Office leasing in Malta: legal and commercial insights from the experts
In Malta’s commercial property landscape, securing the right workspace is only the first step. The lease agreement that follows plays a central role in how the arrangement operates day-to-day and how well it supports the business in the long run.
A clear, practical lease helps prevent misunderstandings, sets clear expectations, and ensures that both the landlord and tenant are protected.
To provide a comprehensive view of Malta’s office rental market, SiGMA News sat down with two leading experts. Etienne Licari, Commercial Real Estate Advisor at, brings deep knowledge of the local office sector, while , a commercial lawyer, offers valuable insights with his practical approach to lease negotiations.
They shared valuable insights on how companies can structure office leases that are sustainable, efficient, and fit for purpose.
What should a business expect when leasing office space in Malta?
Etienne Licari: Most tenants want a clear idea of their obligations, how long they’re committing for, and what happens if their situation changes. For example, a tech firm that suddenly scales might outgrow their office halfway through the lease. That’s where flexibility in clauses and a clear understanding of lease terms becomes essential.
From the real estate side, my job is to translate what the client wants into a set of property options and then help them understand the level of commitment attached. But once heads of terms are drafted, having a legal expert step in to review the lease wording is key.
Dr David Farrugia: It is important to understand from the outset that every lease is different and is drafted based on a number of factors. Even if an initial draft lease agreement is provided at the outset, landlords, tenants or agents would often wish to modify it—and most changes can have long-term implications. It’s important that businesses don’t just assume the lease agreement is a ‘standard’ one size fits all. A single clause can affect the rights of either party, whether they can sublet, renew, or exit early. Legal advice early on helps avoid confusion and smoothens the final signing process.
What do ‘di fermo’ and ‘di rispetto’ mean, and why do they matter?
Etienne Licari: These are traditional terms in Maltese leases. ‘Di fermo‘ refers to the initial commitment. In smaller offices, this might be just one or two years in Malta. In larger leases, it’s often three or five years. The ‘di rispetto‘ refers to the period following that initial term. It allows the tenant to continue leasing the space by giving notice.
Larger tend to come with longer notice periods—9 to 12 months isn’t uncommon. Smaller spaces might have a 3–6 month notice period. Tenants need to understand these periods well in advance to avoid unexpected extensions or penalties.
Dr David Farrugia: Absolutely. These terms might be familiar to locals, but international clients often misunderstand them. It might be the case that a lease may continue beyond the di fermo term unless the tenant actively gives notice as provided for in the agreement. If this isn’t defined, it leads to assumptions and, sometimes, disputes. We always recommend clearly stating how long the lease lasts, any applicable di fermo (fixed) periods, what triggers any applicable extension, and what notice needs to be given.
Dr. Farrugia, you emphasise practicality. Can you explain what that means in the context of lease negotiations?
Dr. David Farrugia: A practical commercial lawyer aims to get the deal done — not simply rewrite the entire lease in legalese. While legal considerations and technicalities are essential in lease agreements, my approach prioritises practicality and the successful execution of the commercial deal. I focus on making sure the terms are fair, enforceable, and reflect the commercial intent. That way, we avoid months of unnecessary back-and-forth that frustrates everyone involved.
Etienne, how does a practical lawyer change the outcome of a lease negotiation for your clients?
Etienne: It’s night and day. When a lawyer understands both the legal risks and the business objectives, the conversation becomes productive instead of defensive. It helps the client feel secure without killing momentum. That’s key in a competitive market.
What are some common pitfalls or issues you’ve encountered?
Etienne Licari: One major issue is vagueness. If the lease doesn’t clearly define the responsibilities of each party, disagreements are bound to happen. I’ve seen tenants assume that service charges include everything, only to be surprised with extra bills for things like lift maintenance or shared area cleaning.
Another recurring problem is internet and infrastructure assumptions. One tenant expected fibre internet as part of the deal—it wasn’t, and that delayed their move by two weeks.
Dr David Farrugia: In many cases, unfortunately a multitude of vital aspects are left out of agreements. Can the tenant renew automatically? What condition must the office be returned in? Are fixtures and movables to be removed or left in place upon termination? Without clarity, both sides may suffer serious consequences.
A classic example is a tenant who would have installed air-conditioning systems and high-cost glass partitioning in the office that he has leased. At the end of the lease, the tenant may consider them valuable upgrades and expect compensation if these are to be retained by the landlord upon termination. The landlord might be happy to leave them in place but may also disagree with the valuation. Removing them and restoring the space to its original condition can be expensive for the tenant, so that option might not be attractive or realistic. As a result, a previously good relationship can break down. If the lease doesn’t clearly address the situation, you would probably end up having to negotiate a settlement or end up in a litigious situation. Clear and defined terms in the lease agreement would prevent the issue altogether.
How can businesses avoid delays and friction during lease negotiation?
Etienne Licari: Start with alignment. Make sure the commercial heads of terms are realistic and reflect your internal discussions. I’ve seen deals slow down when the legal review reopens things that were already agreed.
Dr David Farrugia: Once the business side is agreed upon, the lease should formalise—not challenge or defeat—that understanding. I aim to turn what’s been agreed into a functional, fair agreement. My role is not to add obstacles, but to make sure nothing is left vague or open to conflicting interpretations. Do lease structures change depending on business type or company size?
Etienne Licari: Yes. A startup might want a 12-month di fermo with a rolling break clause. A larger organisation might be fine with a 5-year lease but request specific conditions for signage, branding, or phased handovers. In some cases, we see tenants negotiate for the right to sublet or share the space with sister companies, which needs to be written in.
Dr David Farrugia: Larger companies also tend to bring their in-house legal and finance teams into the process. That’s where precision and simplicity go a long way. A clear lease helps everyone—external lawyers, in-house counsel, and the commercial teams—move faster.
What are some lease clauses that get overlooked but make a big impact?
Dr David Farrugia: Clauses around reinstatement, maintenance and preservation of the property are often ignored. Tenants don’t always realise that they may need to return the space to its original condition. This can mean removing partitions, repainting, or even restoring old flooring. Clauses dealing with services and utilities , rent increase, and access rights also need attention. I recommend including annual increases—3–5% is common in Malta—or else the landlord may attempt renegotiation or increase of rental amounts which might not be acceptable to the Lessee.
Etienne Licari: I’ve seen rent review clauses completely missing, which later led to informal discussions when the market changed. That’s not good for either party. I also tell clients to be aware of whether subletting or assigning the lease is permitted, especially for companies that expect operational changes during the lease term.
Any final advice for companies looking to sign an office lease in Malta?
Etienne Licari: Plan early, ask questions, and treat the lease as a tool that should work for your business. Whether you need flexibility or long-term control, it needs to be clear in the agreement. Don’t assume anything discussed verbally will be included unless it’s in writing.
Dr David Farrugia: Be proactive. Think ahead – obtain the proper legal advice and a formalised agreement from the outset. Clarity avoids conflict. A lease that’s easy to understand is one you’re more likely to follow and enforce. Whether you’re a small team or a large business, make sure your agreement reflects your actual situation, not just a legal template.
Final thoughts
Whether you’re leasing your first office in Malta or expanding into a larger space, the terms you agree to today will shape how your business operates tomorrow. As Etienne Licari and Dr. David Farrugia have shown, the strength of a lease lies in its clarity, relevance, and ability to reflect the real needs of both parties.
By approaching the process with foresight and the right professional input, businesses can secure an office in Malta and a stable and workable foundation for the future.
