Finding an Online Payment Provider – The Credorax Malta Example

If you want to open an online shop, you obviously need a way to accept payments online. However, this is often a much harder task than people expect. At Dr. Werner & Partners, I have worked with quite a few companies running websites that need to accept customer payments. This is standard practice in the iGaming sector, for example, and there are plenty of these companies in Malta due to the liberal gambling policy. But to get back to the topic at hand: Credorax Bank here in Malta cooperates with the Munich-based company Paymill to handle worldwide web payments.

Strict rules for accepting online payments

If you want to accept payments online, you have to meet a whole range of requirements, and providers vet exactly who is supposed to be receiving the money. You will need to submit various forms of proof regarding the physical location of the business and the identity of the shareholder. The EU has introduced strict regulations here to make it harder for fraudsters to scam unsuspecting online shoppers out of their money.

Credorax Bank is licensed in Malta

One bank based here is Credorax Bank. They handle payments for Paymill customers. While I can only speculate, it is certainly no accident that the bank chose Malta as its base. Malta offers a modern framework that benefits this financial company (founded in 2007) and EU-certified financial institution—with the tax aspects likely being right at the top of the list.

I want to add a quick note here regarding the tax rules for online shops. While Malta is predestined for internet-based businesses, there are limitations when it comes to e-commerce shops shipping physical goods. A prerequisite for the Malta Limited model is that the company has substance in Malta and that the business actually operates from here—which is usually achieved by moving your residence to Malta. The permanent establishment (PE) must be in Malta.

Since warehouses also count as permanent establishments, the entire sales and shipping process would also need to take place in Malta. This can be a major disadvantage due to the logistical difficulty of shipping physical goods from an island. The situation is completely different for digital goods and online services. Those business models are perfectly suited for tax optimization using the Malta Limited model.