Obtain a licence for financial services in Malta – My advice

In a number of occasions of the last months I have been asked if I could assist with obtaining a licence for financial services in Malta. Some people still have a very wrong impression on how to become financially licenced in Malta. “A few papers and my passport and then we can start in a few weeks, right?” Well, no, not right. The compliance and red tape around any financial licence application is enormous – but honestly, even it is very burdensome before and during the application, to ensure the quality of the Maltese licensees and to safeguard Malta’s reputation as a financial service hub, it seems to be the right tool and process.

MFSA with individual standards for licence for financial services

Obtaining a financial licence in Malta is an ever-changing and complex process, all done on a case to case basis. The MFSA has different requirements from licence application to licence application in terms of staff, share capital and substance in Malta. Obtaining a licence takes at least 12 months from start to finish.

Substance in Malta: Very important for licence for financial services

The most important part for getting a financial licence is physical substance in Malta. This means that the key personnel will have to be resident in Malta and perform the activities from here.  The MFSA desires educated, experienced people on the ground, in Malta. We are assisting clients with obtaining licence 3 at the moment, and for this they have requested a total of 9 people to be resident of Malta and work from here. All of those people will have to work full time for the company and all of them will have to show relevant competency and experience. In the case of this client, the monthly payroll for these nine staff is in the region of 70k EUR. Obviously each applicant will require office space to host your staff, I would assume an office to be in the region of 2-3k EUR per month. Top market 6-10k per month.

Detailed listing of your plansis required for licence for financial services

The most important document to start any application process is a DETAILED DESCRIPTION OF PROPOESED ACITIVITIES (DDPA). That is document that you will have to draft and that describes the whole operation in theoretical terms on how you plan to set it out.

The comprehensive written description (DDPA) should contain and outline the following elements:

  • Background details about the Applicant and any affiliated entities including their respective regulatory status and previous business history;
  • Target clients;
  • The Applicant should attach a chart which illustrates the internal operational structure of the Applicant’s business (this should show names, reporting lines and roles);
  • Detailed Description of the proposed operational set-up personnel and internal controls;
  • The location of the business;
  • The applicant’s plans anticipated level of business and its plans for the future;
  • If part of a group, the applicant is to specify its role within that group, and if part of a group a diagram showing the relationships between the Applicant and other members of the group must be provided. 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 of (b) no less than fifty ultimate beneficial owners who between them account for over 50% of the voting rights.
  • Rationale for applying for a license;
  • At inception and the anticipated yearly development of such set-up for the first three years of operation;
  • Marketing plan;
  • Governance of the company;
  • Systems to be used;
  • Business strategy;
  • Outsourcing arrangement

MFSA wants to meet applicant of licence for financial services in person

Normally, the DDPA is 20-30 pages long. Once drafted, we file it with the MFSA and then they will schedule a meeting in Malta with the promotors. They want to know the key people personally and they will discuss the proposed activities with them and they will ask questions on how the applicant wishes to operate. Once this is done, the MFSA will consult internally and will then send their assessment of what licence they think is required, how much share capital is required, what personnel and substance is required need and if qualified shareholding is required or not.

Based on that we can start to assemble the application by getting all information of all involved persons and companies on file.

The documentation process requires a lot of discipline from the client to provide all info in timely and broad manner- we can assist and guide you but we cannot invent the contents of the application for you.

If you plan to get your Maltese company licensed in Malta, please contact Dr Werner & Partner today.

 

About Philipp M. Sauerborn

Philipp Maria Sauerborn is a certified tax advisor and expert in International Tax & Blockchain. As CEO of Dr. Werner & Partner in Malta, he has already advised over 3000 clients on their tax situation.

0 %
Clients who remain clients for more than 12 months

Schreibe einen Kommentar

Deine E-Mail-Adresse wird nicht veröffentlicht.

Disclaimer

The above-mentioned article is simply based on independent research carried out by Philipp Sauerborn and cannot constitute any form of legal advice. If you would like to receive further information, please contact us for an appointment.

You can find more information here

Expert Webinar with Philipp M. Sauerborn

Book 1 of 25 seats

This Saturday: Webinar about starting a company abroad. Sign up