Obtaining a payment license in Malta

Introduction

Malta's focal area in the Mediterranean makes it an ideal centre point for organisations planning to arrive in Europe, Africa, and the Middle East. The nation's steady overall set of laws, lined up with EU guidelines, gives a dependable groundwork to monetary administrations, guaranteeing organizations can work unhesitatingly. Malta offers a positive expense system, a talented labor force, and government support, establishing an inviting climate for the two new businesses and laid out organizations. The public authority additionally gives impetuses like awards, tax reductions, and preparing sponsorships to draw in global ventures. Malta embraces new advancements in the monetary area, empowering fintech developments that keep organizations cutthroat. The Malta Financial Services Authority is a regarded administrative body that keeps up with high functional principles, adding believability and security for authorised entities.

In the globalized economy, obtaining a payment license in foreign countries has turned into a basic step for organizations meaning to universally extend their tasks. Payment licences not just give legitimate approval to offer payment benefits yet additionally assemble entrust with consumers and affiliates.

Malta: A Business jurisdiction

Malta is leaned toward for business because of its essential Mediterranean area, working with exchange across Europe, Africa, and the Middle East. It offers a stable world of politics, favorable to business strategies, and solid administrative structure lined up with EU principles. Charge motivations like a low corporate duty rate, twofold tax collection help, and support exclusions draw in worldwide firms looking for effectiveness. As a monetary center point, Malta offers different administrations under rigid oversight by the Malta Financial Services Authority. It succeeds in advanced development, especially in blockchain and fintech, reinforced by strong guidelines. A gifted, multilingual labor force supplements its living quality, making Malta engaging for business and lifestyle equally.

Overview of Malta’s Fintech

Malta is quickly laying down a good foundation for itself as a great objective for creative fintech organizations, incorporating those practicing for InsurTech and RegTech, as well as different industry innovation specialists creating applications for this area.

The island country has proactively shown its capacity to support a worldwide tech-based industry. Malta offers monetary programming business people an essential area inside one of Europe's quickest developing money communities, giving nearness to expected workers for hire and financial backers. Organizations are likewise utilising Malta as a platform to get to local business sectors, especially in Africa, which is progressively turning into a proving ground for new monetary advancements.

FinTech companies in Malta are drawn because of its plentiful ability pool in both innovation and money. The neighbourhood labor force is exceptional to fulfil the mandates of ICT businesses across a wide range of specialised and imaginative abilities. Also, expert information can be effortlessly obtained from abroad, on account of a motivation program for multinational specialists. Malta's worldwide network is aided by three administrators giving global entryway administrations through fibre-optic links to central area Europe, which is imperative for the progress with improvement of this area.

In addition, established companies in Malta searching for supplemental imaginative and practical arrangements are anxious to associate and team up with new market participants. This puts forth intriguing open doors for organisations disturbing areas like payments, protection, speculation, and adherence.

Types of payment license in Malta

Numerous kinds of remittance licenses exist, such as those for electronic money institutions (EMIs) and payment service providers (PSPs). EMIs have the power to issue digital money, whereas PSPs specialize in enabling payment transactions between different entities.

It refers to companies offering remittance solutions without issuing virtual money. They manage tasks like funds transactions and remittance operations.

However, have the authority to administer virtual money alongside presenting remittance services. This dual capability enhances their flexibility and typically subjects them to stricter regulatory oversight.

Monetary Statutory Body

The Malta Financial Services Authority (MFSA) fills in as the essential administrative expert for administering monetary administrations inside Malta, guaranteeing adherence to both public and EU guidelines. It directs the admittance of remuneration warrants, screens conformance, and upholds the uprightness of the monetary framework. Its intensive methodology guarantees that main qualified companies in Malta obtain licenses, along these lines keeping up with elevated prerequisites of administrative oversight.

After incorporating the Payment Services Directive (Directive 2007/64/EC) into Maltese law, Malta now handles standalone PSPs, also referred as Payment Institutions, under the Financial Institutions Act (Chapter 376, Laws of Malta). This legislation also supervises EMIs since July 1st, 2011, along with other fiscal solutions.

Malta-Licensed Payment Institutions – Authorized Operations

A payment institution licensed in Malta may perform the subsequent operations:

• Administrations empower money to be put on a remittance account along with all the necessary activities for managing a remittance account.
• Administrations empowering cash debits from an remittance account as well as every one of the schemes expected for working an remittance account.
• Fulfilment of monetary agreements incorporating conveyance of assets for an payment account with the client's payment specialist co-op or with another remittance specialist organisation among which:
• Facilitating direct debit remittances, encompassing both one-off and recurring debits.
• Handling remittance dealings using a remittance card or a comparable device.
• Facilitating fund transfers, inclusive of regular standing orders.
• Finalisation of pecuniary dealings whereby the bills are supplied by an authorization line for a remittance service operator, incorporating:
• Facilitation of direct debits, encompassing one-time direct debits.
• Conducting remittance dealings using a remittance card or an equivalent device.
• Carrying out credit transfers, consisting of recurring standing orders.
• Providing or obtaining payment methods:
• Remittance
• Carrying out remittance dealings with the client's agreement is transmitted via any networking, electronic, or IT tool. The remittance is facilitated by the telecommunication, IT system, or network operator, who acts purely as a middleman for the remittance service user and the supplier of products and solutions.

Essentials for PSP license

An enrolment may be authorised to obtain a PSP license in Malta if the lawful firm meets the stated conditions for PSPs:

• The MFSA coordinates a proper assessment of the member while reviewing the conveyed files. This assessment requires financiers and senior directorates to show their expertise and integrity in all their schemes. The user is obligated to assemble the indenture package.
• An enrolment fee of €3,500 is mandated, with the least fund prerequisite varying between €20,000 and €350,000 relying on the solutions given. To guarantee a Payment Services Provider licence in Malta, at least three managers are needed, one of whom must be a citizen, along with a regional appearance.
• Creating a regional administration is eventually mandatory to uphold a PSP licence in Malta. The MFSA may also mandate additional information if deemed necessary. The whole authorisation sequence can take between three to six months. Nonetheless, there is an alternative to expedite the sequence by purchasing an existing PSP licence or considering a ready-made PSP for sale.

Statutory Adherence in obtaining payment license in Malta

Guaranteeing adherence to administrative norms is fundamental for any monetary establishment in Malta, especially those with remittance warrants. The MFSA upholds thorough guidelines to guarantee that all authorized entities capability with straightforwardness, security, and adherence. This includes persistent detailing obligations and regular reviews and assessments to affirm that adherence strategies are overall appropriately followed.

Continuous reporting obligations are laid out to keep up with continuous oversight of monetary organizations. These guidelines require authorized entities to refresh the MFSA on different parts of their tasks regularly. The essential components of these detailing obligations include:

Elements are obliged to submit intermittent fiscal summaries, normally on a quarterly and yearly premise. These assertions offer the MFSA itemized experiences into the establishment's monetary wellbeing and security.

Normal reports on the establishment's tasks, including exchange volumes, sorts of administrations offered, and any significant changes in business exercises, should be given. This empowers the MFSA to screen everyday exercises and guarantee adherence to administrative guidelines.

Authorized entities should submit conformance reports specifying their adherence to administrative necessities. This incorporates AML measures, information insurance, and other significant administrative systems.

Any critical episodes, for example, security breaks, functional disappointments, or rebelliousness occasions, should be urgently answered to the fiscal supervisors. This assures that the directive body can make a fitting move to relieve dangers and shield purchasers.

Standard assessments and investigations are a crucial piece of the MFSA's sequence to keep up with elevated degrees of control and guarantee certified corporations conform to every administrative necessity. These reviews and assessments are directed by both inward conformance groups and outside examiners supported by the MFSA.

Authorised entities are expected to lead normal inner reviews to assess their adherence with administrative guidelines. These assessments evaluate the viability of inward controls, threat oversight practices, and by and large adherence to conventions.

The MFSA orders occasional outer reviews by autonomous, licensed inspectors. These reviews give an objective assessment of the organization's monetary wellbeing, functional uprightness, and e with administrative prerequisites.

The MFSA does nearby examinations to assess the tasks of authorized entities straightforwardly. These assessments include exhaustive surveys of monetary records, functional cycles, and compliance works on, assisting with distinguishing potential issues that may not be clear through customary detailing.

Occasionally, the MFSA conducts topical audits zeroed in on unambiguous areas of concern or industry patterns. These surveys expect to evaluate how various entities address specific threats or administrative prerequisites, offering a more extensive comprehension of industry practices and difficulties.

Merits of obtaining a payment license in Malta

Safeguarding a payment license in Malta offers numerous advantages, particularly in pecuniary and statutory domains.

Malta boasts a highly established infrastructure that facilitates the efficient functioning of pecuniary enterprises. This includes state-of-the-art technological and telecommunications networks, as well as talented professionals, which is crucial for businesses involved in digital money and remuneration solutions.

Malta is acknowledged for its supportive statutory sphere, which maintains a balance between rigorous supervision and the encouragement of innovation. The nation's fiscal services legislation aligns with global norms and motivates transnational speculation.

Being an EU member state, Malta grants entry to the entire European market. This allows companies licensed in Malta to function across the EU without needing separate licenses for each individual country.

Malta offers a highly favourable tax regime for organisations operating within the fiscal assistance area. Among the primary merits is the potential to lower the effective impost rate to as little as five percent for certain businesses, facilitated by the impost refund framework. This sets Malta as among the most duty-competitive jurisdictions within the EU.

Malta is proactive in promoting innovation, particularly in the fintech and digital technology sectors. This support cultivates an advantageous environment for companies aiming to develop novel goods and support, particularly in payment systems and electronic money.

Malta is distinguished by its robust governmental and fiscal prosperity, making it an alluring destination for savings for the future and finance businesses.

The payment licence solution in Malta has consistently been a known option over a long time.

Challenges of obtaining a payment license in Malta

Navigating Malta's regulatory landscape can be complex. Participating as a domestic expert or legal advisor can help mitigate these challenges.

Incomplete or inaccurate documentation is a common pitfall. Double-check all submissions and consider professional assistance.

Maintaining ongoing adherence with AML/CFT statutes requires continuous effort. Investing in robust compliance systems is essential.

Sponsorship schemes for payment services businesses in Malta

E-Commerce Grant Scheme

The programme aims to assist individuals interested in establishing an E-Commerce enterprise in Malta or enhancing existing electronic trading platforms. This encompasses the generation or enhancement of websites and mobile apps for online sales or bookings, alongside the integration of online payment systems to facilitate online transactions.

The highest grant available is €5,000, covering up to 50% of eligible development costs. This financial aid presents a substantial chance for trades to receive aid in advancing their E-Commerce ventures.

Eligible expenses include expenses such as domain name registration, hosting services, acquisition and setup of content management systems (CMS), design of websites or mobile applications, integration of shopping carts, and other costs associated with establishing and operating an E-Commerce platform.

The programme targets micro, small, and medium-sized E-Commerce enterprises registered in Malta, irrespective of their legal structure. It places particular emphasis on businesses seeking to integrate or enhance their E-Commerce capabilities.

This initiative shows a significant potentiality for Maltese trades to expand their online commerce capabilities, adapting to evolving market demands and enhancing their competitiveness.

SME Digitization Grant

The programme aims to encourage entrepreneurs looking to establish IT companies in Malta. It encompasses various components of digitalisation, incorporating deploying novel information systems, updating software, developing digital trade solutions, and leveraging other technologies to enhance business efficiency and productivity.

The scheme offers partial funding for digitalisation investments, covering up to 50% of project costs in the polity and up to 60% in Gozo. Enterprises can receive a maximum grant of €50,000, making this initiative a substantial incentive for SMEs interested in digital advancement.

To qualify for IT funding, companies registered in Malta must submit a project plan demonstrating how their digitalisation investment will contribute to business development. Evaluations also consider the potential impact on enhancing operational efficiency and competitiveness.

Involvement in the programme is expected not only to modernise current operations but also to better equip companies to adapt to future technological changes, ensuring sustainable growth and enhancement. This initiative offers a potential financial support mechanism for SMEs pursuing digital transformation and is integral to Malta's digital strategy.

Start-Up Enhance

The Start-Up Enhance scheme in Malta, backed by the European Regional Development Fund, is a novel initiative designed to aid start-ups by offering non-repayable grants. These grants aim to partially cover investments in both tangible and intangible holdings, with the objective of potentially boosting enterprise productivity.

This scheme will be available until 31 December 2023, contingent on the attainability of funds. It targets micro firms that conforms with the start-up needs and are involved in eligible economic activities, regardless of their legal structure. A start-up, in this context, is defined as a non-public small organisation that is up to five years old at the point of receiving financial aid in Malta. Additionally, it must not have taken over another enterprise's activities, distributed profits, or been formed as an outcome of a merger.

The funding assistance available by this scheme encompasses fifty percent of schemes in the region and 60% in Gozo. The funding amounts range from a minimum of €10,000 to a maximum of €400,000 per operation.

Procedure for opening a payment license in Malta

Essentials for obtaining a payment license in Malta

Among non-residents seeking to obtain a payment license in Malta , the option of organisation in the form of an LLC - is widespread. This structure is especially attractive because the participants' pecuniary liability is limited to their investment in the organisation.

Companies seeking to obtain a payment license are mandated to have a physical presence in Malta. This means having a real office, and not just a legal address. An administrative office must be equipped with the necessary infrastructure and workers to perform dealings. The physical administration requirement guarantees that the company actually facilitates trade in the nation and is subject to local statutes and ordinances.

The value of authorized capital varies depending on the type of services provided. For companies working with electronic money, a minimum of 350 thousand euros is mandated. In the case of other payment institutions, the value of the authorized capital ranges from 25 to 125 thousand euros.

The company must have at least two management employees of good standing and relevant experience. These employees must be assessed for professional suitability by the MFSA.

Sequences to apply for and obtain a payment institution license in Malta

At this phase, the company's project is reviewed and preliminarily agreed upon with the regulator.

• Commercial Plan: An outline of the enterprise's functions.
• Principal Articles: The firm's basic agreements.
• Corporate strategy:It is an in-depth account of the framework, oversight, and supervision systems for the next three years.
• Security Policy: A risk assessment and measures to protect payment data.
• Procedures Description: Detailed procedures for handling complaints and monitoring operations.

Upon submission, the MFSA meticulously reviews all indentures. This involves verifying the conformance of the proposed activities, reviewing the corporation's economic health and reviewing protection and threat control measures systems.

After passing all checks and meeting the required criteria, the MFSA grants a license to conduct payment activities.

It's imperative to prepare thoroughly and adhere strictly to all regulatory requirements to acquire a license. Our specialists can assist in minimizing threats and expediting the licensing sequence.

Pecuniary Obligations: Obtaining a financial license in Malta involves specific financial commitments, including an yearly oversight fee and other related charges.

Annual Supervision Fee: Financial institutions licensed under Maltese law must pay an annual fee calculated at 0.0002 of the establishment's total assets, with a least fee of €2,500.

Registration Fees: Companies with registered capital in Malta exceeding €125,000 must pay a state fee of €890 and an annual fee of €600.

Application Processing Fees: Financial institutions seeking a license for payment or electronic money systems must pay a fee of €3,500 for the acceptance and processing of their applications.

These fees are part of the supervisory and regulatory schemes of the MFSA, ensuring adherence with created norms and statutes.

Purchase of a ready-made company with an open payment license in Malta

Merits and disadvantages of acquiring a company with a registered payment license in Malta

Merits:

• Duration and Fund Efficiency: Acquiring a shelf corporation can save significant time and resources that would otherwise be used on the full licensing process, which typically takes 3 to 6 months.

Demerits:

• Higher Cost: Buying an existing venture can be more costly than creating a new one.
• Company History: Thoroughly reviewing the company's background and finances is crucial to avoid unforeseen issues

Phases of purchasing a ready-made company with an open payment license in Malta

Defining Your organisation's aims and needs. It is essential to fulfill a detailed analysis of the market and available options.

Search for a ready-made company in Malta that conforms to your mandates. This may incorporate an analysis of its monetary condition, reputation and operating history.

Perform a comprehensive due diligence of the firm, including actually assessing the constituent archives, budget summaries and the accessibility of all necessary licences.

Meetings of the terms of the deal, and preparedness of the purchase and sale agreement.

After the purchase, it is mandatory to re-enrol the indentures to the new owner and, if mandatory, make alterations to the organisation’s component indentures.

The final phase, consisting of updating data in the imperative authoritative agencies.

Thus, the purchase of a shelf company with an open payment license in Malta depicts a unique chance for businessmen and ventures wishing to quickly enter the EU fiscal market.

Opening a Corporate Account in Malta

To initiate a corporate account in Malta, you should consent to different legitimate necessities, including:

• Giving confirmation of character and address for all organisation executives and investors.
• Submitting definite marketable strategies and monetary conjectures.
• Complying with AML guidelines.

Appointing the Appropriate Bank

Major Banks in Malta

Some of the major banks in Malta include:

• Bank of Valletta
• HSBC Bank Malta
• APS Bank
• Lombard Bank

Elements to Consider When Choosing a Bank

When choosing a bank, consider the following:

• Reputation and Trustworthiness: Decide on a bank known for its strong standing.
• Accessible Services: Check that the bank offers the particular administrations you require.
• Bills and Fees: Assess and think about the expenses and charges forced by various banks.

Required Documentation

Mandatory Indentures for Account Initiation

To initiate a monetary account, you'll typically need:

• Attestation of Formation
• Charter and Bylaws
• Identification papers for supervisors and sponsors
• Verification of business location
• Current bank statements

Tips for Preparing Your Documentation

Ensure that all documentation are kept current and appropriately reflect your company information. If they are written in another language, it is also recommended that they be translated into English.

Sequences in Opening a Corporate Account

Begin by exploring different banks and evaluating their services. Pay attention to factors such as fees, offerings, and customer feedback.

After narrowing down your options, contact the chosen banks to arrange consultations. This first meeting will clarify their requirements and procedures.

Gather and submit all necessary paperwork. Ensure everything is complete to prevent any setbacks.

Following a review of your documents, the bank will approve your account and present the essential data for activation.

Final Word

The nation's Firms want to develop a desirable station for trades looking to secure a payment license because of its steady finances and advanced facilities and favorable levy regime. The country offers a variety of license types for various fiscal aids business models, like grant schemes that support the growth and digitalization of SME trades. These factors make the region an alluring choice for firms wanting to create their existence in the EU sector.

Our company's experts are set to supply every pertinent specifics and full aid in the procedure of obtaining a payment license in Malta . Appoint a communication method convenient for you from the "Contacts" section.