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Malta’s banking industry has gained considerable ground over the past years and in particular since Malta's accession to the EU in 2004 and adoption of the Euro in 2008. Over the past decade, the banking sector has transformed itself from a few retail banks serving the local population to a reputable international banking centre. 

The industry witnessed an increase in the range of products and services being offered from Malta. These include retail banking, private banking, trust business, investment banking, trade finance, treasury operations and syndicated loans.

A comprehensive regulatory framework

The Malta Financial Services Authority (MFSA) is the country’s single regulator for all banking, investment and insurance business. Its high regulatory standards are modelled on EU legislation and best practice, whilst at the same time allowing for the flexibility necessary in a modern and dynamic banking environment. Closely supervised by the MFSA, Maltese banks are adequately capitalized, feature high liquidity ratios and sound and diversified portfolios. Customer confidence and prudent business models have enabled Maltese banks to resist the recent global crisis, as evidenced by the World Economic Forum’s October 2008 report on global competitiveness which ranked Malta amongst the top ten countries insofar as soundness of the banking system is concerned.

A competitive and tax efficient jurisdiction

EU membership, euro adoption, and a prompt, and an efficient and accessible regulator are some of the reasons as to why Malta has become an attracive basis for international banking operations. These are buttressed by a good source of professionals and qualified personnel, a solid IT infrastructure and support services and a relatively low business costs compared to other EU jurisdictions.

Above all, the Maltese tax regime contains an interesting combination of tax refunds (available to shareholders) and a participation exemption which, with proper planning and structuring, provide interesting tax planning opportunities for international and local operations. For more information about tax advantages, please visit our Tax Section.

Banking Licence application procedure

Entities that may Apply for a Banking Licence

Any company which intends to carry out the business of banking or of issuing electronic money in Malta is required to apply for a licence with the MFSA prior to commencing operations. An application for a license may also be filed for the following types of establishments:

•     branches of foreign banks;

•     subsidiaries being legally independent institutions, wholly or majority owned by a credit institution which is incorporated either in Malta or in a foreign country; and

•     joint ventures.

Required Documentation

The Banking Application Form should include (i) Information regarding the entity which has applied to become a license holder and (ii) Personal information regarding the applicant including personal contact details, qualifications, memberships, employment history, directorships, the applicant’s bank references and other regulatory authorizations, other general information as well as declarations and confirmations. The Form should be submitted in writing to the MFSA and shall be accompanied by the following documents

• A copy of the Memorandum and Articles of Association of the entity;
• Audited financial statements for the previous three years (if applicable);
• A business plan including the structure, organization and management systems of the prospective bank;
• Identity of all directors, controllers and managers of the institution;
• Identity of all shareholders with a qualifying shareholding;
• Identity of the individuals who will be effectively directing the business of the prospective bank; and
• Internet and Electronic Banking Questionnaire where the Bank wishes to carry out specific Internet related services. 

Conditions for Issuing a Banking Licence

Statutory Requirements 

A company is granted a licence only if:

• The Applicant’s own funds amount to not less than EUR 5 million or in the case of electronic money institutions to not less than EUR 1 million. These criteria apply equally to Maltese- registered banks and to overseas institutions wishing to set up branches in Malta;
• There are at least two individuals that will effectively direct the business of the credit institution in Malta (the “four eyes principle”);
• All qualifying shareholders, controllers and all persons who will effectively direct the business of the credit institution are suitable persons to ensure its prudent management; and
•  The MFSA is satisfied that there are no close links between that company and another person/s which through any law, regulation, administrative provision or in any manner prevent the company from exercising effective supervision of that company under the provisions of the Banking Act.

Minimum Criteria

In order for the MFSA to grant a licence, it must be satisfied that the applicant fulfills the minimum criteria relating to:

• prudent conduct;
• fit and proper persons;
• integrity and professional staff; and
• the safety of potential depositors.

In addition, the MFSA must be satisfied that there will be adequate flows of information from the institution and relevant connected parties which would allow the MFSA to monitor the fulfilment of prudential criteria and identify and assess any threats to the interests of depositors and potential depositors.

Time-lines

The Banking Act stipulates that an application for a license is determined within six months of receipt. In instances where the application does not comply with the required form or if additional information is required, the application shall then be determined within six months of compliance with the required form. A company licensed in another country outside Malta which carries on the business of banking must give at least two months’ notice to MFSA to establish a representative office in Malta. 

Our services

Will can assist applicants throughout all stages of the application process:

Initial Stage

• Establishing contact with the relevant regulatory authorities in Malta;
• Advising on the legal and regulatory framework in Malta, including an overview of banking legislation, related banking rules and regulations and anti-money laundering legislation and policies;
• Tax planning
• Providing  assistance for the incorporation and registration of the applying entity in Malta.

 Application Process Stage

• Preparation of relevant applications to the MFSA and process management;
• Setting up of meetings with the relevant authorities, such as the MFSA, the Central Bank of Malta and the Financial Intelligence Analysis Unit (FIAU);
• Guiding the applicant towards professionals to be recruited as staff in the prospective bank; 
• Providing tax and VAT compliance and advisory services; and
• Assisting with the required drawing up of internal policies and procedures.

 Continuing Relationship

• Assisting with the initial setting up of the banking institution
• Providing the bank with ongoing advice 
• Introducing the bank to other industry players in Malta.   

For further information please contact This e-mail address is being protected from spambots. You need JavaScript enabled to view it .