Malta's strategic role in the European financial industry
Malta, uniquely located in the Mediterranean region, plays a significant role in Europe's financial industry. It is distinguished by the following key aspects:
- Innovative regulation: Malta is known for its progressive approach to financial regulation, including the adoption of the latest technologies and standards.
- EU membership: EU membership provides access to the single market and promotes harmonisation of financial standards.
- Strategic location: Malta's geographical location favours trade and investment links between Europe, Africa and the Middle East.
- Tax incentives: Malta's attractive tax policy and double tax treaties attract international companies.
- Economic stability: a growing and stable economy creates a favourable climate for business and investment.
- Support for innovation in finance: Malta actively encourages the development of new financial products, including cryptocurrencies and blockchain.
- High standards of security and transparency: strict adherence to security and transparency standards enhances investor and customer confidence.
These factors make Malta an attractive centre for the development of financial services, including EMI providers, highlighting its importance in Europe's financial industry.
Malta's position as a leader in e-money regulation
Malta, historically renowned for its strategic geographical position in the Mediterranean, has now also earned a reputation as a leader in e-money and payments regulation in Europe and globally.
- Malta actively supports the development of financial technology and e-money through progressive legislation.
- The National Bank plays a key role in supervising companies with an open EMI licence in Malta, ensuring reliability and control in the sector.
- The country stands out for its innovative approach in fintech, actively supporting start-ups and investments in electronic payments, blockchain and cryptocurrencies.
- Malta is also noted on the world stage for its EU membership and international partnerships, making it attractive to global financial services companies.
- A skilled workforce in the financial and IT sectors contributes to the development and implementation of cutting-edge financial products, reinforcing Malta's reputation as a centre of innovation in the financial industry.
The role of the National Bank of Malta and related legislation ensures strict controls and high security standards for EMI providers in Malta, which promotes reliability and trust in these companies.
The process of obtaining an EMI licence in Malta
Preliminary discussions with the regulator
Preliminary discussions with the Malta Financial Services Authority (MFSA) are an important step for those wishing to open an EMI licence in Malta. During these discussions, applicants can obtain important information about requirements and procedures, as well as agree their business plan with the regulator.
- Consultation with the MFSA: Applicants can contact the MFSA to consult and discuss their intentions to obtain an EMI licence in Malta. As part of this consultation, the regulator can provide information on requirements and expectations and ask questions about planned activities.
- Preparing a business plan: An important part of the preliminary discussions is the development and presentation of a business plan. This plan should include a description of the business model, a development plan, financial projections and a wealth of other information that demonstrates the financial viability and feasibility of the EMI provider.
- Assessing the chances of success: discussions with the MFSA can provide applicants with information on how realistic their chances of successfully obtaining an EMI licence in Malta are. The regulator may point out areas that require further development or clarification.
- Agreeing an action plan: ultimately, the outcome of the preliminary discussions should be an agreed action plan. This plan includes the steps that the applicant must follow in order to prepare a complete application for an EMI licence.
Preliminary discussions help applicants approach the EMI licence process in a more informed way, reducing risks and improving the chances of success.
Submission of the application and related documents
Licence application form
Formal statement detailing objectives and plans for EMI licence.
An assessment of future financial performance, including balance sheet, income statements, cash flow.
Information on the management structure, including personal details of directors and management.
Business model description
To open an EMI licence in Malta, a full description of the business model, objectives, customer base, marketing and sales strategy must be provided.
AML and KYC policies
Anti-money laundering and customer vetting policies and procedures.
Information about the software
Details of payment processing and security software.
These documents and information provide the regulator with a full understanding of an applicant for an EMI licence in Malta, its financial strength and its ability to meet security and statutory criteria for electronic disbursements.
Minimum share capital to open an EMI licence in Malta
Capital exigencies for Electronic Currency Establishments in Malta have altered in accordance with Directive 2009/110/EC transposed by Malta in April 2011. Formerly, enterprises aspiring to procure an EMI authorization in Malta were obligated to possess a minimum inaugural pecuniary of €1 million. Nevertheless, subsequent to the alterations, the minimal pecuniary demanded has been curtailed to €350,000. This affords diminutive and nascent enterprises to ingress the electronic currency sector, diminishing the impediment to ingress into the marketplace.
Steps in the verification and assessment of an application
Verification and evaluation phase
Analysis of financial forecasts
Reviewing financial metrics including the equilibrium parchment, gain manifestation, and liquidity torrent.
Verification of internal procedures
Evaluating internal policies and mechanisms encompassing hazard oversight, AML and KYC.
IT infrastructure assessment
Reviewing technical solutions and ensuring the security and efficiency of the payment software used.
Security policy audit
Evaluating security measures including data protection and cyber-attack prevention.
Business plan review
Analysing the company's development strategies, marketing and sales plans.
Internal procedures and IT infrastructure
- Information security: the MFSA assesses the information security systems of an applicant for an EMI licence in Malta, including cyber threat protection measures, encryption and access control, to guarantee the safeguarding of clientele data and financial transactions.
- Risk management: the regulator checks the effectiveness of the company's risk management systems, including credit analyses, transaction monitoring and anti-money laundering measures.
- AML and KYC: the existence and effectiveness of anti-money laundering and customer identification procedures are checked.
Conditions and terms of licence approval
- Stipulations: The MFSA establishes the stipulations for acquiring an EMI authorization in Malta, which might encompass pecuniary prerequisites, time constraints, and additional statutes.
- Temporal Span: The duration of the authorization endorsement procedure fluctuates contingent on the circumstance and the exertion of the overseer, commonly enduring numerous lunar cycles.
It is crucial for corporations to maintain vigilance over contemporary statutory modifications and prerequisites during the application procedure.
Licensing for small EMI (sEMI) in Malta
Licences for sEMIs in Malta are a special category of licences designed for smaller e-money issuing institutions. The main aspects of these licences include:
- Definition of small EMIs: these institutions are characterised by the fact that they are headquartered in Malta and are engaged in the issuance of electronic money.
- Revenue Limitations: The total revenue from services provided by small EMIs must not exceed €2 million. This restriction helps to determine which institutions can qualify as small EMIs.
- Minimum capital requirements: there are different minimum authorised capital requirements depending on the income of the company:
- For companies with revenues up to €1 million, a minimum authorised capital of €50,000 is required.
- If revenues start from 1 million euros, the minimum authorised capital increases to 100,000 euros.
- Operating restrictions: Small EMIs cannot provide their services in other countries of the European Union or the European Economic Area (EU/EEA). This means that their operational activities are limited to the territory of Malta.
These requirements and restrictions reflect the desire of Malta's regulators to provide support to small financial institutions, while controlling their scale and scope of operations to manage the risks associated with the financial sector.
Popular forms of legal entities for obtaining an EMI licence in Malta
Some of the most popular types of legal entities to obtain an EMI licence in Malta are limited liability companies (Ltd./Limited) and public limited companies (p.l.c.). The registration of these types of legal entities is as follows:
- Choosing a company name: the first step is to choose a unique company name and have it approved by the registration authority.
- Preparation and filing of documents: it is necessary to prepare and file incorporation documents, business plan and other required materials.
- Registration procedure: filing an application for registration with the MFSA, followed by payment of the registration fee.
- Obtaining a licence: application for an EMI licence with additional information about the activity.
- Technical compliance: ensuring that the IT infrastructure complies with technical standards.
- Financial sustainability: providing financial documents to confirm the sustainability of the company.
- Audits and scrutinizations: the MFSA may execute an inquest to corroborate the corporation's adherence.
- Permission issuance: upon endorsement of the request, the corporation is bestowed an EMI permission in Malta to furnish electronic currency amenities.
This process requires careful preparation and compliance with all regulatory norms and standards. It should also be noted that opening a p.l.c. in Malta is more suitable for companies aiming to attract public investment and development into large-scale financial institutions.
Malta proffers alluring prospects for pecuniary establishments aspiring to acquire an EMI authorization and dispense e-currency amenities in a contemporary fiscal milieu. Effectively securing an authorization can be accomplished if all the requisite prerequisites and methodologies are fulfilled, rendering Malta a compelling terminus for this genre of enterprise.