Financial Institutions are regulated by the Financial Institutions Act, Chapter 376 of the Laws of Malta.
Financial Institutions are authorised to carry out similar activities as credit institutions, with the main distinguishing feature being that financial institutions cannot take deposits from the public. Malta is an attractive jurisdiction in this market due to low license fees in comparison with other countries, and attractive tax rates.
Financial institutions can be classified into two categories:
Malta was the first jurisdiction to introduce ad-hoc regulation of e-Money Institutions. In order to operate an e-money institution in Malta, entities must be granted a license by the Malta Financial Services Authority (MFSA). Such license can be passported to other Member States in the European Union and the European Economic Area.
EMIs are regulated by the Financial Institutions Act which defines e-Money as “electronically, including magnetically, stored monetary value as represented by a claim on the issuer which is issued on receipt of funds for the purpose of making payment transactions…and which is accepted by a natural or legal person other than the financial institutions that issued the electronic money”. EMIs are defined as “a financial institution that has been licensed in accordance with this Act and authorised to issue electronic money or that holds an equivalent authorisation in another country in terms of the Electronic Money Directive to issue electronic money”.
Some of the requirements for e-money institutions under the Maltese framework include:
Licensed e-money institutions may undertake, namely, the following activities:
Providing ancillary services in respect of the issuing of e-money or of providing payment services;
Payment Institutions, or Payment Service Providers (PSPs) are regulated by the Financial Institutions Act which transposed the Second Payment Services Directive (Directive 2015/2366). Recently, the number of PSPs in Malta has markedly increased due to the growing i-Gaming and e-Commerce industries coupled with an attractive tax regime.
PSPs may undertake, inter alia, the following services:
PSPs may also carry out additional activities, including:
Applications for a license must be submitted to the Malta Financial Services Authority (MFSA), subject to certain licensing requirements including:
Application fee of €3,500.
At Nexia BT, we aim to assist the organisation in developing a clear approach that is fully aligned with the business needs.
Nexia BT applies research, financial and strategic skills to help you identify, evaluate and translate opportunities into concrete financial projections.
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