Notification: New government fees payable to the Immigration Appeals Board

Immigration Amendment Regulations, 2023 – L.N. 1 of 2023

Notification date: January 2023

We would like to notify about an amendment issued to the Immigration Act (CAP. 217), Immigration (Amendment) Regulations, 2023 whereby, Regulation 19 of the principal regulations has been substituted by the following new regulation, having fees payable to the Immigration Appeals Board:

(1)  Any person who feels aggrieved by any decision of  the  Principal  Immigration  Officer  or  by decisions  with  respect  to  the  issuance  of  residence permits, the issuance of visas or matters of carrier liability may appeal to the Board as provided for in article 25A of the Act.

(2)  The fees payable in respect of appeals shall be taxed in accordance with the scales of fees stipulated in the Schedule annexed to these regulations and shall in all cases be levied by the Board.”.

The new fees payable to Registrar of the Immigration Appeals Board are as follows:

• For the filing of an application of an appeal from decisions on the issuance of residence permits – €45
• For the filing of an application of an appeal from decisions on the issuance of visas – €120
• For the filing of an application of an appeal from decisions on matters of carrier liability – €120

If you require our assistance for any type of appeal, please get in touch by email on [email protected] and visit our dedicated webpage for more information or the Immigration FAQs for Third Country Nationals.

This article is for information purposes only and should not be construed as legal advice.

Sciberras Advocates founded by Dr Adrian Sciberras, is a law firm based in Malta. The firm prides itself to be multi-disciplinary, innovative and flexible in order to meet the changing times and any challenges in the local and international legal scenario. No matter what private or corporate complex demands are called for, Sciberras Advocates offers practical and cost-effective legal solutions to achieve your desired results. You may reach Sciberras Advocates by phone on +35627795222 or via email on [email protected].

Notification date: January 2023

When we submit an appeal application on your behalf, our engagement with you terminates as soon as the application is lodged, and an application reference is received.

The Application reference will be in a format similar as follows:

For Single Permit Appeal: IAB/SP/1234/2023

For VISA Refusal Appeal: IAB/VISA/1234/23

For IPAT Appeal: IPAT1234

If you would like to check the status of your application, you are requested to send an email as follows:

For Single Permit Appeal: [email protected]

For VISA Refusal Appeal: [email protected]

For IPAT Appeal: [email protected]

Or you can personally visit the Appeals offices on Monday/Tuesday/Thursday/Friday between 8am and 12pm, at the following location:

15, 1st Floor, City Gates Building,

Ordinance Street,

Valletta, VLT 1020

(Directions: on top of Burger King, first floor to the right)

Typically appeals take between 6 months to 1 year to get a result, the reason is that the appeal needs to be sent to all the respective stakeholders for their comments after which they are passed on to the Board for their final decision. It is important that you personally go to the Board at least every two months so that you renew your interest in the appeal.

If you would like the office to request an update on your behalf there is a fee chargeable for every update. Should you require this service, please contact us on [email protected].

This article is for information purposes only and should not be construed as legal advice.

Sciberras Advocates founded by Dr Adrian Sciberras, is a law firm based in Malta. The firm prides itself to be multi-disciplinary, innovative and flexible in order to meet the changing times and any challenges in the local and international legal scenario. No matter what private or corporate complex demands are called for, Sciberras Advocates offers practical and cost-effective legal solutions to achieve your desired results. You may reach Sciberras Advocates by phone on +35627795222 or via email on [email protected].

“This letter is in response to your application, dated DD/MM/YY, requesting a residence permit for the purpose of employment in Malta.

Your application, as the holder of passport number XXXXXXX was submitted under the Single Permit procedure, as provided for in Subsidiary Legislation 217.17 of the Laws of Malta.

“Please be informed that your request has been granted in principle, but this letter is NOT your work permit.”

This is the introduction of an Approval in Principle letter issued by Identity Malta Agency, Expatriates Unit, in response for a residence permit for the purpose of employment in Malta – Still Abroad Application. The letter goes on stating that the approval to a third country national is without prejudice to:

“- any further approval that may be required by the Maltese Health Authorities to proceed to Malta (as per Legal Notices 244, 255, 280 and 290 of 2020, and/or any subsequent related LN which maybe issued by the Health Authorities)

– any visa requirements especially if you reside in those third countries where there is yet no facilitation for the issue of visa;

– any restrictions regarding travelling to Malta imposed by states through which you would need to transit in order to reach Malta.”

The procedures instructions and rules follow, such as the need to present a Visa application form and other supporting documents to the relevant Embassy or Maltese Consulate within 180 days of receipt of the letter. If there is no Embassy or Consul present in an applicant’s country of residence, one needs to obtain the necessary authorisation to apply for a visa at the nearest operational Maltese Embassy. Failing to do so within the said 180-day period the letter becomes invalid.

It’s important to know that any letter by Identity Malta Agency has a unique QR Code, a link and a unique code number to verify the integrity of the document. When you click on the link, it will ask you to input the unique code found on the letter to verify the document. Beware of any fake letter.

A note is also added that the issuing of a Schengen visa is without prejudice to any decision by border control authorities to refuse entry into the Schengen territory for failing to fulfil all the conditions of entry or where the intention of travelling to Malta is not for the purpose of the authorisation that has been granted to you.

Once a visa is obtained and one arrives in Malta, the next step is to obtain the work and residence permit (single permit). An appointment needs to be fixed with Identity Malta Agency to present original documents and have the biometric data and photo taken. This procedure must be carried out within 90 days of arrival to Malta. Failure to do so the letter becomes invalid. It is also important to note that failure to attend the appointment without explanation will also results in the nullification of application.

For this appointment one needs to present a set of documents:

• Valid passport
• Copy of the entry visa and passport page showing date of entry stamp
• ‘Still Abroad Part 2’ application duly filled and signed
• Insurance policy showing coverage for medical assistance
• Rental agreement
• Copy of approval letter given to landlord by the Housing Authority
• Health screening evidence

Additional documents must be submitted if one will be working in the following industry:

Catering: Food handling certificate

Security: Police licence and security tag

Drivers: European driving license and Malta driver tag

If you are an employer looking to employ Third Country Nationals, and you have difficulty with the procedure and paper works, Sciberras Advocates can handle the work permit, visa and residency process for you. Furthermore, if any of your new employees have been denied a work permit or a visa to relocate to Malta, we can file appeals with the relevant departments. For more information about immigrations, appeals and work permits, please follow these links: https://sciberras.legal/practice-areas/immigration-law/ and https://sciberras.legal/practice-areas/work-permits-residency/.

This article is for information purposes only and should not be construed as legal advice.

Article written by Ms Charlene Sciberras, B.A. (Hons), guest writer, is a marketing and business administration specialist with a special focus on corporate, accounting, and legal matters.

Sciberras Advocates founded by Dr Adrian Sciberras, is a law firm based in Malta. The firm prides itself to be multi-disciplinary, innovative and flexible in order to meet the changing times and any challenges in the local and international legal scenario. No matter what private or corporate complex demands are called for, Sciberras Advocates offers practical and cost-effective legal solutions to achieve your desired results. You may reach Sciberras Advocates by phone on +35627795222 or via email on [email protected].

As a law firm working in the fields of immigration and employment law, we are often asked questions and see many similar scenarios on the topic of immigration, work permits problems, visa refusals, unjustly terminations and more. Therefore, we have come up with a set of Frequently Asked Question revolving around these topics to assist any TCNs with all their queries.

In this article we are pinpointing the top FAQs. To read all the FAQs in full please go to this page: https://sciberras.legal/practice-areas/immigration-law/immigration-faqs-for-third-country-nationals

Prior to your arrival in Malta

My employer is requesting money to employ me. Do I pay him?

You should never sign for any job that requests you to pay money. That goes against the fundamental human rights of your right to work and is equivalent to human trafficking. You should not accept any job which requests you to pay.

What is the procedure to apply for the Single Work Permit?

The procedure to apply for work in Malta for TCNs is called the Single Work Permit application.

The employer or agency will apply for you on a ‘still abroad’ basis. The application is straightforward and you need to fill the form and attach all relevant documents. Normally the employer will prepare the form with your input and submit to obtain an Approval in Principle letter.

How long does it take to get a work-permit?

Typically, from the day of submission with Identity Malta, it usually takes 30-60 days to get approved. Following this, you have six months’ time to travel to Malta, subject to visa clearance.

What do I do in case that my application for work is not accepted?

If you or your employer receive an email by Identity Malta Agency stating that your application cannot be processed, you have a right to appeal with the Immigration Appeals Board. You must consult an immigration specialist law firm like Sciberras Advocates who can understand the case and guide you accordingly. Similarly, if you receive a refusal letter you have three days’ time to appeal at the Immigration Appeals Board.

What happens when a visa is refused?

If a visa for work permit is refused, you have a right to appeal within 15 days with the Immigration Appeals Board. Appeals can also be sent via email. It is advisable to consult an immigration specialist law firm like Sciberras Advocates who can understand the case and guide you accordingly.

How long do appeals take to get an answer?

Appeals in Malta are done in writing. Once the appeal is submitted, the Appellant is given another 15 days to submit any further documentation to substantiate his appeal. At the same time, the various stakeholders (Identity Malta, Jobsplus, Immigration Police, Central Visa Unit) are asked to give their feedback depending on the type of appeal. Typically appeals take between 6 to 9 months to get a final definite answer.

Arriving in Malta

What happens when I arrive in Malta?

Once in Malta, you need to fulfil the final steps to complete the conditions of your work permit application and obtain the Maltese Residence Card. The work permit and residence card will be valid for one year. It is important that during the first weeks in Malta and beyond you ensure that:

1. You are correctly registered with Jobsplus
2. You are getting a payslip every month
3. You ensure that your National Insurance contributions are being paid by your employer
4. You are getting the correct amount of leave and overtime rates
5. You are being given an FS3 (your annual statement of earnings)
6. You are not terminated without being informed or not given advance notice to find a new job.

What if I am stopped in my workplace or pulled over by the police?

There is nothing to worry about, if you always carry your Residence Card, there should be no issues. It is important that if you work permit covers a specific job with a specific employer, you are doing so. Working illegally is subject to detention and removal orders and it will be very difficult to challenge it in the courts.

Changing jobs in Malta

What happens if I am unhappy with my job?

Remember the contract that you signed before coming to Malta and remember the important clauses. You still have an opportunity to leave however it is advisable that first you have found another job. When changing jobs, you only have a 10-day window to apply between termination and application. Furthermore, when you apply for a new job, it does not automatically mean you can start working straight away. You need to get a new employment license and approval from Identity Malta Agency, and this takes some time. Whilst you can legally reside in Malta when changing jobs, the application does not give you automatic rights to work.

What if my employer terminated me without informing me?

It is not the first time that employers terminate employees, send the Jobsplus termination form a month late and back date it. This would put you in an automatic overstay position and make you irregular in Malta. In that case you need to speak to an immigration and employment lawyer specialist such as Sciberras Advocates to see if there is a chance of redress.

For assistance on immigration law and any type of work permit appeal, visa appeal or return order appeal, please contact us on [email protected].

This article is for information purposes only and should not be construed as legal advice.

Article written by Ms Charlene Sciberras, B.A. (Hons), guest writer, is a marketing and business administration specialist with a special focus on corporate, accounting, and legal matters.

Sciberras Advocates founded by Dr Adrian Sciberras, is a law firm based in Malta. The firm prides itself to be multi-disciplinary, innovative and flexible in order to meet the changing times and any challenges in the local and international legal scenario. No matter what private or corporate complex demands are called for, Sciberras Advocates offers practical and cost-effective legal solutions to achieve your desired results. You may reach Sciberras Advocates by phone on +35627795222 or via email on [email protected].

Startups are affluential to generate new economy and contribute to the growth of a country, and Malta has recognised this opportunity as in the most recent years it has unrolled to various innovative startups and attracted FDI with the aim to create new opportunities for everyone and generate to the country’s GDP. Foreigners view Malta as a good jurisdiction to kick start a new business, thanks to great business ethics, stability, English speaking and access to the European Union market.

The newly launched Malta Startup Residency Programme is another step by the Government that shows its openness to foreign startups that want to build their presence in Malta. The Malta Startup Residence Programme grants a 3-year residence permit, extendable for an additional 5 years (once Malta Enterprise and Residency Malta confirm that the startup is still ongoing and still meets the eligibility criteria), to the founders and/or co-founders, core employees and immediate family members, and is intended for non-EU nationals. It’s important to note that beneficiaries of this programme need to have a tangible presence in Malta by living and paying taxes locally.

The eligibility criteria, amongst others include concrete intention to develop and/or expand business in Malta, a solid business plan, to live and pay taxes in Malta, to have sufficient financial resourced to support themselves and other dependants, to have no criminal records or pending criminal charges, and to have health insurance covering risks in Malta. The incorporated startup in Malta is required to place a tangible investment and/or pay up a share capital of not less than €25,000.

The startup activities to be eligible for the Malta Startup Residency Programme are:

• Manufacturing
• software development
• Industrial services analogous to manufacturing
• Health, biotechnology, pharmaceuticals and life sciences
• Eco startups involved in the blue, green and sustainable industries
• Other innovative economic activities which are enabled through knowledge and
• Technology providing services or products which are currently not readily available in the relevant market or which shall be provided through a process which is novel.

Also, eligible business projects must meet at least two of the following criteria:

• Propose products and/or services that have the potential to generate income from various geographical markets
• Produce products and/or services which are new, innovative or substantially improved compared to complementary products on the market
• Utilise process which are new or substantially improved compared to those adopted in current complementary activities.

If you would like more info on the eligibility criteria and quote to apply for such a programme, please email us on [email protected]. Our business administration team and lawyers will be able to assist you in guide in every step from the business plan to application stages and in obtaining the necessary residency permits once approval is given.

This article is for information purposes only and should not be construed as legal advice.

Article written by Ms Charlene Sciberras, B.A. (Hons), guest writer, is a marketing and business administration specialist with a special focus on corporate, accounting, and legal matters.

Sciberras Advocates founded by Dr Adrian Sciberras, is a law firm based in Malta. The firm prides itself to be multi-disciplinary, innovative and flexible in order to meet the changing times and any challenges in the local and international legal scenario. No matter what private or corporate complex demands are called for, Sciberras Advocates offers practical and cost-effective legal solutions to achieve your desired results. You may reach Sciberras Advocates by phone on +35627795222 or via email on [email protected].

A franchising contract or franchising agreement is a contract under which the franchisor, being the owner of a business or brand, grants the franchisee the rights to operate a business, (or sell, or distribute goods or services) identified or associated with the franchisor’s trademark.

Becoming a franchisee means, an individual or business buys into the original company by purchasing the right to sell the franchisor’s goods or services under the existing business model and trademark name.

For example, an Italian shirt company, named SHIRTS owns 20 shops in the north part of Italy. They would like to expand their business in Italy and in other European countries. So, they create a business franchising model to be able to partner with other businesses to expand their number of shops named SHIRTS. In this type of contractual business model or relationship, SHIRTS, known as the franchisor, allows an independent business owner, called the franchisee, to use the branding, business model, and other intellectual property of SHIRTS, to sell such clothing in other shops in different locations and different countries, also called SHIRTS.

The franchising industry is very versatile offering different types of franchise arrangements, options, and investment ranges. The typical duration of a franchise agreement is usually 10 years, and such contract will spell out the conditions under which the franchise can be sold to someone else, which can be stringent to ensure that any future franchisee is qualified enough to run the business.

Generally, the franchisee makes a one-time initial fee payment to the franchisor upon signing of the contract, as an entry fee. Besides, the franchisee might pay royalties on sales, marketing and advertising assistance fees, or equipment and supplies for the shops. The franchise agreement will also stipulate that the franchisee may only operate the franchise in an assigned territory or country and may also limit the right of the franchisee to sell online.

It’s important to note that the franchise agreement should outline the rights and obligations of both the franchisor and the franchisee. The main purpose of this contract is to protect the intellectual property and products or services of the franchisor. It will also hold certain obligation so that each franchisee operates the franchise consistently. It’s good to know that a franchisor is responsible for the overall brand reputation management, whereas the franchisees are responsible for marketing their businesses in their assigned market areas. However, the franchisees are partners and they also play an important role in protecting and fostering the brand’s image.

If you are thinking to expand your business by creating a franchising model, or you are interested in starting a new business as a franchisee, our lawyers will be able to guide you legally and commercially on anything related to franchising. Contact Dr Adrian Sciberras on [email protected]. 

This article is for information purposes only and should not be construed as legal advice.

Article written by Ms Charlene Sciberras, B.A. (Hons), guest writer, is a marketing and business administration specialist with a special focus on corporate, accounting, and legal matters.

Sciberras Advocates founded by Dr Adrian Sciberras, is a law firm based in Malta. The firm prides itself to be multi-disciplinary, innovative and flexible in order to meet the changing times and any challenges in the local and international legal scenario. No matter what private or corporate complex demands are called for, Sciberras Advocates offers practical and cost-effective legal solutions to achieve your desired results. You may reach Sciberras Advocates by phone on +35627795222 or via email on [email protected].

We recently posted a blog on residential rental contracts in Malta. This article instead will focus on rental contracts (also known as commercial lease agreements) of commercial property, such as retail outlets, catering establishments, offices, factories, warehouses, clinics, garages for commercial use, and so on.  

The Maltese law distinguishes commercial property as property which is used for business purposes in order to generate profit. Generally, a commercial lease agreement requires a contract to include standards details such as property to leased, agreed usage, duration of agreement, rent amount to be paid and how, otherwise it could be deemed as null.

When signing a commercial lease agreement, it is important to understand certain legal terms and understand certain legal conditions. Let’s have a look here at the most common and important terms on such contracts:

Notice period: A time between the official notification of vacating the premises until the day when one needs to vacate the premises.

Di fermo period: A time where the tenant cannot withdraw from the contract and must pay rent during this definite period.

Di rispetto period: A period that gives the tenant the opportunity to terminate the agreement during that period by giving an official notice as per agreement.

Renewal clause: A condition that allows the lease to be extended upon expiration of a term.

Default: A failure to complete a legal obligation such as the payment of rent.

Eviction: The legal process to pull a tenant out of the property.

Assignment: The transfer of rights of property from one person (or business) to another.

Security deposit: A sum of money deposited by a tenant with the property owner as security which is normally kept until the end of the lease.

Sublease: A lease by the tenant to a third party, where the original tenant remains completely liable for the rent.

When renting a commercial property, it’s very important to know which commercial permits it can operate in, to make sure that they are right for your business model. These permits include Planning Authority permits, environmental permits, and other specific licenses depending on your business line (such as catering establishments from Malta Tourism Authority). Additionally, you will also require applying for utilities such as water and electricity with commercial rates.

Before signing a commercial lease agreement, it is important to understand the difference between commercial and residential agreements. If you would like advice or require an expert to review such agreements, whether you are the owner of a commercial property, or the one renting it out, do not hesitate to contact us.

This article is for information purposes only and should not be construed as legal advice.

Article written by Ms Charlene Sciberras, B.A. (Hons), guest writer, is a marketing and business administration specialist with a special focus on corporate, accounting, and legal matters.

Sciberras Advocates founded by Dr Adrian Sciberras, is a law firm based in Malta. The firm prides itself to be multi-disciplinary, innovative and flexible in order to meet the changing times and any challenges in the local and international legal scenario. No matter what private or corporate complex demands are called for, Sciberras Advocates offers practical and cost-effective legal solutions to achieve your desired results. You may reach Sciberras Advocates by phone on +35627795222 or via email on [email protected].

A rental contract (or rental agreement, or lease agreement) is a legal document between a landlord that rents a residential property to a tenant in exchange for payments. These rental contracts are legally binding contracts that explain the obligations and rights of the tenant and landlord. No matter if you are renting out an apartment, a villa, or a room within your own residence, you need to have a residential rental contract in place.

A rental contract is required by law, and it explains the responsibilities as a landlord and sets rules for the tenants. In Malta, the rental regulations are set out in The Private Residential Leases Act (Cap. 604 of the Laws of Malta). In the long terms, having a rental contract helps you avoid disputes with your tenants, and is a reference on how to fix problems when they happen.

There are various types of rental contracts, as we explain here:

Long let

• Minimal duration of one year
• The lessor and the lessee may agree on a longer lease contract (two years or more)
• First six months are mandatory for the lessee/s
• Following the obligatory six months, the lessee/s may be released from the contract by giving at least one month notice
• If the lessor does not intend to renew the lease, the lessee/s must be informed three months prior to the termination of the contract
• If the lessor fails to notify the lessee within the established period, the lease is renewed automatically for a year.

Short let

Leasing to temporary foreign workers, students pursuing short courses, foreigners who would not be seeking to establish residency in Malta, residents who need to lease a residency for a short period of less than six months.

• The lease duration is six months
• The first month of the lease is mandatory for the lessee/s
• Following the obligatory month, the lessee/s may be released from the contract but is obliged to give at least one week’s prior notice
• The contract cannot be renewed.

Shared residential spaces let

Leasing of a separate space in an apartment or building, with shared amenities like the kitchen and bathroom facilities.

• The lease duration is six months
• The lessee may be released from the contract at any time by giving one week’s prior notice
• The contract cannot be renewed.

It is important to include the following information and clauses in a rental contract:

• Names and passport/identity card numbers of landlord/s and tenant/s
• Address of the property being rented
• Intended use of property (residential or commercial)
• The duration of the lease, including start date and finish date
• The rent amount to be paid, and how and when it should be paid
• Note down water and electricity metre readings
• Security deposit the landlord will hold in case of damages
• Whether and how the rental agreement can be renewed
• An inventory outlining the conditions of the premises.

It is essential that the tenants are provided with a copy of the rental contract after signing it. Furthermore, all lease contracts for a primary residential purpose must be registered by the owner with the Housing Authority (Rent Registration) within ten days from the commencement of the lease. The quickest way to do this is by using the online facility by logging in with one’s e-ID. The normal registration fee is €10, and late registrations fee is €120. As an additional note it’s good to know that there are tax rebates on income for long term residential leasing. This rebate applies to contracts which have a minimum period two years, and the rebate amount depends on the number of bedrooms and duration of lease.

If you require assistance with rental contracts, and for any advice and disputes between landlords and tenants, Sciberras Advocates can assist with resolving issues amicably through out of court settlements.

This article is for information purposes only and should not be construed as legal advice.

Article written by Ms Charlene Sciberras, B.A. (Hons), guest writer, is a marketing and business administration specialist with a special focus on corporate, accounting, and legal matters.

Sciberras Advocates founded by Dr Adrian Sciberras, is a law firm based in Malta. The firm prides itself to be multi-disciplinary, innovative and flexible in order to meet the changing times and any challenges in the local and international legal scenario. No matter what private or corporate complex demands are called for, Sciberras Advocates offers practical and cost-effective legal solutions to achieve your desired results. You may reach Sciberras Advocates by phone on +35627795222 or via email on [email protected].

In a recent article dated 7^th August 2022 published in the Times of Malta, it informed that many business have been caught recently by the VAT department in failing to provide VAT receipt. It seems that over 250 catering establishment were inspected and one third were caught not giving a fiscal receipt to their customers.

The article states that soon after a similar blitz was held amongst beauticians, nail technicians and hairdressers, where it transpired that half of these businesses failed to issue fiscal receipts to the clientele.

It seems that more inspections covering various sectors will be randomly inspected to cut out such abuse. This is a message that the 2022-elected Commissioner for Revenue Mr Joseph Caruana stated. The Commissioner for Revenue is not only responsible for the administration and collection of Value Added Tax, but also of Income Tax, Duty on Documents & Transfers, and Customs & Excise Duties. The government has plans to crack down these abuses across all economic sectors and intends to bring further discipline and compliance to ensure that it is not losing out further from tax evasion.

Furthermore, the tax man strengthened his resources on enforcement against money laundering and tax evasion. As we wrote in our recent article, Tax Matters: What is an Executive Title?, the Commissioner for Revenue has the right to obtain an executive title against anyone who fails to settle their taxes. Indeed, when tax and VAT returns are not submitted and the tax due is not paid, the individual or the business become in default of their tax obligations. The tax man can therefore initiate legal proceedings and present the individual or business with an executive title by means of a judicial letter.

Tax avoidance and tax evasion threaten government revenues, and ultimately the sums due run into millions of euros. Lost VAT and tax revenues have a negative impact on the government’s spenditure. According to the 2021 Report on the VAT Gap released by the European Commission, EU countries lost €134 billion in VAT revenues in 2019. In this report, it outlines that Malta registers the highest VAT gap increase in European Union, and the country loses out on €287 million in uncollected VAT. To this, the VAT department has now a fully blown investigations centre to lead the fight against tax evasion.

Sciberras Advocates can assist with non-filed VAT and tax returns and challenge any VAT summons and tax intimations. As legal and tax representatives we can deal directly with the tax department lawyers and the courts to contest any executive titles issued.

This article is for information purposes only and should not be construed as legal advice.

Article written by Ms Charlene Sciberras, B.A. (Hons), guest writer, is a marketing and business administration specialist with a special focus on corporate, accounting, and legal matters.

Sciberras Advocates founded by Dr Adrian Sciberras, is a law firm based in Malta. The firm prides itself to be multi-disciplinary, innovative and flexible in order to meet the changing times and any challenges in the local and international legal scenario. No matter what private or corporate complex demands are called for, Sciberras Advocates offers practical and cost-effective legal solutions to achieve your desired results. You may reach Sciberras Advocates by phone on +35627795222 or via email on [email protected].

Termination clauses are essential and necessary to any contract. There are several methods for which a contract may be ended, such as a dated expiry, breach of contract, a contract that becomes void, a discharge by agreement, a release, performance related issues resulting in the end of a contract, a termination due to an event of force majeure, or a rescission, amongst others.

As much as most contracts include a termination clause, it is always advisable to ensure that there is one and that it is convenient for both parties, to make sure no major harms and damages are caused by such termination. Sometimes in the rush and excitement to sign a business deal, many don’t focus on termination provisions in these commercial contracts and this is often because they don’t anticipate the need to end a contract early due to the rush of the moment. However, one needs to ensure there are exit routes in the contract itself, that is why it is important to have suitable termination clauses.

Termination clauses in a contract allows parties to cease an agreement without breaching the contract under ‘early termination’ and ‘mutual termination’. The parties involved can avoid a dispute between them by allowing a termination clause in an agreement to trigger. Two types of termination clauses include:

• Termination for convenience
• Termination for cause

For obvious reasons, incorrect use of the termination clause can also result in a legal conflict. In other words, termination clauses set the terms and conditions surrounding the cancellation of a contract and will address who may cancel the contract and for what reason/s. Negotiating these terms carefully will ultimately safeguard you and your business. Possibly, breach of contracts, including early termination can result in penalties, depending on how the contract was negotiated and concluded. A termination clause could also be a resolutive condition, one which terminates the obligation of the contract upon a specific condition listed in the contract.

A good lawyer will be able to advise of sector specific termination clauses during the drafting of contracts to ensure they are fit for the specific deal. To note is that exit clauses, (also known as escape clauses), in a contract allow one party to leave the agreement without having to follow through on their obligations. When you want to cancel a contract, it is important to carefully consider if you have the grounds to do so because failure to check the contractual terms could be an expensive mistake. Always get advice from a lawyer for a solid termination clause in a contract to avoid costly mistakes.

This article is for information purposes only and should not be construed as legal advice.

Article written by Ms Charlene Sciberras, B.A. (Hons), guest writer, is a marketing and business administration specialist with a special focus on corporate, accounting, and legal matters.

Sciberras Advocates founded by Dr Adrian Sciberras, is a law firm based in Malta. The firm prides itself to be multi-disciplinary, innovative and flexible in order to meet the changing times and any challenges in the local and international legal scenario. No matter what private or corporate complex demands are called for, Sciberras Advocates offers practical and cost-effective legal solutions to achieve your desired results. You may reach Sciberras Advocates by phone on +35627795222 or via email on [email protected].