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Malta has established itself as a leading EU jurisdiction for financial services, thanks to its robust regulatory framework overseen by the Malta Financial Services Authority (MFSA). The MFSA issues a wide range of financial licences that enable companies to operate across banking, investment, payments, insurance, funds, and emerging sectors like crypto-assets.
Typical Finance Licences in Malta
Credit Institution (Banking) Licence: authorises deposit-taking, lending, and full banking services (minimum initial capital often €5 million or higher, plus strict prudential requirements).
Investment Services Licence (under the Investment Services Act, aligned with MiFID) – covers activities such as reception and transmission of orders, execution of orders, portfolio management, investment advice, and dealing on own account. Investment firms are now classified into Class 1, Class 2, or Class 3 based on size, risk profile, and activities (replacing the older Category 1–4 system).
Financial Institutions Licence (under the Financial Institutions Act) – for Payment Institutions (PI/PSP), Electronic Money Institutions (EMI), and activities like lending or money brokering (capital requirements typically €50,000 – €350,000 depending on the exact services).
Insurance and Reinsurance Licences – for underwriting risks and related activities (capital varies significantly by risk profile and type of business).
Fund Management Licences – including Alternative Investment Fund Managers (AIFM), de minimis AIFM, UCITS Management Companies, and depositaries.
Crypto-Asset Service Provider (CASP) Authorisation (under the Markets in Crypto-Assets Regulation (MiCA)) – for trading, custody, exchange, and issuance of crypto-assets (asset-referenced tokens, e-money tokens, and others), with own-funds requirements scaled to the type and volume of services.
Other specialised licences – such as Crowdfunding Service Providers and certain securitisation or DLT market infrastructure authorisations.
These licences benefit from EU passporting rights, allowing firms to operate across the European Economic Area once authorised in Malta.
Prior to obtaining a licence, you will need to register a company in Malta. Most financial licences require a minimum authorised (share) capital, which must be fully paid up and maintained at all times in a Maltese bank account. The baseline is often €125,000 for many investment services and financial institutions' licences, but the MFSA may impose higher requirements on a case-by-case basis depending on the risk profile of the proposed activities (e.g., significantly higher for banking or certain high-risk investment activities). The authorised capital (as approved by the MFSA) must remain fully maintained in the company's bank account at all times.
State fees payable to the Registrar of Companies for a company with €125,000 authorised capital (subject to confirmation of current rates):
– €1,890 upon registration;
– €2,600 annual fee.
Directors and Substance Requirements
Most licences require at least two directors (typically including executive functions) who must be resident in Malta or demonstrate sufficient local presence. All directors must meet the MFSA's "fit and proper" test (integrity, competence, and financial soundness).
Shareholders, directors, and beneficial owners must provide comprehensive documentation, including notarised passport copies, bank references, professional references, CVs, and police conduct certificates. A physical office in Malta is mandatory, equipped with a landline telephone, fax, internet connection, and appropriate signage. Key employees and senior management must be based at this office to satisfy substance requirements.
Phases of Acquiring a Finance Licence in Malta
Preparatory Phase
This includes preliminary discussions with the MFSA to align on the business model, submission of a detailed business plan, financial projections for at least three years, organisational structure, risk management policies, and proof of compliance with qualification requirements for directors, shareholders, and key function holders (e.g., compliance officer, risk manager, MLRO).
Pre-licensing Phase
The MFSA reviews the full application and, if satisfied, issues an in-principle approval. Any outstanding conditions (e.g., finalisation of policies, appointment of auditors, or capital injection) must be completed.
Post-licensing Phase
Final steps before commencing regulated activities, such as obtaining professional indemnity insurance (where required), finalising IT systems, and confirming all operational readiness. Only once the MFSA grants full authorisation may the company start providing regulated services.
The MFSA collects the following fees for obtaining and renewing a licence. Fees vary significantly by licence type. Examples include:
– Investment Services Licences (e.g., typical Class 2 / former Category 2 investment firm): one-time application fee of €5,000; annual supervisory fee starting at €4,500 (for revenue/profit up to €250,000) plus €400 for each additional €250,000 tranche (capped at €5 million revenue).
– Banking Licence: application fee €35,000; annual supervision fee based on deposit liabilities (minimum €25,000, maximum €1.2 million).
– Payment Institutions / Electronic Money Institutions: application fee from €3,500; annual fees depend on transaction volume and services.
– Insurance Licences and Fund Management Licences: higher application and ongoing fees reflecting the scale and risk (specific figures provided by the MFSA upon pre-application consultation).
The first annual fee is usually due on the date the licence is issued.
The Process of Acquisition
The MFSA aims to process complete applications within three months, extendable by a further three months if additional information is required. The total timeline from submission to full authorisation typically does not exceed six months, though complex applications (e.g., banking or large-scale investment firms) may take longer.
Acquiring the Licence
Success depends on meeting the MFSA's strict "fit and proper" and prudential standards. Shareholders, directors, and senior managers must demonstrate integrity, competence, and sufficient financial resources. The regulator evaluates the business plan, risk management framework, internal controls, AML/CFT policies, and IT systems. The MFSA also assesses whether it can effectively supervise the entity and whether the proposed activities pose any threat to the stability of Malta's financial system.
If the MFSA identifies deficiencies (e.g., inadequate technical infrastructure, insufficient substance, or unsuitable personnel), it will either request further information or refuse the application. Refusals related to remediable issues (such as software or policies) allow re-application once corrected. However, refusals based on the fundamental unsuitability of key individuals are generally final for those persons.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
