Malta has the most inefficient insolvency proceedings of all the EU member states, a damning report by the European Commission has revealed. The report coincides with new EU rules on business insolvency, aimed at increasing the opportunities for companies in financial difficulties to restructure early on so as to prevent bankruptcy and avoid laying off staff, the Times of Malta reported. At present, many viable companies in financial difficulties are steered towards liquidation – which the EU report described as “the most likely outcome” in Malta – rather than early restructuring, with too few entrepreneurs getting a second chance. Indeed, there does not seem to be much chance of a ‘second chance’: Malta is one of eight member states where bankrupt entrepreneurs cannot shed their ‘bankrupt’ status as no discharge exists, while 11 countries have a discharge period of three years or less. The report estimates that Malta could increase its SMEs by five per cent if it were to offer a discharge period of three years, creating 428 jobs. The impact could be significant: Malta is one of nine member states where SMEs account for over three-quarters of employment. Read more.