Bank Comfort Letter (Malta)
Updated on 12 August 2026
A letter of comfort is not defined by a specific Maltese statute and no Malta-specific case law addressing its binding effect could be confirmed. It is generally understood, as in most jurisdictions, as a non-binding statement of assurance rather than a legal guarantee. This is contrasted with suretyship, a formal, binding contract codified under Malta's Civil Code (Chapter 16), Articles 1925 to 1963.
A letter translated directly from a US template may unintentionally use wording that creates the impression of a payment obligation — which is foreign to the nature of a non-binding letter of comfort. This template keeps the language of intention and information, avoiding wording that would approach a guarantee unless the parties clearly want that.
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LETTER OF COMFORT
- Date:
- Parent company:
- Subsidiary:
To:
hereby states the following in connection with its shareholding in : .
This letter is governed by: .
Parent company
Date:
Binding or non-binding letter
A non-binding letter of comfort does not create a payment obligation, but expresses only an intention, such as maintaining a shareholding in a subsidiary. A binding letter, by contrast, creates a real obligation of the parent company. This template includes a dedicated field to select one of these two versions.
No specific statutory regulation
A letter of comfort is not regulated by a specific Maltese statute, so its legal effect largely depends on the actual wording used. This template avoids wording that would unintentionally go beyond the boundaries of the version chosen.
Difference from suretyship
If the parties genuinely want a binding and enforceable obligation, suretyship under Articles 1925 to 1963 of the Civil Code, with its own formal requirements, may be a more suitable solution depending on the circumstances. This template is intended for the letter of comfort itself and should not be used if the parties actually want a formal guarantee.
A precise description of the shareholding
Vague wording that the parent company "supports" the subsidiary, without stating a shareholding percentage or the precise content of the statement, further weakens the letter. This template requires a precise description of the shareholding and the statement.
Section by section
- Parent company
- Identifies the parent company issuing the letter.
- Subsidiary
- States the subsidiary the letter relates to.
- Recipient
- Identifies the recipient of the letter.
- Letter form
- States whether the letter is binding or non-binding.
- Governing law
- States the law governing the letter.
How to fill in the letter
- Identify the parties. Enter the parent company's, subsidiary's, and recipient's details.
- Describe the shareholding. State the shareholding percentage and the content of the statement.
- Choose the letter form. State whether the letter is binding or non-binding.
- State the governing law. Set the law governing the letter.
Frequently asked questions
Is a letter of comfort the same as a guarantee?
Only in its binding version. A non-binding letter of comfort does not create a payment obligation, while a binding letter approaches a guarantee.
Is a letter of comfort regulated by statute in Malta?
No, it is a practice-based instrument whose legal effect largely depends on wording.
When is it worth using suretyship instead of a letter of comfort?
When the parties genuinely want a binding and enforceable parent-company obligation, with the formalities specific to suretyship.
Why must the shareholding be described precisely?
Because vague wording without a shareholding percentage or the content of the statement further weakens the letter's value.
Which version should be chosen for a real obligation?
A binding letter of comfort or, depending on circumstances, a formal guarantee, rather than a non-binding letter of comfort.
Related templates
Disclaimer
This template and guide are provided for general information only. They are not legal advice and have not been reviewed by a lawyer. Check the letter's actual legal effect before using it.
