Financial Institutions

Being made up of lawyers, accountants and tax professionals, our Financial Institutions Practice is able to assist businesses as well as individuals in all their related needs. Our Legal Team advises and assists financial services operators in setting up, and operates from a Maltese regulatory and legal perspective by working hand in hand with the promoters, in-house legal and financial advisors, managers and other functionaries. Our Tax Team also advises on the most appropriate and tax-efficient structure for each particular case. Our Accounting and Finance Team advises on ongoing monitoring and compliance, best accounting systems and procedures, historical analysis and projections. Our professionals are also frequently requested to provide analysis papers, consultative opinions and revisions of laws analyses to institutions, regulatory bodies and agencies.

Chetcuti Cauchi’s expertise and familiarity with the peculiarities of this industry, coupled with our in-depth knowledge of local regulatory processes has positioned us as the advisors of choice for discerning operators seeking a one-stop shop financial services solution provider in Malta.

Legal Basis for Financial Institutions in Malta

The Financial Institutions Act (Chapter 376 of the Laws of Malta) is the key legislative instrument which regulates financial institutions in Malta. The act embraces the provisions of the EU Payment Services Directive (2007/64/EC) and Electronic Money Directive (Directive 2009/110/EC).           

The act provides that any person who regularly or habitually provides and executes payment services in relation to banknotes, coins, scriptural money and electronic money qualifies as a payment institution. Payment Service Providers (PSPs) and Electronic Money Institutions (EMIs) are two such financial institutions which also fall under the broad Fintech sector which is firmly grounding its roots in Malta.

Payment Service Providers (PSPs)

A number of Payment Service Providers (PSPs) have been drawn to Malta’s shores on account of its low operational costs and competitive fiscal environment. Malta’s skilled English-Speaking workforce, the island’s sound ICT infrastructure which allows Malta to offer cross-border payment services across the EU on the basis of a single Malta Payment Services Licence have all contributed to Malta’s renowned status as an ideal location for PSPs.

PSPs can engage in various activities, including the execution of payment transactions, issuing and/or acquiring of payment instruments, as well as money remittance. Similarly to other financial institutions such as EMIs, PSPs may not receive deposits or other repayable funds from the public and must use funds exclusively to provide payment services.

Prospective PSPs have sought our professionals' guidance for assistance with the local set up procedures. Our professionals are able to take care of the preparation of all application documents, manage correspondence with the local regulator and offer counsel on regulatory, tax and corporate matters. Our lawyers are well established within their respective fields in the jurisdiction, and can offer knowledgeable insight and introduce clients to important contacts in their field.

Electronic Money Institutions (EMIs)

With a state-of-the-art telecoms infrastructure and over 250 iGaming companies established on its shores, Malta has enticed a number of Electronic Money Institutions (EMIs) to establish operations within its shores or passport to Malta from other EU Member States. What gives the Maltese licence an edge over others is the fact that it allows EMIs to start operating with a lower capital requirement when compared to a full banking licence, thus making it a very cost effective vehicle.

Our Financial Institutions Practice

Our seasoned Financial Institutions team made up of legal, accounting and tax and finance professionals who are dedicated to providing guidance and council on general prudential requirements, such as initial capital, own funds and safeguarding requirements as per the relevant local legislation.

Moreover, our team provides its assistance and counsel at pre-licensing, set-up and post licensing stages. At pre-licensing, prospective financial institutions are advised on the statutory requirements to be fulfilled relative to the application procedures and requirements for authorisation under the respective legislation. At post-licensing stage, clients are guided to ensure they remain fully compliant with the statutory obligations licence holders are bound by and the statutory notification and authorisation requirements which must be satisfied vis-à-vis the regulator.