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Malta Cryptocurrency License

Inteliumlaw » Crypto licenses » Malta Cryptocurrency License

Malta has become a magnet for cryptocurrency and blockchain. Studies show its market’s revenue might reach US$6.3 million in 2024. Additionally, it will continue growing at a rapid CAGR of 9.05% until 2028. These figures alone are a sign virtual money has come to stay in this country. 


However, before your business uses digital money in Malta, it must first get a Malta crypto license. Here is all you need to know about it.

Malta's Virtual Money Regulations

In 2018, the Malta Blockchain Acts were introduced. These acts set rules for blockchain, cryptocurrencies, and distributed ledgers. These bills are:

The Virtual Financial Assets Act

This law ensures that virtual money and tokens are traded correctly. It also has rules for Initial Coin Offerings and ensures that virtual money and exchange provider services follow the law.

The Innovative Technology Arrangements and Services Act

This law manages the registration and function of ITAs. These include blockchain platforms and services. It accepts smart contracts and provides a safe place to test new technologies and services.

The Malta Digital Innovation Authority Act

The MDIA, established by this act, enforces rules for DLT platforms and services. It certifies DLT platforms and auditors to ensure regulatory compliance.

Benefits of Obtaining a License in Malta

Regulatory Certainty

The VFA regulations have clear guidelines and requirements. They give businesses certainty and cut risks in the sector.

Access to the European Market

As an EU member, the country gives Malta cryptocurrency license holders access to the European Single Market. This allows them to offer services to EU customers through their passports.

Investor Confidence

An operating license from them signals to investors that a company operates in a regulated place. It ensures investor protection and market integrity.

Legal Compliance

By following the regulations set by the Maltese government, you avoid potential legal troubles such as fines or penalties. This protects your business from financial losses and builds trust with customers, partners, and investors. Compliance also helps your business access new markets or partner with other companies.

Flexible

Their VFA regulations are flexible, accommodating diverse business models in the blockchain sector.

Supportive Ecosystem

It supports digital tokens and blockchain businesses. It offers access to skilled talent, networking, and specialized legal and financial advice.

Possible Activities Under a Virtual Money License in Malta

With a Malta cryptocurrency license, businesses can do lots of things involving virtual money and blockchain technology, such as:

Requirements for Obtaining a Virtual Money License in Malta

To get a Malta crypto exchange license, there are a few steps you need to follow, such as:

Procedure and Duration for Obtaining a Cryptocurrency License in Malta

While it usually takes several months, the MFSA aims for efficient processing for companies seeking a Malta crypto license. InteliumLaw can help you get this license. The process involves these steps:

Tax Implications

General tax rates in Malta are as follows:

The tax implications and social security contributions (SSC) of a Malta cryptocurrency license vary but some general considerations apply:

Corporate Tax

Malta has a 35% corporate tax rate. But, companies, especially those in virtual money trading, may qualify for effectively lower rates in case of the correct corporate and tax structuring.

Value Added Tax (VAT)

Virtual money services are ‌VAT-exempt. But, VAT on virtual money transactions is based on EU directives and local rules.

Capital Gains Tax

Depending on factors like the holding period and transaction nature, profits from virtual money sales may face capital gains tax.

Withholding Tax

Malta doesn't take any tax money directly from dividends, interest, or royalties for entities/individuals outside of Malta. Exceptions apply.

Licensing fees and AML/CFT Levy

Licensed entities may face annual licensing fees and levies from the MFSA. It funds AML/CFT supervision and enforcement.

Tax Residency

A virtual money business's tax residency in Malta can affect its tax liability. It affects treaty coverage and foreign tax credit availability.

FAQ

What’s the validity period of a Malta crypto exchange license, and what’s required for its upkeep?

Crypto license Malta last one year and need annual renewal. To keep the license, businesses must meet regulatory obligations like сompliance reporting, AML/CFT measures, security standards, operational requirements.

Can Maltese companies engage in virtual money activities without contacting the local tax authority?

No. They should reach out to the local tax authority. These help to ensure compliance with tax laws. Seeking guidance can help navigate complexities. These include corporate tax, VAT, and the Malta crypto exchange license cost.

Are there any difficulties in obtaining a crypto license in Malta?

It is not so difficult to obtain a permit in Malta, if you are prepared. Firstly you need to get approval from the MFSA. They check your business plan and if you comply with the laws. They also require strong AML/CFT measures and proof of security and operational abilities. InteliumLaw will give you professional guidance and help you prepare for the process.

Do I need a physical office to get the Maltese crypto license?

Yes, a physical office is usually required for obtaining a crypto license Malta. The MFSA expects applicants to have local office space and staff. This shows a commitment to doing business in Malta. Requirements may vary by license type and business activities. So, it's best to consult legal and regulatory experts like IntelimLaw, who know Maltese crypto laws, for tailored guidance.

Can a legal entity become a shareholder?

Yes, an individual or company can own part of a business in Malta. But, the rules might change depending on what kind of corporation or individual wants to own part of the business. InteliumLaw can help you with crypto company formation in Malta.

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