Obtaining a financial licence in Malta

Financial activities in Malta are strictly regulated by legislation both at the national level and at the pan-European level. The publication explains the requirements and steps to obtain a Maltese financial licence.

Incorporating a finance company in Malta: what makes the country attractive to international entrepreneurs?

Malta, positioned in the midst of the Mediterranean, amidst Europe and North Africa, is an EU Comrade Commonwealth and is interwoven into the European finance commerce. The isle's monetary segment is distinguished by a sturdy regulatory framework, a dedication to pioneering in monetary technology, and a sophisticated telecommunications infrastructure.

Obtaining a finance company licence in Malta offers the significant advantage of allowing financial institutions to passport their financial services into the EU. The attractiveness of the island for businesses wishing to obtain a financial institution licence is further supported by a favourable corporate tax regime.The Government has entered into no less than 70 DTAA agreements which provide significant benefits to companies wishing to minimise tax liabilities. As a result, companies with a financial licence in Malta can access an effective corporate tax rate of 5% if such companies are owned by a non-resident or a resident without a domicile on the island.

Financial regulation in Malta

The Malta Financial Services Authority (MFSA), the entity accountable for the oversight of pecuniary services in Malta, was founded in 2002. The MFSA is a participant of the European Banking Oversight, the European Assurance Oversight, the European Securities and Markets Custodianship, the International Organisation of Securities Magistrates, and the International Alliance of Assurance Overseers. Pursuant to the Financial Maintenance Custodian Law (the Law), one of the pivotal roles of the MPMC is to govern, monitor sundry pecuniary utility purveyors:

• Financial institutions and cooperative credit societies.
• Capital administration enterprises.
• E-money establishments.
• Monetary consultants.
• Remittance entities.
• Assurance and reassurance firms.
• Joint venture investment strategies.
• Retirement reserves.
• Digital fiscal amenity providers.

The MFSA fulfills a pivotal function in the licensure of pecuniary amenities corporations and individuals. Entities aspiring to furnish pecuniary amenities on the isle must adhere to the benchmarks established by the MFSA and procure a permit.

The MFSA moreover counsels the provincial governance concerning the advancement of pecuniary amenities strategy, primarily respecting prescriptive actions aimed at guaranteeing the steadiness and progression of the Maltese monetary domain, safeguarding the concerns of patrons and speculators. The MFSA's Financial Cogitation Analysis Units (FIAU) oversee AML/CTF enterprises sanctioned by the MFSA.

Monetary accommodations establishments are necessitated to adhere to the germane inland decrees of Malta and pertinent EU decrees. Register of pivotal decrees that endeavor to govern pecuniary accommodation dispensers in Malta:

• Banking Act.
• Law on Financial Institutions.
• Law on insurance business.
• Law on insurance.
• Law on Investment Services.
• Financial Markets Act.
• Law on Trusts and Trustees.
• Law on Virtual Financial Assets.

Registration of a financial services licence in Malta

If you intend to start a financial business in the Republic of Malta, it is first of all important to decide on the type of activities you intend to carry out. This will determine what type of authorisation you need. The most popular among the financial licences in Malta are:

1. Charter to dispense pecuniary counsel.
2. Factor charter.
3. Banking charter.
4. Currency exchange charter.
5. Charter to conduct a remittance enterprise.
6. Charter for electronic currency issuing establishment.

The process of obtaining a financial licence in Malta:

1. Converse with erudite specialists who shall aid in discerning the genus of permit, aid in formulating an intricate commercial scheme.
2. Fabrication of manuscripts that conform to the prerequisites of the Maltese overseer (commercial scheme, juridical manuscripts of the corporation, encompassing Articles of Association and Memorandum of Association, attestation of fiscal equilibrium and origins of financial backing, credentials of identification and substantiation of competency of the corporation's executives).
3. Deposition of the entreaty concurrently with the complete array of obligatory manuscripts to the MFSA.
4. Remittance of the pertinent charges.

The MFSA scrupulously scrutinizes the proffered documents, evaluating the pecuniary robustness of the aspirant, the appropriateness of the enterprise paradigm and hazard mitigation scheme, and the credentials and renown of the executive cadre. The MFSA might convene with the aspirant to deliberate the intricacies of the solicitation or solicit supplementary intelligence/elucidations on the tendered documents.

Upon consummation of the scrutiny and evaluation of the tendered petition, the MFSA will determine whether to bestow a pecuniary charter in Malta if sanctioned. In the event of an adverse verdict, the MFSA will furnish a elucidation of the causes for the declination.

It ought to be remarked herein that additional documentation must be tendered alongside the Malta Financial Licence supplication parchment (and the antecedently enumerated documents) so as to authenticate the enterprise paradigm:

• pecuniary prognostications;
• methodologies to obviate the legitimation of surreptitious lucre;
• surveillance and peril governance protocols.

Acquiring pecuniary permissions is an intricate and protracted undertaking. The overall duration to acquire a permission fluctuates contingent on the form of authorization (typically spanning from 4 to 8 cycles). To circumvent predicaments with the pertinent overseers and to expedite the complete licensing progression, it is suggested to enlist adept practitioners. TK Deal's cohort of specialists can furnish counsel on an extensive array of concerns associated with fiscal oversight in Malta, extend thorough assistance in procuring a pecuniary permission in Malta.

Obtaining an investment licence in Malta

Capital ventures in Malta are governed by the MFSA under the stipulations of the Capital Ventures Statute 1994. There are sundry classifications of permissions authorizing the proffering of capital ventures.

Depending on the genus of amenities provided by the enterprise, there exist diverse minimal capital obligations for acquiring an investment privilege in Malta:

• Category 1 - 20 thousand EUR.
• Category 2 - 50 thousand EUR.
• Category 3 - 125 thousand EUR.
• Category 4 - 730 thousand EUR.

Obtaining a banking licence in Malta

Malta is acknowledged by myriad investors and pundits as a propitious locale for pecuniary activities with an eye towards accessing the European banking market. The MFSA advocates milieu reforms aimed at mitigating red tape for transnational financial institutions. The World Economic Forum positioned Malta 13th out of 143 nations in regard to banking system robustness.

Under the Banking Act 1994, the following activities require a banking licence in Malta:

• Receiving pecuniary deposits from the populace that are to be withdrawn or repaid promptly or at the termination of a designated duration.
• Procuring or garnering funds from the populace for the intention of employing all or a portion of that capital by disbursing it to others or deploying it.

A credit institution licence in Malta may cover one or more of the ensuing supplementary undertakings, contingent upon the approbation of the MFSA:

• Monetary lease.
• Recompense amenities.
• Proclamation and oversight of alternative payment contrivances like wayfarers' pledges, banking drafts, and akin apparatus.
• Sureties and obligations.
• Barter for personal reckoning or for the reckoning of patrons.
• Counseling enterprises on pecuniary configuration, manufacturing tactic, and connected affairs.
• Securities supervision.
• Proclamation of digital currency.

In order to successfully open a bank in Malta, it is important to meet the requirements of the Maltese banking licence:

• A permit shall be bestowed upon a corporation if its indigenous resources tally to no less than €5 million or, in the event of an electronic pecuniary establishment, no less than €1 million.
• Nominate no less than two individuals to administer the functions of the monetary institution in Malta.
• Every stakeholder and executive of the corporation must satisfy the eligibility standards.

In elicit for the MFSA to vouchsafe a franchise to furnish pecuniary amenities in Malta, the license holder must evince conformance with basal criteria regarding felicitous governance and professionalism of personnel. Banks must designate a Money Laundering Notifying Official (MLNO) who will discharge the ensuing duties:

• Formulating methodologies to quell pecuniary obfuscation.
• Potent patron authentication mechanisms.
• Assuring commensurate tutelage of pertinent personnel.
• Notification, surveillance, and notification of dubious transactions to the regulator and other overseeing bodies.
• Ensuring that all documents are securely archived.

Upon procuring a banking charter in Malta, a bank may be sanctioned to inaugurate branches in European Economic Area (EEA) nations under passporting privileges. Nevertheless, afore undertaking such actions, the bank must apprise the MFSA through inscription and secure the acquiescence of the pertinent proficient authority.

Obtaining an insurance licence in Malta

Malta is one of the most popular jurisdictions for the incorporation of financial companies. The insurance industry represents one of the most promising segments of the Maltese financial sector. The insurance industry in Malta is regulated:

• Insurance Business Act 1998.
• Insurance Intermediaries Act 2006

The licensure compulsion pertains to indemnification mediators, indemnification emissaries, and indemnification corporations. Indemnification corporations might be enrolled on the islet as restricted responsibility enterprises or as distinct intent corporations.

The required capital of a long-term insurance company is:

• €3,000,000 for a chaste reinsurance firm;
• €2,250,000 in the event of a fraternal insurer;
• €1,000,000 in the event of a filial reinsurance corporation;
• €3,200,000 in all other instances.

The minimal pecuniary of enterprises dispensing universal trade assurance is €2,200,000. Nevertheless, the minimal pecuniary of assurance enterprises shouldering specific hazards (notably liability, solvency, and bail) is €3,200,000.If the undertaking is confined to that of a subordinate reassurance enterprise, the merest assets ought to be €1,000,000. In the instance of a sheer reassurer besides a subordinate reassurance enterprise, the merest assets ought to be €3,000,000.

Obtaining a forex licence in Malta

Malta is a propitious cosmopolitan pecuniary nucleus with a commendable renown. The MFSA governs brokerage service purveyors and dispenses sundry classifications of warrants. The Investment Services Act, Chapter 370 delineates the regulatory schema supervising the furnishing of investment amenities concerning forex commerce paradigms.

Depending on the type of licence, a broker can perform a different range of services:

• Receiving and disseminating patron directives.
• Satisfying directives on behalf of patrons.
• Exchanging from their reckonings.
• Positioning pecuniary contrivances.
• Guardianship and governance of investors' (depositants') principal, encompassing fulfillment of fiduciary duties.

Malta forex licence depending on the range of services:

• Classification 1 confers merchants to proffer pecuniary counsel, accept or dispatch mandates in connection to foreign exchange.
• Classification 2 confers merchants to function on a jeopardy-liberated premise, wherein a broker assuming the role of a "alabaster insignia associate" utilizes the framework and expertise of another broker to dispatch their patrons' mandates squarely to the marketplace.
• Classification 3 (Maltese Market Initiator authorization) confers a foreign exchange broker to establish valuations, manage patrons' assets at its own volition, and transact for its own ledger.

Licensed forex brokers in Malta undergo periodic scrutinies to ensure that they adhere to industry norms. Under the recent inaugural pecuniary regulations, bearers of Classification 2 and 3 currency exchanger charters in Malta must demonstrate capital of €730,000 (formerly the inaugural capital pertinent to a Classification 2 charter holder was €125,000).

Obtaining EMI and PI licences in Malta

An EMI (Electronic Money Institution) sanction grants a fiscal organization the authorization to dispense electrofinanciary currency and proffer associated remittance amenities. EMI Malta is permitted to dispense charge plates, albeit not plausibility plates, since such establishments are proscribed from executing credit or alternative banklike operations.

The MFSA elucidates the subsequent regulatory prerequisites for procuring a license to dispense electronic currency in Malta:

• The minimal pecuniary stipulation is €350,000. A sanctioned EMI must uphold its individual funds of at least this magnitude.
• An E-currency establishment must possess at least two stewards. The individuals designated as stewards must be proficient in executing the responsibilities and obligations ascribed to them.

Remark. A diminutive electronic pecuniary institution (Petite EMI) in Malta that engenders remarkable electronic pecuniary resources of between EUR 1 million and EUR 2 million is obligated to possess an inaugural capital of no less than EUR 100,000.

An establishment with an EMI licence in Malta must provide the relevant documentation along with an application form:

• A manuscript delineating meticulously the mercantile regimen.
• Monetary conjectures for the inaugural trio of cycles of functioning.
• An exhaustive manuscript elucidating internal methodologies (both functional and technical).
• Steps undertaken to guarantee information confidentiality.

Subsequently acquiring the pertinent Maltese sanction, EMI is sanctioned to proffer amenities in alternative EU nations (under the passporting regimen), having adhered to specific rudimentary announcement methodologies.

EU gubernatorial norms regarding the dispensation of remittance amenities have been instated into Maltese jurisprudence. Beneath the statute, Payment Institutions are beholden to equivalent degrees of oversight akin to credit enterprises, albeit devoid of the constraints stipulated within the Banking Act of 1994.

The PI (Payment Institution) licence gives the right to offer such payment services to customers:

• Remuneration transacting and oversight amenities.
• Currency conveyance amenities.
• Acknowledgment and remuneration commencement amenities.
• Record intelligence amenities.
• Proffering and transacting of remuneration implements.

Key requirements for obtaining a PI licence in Malta:

• The rigid edifice must possess at least 3 overseers, one of whom must dwell on the isle.
• 1 Anti-Money Laundering functionary stationed in Malta, adherence overseer (MFSA sanctioned).
• Inceptive funds ranging from €20k to €125k (depending on the nature of amenities the enterprise intends to offer).

Obtaining a VFA licence in Malta

Fintech conglomerates are governed by the MFSA beneath the Markets in Financial Instruments Directive (MiFID II), the Virtual Financial Assets Act (VFA Act) and the Innovative Technology Arrangements and Services Act (ITAS Act). The VFA Act delineates the prerequisites for maintenance contributors, encompassing brokerage companies, investment planners, custodial and nominee maintenance contributors, e-wallet contributors, and cryptocurrency exchanges. A crypto authorization in Malta will be obligatory to administer the VFA maintenance.

Varieties of VFA amenities that might be proffered pursuant to the VFA Statute:

• Receiving and transmitting mandates to purchase, vend, or subscribe for ethereal pecuniary substances and transmitting that mandate to a tertiary party for execution.
• Executing mandates on behalf of others.
• Commerce of own reserves culminating in the finalization of dealings with one or more ethereal pecuniary substances.
• Overseeing a collection (one or more VFAs).
• Functioning as custodian of an ethereal pecuniary substance and/or private cryptographic currency.
• Consultation concerning investments linked to VFAs.
• Arrangement of ethereal pecuniary substances.
• VFA exchange maneuvers.

In ordainment to be capacitated to purvey the aforestated amenities, the supplicant requires to procure a Maltese VFAA (virtual pecuniary asset servitor) sanction as expounded in the tabulation beneath.

Each singular and corporate entities can procure a virtual pecuniary asset service provider authorization in Malta. In the circumstance of an individual, the singular attendance of the petitioner on the islet during the licensing progression is mandatory. A corporate entity must be instituted in Malta or, if instituted abroad, must inaugurate a branch domicile in Malta.

The corporation ought to possess a minimum of two stewards, a indigenous scribe, a conformity overseer, a narrating steward, and a peril steward.

Conclusion

Acquiring a pecuniary charter in Malta is an antecedent for investment, banking, assurance firms, foreign exchange brokers, and remittance establishments that proffer their amenities in Malta. Fiscal amenities are the most expeditiously burgeoning sector of the Maltese economy.

The amalgamation of novelty with pertinent regulatory measures in accordance with global standards, propitious geographical position fortifies Malta's renown as a esteemed participant in the global pecuniary domain. The jurisdiction's allure is buttressed by diminished red tape, streamlined protocols, diminished charges, and conformity expenditures.

If thou art intrigued in acquiring a pecuniary amenities authorization in Malta, we beseech thee to reach out unto our commerce advisors for exhaustive particulars of the manuscripts necessitated for entreaty. To beseech succor in enrolling a pecuniary amenities enterprise in Malta, we entreat thee to consummate the concise form beneath.