Malta Opens A New Runway For Aircraft Financial Leasing With MFSA’s Proposed Rulebook

Financial Leasing falls squarely within MFSA’s regulatory framework for financial institutions and it therefore subject to licensing in terms of the First Schedule of the Financial Institutions Act (the “Act”). The MFSA’s new consultation proposes a new Article 3B to the Act which will sit alongside the current exemption under Article 3A. Article 3B will not replace Article 3A but will give companies an additional route to conduct aircraft financial leasing withut the burden of a full licence. Companies relying on Article 3B must instead seek admission to a new List of Aircraft Financial Leasing Companies which will be maintained by the MFSA. This listing is not tantamount to licensing however it demonstrates that the company is lawfully carrrying out aircraft financial leasing in compliance with MFSA rules. A company seeking admission to the MFSA’s List of Aircraft Financial Leasing Companies (the “List”) must satisfy each of the following criteria:

1. The company must be incorporated and registered in Malta.
2. At least one director must reside in Malta and effectively direct the business from Malta.
3. Aggregate total assets must reach at least EUR 100 million, whether in liquid form or in the form of aircraft or engines valued by a reputable independent valuer.
4. The company’s financial services activities must be limited to aircraft or engine financial leasing (whether directly or through subsidiaries), together with ancillary activities and
5. Due Diligence Service Provider (“DDSP”) must be appointed before notification is submitted and where applicable a MLRO which will depend on the structure, nature and size of the business.

Once admitted to the List, a company must comply with continuing obligations throughout its lifetime which include ongoing monitoring by the DDSP at least annually, complying with outsourcing requirements and meeting ICT and security risk requirements including appropriate governance and control measures. Article 3B gives entities that cannot meet Article 3A’s ownership and funding test an alternative route into the aircraft leasing market. Article 3A demands that the company is owned, controlled by, or a subsidiary of, or exclusively funded by qualifying institutional investors with the leasing transaction financed exclusively by eligible counterparties under MiFID II. Article 3B removes these restrictions and gives companies and investors more flexibility to incorporate, manage and administer a finance leasing company.

Article 3B presents a new regime and rather than displacing the existing regime, it will operate side by side within Malta’s aircraft leasing framework. For investors who fall shorts of Article 3A’s institutional-ownership threshold, Article 3B, once adopted may prove the more accessible way into Malta’s aircraft as long as they are ready to take on the substance, governance and compliance obligations that come
with it.

The MFSA invites aircraft lessors, aviation finance professionals, legal practitioners, corporate service providers, auditors and other interested stakeholders to review the proposed Rules for Notified Aircraft Financial Leasing Companies and Related Due Diligence Service Providers and submit their feedback during the consultation period which closes on 31st August 2026.