Eternity Law International News SEMI license in Malta

SEMI license in Malta

February 15, 2023

The Republic of Malta is among the top three countries in terms of the number of SEMI licenses issued. The increased interest in this jurisdiction and the status of Malta’s e-money license is due to a number of factors, including a single European passport, tax preferences, a loyal attitude towards foreign investors, and comprehensive active government support for providers and users of monetary services.

What is SEMI, and why do you need to choose Malta?

For any legal activity related to the provision of any payment services on the territory of the EU, the organization must obtain the appropriate permission – a payment license at the level of a Financial Institution. An SEMI license is required if transfers involve electronic payments.

An SEMI license it’s permission that allows you to to perform transfers involving electronic money like electronic money. In particular, permission is needed for the operation of payment systems and the organization of payments through electronic wallets. The SEMI in Malta license also gives the right to issue electronic money.

E-money is an alternative to cash. These are assets stored electronically and on an electronic wallet. Like physical money, it can be used for trade, exchange and various payment activities(transfers).

Even before the introduction of the European directive on electronic money, Malta offered possibilities for the enrollment of such companies and allowed to obtain SEMI license in Malta . After the Directive appeared, Malta retained the status of an innovator and promising jurisdiction for payment systems.

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What makes Malta attractive for obtaining an SEMI in Malta:

  • Developed infrastructure: network, Internet, legislation;
  • Developed IT sector;
  • The big I-Gaming market should be mentioned separately – online gambling: bets, casinos, slot machines and much more;
  • At the same time, Malta is a member of the EU and its license can be used for clients throughout the Union;
  • Expenses for the maintenance of the company may be lower than in other EU countries;
  • It is possible to reduce the effective tax rate to 5%;

Acquiring a license is possible in a short period of time – approximately 3-4 months after submitting an application with all official papers.

Services and features that SEMI license in Malta provide

  • Services that allow you to transmission money to a defrayal account, as well as actions needed for the operation of a pay-account;
  • Favors that allow you to withdraw cash from a payment account, as well as actions needed for the operation of a payment account;
  • Implementation of payment transfer actions, including the remittance of funds to a payment account and including the execution of direct debits, credit and payment transmission through a paycard or similar device;
  • Making payment transfers when the costs are shaded by a credit line for the user of the payment service, including making direct debits, credit transfers and money transmissions via a payment card or other device;
  • Issuance and/or acquisition of monetary instruments;
  • Remittance;
  • Execution of payment operations, when the payer agrees to a payment operation using a telecommunication, digital or IT device, and the payment is also made by the latter, which acts as an intermediary on behalf of the client of payment services.

Requirements for SEMI license in Malta 

Obtaining an SEMI license in all EU countries requires the company to comply with certain requirements regarding the size of the authorized capital, personnel issues (company structure, reputation of top managers), asset protection policy.

Of course, the licensing process also requires certain monetary costs. This is the cost of setting up a company, payment of state tax and services for processing the application in Malta (one-time non-refundable application processing fee is 3.5 thousand euros). Cash investments will be needed to purchase equipment and software to run and support the business. An annual mandatory payment to the regulator is provided, equivalent to a share of 0.0002 of the total assets.

  • A required condition for acquiring a license to use electronic money in Malta is the presence of a real physical head office on the territory of the Republic.
  • The management structure of the payment company must have at least two directors resident in Malta, an auditor and a secretary. Top managers must have the needed training and practical knowledge in finance, as well as an impeccable reputation. To confirm this, Due Diligence of key persons and major shareholders is conducted.
  • The licensee must organize a control system within the company (Customer identification procedures, regulation of operational risks).

Obligations of public companies with a Small electronic money institution license in Malta  include annual reporting.

Initial capital requirement

Small SEMIs are defined as companies headquartered in a country that issue electronic money.

The total amount of earnings from the providing of their services cannot exceed 2 million EUR. Officials must provide a certificate stating that they have not been convicted of crimes and are not involved in the financing of illegal activities.

In cases where SEMI companies make a profit of EUR 1 million, the minimum authorized capital (which is equal to the minimum account balance) is EUR 50,000.

Documents, that needs to get SEMI license in Malta 

Be prepared to provide an impressive list of legal papers in order to successfully obtain a license:

  • Operations program;
  • Copies of the memorandum and charter of the firm or partnership agreement;
  • Audited financial statements;
  • Business plan with the structure, organization and administration system of the firm;
  • Explanation of the internal control system;
  • Asset conservation measures;
  • Data on all directors, controllers and managers of the company;
  • Info about shareholders and partners;
  • Information about the persons who will manage the company;
  • The official status of the company and the address of its head office.

Licensing procedure

The process for obtaining an Small e-money license in Malta includes:

  1. A meeting with the MFSA is arranged before the request is submitted.
  2. If necessary, additional preliminary request details may be submitted for review and comment.
  3. The applicant submits a completed questionnaire together with supporting documents.
  4. MFSA confirms the receipt of the request within 3 working days from the moment of receipt of the application.
  5. Within 10 working days after receiving the application, the MFPD informs the applicant about the status of the application – whether it contains all the necessary info.
  6. After receiving all the needed papers, the body proceeds to the evaluation stage. The MFSA informs the Applicant about the assessment phase, which usually lasts three months.
  7. The application will be officially approved or rejected within 3 months of receiving the complete application. If the Authorized Body doesn’t approve application within this period, it will be considered a refusal.

On average, the entire licensing procedure, including preparation time, can take 4-6 months.

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