Company in Malta

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Authorised Payment Institutions

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Authorised Payment Institutions in Malta


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.


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.


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.


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;


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:

Maltese Company No Foreign Tax With Foreign Tax
Net Foreign Income 2000 2000
Grossing up with Foreign Tax 0 105
Chargeable Income 2000 2105
Tax at 35% 700 737
Credit- Double Tax Relief 0 105
Malta Tax Payable (tax at 35% less tax credit) 700 632
Shareholder of Maltese Company
Refund on distribution (6/7 of Malta Tax Payable) 600 632*
Effective Tax Paid in Malta 100 0
Effective Tax leakage in Malta on Net Income 5% 0%

*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 or by calling at +356 2338 1500

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