Specificity of the registering
One of the main specifics of the blockchain and cryptocurrency sector in Malta is the difficulties in opening a current account even after going through all the procedures and obtaining expensive licenses.
An application for cryptocurrency licenses in Malta must be submitted exclusively through a VFA agent registered in accordance with the Law in the form and procedure required by the competent authority, as well as:
Accompanied by information and documentation in addition to those required by this act, in accordance with the requirements of the competent authority or in accordance with the regulations;
Be checked in the manner and extent required by the competent authority;
Contain an address in Malta to provide notifications to the applicant or other documents in accordance with the Law;
Be accompanied by a description of the principles of security protocols and also other documents that may be required by a competent authorities;
A fee that is non-refundable must be paid.
Pay attention to the responsibilities for the licensing process in accordance with Article 14 of the VFAA.
Registrations fee
Cryptocurrency license in Malta are divided into classes with varying degrees of restrictions. The cost varies from 3,000 € to 12,000 € for obtaining a license plus an annual renewal fee, which significantly exceeds the cost of a similar license, for example, in Estonia. The amount of registered capital for obtaining a Maltese license ranges from 50,000 € to 730,000 €.
Types of licenses
Type 1
Suitable for financial advisors
3 000 € and annually from 2 750€
Requirements for the authorized capital — 50 000 € or 25 000 € with PII insurance
This is a simple placement and consulting for VFAs. This license entitles its holders to get and also transmit all orders relating to virtual financial assets and also to offer investment advice.
Type 2
Suitable for providing wallets, P2P exchange, asset management
5 000 € and annually from 4 500€
Requirements for the authorized capital — 125 000 €
This license entitles companies to offer VFA service and control or hold customer’s money. It also controls customers not to trade their own account or operate a VFA exchange.
Type 3
Suitable for OTC traders, over-the-counter transactions
7 000 € and annually from 6 000€
Requirements for the authorized capital — 730 000 €
This license entitles its holders to offer any type of VFA service and to control or hold customers money. However, one is not allowed to operate a VFA exchange. Since this license offers granted rights, it has been seen as the best choice especially for the market makers and OTC traders.
Type 4
Suitable for cryptocurrency exchanges of any type
12 000 € and annually from 25 000 €
Requirements for the authorized capital — 730 000 €
This’s the most comprehensive license which entitles companies to hold or control customers money and also operate a VFA exchange. It also entitles companies to control virtual financial assets, private cryptographic keys and be the custodian of nomination services only in the activities of VFA exchange.
Term of
registering
The preparatory phase takes a significant part of the time, this is due to the large list of requirements for candidates. Obtaining a license from the time of application can take from three to six months. Depends on whether MFSA will require additional documents. If the MFSA regulator is not sure about a candidate for a license, he will request as much information as will be necessary to make a decision.
Useful information
Carefully read the law on virtual financial assets. VIRTUAL FINANCIAL ASSETS ACT – is one of the fundamental acts that regulates the activities of fintech and blockchain projects in Malta, as well as projects related to these niches.
Make sure that your company falls under the concept of distributed accounting register technology. MFSA (Malta Financial Supervision Authority) introduced the concept of Financial Instruments Test. Before starting to build a fintech/blockchain business/ICO in Malta, a company must make sure that it falls within the concept of distributed register technology.
Make sure that the administrative board of your company meets all the stated requirements:
The administrative board should have a good reputation, possess sufficient knowledge, skills and experience, devote enough time to fulfill their duties and understand the activities of the license holder, take into account the main risks;
The administrative board should monitor and evaluate the adequacy and implementation of the strategic goals of the license holder in the provision of VFA services, as well as exercise a reasonable management and pursue a reasonable policy;
The license holder must provide the administrative board with an access to all available information;
The license holder must allocate sufficient human and financial resources for the training of members of the administrative board;
Each member of the administrative board must act honestly and impartially in order to effectively evaluate and challenge the decisions of senior management;
The administrative board should review and oversee the implementation of the management mechanisms, reasonable and effective management and diversification of duties in order to prevent conflicts of interest;
The administrative board shall establish, approve and control: skills, knowledge and experience of staff, as well as procedures and mechanisms for providing VFA services; VFA assets and services policies provided under an acceptable level of risk; the policy of rewarding of persons involved in the provision of services, aimed at promoting responsible business conduct.
Obtain a legal assessment of the project. This report contains all the necessary information about the regulatory environment related to the activities you intend to carry out in Malta. Thanks to the report, you can make the right decision before the start of the planned activity. The cost of the service varies depending on the complexity of the project and averages 8,000 €. We will provide more detailed information in person.
Visit Malta Financial Services Authority (MFSA). We recommend that you submit your project to MFSA in advance and receive important informal feedback on what MFSA expects from you. In the case of our support, we will take on this task.
Documentation package
Be prepared to provide all the necessary documents to MFSA:
MFSA application form;
System auditor report;
Professional liability insurance (sample of contract or agreement);
Detailed business plan;
Legal opinion;
Article of Associations;
Completed questionnaires for shareholders, directors, senior employees, including compliance officer and MLRO;
Detailed financial forecasts for 3 years (the best, the worst and the normal scenario);
Completed MFSA compliance officer and MLRO competency assessment forms;
Policy and procedure development;
Business continuity and recovery plan;
Our support includes a turnkey package of services. The cost of services is calculated individually for each project and can be provided upon request.
Private Financial Services will guide you through the whole process to get cryptocurrency licenses in Malta.
If cryptocurrency licenses in Malta do not meet your business goals, as alternative, you can consider cryptocurrency license in Estonia.