Maltese Companies/Gaming Licence in Malta
Maltese companies provide one of effective solution as a EU based company. Malta's competitive tax system and extensive network of Double Taxation Agreements make it an increasingly popular business vehicle for companies from all over the world.
- private limited liability company; and
- public limited liability company.
A private company must have, at least, 2 shareholders who may be individuals or corporate.
A Maltese company must have a registered office situated in Malta. We can provide registered office facilities in Malta.
Besides incorporation services, we provide resident directorship and professional management services for companies under our administration, subject to the satisfaction of certain conditions. Furthermore, We also offer the service of liaising with all local authorities, procuring local secretarial services, and coordinating all statutory accounting and filing requirements.
The Company Secretary of a Malta company is responsible for the Company Register, to keep all minutes of meetings of the Company's members and directors, and to file all documentation with the Registry of Companies as required by law. In line with the customary practice, and also in order to be able to provide the information required in an Annual Return, the company secretary also keeps the register of applications and allotments of shares, the register of pledges on shares, the register of directors, the register of company secretary.
The length of time to incorporate depends on the type of company involved and on the timely submission of all information and documentation to our offices.
The company rate of tax is a flat-rate of 35% on the chargeable profits based on the audited accounts of the company. However, a system of tax refunds granted to shareholders provides significant fiscal benefits, reducing Malta tax in the hands of shareholders to 0% in the case of holding companies, and 5% in the case of trading companies. In either case, there are specific legal requirements that must be satisfied in order for shareholders to benefit from such refunds. Licensed shipping organisations which own or operate tonnage tax ships are exempt from taxes in Malta.
GAMING LICENCE IN MALTA
Remote Gaming in Malta
In the past five years Malta has successfully established itself as a leading, well-regulated European remote gaming jurisdiction and is estimated to host around 10% of the world’s on line gaming companies. The Government of Malta had revised and consolidated its gaming legislation by enacting a new comprehensive gaming law and setting up the Malta Lotteries and Gaming Authority (LGA). The Malta Lotteries and Gaming Authority has revised the regulations so that gaming activities including online casinos, casino-style games, online poker, betting exchanges and lotteries could be allowed after an application is submitted and a licence is granted.
Jurisdictions such as Gibraltar, Alderney and the Isle of Man are other popular jurisdictions that offer licensing for remote gaming operations, however, Malta is the only jurisdiction that is an EU member state and therefore offers the possibility of “free movement of goods and services” within the EU market.
Our Firm offers a “one-stop-shop” service to Online Gaming Operators by assisting Clients in setting up or re-locating their Gaming Operations to Malta. We assist clients in submitting and pursuing a Gaming License application to the Malta LGA. We realise that clients have individual requirements and it is our policy to provide a service that is tailor made to each Client.
The Malta Remote Gaming Regulations came into force on the 20th April 2004. The new Regulations are established under the main Act as Other Games by Means of Distance Communication.
- Technology Neutral – Apply to all types of technologies (internet, mobile, telephone, fax and game devices).
- Game Neutral – Apply to all types of games (Betting, P2P, Online Casino, Community Games, Leagues, etc.)
- Future Proof (as much as practicable).
- Shift from regulating games to regulating the means of carrying out gaming.
- Establishes a safe environment for players.
- Gives operators a competitive edge.
Gambling Licence in Malta
In order to get a gambling license in Malta, you will need to do the following:
- Set up a company and apply for a licence
- Pass the inspection by the Maltese Lotteries and Gaming Authority (LGA)
- Deploy the system
- Maintain your licence
Incorporation of a Maltese Company and Application for a Gambling Licence
The initial cost of setting up a Maltese company in order to apply for an online gaming licence will amount to around Euro 5,550, which includes:
- Malta Financial Services Authority (MFSA) registration fee,
- Drafting of Memorandum & Article,
- Obtaining of Stamp Duty Exemption,
- Combined register and share certificates
- Obtaining of VAT registration
- Company secretary
- Nominee shareholders
- Registered office in Malta
The application for the gambling license will cost an initial Euro 2,330. This application fee is not refundable should the application fail to be accepted.
After you gather all necessary documentation and information, our law firm can file the application within two weeks. The application will take around 1 1/2 months to be processed, and then you will be given a six-month period to establish the business in Malta, conclude all necessary agreements and carry out the necessary testing of the set-up. After this six-month period, LGA will issue a formal licence after the compliance certificate is obtained, which normally takes two weeks.
Classes of Remote Gaming Licences
Remote Gaming Regulations are based on a principle that any concept using a means of electronic communication in which, one or more players pay to participate to win a prize, is licensable. The Remote Gaming Regulations categorises these concepts under four different types of Classes of Licenses, which are:
Class 1 Remote Gaming Licence – applies for operators that offer games which are based on repetitive events and the gaming risk is managed by the operator. This type of license covers casino table style games, lotteries and slots. Since the licensee bears the full risk of the gaming activities conducted, the winnings are therefore guaranteed by it.
Class 1 on 4 Remote Gaming Licence - an online gaming license for all types of games of chance and games of skill, operating on an existing Class 4 licensee.
Class 2 Remote Gaming Licence – the license covers operators who manage risk based on a singular event using markets. This license covers the traditional fixed odds betting and some forms of pool betting.
Class 3 Remote Gaming Licence – applies for operators that organise player to player games, but they do not partake in the risk and receive only a commission. This license is suitable for betting exchange providers, pools and poker rooms.
Class 3 on 4 Remote Gaming Licence - a licence to promote and assist gaming from Malta. For operators who promote or assist gaming from Malta on an existing Class 4 licensee.
Class 4 Remote Gaming Licence – applies to software vendors, who intend to host and manage remote gaming operators having any class of the above. They cannot partake in the gaming risk and can only receive a commission.
Once an application is submitted and the LGA find the application to be in order, a Malta Company is incorporated and a temporary gaming license is issued in the name of the Maltese Company. This process takes approximately 6 to 8 weeks. At this stage, applicant may commence their operations and would then have 6 months to obtain a certification of compliance, to then be issued with the official gaming license.
Malta Gaming Licence: Application Procedure
Prior to granting a remote gaming licence, the Malta Lotteries and Gaming Authority applies an application process that is made up of 3 Stages.
The business plan should outline the following:
- The objectives of the operation;
- Structure of the company: business functions and human resources including risk managers, odds compiler, financial officers, etc.;
- The nature of games to be offered: betting, pool betting, betting exchange, casino, poker, leagues, etc.;
- The technologies to be used for remote gaming: Internet, telephone, fax, mobile, etc.;
- An overview of the software to be used as gaming and control systems;
- A three-year business plan including: marketing and sales plan; forecast balance sheets; financing plan showing sources of finance.
The following information and documents relating to each shareholder and key management personnel need to be submitted to the LGA:
- Passport copy
- Birth certificate
- Passport size photo
- Certificate of Good Character, issued by a law enforcing authority in the country of origin of the applicant
- Statement of Affairs
- Financial references including a professional recommendation.
- Resume / CV
- Existing Gaming Licence (if applicable).
Under normal circumstances, the first stage is completed within 3 to 4 weeks.
Stage 2 - After successfully completing Stage 1, the LGA willl inform the Applicant to proceed to Stage 2. At this stage, the following documents are to be submitted to the LGA:
- Incorporation Documents – A Maltese Company Registration Certificate, Memorandum and Articles of Association and the LGA’s Business Entity Information Form.
- Operational Manual outlining the application & system structural design of the gaming and control systems, the software developer, security and control procedures, back-up and disaster recovery procedures, and the rules, terms, conditions and procedures of the games, including online text.
- The Payment methods, payment system/s and its provider/s.
- Agreements with business partners, affiliates and/or agents.
- The second stage is generally completed within 3 to 4 weeks, provided that correct and complete information is submitted to the LGA.
Stage 3 – After successfully completing Stage 2, a temporary licence to operate remote gaming is granted to the Malta Company with the intent of obtaining certification of compliance for the operation based on the standard ISO / IEC17799:2000 within six months. In additional to the necessary certification, the applicant must appoint a Key Official within 21 days of issuance of the Letter of Intent, conclude necessary testing and all the required agreements in respect of the hosting of servers, associated equipment as well as the office lease agreement. Once completed, the Applicant is issued with the official gaming license.
The licence is issued for a period of five years.
Each year, you will have to pay:
- A 5% income tax
- An Euro 83,844 Gaming Tax (Euro 8,987 monthly)
- A server hosting fee (in Malta) of Euro 4,200
- A key official fee of Euro 10,200
- Fees for a Maltese office, secretary, and two shareholders, amounting to Euro 2,700
- An annual license fee of Euro 7,000
Requirements for Certification:
- Server protocols, communication protocols and specifications which are part of the gaming system structure;
- Gaming risk management procedures;
- IT security risk management procedures and internal control of the system;
- Modules that affect processes, rules and parameters of the game if the source code is changed;
- Detailed description of the set-up and functionality of the application structure and system architecture.
- System of internal controls, administrative and accounting procedures for the conduct of a remote gaming office;
- Technically this includes all the subcomponents of the system where the player is in the “secure area” and login module.
- The RNG is part of the control system.
- The applicant is required to submit a written document outlining the control system functionality and specifications for the approval by the LGA including updates if any changes have been carried out.
The control system must be located in Malta and a Gaming Licence is granted once the control system has been issued the certification of compliance.
- A system by which remote gaming is conducted, and shall include all its associated components, its operating systems and application software;
- Technically this includes all the sub components of the system that provide the games, including gaming devices where applicable.
Gaming Tax & Licence Fees
Licensing fee applicable by the Malta Gaming Commission (Lotteries and Gaming Authority):
- Processing fee (non-refundable) in respect of an application – Euro 2,330
- Annual licence fee in respect of class 1, class 2 and class 3 – Euro 7,000 per class / licence. The annual licence fee for class 4 is nil for the first 6 months, Euro 2,300 per month for the next 6 months (month 7 to 12) and Euro 4,600 from month 13 onwards.
- The annual licence fee is to be paid within fifteen days from the formal granting of licence and repeated annually accordingly.
Gaming tax applicable by the Malta Lotteries & Gaming Authority:
- Gaming Tax for Class 1 (online gaming) - Standalone is Euro 7,000 per month. Gaming Tax for Class 1 on 4 is Euro 1,200 per month.
- Gaming Tax for Class 2 (online betting) - A sum equivalent to half of 1% (0.5%) on the gross amount of bets accepted in online betting operations.
- Gaming Tax for Class 3 is 5% on net income which is defined as the net revenue less direct costs: bonuses, commissions and payment processing fees (ecommerce fees)
- The Gaming Tax for Class 4 – no gaming tax (inherits tax of its sub-licensees).
- In the case of Classes 2, 3 and 4 licences, the total maximum amount of tax payable per annum by one licensee in respect of any one licence shall not exceed Euro 466,000. In the case of Class 3 on 4, tax will be paid proportionately depending on the number of licensees operating on the Class 4 gaming platform.
Key Official Requirement and Support
A Key Official would need to be appointed within 21 days from issue of the Letter of Intent.
Following find a list of responsibilities that need to be adhered to by the Companies' Key Official:
- System review / Certification of compliance.
- Sealing of Servers and also responsible to make sure seals are not broken, and if broken, must be reported to the LGA and re-sealed.
- Incident reports - the LGA is to be advised in respect of any changes made to either the hardware or software of the company, by signing and submitting the Incident reports.
- Keeping the LGA updated in respect of any changes to be made, to the set-up approved by LGA.
- Submission of monthly gaming tax and annual gaming licence fee.
- Submission of the Company's Accounts / Audit.
- Ensuring players' funds are adequately held by the Company at all times.
- Data Protection.
- NSO - National Statistics.
- Key Official is to have access to the back-end system.
Further, the Key Official together with the Management of the Company needs to ensure that the Company is operating in line with the following Malta regulations:
- Companies Act, 1995
- Data Protection Act, 2001
- Electronic Commerce Act, 2001
- Electronic Communications (Regulation) Act, 1997
- Income Tax Act, 1948
- Income Tax Management Act, 1994
- Lotteries and other games Act, 2001 as amended (Remote Gaming Regulations)
- Prevention of Money Laundering Act, 1994
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