Malta Authorised Payment Institution

Malta Authorised Payment Institution Packages

€11950 – Malta Authorised Payment Institution License

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We are financial services specialists, providing full support on the licensing of Malta Authorised Payment Institutions.  Through our expertise and experience, we can assist you in the attainment of a licensed Authorised Payment Institution in Malta, as well as all ancillary and support services.

Our in-house and local expertise is at hand, assisting clients in the review / drafting of all licensing documentation, providing expert advice, as well as logistical support, with effective turnkey solutions.

We can assist you with ALL services relating to:

• the completed form “Application for an Investment Services License”;
• covering letter (template included in the Application form);
• Auditor’s Confirmation (template included in the Application form);
• supporting Board Resolution;
• a completed financial resources statement form;
• projected profit and loss account and balance sheet for the three years after the License is issued;
• where appropriate, copies of the last three years audited accounts of the applicant and other relevant related companies;
• Memorandum and Articles of Association (or Partnership Agreement) of applicant;
• specimen copies of the insurance policies and draft schedule/cover note (where applicable), and ‘Insurance Checklist’;
• completed Personal Questionnaire forms for each shareholder, director, and senior officer of the applicant (the PQs should include a certified copy of the person’s passport and a conduct certificate);
• Memorandum and Articles of Association of corporate shareholders of the applicant;
• a chart which illustrates the internal operational structure of the applicant’s business (this should show names, reporting lines and roles);
• Where the applicant Company/Partnership forms part of a Group, a diagram showing the relationships between the applicant and other members of the Group. The “family tree” submitted should give details up to the ultimate beneficial owner(s), showing percentage sizes of holdings in each entity; unless (a) the entity has one ultimate beneficial owner with a holding of over 50% of the voting rights or (b) no less than fifty ultimate beneficial owners who between them account for over 50% of the voting rights. If (a) or (b) apply, it will only be necessary to give details of the ultimate beneficial owners with holdings of 10% or more.

In addition to the aforesaid legal review, we can also extend our assistance to the following services:

Turnkey solutions

A License shall be issued only if the regulator is satisfied that the applicant has satisfied the most rigorous tests re: fitness and properness, and shows that it possesses the adequate means to ensure a seamless running of the licensable activity.

The regulator, shall not allow an activity to be undertaken by a brass plate operation, with little to no substance.  In order to ensure that the applicant can meet the minimum thresholds of substance, we seek to provide turnkey solutions – both with regard to manning and physical premises.

Malta Company Formation Services

Assistance in the incorporation of the corporate vehicle that shall be the recipient of the License, as well as all ancillary corporate services.

Relocation Assistance

Assistance in the relocation of directors, managers and employees of the License holder, including advice on the attainment of necessary work permits, via the liaison with Malta Immigration Authorities and advice re: applicability of bespoke tax scheme such as the Highly Qualified Person Rules.

Authorised Payment Institutions in Malta

REGULATORY FRAMEWORK

The Payment Services Directive 2007/64 (“the Directive”) on payment services in the internal market has been transposed in Maltese law through (i) the enactment of legislative amendments to the Financial Institutions Act – Chapter 376 of the Laws of Malta, which set forth the licensing framework; and (ii) through the enactment of a Directive under the Central Bank of Malta Act – Chapter 204 of the Laws of Malta, for the implementation of the substantive provisions of the Directive.

PERMITTED ACTIVITIES

Any person wishing to undertake the business of an authorised payment institution, i.e the carrying out and executing payment services in relation to banknotes, coins, scriptural money and electronic money shall require a licence under the Financial Institutions Act, 1994. The licence holder may carry out the following activities:

• Services enabling cash to be placed on a payment account as well as all the operations required for operating a payment account;

• Services enabling cash withdrawals from a payment account as well as all the operations required for operating a payment account;

• Execution of payment transactions, including transfers of funds on a payment account with the user’s payment service provider or with another payment service provider;

• Execution of payment transactions where the funds are covered by a credit line for a payment service user:

• Issuing and/or acquiring of payment instruments;

• Execution of payment transactions where the consent of the payer to a payment transaction is transmitted by means of any telecommunication, digital or IT device and the payment is made to the telecommunication, IT system or network operator, acting solely as an intermediary on behalf of the payment service user and the supplier of the goods and services.

• The provision of operational and closely related ancillary services such as ensuring execution of payment transactions, foreign exchange services strictly in relation to payment services, safekeeping activities, and storage and processing of data;

• The operation of payment systems;

• When payment institutions engage in the provision of payment services, they may only hold payment accounts used exclusively for transactions;

• Money remittance.

SHARE CAPITAL REQUIREMENTS

Applicants wishing to apply for an authorised payment institution must submit a detailed business plan to the Malta Financial Services Authority (MFSA) which shall recommend a share capital commensurate to the proposed activities of the proposed applicant.

MINIMUM LOCAL PRESENCE REQUIREMENTS & LICENSING PROCESS

Authorised Payment Institutions must be managed by at least two (2) individuals and all directors and qualifying shareholders must satisfy the “fit and proper” test and must submit a personal questionnaire for the assessment of their eligibility. An application form is to be submitted to the regulator with the following documents:

• a programme of operations, setting out in particular the type of activities envisaged to be undertaken;

• a copy of the Memorandum and Articles of Association of the proposed institution;

• proposed level of initial capital (see above);

• a business plan including the structure, organisation, management systems, governance arrangements and internal control systems of the institution. The plan shall incorporate all relative financial information required by the authority to enable it to establish the initial capital requirement and measures to be taken to safeguard payment service users’ funds;

• a description of the internal control mechanisms which the applicant will establish in order to comply with obligations in relation to money laundering and terrorist financing;

• a description of the structural organisation, including, where applicable, a description of the intended use of agents and branches and a description of outsourcing arrangements;

• audited Financial Statements for the last three years, if applicable;

• the identity of all officers and controllers of the institution;

• the identity of all shareholders holding directly or indirectly a qualifying shareholding and the size of their holdings and evidence of their suitability, taking into account the need to ensure the sound and prudent management of the institution;

• the identity of the individuals who will be effectively directing the business of the institution and, where relevant, persons responsible for the management of the activities of the institution, as well as evidence that they are of good repute and possess appropriate knowledge and experience;

• where applicable, the identity of statutory auditors and audit firms;

• the applicant’s legal status;

• the address of the applicant’s head office;

TAXATION OF AUTHORISED PAYMENT INSTITUTIONS

Like all companies resident in Malta, authorised payment institutions would be subject to income tax on company profits at a rate of 35%. However, this is subject to Malta’s full imputation tax system, whereby tax suffered by a company in Malta shall, on the distribution of a final dividends, be imputed to the shareholder as a tax credit against the shareholders’ tax liability. Therefore, a shareholder will, upon a distribution of the dividend, be entitled to a refund in part or in full of any advance tax levied on the distributing company. The full imputation tax credit thereby renders Maltese companies highly efficient tax vehicles, with a number of applicable refunds to shareholders possible. The default refund applicable to a fund administrator company in respect of active trading income, is a refund of 6/7ths, resulting in a tax leakage of just 5%.

Furthermore, foreign tax paid can be taken into account for purposes of the refund calculation, subject to the maximum refund not exceeding Malta tax paid. Effectively, it is possible to envisage situations where no Maltese tax leakage would be suffered by the authorised payment institution in the manner set forth below:

*632 (6/7ths of 737)

View Malta Company taxation page for full understanding of corporate tax in Malta.

Contact one of our officers to initiate the licensing process of a Malta Authorised Payment Institution and start reaping full benefits of a reputable, low-tax EU jurisdiction. Simply fill in the contact box below or contact us by email on enquiries@fbsmalta.com or by calling at +356 2338 1500