Insights

Malta: A Strategic Jurisdiction for Payment and E-Money Institutions

By Dr Kelly Fenech, Advocate – GKF Legal

Malta has established itself as one of Europe’s most attractive jurisdictions for the licensing of payment institutions (PIs) and electronic money institutions (EMIs). Its combination of regulatory clarity, competitive tax structures, and full access to the European Union’s Single Market makes it a preferred choice for firms seeking to offer cross-border financial services.

Why Malta?

EU Passporting and Market Access

A licence issued by the Malta Financial Services Authority (MFSA) can be passported across all EU and EEA states. This allows Maltese-authorised PIs and EMIs to operate seamlessly throughout Europe. For firms based outside the EU, particularly those in the UK following Brexit, Malta has emerged as a strategic entry point into the European payments ecosystem.

Proactive and Transparent Regulation

The MFSA has developed a reputation for being both approachable and rigorous. Applicants benefit from clear regulatory expectations, a transparent process, and supervisory engagement designed to ensure sound governance and compliance without stifling innovation.

Financial Infrastructure

Malta enjoys access to European payment clearing systems, reducing reliance on correspondent banking relationships and providing direct settlement channels. This ensures operational efficiency and stronger resilience in cross-border transactions.

Skilled Workforce and Business Ecosystem

English is an official language of Malta, simplifying both legal and business operations. The island also boasts a skilled workforce, particularly in financial services, law, risk, and compliance. Combined with a supportive ecosystem of advisers and service providers, this environment is highly conducive to the establishment and growth of payment firms.

Tax Efficiency

Malta operates a corporate tax refund system which often results in effective tax rates of 5% for international shareholders. This makes it one of the most tax-efficient EU-compliant jurisdictions for payments and e-money businesses.

Licensing of Payment and E-Money Institutions

The MFSA authorises two categories of institutions:

  • Payment Institutions (PIs) – authorised to provide services such as money remittance, execution of payment transactions, issuing of payment instruments, and acquiring of payment transactions.
  • Electronic Money Institutions (EMIs) – authorised to issue electronic money and provide payment services linked to e-money accounts.

Both types of licence benefit from EU passporting rights and are subject to prudential and governance requirements under the EU Payment Services Directive (PSD2) and Electronic Money Directive.

The MFSA Licensing Process

The licensing process for PIs and EMIs involves three main phases:

  1. Preparation and Application


Applicants are encouraged to meet the MFSA at an early stage. A formal application, including business plans, governance structures and compliance frameworks, is then submitted. Fit and proper assessments of shareholders, directors and key function holders are conducted at this stage.

  1. Approval in Principle


Following a successful review of the application, the MFSA may issue an “approval in principle.” At this stage, the applicant must resolve any outstanding matters, such as incorporating the entity and finalising documentation.

  1. Post-Licensing Requirements


Before commencing operations, institutions must satisfy any additional conditions imposed by the MFSA, which may include operational readiness testing and confirmation of internal systems. Once completed, the licence holder may formally launch its services.

Regulatory Requirements

Applicants must demonstrate:

  • Fit and Proper Standards – shareholders and directors must meet high standards of integrity, competence and financial soundness.
  • Local Substance – institutions are expected to maintain a presence in Malta, including offices and locally resident directors.
  • Governance and Key Function Holders – institutions must appoint key officers such as a Compliance Officer, MLRO, and Risk Officer.
  • Safeguarding of Client Funds – firms are required to segregate client money from company funds.
  • Capital Requirements – minimum initial capital varies depending on the services provided, in line with EU directives.

Why Malta Stands Out

The jurisdiction’s strengths include:

  • EU passporting rights across all 27 Member States
  • A transparent, approachable regulator in the MFSA
  • Competitive and EU-compliant tax structures
  • A skilled, English-speaking workforce
  • A supportive payments and fintech ecosystem

These factors position Malta as a leading jurisdiction for firms looking to establish payment or e-money services in Europe.

How GKF Legal Can Assist

At GKF Legal, we provide end-to-end legal and regulatory support for payment and e-money institutions. Our services include:

  • Advising on corporate structuring and incorporation
  • Preparation and submission of licensing applications
  • Drafting governance and compliance frameworks
  • AML/CFT advisory and regulatory reporting
  • Ongoing legal and corporate governance support

We combine deep legal expertise with practical knowledge of the MFSA’s processes to guide clients efficiently through licensing and ongoing compliance.

Conclusion

Malta offers a compelling blend of regulatory certainty, market access and operational efficiency. For payment and e-money institutions seeking to establish a strong European presence, it is more than a gateway – it is a strategic platform for long-term growth.

At GKF Legal, we stand ready to support your organisation through the licensing journey, ensuring both compliance and commercial success.

Dr Kelly Fenech is a Founding Partner in GKF Legal’s Financial Services Practice, specialising in EU payments law. The views expressed are his own and do not constitute legal advice.