Malta Online Jurisdiction
In the light of Malta’s geo-political heritage, ranging from its size, geographical location, recent independence following centuries of colonial rule, the relationship with neighboring Mediterranean states and more recently Membership in the EU, Malta has developed a foreign policy in line with this context focusing on solidarity, respect for democracy, the rule of law and human rights, a humanitarian approach and a propensity to giving. With Malta’s accession to the EU, Malta has entered a new environment with new challenges which require different approaches. Membership with the EU provides Malta with the tools to influence decision-making in European policies including common foreign policy hence enabling Malta to strengthen its relevance and weight on the international fora.
Malta has a stable economy and political environment. It also has dedicated legislation, real tax efficiency, and a modern legal and business climate. Malta’s financial market is sound and open to foreign competition. The overall freedom to start and operate a business here is relatively well protected by the national regulatory environment.
Malta has enacted a fiscal and legislative framework with specific emphasis on sectors such as e-commerce, e-gaming, and banking. In May of 2004, Malta officially became a member of the European Union (EU). This is beneficial to international companies because this allows any Maltese-registered company to freely trade under the “passport” system; any license issued by the Maltese government is automatically recognized in the other EU member states.
In Malta, a Private Limited Company can be established and managed. The set up of a Maltese Company, all in compliance with EU regulations, offers substantial tax incentives and other advantages to shareholders. In addition, this entity offers complete anonymity.
There are few requirements for the establishment of a Maltese Private Limited Company. A Maltese Company can perform any kind of activity, be it trading, holding, or investments.
Malta Online Gambling Licensing
Malta offers the E-Gaming Industry a package that few other jurisdictions can match. The Remote Gaming Regulations issued in early 2004 by the Lotteries and Gaming Authority continue to enhance on the existing rules and further enhances Malta’s reputation as a jurisdiction to be trusted by both players and operators.
The Authority will grant licenses to operate gaming offices to such persons who have demonstrated “appropriate business ability to conduct the betting office successfully”.
The new Remote Gambling regulations extend the licensing regime to cover general gaming, betting, betting exchanges, and casino platforms. Four types of licenses are available:
Class 1 – Casino Style Games, Lotteries and Slots;
Class 2 – Sports betting;
Class 3 – P2P, Betting Exchanges, Skins, Tournaments and Bingo;
Class 4 - Software vendors taking commission on wagers.
A license of any class is granted for the period of five years and may be renewed thereafter for periods of five years.
Licensing Requirements
Obtaining a gaming licence in Malta is a serious affair and in the interest of the consumers and the local reputation, the Authority would require to know that the applicant can meet the licence obligations. The licensing procedure is quite extensive but thanks to the professionalism of the persons involved, this procedure should not take more than 5 to 6 weeks.
The application for a gaming licence requires the following documentation:
- Detailed profile of the promoting company
- A copy of the last audited accounts of the promoting company, where applicable
- A business plan indicating the economic activity – including job creation if any – which will be carried out from Malta
- A plan of the premises earmarked for adoption as a call centre.
- Personal details of all shareholders having more than 5% interest in the local operations.
Basic Requirements
Both hardware and software involved in the operations must be located in Malta, and there exist companies that can provide this service without the need for the licensee to obtain its own premises.
The activities of the International Trading Company are limited to those carried outside Malta. No Maltese resident is permitted to place bets with such a company.
License Fees & Taxation
As stated above, Malta gambling license is issued by LGA for a period of 5 years with a renewal opportunity.
The license fees are established by the new regulations for any class of a license as follows:
- The application fee for a new license of any classis Lm1, 000 (approximately €2, 300). This fee is payable together with the submission of an application for the license. The fee for the license renewal (for subsequent five-year period) is Lm500 (approximately €1, 150).
- The annual license fee, for any class of license, is Lm3, 000 (approximately €6, 900).
Gaming tax depends on the license class and type of games offered:
- On casino-type games: €4, 600 per month during the first six months after issue of the full license and subsequently €6, 900 per month for the entire duration of the license period. However, if a casino operator (under Class 1 license) operates from the host platform (under class 4 license) the following taxation apply:
- The gaming tax payable by casino operator is €1, 150 per month.
- The gaming tax payable by the host platform is as follows:
- no gaming tax for the forts six months of operation;
- €2, 300 per month for the subsequent six months; and
- subsequently, €4, 600 monthly for the entire duration of the license.
- On betting: 0,5% on the gross amount of bets accepted.
- On pool betting: 0,5% on the aggregate of stakes paid.
- On betting exchanges and generally on person-to-person games: 5% of the gross earnings (commissions/rake) after deducting bonuses to players, financial transactions costs, and affiliate payments.
Tax Capping
The maximum gaming tax payable annually by a licensee in respect of any license class is €460, 000. However, in case where casino operators (under Class 1) operate from the host platform (under Class 4 license), the cap tax is applicable to the total tax payable by all licensees in this cluster together. In other words, in this case the cap tax is reached when the sum of tax payable by all casino operators licensed under Class 1 and their common host platform reaches €460, 000.
| Class 1 | Class 2 | Class 3 | Class 4 | ||
|---|---|---|---|---|---|
| License Fee | €6, 900 per year | €6, 900 per year | €6, 900 per year | €6, 900 per year | |
| Gaming Tax | Under Class 4 sublicense: €1, 150 per month |
Standalone: 1st six months at €4, 600 per month €6, 900 per month for the entire duration of the license |
0.5% On gross amount of stakes accepted |
5% on net income | No Gaming Tax (Inherits tax of its sublicenses) |
| Tax Capping | Maximum gaming tax payable in respect of any License class is €466,000 | ||||
Corporate Tax
Corporate tax for companies in Malta is 35% on profit. However, shareholders of Malta-registered companies may apply for refund amounting to six-seventh of the tax paid by the company. For shareholders non-resident in Malta, for tax purposes, this means that the effective rate of tax is 5% on profit.
Trusts
Although Malta is essentially a civil law jurisdiction, the legislator hasintroduced the concept of Trusts over time. Trusts were originally limitedly available to non residents with very advantageous benefits and it is only since 2004 that the setting up of trusts in Malta has been made available to both residents and non-residents. Today the Trusts are regulated by the Trusts and Trustees Act.
A trust is an obligation which binds a person or persons (called the trustee) to deal with property of which the trustee is deemed to be the legal owner (called the trust property) for the benefit of persons (called the beneficiaries) or for a charitable purpose in accordance with the terms of the trust.
In terms of Maltese law, a trust is an example of a fiduciary relationship between the Settlor and the Trustee whereby the settlor transfers his property to the trustee who shall act in terms of the trust deed. Due to this fiduciary nature of trusts, a trustee must be licensed to act as such in terms of the Trusts and Trustees Act except in certain limited cases provided by law.
1. Chetcuti Cauchi Advocates
Britannia House
Melita Street
Valletta VLT 1122
Malta
Phone: +356 22056200
Fax: +356 22056201
Website: www.cc-advocates.com
Main Contact: Dr Jean-Philippe Chetcuti
2. Zammit & Associates - Malta Advocates
The Penthouse, Tower Business Centre
Tower Street
Swatar BKR 3013
Malta
Phone: +356 2557 2300
Fax: +356 2557 2310
Website: www.zammit-law.com
Main Contact: Dr Andrew J. Zammit
3. Mifsud & Mifsud Advocates
123 Melita Street
Valletta VLT 1123
Malta
Phone: +356 27237172
Fax: +356 27237314
Email: info@mifsudadvocates.com.mt
Website: www.mifsudadvocates.com.mt
4. EMD Advocates
Vaults 13 - 15
Valletta Waterfront
Valletta FRN 1913
Malta
Phone: +356 21 233005
Fax: +356 21 237277
Website: www.emd.com.mt
Main Contact: tellul@emd.com.mt
5. CSB Group
The Penthouse,
Tower Business Centre
Tower Street
Swatar BKR 3013
Malta
Phone: +356 2557 2557
Fax: +356 2557 2558
Website: www.csbgroup.com
Main Contact: Mr. Michael Zammit (iGaming@csbgroup.com)
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