Payment Gateway Licences

 

E-Money Licence-Requirements

Any company desirous of establishing the business of a financial institution issuing electronic money shall consider Malta as an ideal jurisdiction due to the various benefits and advantageous the jurisdiction offers.

Electronic money is defined by the Act 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”.

The activities permitted are follows:

1. Issuance of electronic money
   
   
2. The provision of certain payment services
   
   
3. The issuance of pre-paid card
   
   
4. The granting of credit related to certain payment services. Provided that any such credit shall not be granted from the funds received in exchange of electronic money and held in accordance with the prescribed safeguarding requirements.
   
   

The benefits of setting up an e-money institution in Malta:

1. Low setting up costs compared to other jurisdictions.
   
   
2. Skilled work-force
   
   
3. Internationally renowned service providers
   
   
4. Flexible regulation in place and a very approachable and efficient regulator
   
   
5. Maltese e-money institutions enjoy passport rights to open branches in EEA states. Maltese e-money institutions desiring to open up a subsidiary or a branch in a non-EEA state need the consent of the MFSA.
   
   
6. Malta adopts a beneficial system of taxation where corporate profits are charged at the rate of 35% in the hands of the e-money institution, however when a dividend distribution is made to shareholders who are non-resident persons, the government refunds them up to 30% of all the corporate taxes paid. Therefore, the effective rate of taxation in Malta is simply 5%.
   
   

The main documents required to apply for an e-money licence under the Financial Institutions Act are:

1. An application form
   
   
2. Group Structure and Due Diligence documents on all shareholders and directors
   
   
3. A minimum of two executives (who must be based in Malta) and one non-executive director
   
   
4. Appointment of an MLRO (must be a director or a senior manager) & Compliance Officer, who may be the same person as the directors
   
   
5. Required shared capital of €350,000 (at time required at €400,000 upon request of the MFSA)
   
   
6. Memorandum and Articles of Association
   
   
7. Scheme of Operations and internal controls in place
   
   

For more information about Payment Gateway and e-Money Licences in Malta please contact us on info@virtusmalta.com or via the Contact Us page.

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