauses, and issuing new shares to an outside investor without first offering them to existing members (or obtaining their waiver) can breach the articles and expose the allotment to challenge. Always read the articles first, and obtain written waivers from the existing shareholders where the shares are going elsewhere.

4. The consideration: what shares can be issued for

Shares must be issued for consideration, and the consideration is subject to specific rules. The overriding principle is that a share cannot be issued for less than its nominal value, and the consideration must be real.

The economic-assessment requirement

The consideration for shares, whether on original subscription or a later issue, must consist of assets capable of economic assessment. Future personal services, or an undertaking to perform work or supply services, cannot be given as consideration for shares. This rules out issuing shares simply in exchange for a promise of future work.

Cash consideration

Where shares are allotted for cash, the straightforward case, a bank deposit slip is required as evidence, showing the deposit of the amount by which the issued capital is being increased, the date the funds were received, and the company as recipient. The cash is paid into the company’s bank account and the shares are issued against it.

Non-cash consideration

Shares can also be issued for non-cash consideration: the contribution of assets such as equipment, property, intellectual property or shares in another company, or the capitalisation of a debt owed by the company. Historically, any issue of shares for non-cash consideration required an independent expert’s report valuing the consideration, filed with the Registrar before the shares were issued. Act XVIII of 2025 introduced an important simplification: by a proviso to Article 73(4), where the monetary value of the non-cash consideration does not exceed €50,000, a directors’ declaration replaces the expert’s report. The declaration must still be filed with the Registrar before the shares are issued or allotted. This change entered into force on 7 August 2025. Above €50,000, the independent expert’s report remains required. Our capitalisation guide covers the non-cash route in detail, including the directors’ declaration.

The 2025 simplification is genuinely useful for smaller in-kind contributions, such as a start-up taking equipment or intellectual property into share capital. It does, however, shift the responsibility for valuing the consideration onto the directors, who make the declaration in place of an independent expert. For anything complex, sensitive or near the €50,000 threshold, many directors still prefer the comfort of an expert’s report even where a declaration would be permitted.

5. Share premium: issuing above nominal value

Shares are frequently issued at a premium, meaning for a price above their nominal value. This is normal and often necessary. Where a company has grown and its shares are worth more than their nominal value, issuing new shares at nominal value to an incoming investor would unfairly dilute the existing shareholders; issuing at a premium that reflects the company’s actual value avoids that.

The premium, being the excess of the issue price over the nominal value, is credited to a share premium account, a capital reserve that is not freely distributable as dividend. For example, if a share with a nominal value of €1 is issued for €10, the €1 increases issued share capital and the €9 is credited to share premium. Using a premium also has a practical filing consequence: because annual return fees and some registration costs are based on authorised share capital, issuing at a premium allows a company to raise substantial funds while keeping its authorised (nominal) capital, and the associated fees, low.

6. The allotment process, step by step

A typical allotment of new shares in a private Maltese company follows the sequence below. The order matters. In particular, the authority and the documentation must be in place before the shares are issued, not after.

Step 1: Confirm capacity and authority

Check that there is sufficient unissued authorised capital for the new shares. If not, plan to increase the authorised capital first. Confirm who holds the authority to issue, whether the shareholders or the board under a valid delegation, and review the memorandum and articles for any pre-emption rights or class-rights provisions that apply.

Step 2: Address pre-emption

Where pre-emption rights exist (statutory for public companies on cash issues, or in the articles for private companies), either follow them by offering the shares to existing members in proportion, or obtain the shareholders’ written waiver of their pre-emption rights in respect of this allotment.

Step 3: Prepare the consideration documentation

For a cash issue, arrange the bank deposit and obtain the deposit slip. For a non-cash issue, obtain the independent expert’s report, or, where the consideration does not exceed €50,000, prepare the directors’ declaration. This documentation must be ready to file before the shares are issued.

Step 4: Pass the resolutions

Pass the necessary resolutions: an extraordinary resolution to increase the authorised capital and amend the memorandum if required; the ordinary resolution (or board resolution under delegated authority) to issue the shares; and any resolution needed to waive or disapply pre-emption. For a private company these are commonly done by written resolution signed by all shareholders.

Step 5: Allot the shares and update the register

Allot the shares to the allottees and update the company’s register of members to record the new shareholdings. Issue share certificates where the company uses them. The allotment is the formal act of appropriating the shares to the persons entitled to them.

Step 6: File with the Malta Business Registry

File the return of allotments (Form H) with the Registrar, together with the supporting documentation, namely the shareholders’ resolution, the bank deposit slip or the expert’s report / directors’ declaration as applicable, the amended memorandum where the authorised capital was increased, and the beneficial-ownership notification where the ownership profile changes. The return of allotments must be delivered within the statutory period.

The critical sequencing rule for non-cash issues: the expert’s report or the directors’ declaration must be delivered to the Registrar before the shares are issued or allotted. If the shares are issued first and the documentation filed afterwards, the Registrar may refuse to register the return, and the issue can be treated as null and void. Get the valuation documentation on file first.

7. Filing and timing obligations

Two filing points deserve particular attention because they carry deadlines.

The return of allotments (Form H)

A company must deliver to the Registrar a return of the allotments (Form H) within two months after the allotment of any of its shares. The return records the shares allotted, the consideration, and the persons to whom they were allotted. Late delivery can attract penalties, so the filing should be diarised as part of the allotment, not left as an afterthought.

Beneficial ownership

Where the allotment changes the company’s beneficial ownership, for example by bringing in a new shareholder who crosses the beneficial-ownership threshold or by shifting the proportions among existing owners, the change must be notified to the Registrar within the period prescribed under the beneficial ownership regulations, using the appropriate beneficial-ownership form. This is easy to overlook when the focus is on the share issue itself.

Where an increase in authorised capital is involved

If the authorised capital was increased, the amended memorandum reflecting the new authorised capital is filed as part of the submission, and the applicable registration fee, calculated on the increased authorised capital, is paid. Issuing at a premium (which increases issued capital and reserves without raising the nominal authorised figure) is one way companies manage this cost.

8. Tax and stamp duty considerations

The issue of new shares by a company is generally distinct, for Maltese tax purposes, from a transfer of existing shares. Duty on documents applies to transfers of marketable securities, not to the fresh issue of shares by the company to a subscriber. The allotment of new shares in exchange for a contribution of cash or assets is therefore ordinarily outside the scope of duty on the issue itself. Where the consideration is the contribution of an asset, the tax treatment of that contribution (for the contributor) should be considered separately, as should any value-shifting that a disproportionate issue might create between shareholders. Because the tax and duty analysis depends on the specific facts, including the nature of the consideration, the identities of the parties, and whether value passes between shareholders, it should be confirmed for the particular transaction rather than assumed.

This article explains the corporate-law mechanics of allotment. The tax and duty treatment of a specific share issue, particularly where shares are issued for assets, at an undervalue, or in a way that shifts value between shareholders, depends on the facts and should be confirmed for the transaction. EGM is not providing tax advice in this general guide.

9. Common scenarios

Scenario A: Bringing in a new cash investor

A private company wants to issue new shares to an incoming investor for cash. The directors first confirm there is enough unissued authorised capital (increasing it by extraordinary resolution if not), check the articles for pre-emption rights and obtain waivers from the existing shareholders in the investor’s favour, agree an issue price (often at a premium reflecting the company’s value), pass the resolution to issue, take in the cash and obtain the deposit slip, allot the shares and update the register, and file Form H with the resolution, deposit slip and beneficial-ownership notification.

Scenario B: Injecting capital by the existing owner

A sole or majority owner wants to strengthen the balance sheet by putting in more capital. Pre-emption is not an obstacle (the owner is the person receiving the shares, or the other members waive). The owner subscribes for new shares for cash, and the company follows the same allotment and filing steps. Where the owner is contributing an asset rather than cash, the non-cash rules apply: a directors’ declaration where the value is €50,000 or below, or an expert’s report above it.

Scenario C: Converting a shareholder loan into equity

Where the consideration is the release of a loan the company owes to a shareholder, the allotment is an issue for non-cash consideration, being the capitalisation of a debt. The same Article 73 framework applies: an expert’s report, or a directors’ declaration where the amount does not exceed €50,000. This specific and very common case is covered step by step in our capitalisation guide.

10. Frequently asked questions

What is the difference between allotment and issue of shares?

In practice the terms are used almost interchangeably for the creation and allocation of new shares. Strictly, allotment is the act by which a person acquires an unconditional right to be entered in the register of members in respect of the shares, and issue follows when the shares are actually issued and the person is registered. For a director’s purposes, the important point is the same: new shares are being created and given to shareholders in exchange for consideration, and the Companies Act procedure must be followed.

What is the difference between authorised and issued share capital?

Authorised share capital is the maximum nominal value of shares the company may issue under its memorandum, in other words a ceiling. Issued share capital is the portion actually allotted to shareholders. Issued capital can never exceed authorised capital. If a proposed allotment would take the issued capital above the authorised ceiling, the company must first increase its authorised capital by amending the memorandum, which requires an extraordinary resolution.

Do I need shareholder approval to issue new shares?

Ordinarily, yes. An increase in issued share capital is decided by ordinary resolution of the shareholders, unless the memorandum or articles require a higher majority. The shareholders can delegate the authority to issue to the board (for up to five years, renewable) if the memorandum or articles permit, but that delegation is itself an extraordinary-resolution matter. Directors should not issue shares without confirming that the necessary authority is in place.

What are pre-emption rights and do they apply to my company?

Pre-emption rights give existing shareholders the first right to be offered new shares in proportion to their holdings, protecting them from dilution. For public companies they are a statutory right on cash issues. For private companies the Act does not impose them, but they are very commonly written into the articles, so in most private companies they do apply. Always check your articles: if pre-emption clauses are present, offer the shares to existing members first or obtain their written waiver before issuing to a third party.

Can I issue shares for something other than cash?

Yes. Shares can be issued for non-cash consideration such as equipment, property or intellectual property, or the capitalisation of a debt, provided the consideration consists of assets capable of economic assessment. Future services cannot be given as consideration. For non-cash issues, an independent expert’s report is required, unless the value does not exceed €50,000, in which case (since 7 August 2025) a directors’ declaration suffices. Either must be filed with the Registrar before the shares are issued.

What is the €50,000 directors’ declaration route?

Introduced by Act XVIII of 2025 through a proviso to Article 73(4) and in force from 7 August 2025, it allows a directors’ declaration to replace the independent expert’s report for an issue of shares for non-cash consideration where the value does not exceed €50,000. The declaration must still be filed with the Registrar before the shares are issued. It reduces cost and time for smaller in-kind contributions, but places responsibility for valuing the consideration on the directors themselves.

What is share premium and why issue shares at a premium?

Share premium is the amount by which the issue price exceeds the nominal value of the shares. Companies issue at a premium so that new shares reflect the company’s actual value rather than just their nominal value, avoiding unfair dilution of existing shareholders. The premium is credited to a share premium account, a non-distributable capital reserve. Issuing at a premium also lets a company raise significant funds while keeping its authorised (nominal) capital, and the fees based on it, low.

What do I have to file with the Malta Business Registry, and when?

The main filing is the return of allotments (Form H), delivered within two months of the allotment, together with the shareholders’ resolution, the bank deposit slip (cash issues) or the expert’s report / directors’ declaration (non-cash issues), the amended memorandum if the authorised capital was increased, and a beneficial-ownership notification where the ownership profile changes. For non-cash issues, the valuation documentation must be on file before the shares are issued.

What happens if I issue shares without the proper authority or filings?

The consequences range from the filing being rejected to the issue being defective. In particular, for a non-cash issue, if the expert’s report or directors’ declaration is not delivered to the Registrar before the shares are issued, the Registrar may refuse to register the return of allotments and the issue can be treated as null and void. Issuing beyond the authorised capital, or without the required resolution, similarly exposes the allotment to challenge. The remedy is to follow the sequence correctly: authority and documentation first, issue second, filing promptly after.

Does issuing new shares dilute the existing shareholders?

It can. Issuing new shares to a party increases the total number of shares, so a shareholder who does not take up their proportion sees their percentage holding fall. Pre-emption rights (where they apply) address this by giving existing members the first opportunity to maintain their proportion. Issuing at a premium that reflects the company’s value addresses the economic dilution, ensuring incoming shareholders pay a fair price for their stake rather than acquiring value built up by the existing owners at nominal cost.

Is allotment of shares the same as a transfer of shares?

No. Allotment is the creation and issue of new shares by the company, increasing the issued share capital. A transfer is the movement of existing shares from one party to another, with no change in the total issued capital. They are governed by different provisions, involve different documents, and have different tax and duty treatment. This guide covers allotment; our separate guide covers share transfers.

Related guides from EGM Assurance

• Share Transfers in Malta 2026: Complete Director’s Guide

• Setting Up a Company in Malta: Step-by-Step Guide

• Becoming a Malta Company Director: Duties, Liability and Personal Exposure

• Corporate Filings and Beneficial Ownership in Malta

• Memorandum and Articles of Association in Malta 2026: A Director’s Guide

Authoritative references

• Companies Act (Cap. 386): Chapter II (Arts 83–88, changes to share capital), Chapter IV (Arts 97–103, allotment), Article 73 (non-cash consideration)

• Companies (Amendment) Act, 2025 (Act XVIII of 2025): Article 73(4) proviso (in force 7 August 2025)

• Malta Business Registry: Form H (Return of Allotments) and increase in share capital

• Companies Act (Fees) Regulations (S.L. 386.03): registration and annual return fees

• Malta Business Registry: beneficial ownership filings

• Duty on Documents and Transfers Act (Cap. 364): duty on transfers of securities

Planning to issue new shares in your Malta company? EGM Assurance guides directors through the full allotment process: confirming authority and capacity, handling pre-emption and consideration, preparing the resolutions and directors’ declaration where applicable, and filing correctly with the MBR. Get the sequence right and the issue is clean and unchallengeable. Get in touch →

This article is prepared by EGM Assurance for general informational purposes and reflects the legal and regulatory position in Malta as at June 2026, including the Companies Act (Cap. 386) and the amendments made by Act XVIII of 2025 (in force from 7 August 2025). It does not constitute legal, tax or accounting advice. The requirements for a specific allotment, and its tax and duty treatment, depend on the facts of the transaction and the company’s constitutional documents. Always obtain specific advice from a qualified professional before issuing shares.