MALTA

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Malta has positioned itself as a prime Fintech island over the last decade.  As a result, it has attracted many electronic money establishments, payment service providers, cryptocurrency  and digital assets' exchanges, as well as developing into the largest iGaming hub in the world.

Malta has drafted a legal framework to regulate various forms of Virtual Financial Assets (VFAs) and Virtual Financial Assets-related services.  The Malta Financial Services Authority (MFSA) assesses applications based on the following legal acts:

• Malta Digital Innovation Authority Act (MDIA Act) that establishes the Malta Digital Innovation Authority (MDIA)
• Innovative Technology Arrangements and Services Act (ITAS Act) that provides for the registration of technology service providers and the certification of technology arrangements.
• Virtual Financial Assets Act (VFAA), which is charged with the regulation of VFA service providers, the Initial Coin Offerings (ICOs) and VFA agents.

There are four types of licenses issued by the MFSA in relation to cryptocurrency, which are broken down into the following categories:

1. Class 1: Licence holders authorised to receive and transmit orders and/ or provide investment advice in relation to one or more virtual financial assets and/ or the placing of virtual financial assets.  Class 1 Licence Holders are not authorized to hold or control clients’ assets or money.
2. Class 2: Licence holders authorised to provide any VFA service but not to operate a VFA exchange or deal for their own account.  Class 2 Licence Holders may hold or control clients’ assets or money in conjunction with the provision of a VFA Service.
3. Class 3: Licence holders authorised to provide any VFA service but not to operate a VFA exchange.  Class 3 License Holders may hold clients’ assets or money in conjunction with the provision of a VFA Service.
4. Class 4: Licence holders authorised to provide any VFA service.  Class 4 Licence Holders may hold or control clients’ assets in conjunction with the provision of a VFA Service.

The minimum capital requirement for holding a VFA Class 4 service license is 730,000 EUR.  Contact us for information on capital requirements on the lesser Class 1 to Class 3 licenses. 

If engaging in the business of virtual financial assets and crypto exchanges, you must have a physical presence in Malta.  You must create a legal entity (Private Limited Liability Company), rent an office space, and hire a minimum of three staff.  The director of the company may be used as one of these nominal representatives. 

The experience and qualifications of personnel constitute one of the most important elements of a successful application.  It is very important to be able to locate and select qualified individuals, who would constitute the minimum required key personnel of your firm.  These individuals must be approved by the regulator.

We can handle all relevant subjects which include selection of the personnel, immigration and work permits, drafting employment contracts and, most importantly, check adequacy of the candidates against the key position in your firm.   

The regulator requires you to disclose most all aspects and details of your business. Our business is to ensure you meet the regulator's requirements, and we will review what you currently have or complete what is needed for you.

• Business and Financial Plan
• Supervisory and AML/CTF Manuals
• KYC of beneficial owners, directors, controllers and affiliates
• Proof of Professional Indemnity Insurance

• Capital adequacy requirements must be calculated regularly
• Annually, an audited financial statement
• Monthly, interim financial statements prepared in accordance with generally accepted accounting principles
• As needed, any material changes to the firm, its operations or people

Malta is within the EEA and has a number of options to choose from banks serving the financial services sector.  We will facilitate bank introductions and account openings.   

Malta has close ties with European nations and is a member of the EU.  Establishing institutional relationships with liquidity providers and prime brokers not so difficult.  We will help you establish the institutional relationships you need to build a successful business.

When you engage with us, our scope of service covers all of the aspects you need in order to get your crypto licence:

• Provision of regulatory guidance
• Company incorporation
• Approved Person’s fit and proper tests
• Employing local directors, officers and staff
• Establishing an office
• Facilitating bank accounts
• Introduction to accountant and auditor relationships
• Management and supervision of the application
• Preparation of all client-facing legal documents including client business terms and disclosures
• Completing the business plan, compliance manuals, employment and outsourcing agreements  

3 to 5 months.