by MK Malta28th June 20230 comments

Malta Permanent Residence Programme (MPRP)

Another residency-by-investment programme is the Malta Permanent Residence Programme (MPRP). This programme allows third-country nationals to obtain permanent residency in Malta, also based on investments in property and government contributions.

The MPRP offers many benefits to its beneficiaries, including the right to settle in Malta, stay and reside permanently in Malta, visa-free travel across Schengen for 90 out of 180 days, and the ability to penetrate Malta’s affordable real estate market.

Who is eligible for the MPRP? Third country nationals, non-EU, non-EEA, and non-Swiss. Additionally, applicants may include up to four generations in an application.

Very similarly to the Maltese Citizenship by Naturalisation for Exceptional Services by Direct Investment, Investors who obtain permanent residency in Malta via the MPRP programme enjoy many perks. These include living in the country and visiting the Schengen Area for 90 days within 180 days, the possibility to register a company in Malta, or find a job, as well as becoming a tax resident of the country. The permanent residence card for adult applicants is valid for five years, and a minor applicant renews the card a month after turning 14 or 18 years old.

Benefits of the Malta Permanent Residence Programme (MPRP) scheme:

Citizenship for close family members;
Visa-free travel;
High standard of living;
Tax benefits;
Business and employment opportunities;
Access to EU markets.

Want to become a Permanent Resident in Malta?

Get in touch with one of our experts for a free consultation on obtaining Permanent Residency in Malta through the MPRP.

by MK Malta27th June 20230 comments

Naturalisation by Direct Investment

The Maltese Citizenship by Naturalisation for Exceptional Services by Direct Investment programme permits foreign individuals and their families to obtain Maltese citizenship by contributing to Malta’s economic development.

Precisely, this scheme requires a minimum investment of €690,000. However, such an investment can be effected in several forms. Including a contribution to the National Development and Social Fund

and the purchase of a residential property worth at least €700,000 in Malta, which must be held for a minimum of five years. Furthermore, eligibility for the programme necessitates investors to prove their 12 or 36 months of residency in Malta.

Overall, qualifying investments for the Maltese Citizenship by Direct Investments scheme vary between €700,000 and €1,460,000. Regarding actual residency in the country, direct investors are required to live in Malta for a period of 1 or 3 years at a time, depending on the investment amount. The timeframe for receiving citizenship by naturalisation for exceptional services by direct investment varies, however MK Malta has a timely track record with its current and past clients.

Regarding family members, investors who obtain citizenship of Malta by naturalisation for exceptional services by direct investment can append close family members in their application. This includes their spouse or registered partner, and their principally-dependent children up to 29 years old, including those from previous marriages.

Want to become a Maltese Citizen?

Get in touch with one of our experts for a free consultation on obtaining Maltese Citizenship by Naturalisation.

There are a multitude of perks and privileges.

Firstly, this scheme includes full European Union (EU) benefits, including Schengen borderless travel and a United States visa waiver. In reality, investors acquire visa-free travel to more than 180 countries. Secondly, there is the immense advantage of Malta’s favourable tax system, such as the exclusions of inheritance tax, wealth tax, and tax on worldwide income for non-domiciled investors. Third, Malta’s strategic location in the Mediterranean and a highly skilled workforce make it a hub for international business, thus facilitating inter-jurisdiction business activities. Closely linked to this, is the access to the EU’s single market, since Malta is a member of the EU. Furthermore, Malta offers a high standard of living with excellent healthcare, education, connectivity, and infrastructure compared to other islands and small states, and even larger countries.

Finally, only official representatives licensed by the Government of Malta can apply on behalf of clients MK Malta has numerous experts in Residency Programmes, some of which are officially authorised and licensed as required.

Benefits of the Maltese Citizenship by Naturalisation for Exceptional Services by Direct Investment Scheme

Citizenship for close family members;
Visa-free travel;
High standard of living;
Tax benefits;
Business opportunities;
Access to EU markets.

by MK Malta27th June 20230 comments

Key Employee Initiative (KEI)

The Key Employee Initiative (KEI) is a scheme that offers a fast-tracked work and residence permit to highly-specialised third-country nationals seeking employment in Malta. Furthermore, the scheme is applicable to managerial or highly-technical posts that depend upon relevant qualifications or adequate experience related to the job being offered

Persons who wish to apply for this scheme have to provide relevant information to numerous authorities and government entities, such as the Expatriates Unit and Identity Malta. This is done in order to confirm applicants’ eligibility conditions, including an annual gross salary, and certified copies of relevant qualifications, warrants, or necessary work experience.

Subsequently, employers also need to be involved in the process of the KEI. This is done so that single permit applications based on the KEI are processed on a fast-track basis to ensure that third-country nationals applying for managerial or highly-technical posts with Maltese companies may commence their employment as soon as possible. Further to this, the process reduces the time and resources required to find suitable candidates for highly-technical or managerial positions.

Looking to employee a third-country national?

MK Services can assist you in applying for a Maltese Work Permit under the Key Employee Initiative.

by MK Malta17th March 20230 comments

Aviation Services

As a subsidiary of a large and well-established international law firm, MK is able to offer legal services to clients in Malta in various specialised fields.

by Joseph Zammit1st July 20210 comments

Malta iGaming Licence (B2C)

GAME TYPES

A Malta i-Gaming B2C licence can be obtained with one or more game types as follows:

Type 1 – games of chance played against the house, the outcome of which is determined by a random number generator. This type includes casino type games such as roulette, blackjack, baccarat, poker played against the house, lotteries, secondary lotteries and virtual sports games.

Type 2 – games of chance played against the house, the outcome of which is not generated randomly but is determined by the result of an event or competition extraneous to a game of chance and where the operator manages his or her own risk by managing the odds offered to the player, typically a sportsbook.

Type 3 – games of chance not played against the house and wherein in the operator is not exposed to gaming risk, but generates revenue by taking commissions or other charges based on the stakes or the
prize. This type includes player versus player games such as poker, bingo, betting exchange, and other commission-based games.

Type 4 – skill games the outcome of which is determined by the use of skill alone or predominantly by the use of skill determined to be licensable by the MGA (therefore controlled skill games), principally fantasy sports.

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KEY REQUIREMENTS

All gambling activities in Malta are regulated by the Gaming Act of 2018 which grants power to the Malta Gaming Authority to issue licenses for both land-based and remote gambling activities. The Act consolidated all previous laws and regulations and provided for an overhaul in the licensing system reducing the various classification of licences to two: Business-to-Consumer (B2C) and Business-to-Business (B2B). The Gaming Authorisations Regulations, 2018 (subsidiary legislation 583.05) enacted under the Gaming Act mainly regulate the attainment of a licence in Malta. Specifically, a Business-to-Consumer licence also referred to as a Gaming Service Licence, allows the operator to offer, provide or operate games whereby players may participate.

The gaming operator must be a company incorporated in Malta or another EU country

No restrictions on the nationality of the ultimate beneficial owners of the company
Shareholders, directors and persons carrying out key functions must be approved by the MGA
Players’ funds must be kept separate from operations funds

Minimum share capital to be paid up:

B2C Type 1 or 2 – €100,000
B2C Type 3 or 4 – €40,000

For more information talk to one of our lawyers

Talk to our Lawyers

by Joseph Zammit1st July 20210 comments

Malta Recognition of Foreign Licence

MALTA

Malta’s strategy in i-gaming has been bold and unique. The legislator decided to focus on regulation and transparency, providing a strict approach to licensing and monitoring of gaming operations. This has resulted in optimum protection for players on the one hand, to providing a regulatory solution to operators on the other, thereby achieving a balance between two opposing needs: the suppliers and the customers.

Malta’s main advantage is the fact that it is an onshore jurisdiction and recognises iGaming licences issued in other EU/EEA jurisdictions in line with European Treaty principles. Maltese operators do not face the difficulties that offshore operators face with exchange controls, access to capital markets and access to e-wallets and payment gateways worldwide. In the case of Malta i-gaming licensees, players find comfort in knowing that they are dealing with an onshore jurisdiction whose legislation is in line with the applicable EU legislation and international agreements.

Malta has always remained at the forefront of advances in technologies that affect the gaming sector. In 2017, the Malta Gaming Authority (MGA) together with the stakeholders of the gaming industry embarked upon a mission to make gaming legislation future-proof and thus ensuring that the gaming laws would be kept up to speed with emerging and disruptive technologies such as virtual currencies and distributed ledger technologies.

Talk to our Lawyers

MALTA RECOGNITION OF FOREIGN LICENCE

The Malta Gaming Authority (MGA) recognises iGaming licences issued in other EU/EEA jurisdictions in line with European Treaty principles. Licensed companies are allowed to operate in Malta provided that they notify the MGA and obtain a recognition notice. The procedure is mainly regulated by the Malta Gaming Authorisations Regulations (a subsidiary legislation 583.05) issued under the Malta Gaming Act 2018.

Whilst the recognised licensee itself is not regulated by the MGA and the full rights and obligations emanating from the jurisdiction of where the licence was originally issued continue to apply, a recognised licence in Malta has the same effect as an authorisation issued by the MGA to provide a gaming service, gaming supply, key function, or any other authorisation in or from Malta. The recognition, therefore, legitimises the operations of the licensee in and from Malta

Talk to our Lawyers

KEY REQUIREMENTS

The following requirements need to be fulfilled for the successful recognition of a foreign licence in Malta:

the applicant has a licence issued in an EU or EEA member state;
the licence is operational;
the licence is in good standing;
the licence covers the games being offered by the applicant;
the applicant submits with the MGA an application for recognition accompanied by the required documentation;
and the first-year recognition notice fee is paid on submission of the application

For more information talk to one of our lawyers

Talk to our Lawyers

by Joseph Zammit24th June 20210 comments

Malta Yacht Registration

Malta Yacht Solutions

The Yachts team of consultants and lawyers have a passion for the yachting industry and are specialised in ownership solutions for superyachts, yacht registrations and tax optimisation of yacht ownership and enjoyment. The firm acts for major international pleasure yachts brands, superyacht brokers and yacht owners, assisting with all legalities of yacht ownership, freeing up time for better enjoyment of the vessel. At MK we provide solutions for superyachts, yacht registrations and tax optimisation of yacht ownership tailored for the client’s needs

Malta

The island nation of Malta has, since time immemorial, been wedded to the maritime sector. The geographic position of Malta in the centre of the Mediterranean Sea, at the borderline between North Africa and Europe and halfway between the straits of Gibraltar and Suez, has aided in making the country a natural interconnector and a hub for maritime activities. Yet, Malta offers more than a strategic location! Particularly, Malta is considered a world leader in the registration of pleasure yachts and super-yachts mainly due to logistical as well as legal advantages. The registry has maintained its positive reputation for its straightforward procedures for yacht registration, provisional registration of a pleasure yacht obtainable within one to three days. Whilst enjoying competitive registration and renewal fees, twenty-four hours, seven days a week service is guaranteed, utterly useful in emergency situations. Having English as an official language, and being part of the European Union, renders the Maltese registration both efficient and effective. Malta is a signatory to all major conventions issued by IMO, ILO and UN amongst others, and actively applies/implements EU and international regulations and directives.

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Malta Legal System

The Maltese legal system provides for various Yacht Registrations of any commercial yachts and is mainly regulated by the Merchant Shipping Act 1973 and subsidiary legislation enacted thereunder, which incorporates the majority of laws that regulate this sector. Based on Common Law, the Act has been amended several times to reflect changes in maritime trends, conventions and regulations.

Commercial yachts have also to follow the Malta Commercial Yacht Code 2015 requirements. Due consideration must also be given to international maritime conventions and regulations. On the regulatory side, Malta has a body of maritime laws that provide a solid, reputable and financier friendly environment, including:

the flexibility of catering for the needs of all types of vessels, from pleasure yachts to oil rigs, including vessels still under construction;
the absence of restrictions on the nationality of the master, officers and crew engaged on Malta-flagged vessels; and
a secure mortgage system, which has been great
accepted by banks and financial institutions, therefore, facilitating the attainment of finance for yacht purchases. Maltese law provides for executive/administrative powers that mortgagees may resort to over the mortgaged vessel and the possibility to sell the vessel privately (not through sale by auction) in cases of default. Additionally, special protection is afforded to mortgagees and privileged creditors in the context of bankruptcy or insolvency of the owner of the vessel in that vessels are granted a special status being separate and distinct assets within the estate of their owner. This status allows any arrest or enforcement against the vessel by mortgagees or privileged creditors of maritime claims to proceed irrespective of bankruptcy or insolvency proceedings.

Commercial yacht registrations are undertaken and administered by the Merchant Shipping Directorate within Transport Malta.

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Our Services

COMMERCIAL YACHT REGISTRATION

REQUIREMENTS

Type of Vessel

Vessels eligible for commercial registration need to have the following characteristics :

be of 15 metres in length or more;
be not more than 3000 gross tonnes; do not carry cargo or more than 12 passengers; and
are operated for commercial use. Malta commercial yachts are categorised into three distinct classes depending on the size and gross tonnage:
yachts less than 15 metres in length and not more than 24 metres (category 1);
superyachts of more than 24 metres in length and less than 500 gross tonnes (category 2); and • superyachts of more than 24 metres in length and 500 gross tonnes and over but less than 3000 gross tonnes (category3).

The Malta Commercial Yacht Code provides a level of safety standards corresponding to the yacht`s size and gross tonnage. Historical yachts may also be registered and, on a case by case basis, the registrar
may provide for particular arrangements in consideration of the impossibility of the vessel to comply with all the requirements of the Malta Commercial Yacht Code. The same flexibility is also afforded to
racing yachts during races.

Eligible Owners

Under Maltese law, the following persons can register a yacht in Malta without further requirements:

a Maltese person or entity;
any other EU, EEA or Swiss citizen resident in Malta.

The following persons are also eligible to register a yacht in Malta subject to the appointment of a resident agent, that is, a person who is habitually resident in Malta or a Maltese entity that will act as a
representative of the owner:

an EU, EEA citizen or Swiss citizens not resident in Malta; and/or
a foreign company as approved by the registrar

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PLEASURE YACHT REGISTRATION

ELIGIBILITY

Vessels

All types of vessels can be registered in Malta including oil rigs, platforms and barges. Hulls and vessels under construction can also be registered under the Malta flag.

Ownership

Under Maltese law, the following persons can register a yacht in Malta without further requirements:

a Maltese person or entity;
any other EU, EEA or Swiss citizen resident in Malta.

an EU, EEA or Swiss citizen not resident in Malta; and/or
a foreign company as approved by the registrar

Talk to our Lawyers

YACHT STRUCTURES

YACHT & ASSET PROTECTION STRUCTURES

Maltese law provides for the possibility of constituting different vehicles for asset protection including trusts, foundations, limited liability companies or partnerships. Each of these has different characteristics and may provide scaling levels of protection of assets. Undoubtedly, the most commonly used vehicle for asset segregation and protection is the limited liability company, generally classified as a holding company in that the company is set up for the purposes of owning assets rather than undertaking a trade. Essentially, holding companies are onshore flexible and tax-efficient entities set up to ring-fence assets from other trading or commercial risk and to provide ownership participation and enhanced asset control.

MARITIME COMMERCIAL AND TRADING STRUCTURES

Again for the purposes of undertaking trading activities through the commercial operation of yachts or for the provision of ancillary services thereto, various types of entities may be utilized under Maltese
law. Here again, the most popular vehicles are companies set up for trading purposes.

Malta Trading Companies

Companies registered in Malta are deemed to be resident and domiciled in Malta and are therefore subject to tax on their worldwide income less permitted deductions at the corporate income tax rate which currently stands at 35%. Shareholders of a Malta company in receipt of a dividend may elect to claim a refund of all or part of the Malta tax paid at the level of the company on such income. The amount of refund which may be claimed depends on the type and source of income received by the company. In the context of maritime trading activities, when dividends are paid to the shareholders, these shareholders become entitled to claim a refund of 6/7ths of the Malta tax paid by the company. This results in an effective rate of Malta tax of 5% in the hands of the shareholders.

Shipping Organisations

An entity that undertakes shipping activities as stated in the Merchant Shipping Act is considered a shipping organisation. Shipping activities mainly refer to the international carriage of goods and passengers, in accordance with the EU Maritime State Aid Guidelines. Ancillary activities, which constitute less than half of the revenue generated from the main shipping activities also are considered as such. Once a company is recognised as a shipping organisation, it is exempt from tax based on fluctuating income subject to tonnage tax being paid based on the weight and age of vessels engaged in the shipping activity. The main fiscal advantages of the tonnage tax system for a shipping organisation covering shipping activities include:

exemption from corporate tax under the Income Tax Act on shipping activities;
exemption from tax under the Income Tax Act on any income, profits or gains derived from the sale or other transfer of ship tonnage tax ship which had been acquired or sold whilst under the regime or from the disposal of any rights to acquire a ship which when delivered would qualify as a tonnage tax ship; and
exemption from tax on the distribution of profits derived from shipping activities to the shareholders.

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VAT YACHTS SOLUTION

REQUIREMENTS

In order for VAT on Malta leases to be levied on the basis of the actual yacht’s use and enjoyment within the EU territorial waters and to benefit from the guidelines, the following requirements have to be followed:

the lessor must be a Maltese shipping organisation established in Malta for VAT purposes and holding a Malta VAT number;
the lessee may be established outside Malta, be- ing a non-taxable person and therefore using the yacht for pleasure and not business purposes;
the lessor and the lessee must enter into a leasing arrangement and the lease must be for more than 90 days (long-term lease);
the leasing of the yacht must be undertaken through Malta and hence the yacht must be placed at the disposal of the lessee in Malta;
the lessor must keep appropriate records in relation to the actual use by the lessee of the yacht in/ outside the EU; and
VAT returns must be properly submitted and an annual declaration filed with the Commissioner of Inland Revenue.

For further information on Yacht Registration or other areas of specialisation

by Joseph Zammit17th June 20210 comments

Malta Nomad Residence Permit

The Nomad Residence Permit, enables holders to retain their current employment-based in another country whilst legally residing in Malta. The Permit is open to individuals who can work remotely and independent of location, using telecommunications technologies. Malta already hosts and welcomes digital nomads from the EU.

This community of entrepreneurial digital ex-pats make the most of what Malta has to offer in terms of lifestyle and climate, while it seeks to network with like-minded people who can give value to the community. Residency Malta’s Nomad Residence Permit is open to individuals from third countries, who would normally (but not necessarily) require a Visa to travel to Malta.

A Nomad Residence Permit will be issued for one year and can be renewed upon application at the discretion of Residency Malta, as long as the applicant still meets the set eligibility criteria. Applicants who are interested in staying for less than a year will be issued with a National Visa for the duration of their stay.

Eligibility Under The Nomad Residence Permit

In order to be eligible under the NRP, applicants must be non-EU nationals and prove that they can work remotely. In addition, applicants must prove that they fall under one of the following categories:

Be employed and registered with a foreign employer and have a contract of work, or
Conduct business activities for a company registered outside of Malta and of which the applicant is a partner or a shareholder in, or
Offer freelance or consulting services, mostly to clients whose permanent establishments are in a foreign country, and with whom the applicant has contracts

An applicant must also reach a monthly income threshold of €2,700 gross of tax.

Applicants must also:

Hold a valid travel document
Have Health Insurance covering all risks in Malta
Hold a valid property rental or purchase agreement
Pass a Background Verification Check

Are you a Digital Nomad?

Get in touch with one of our experts for a free consultation on obtaining a Digital Nomad Residence Permit in Malta.

Malta ticks all the boxes for digital nomads

Island life. Sun, sea, sand, and outdoor life – our country has all the ingredients for being the ideal remote working base.
Communication made easy. English is an official language and the language used to do business.
With a robust infrastructure, internet speed, wifi coverage and the first EU country with nationwide 5G mobile internet service, it’s plug and play for digital nomads on the Island.
Malta’s location in the middle of the Med means it’s a stone’s throw away from Europe, North Africa and the Middle East. With great air and sea links, our Island is well connected to the rest of the world.
Multi-culture. Malta has a chequered history of settlers and is no stranger to foreigners on the Island. Nowadays, the country hosts a large ex-pat community from all over the world
Nomads will find an excellent support system for start-ups and entrepreneurs and several Government entities offer consultancy and support services.
Our top-notch, reputable health care system offers accessible services. With our flagship hospital, numerous Government health centres and private hospitals and clinics, residents have peace of mind in the event they experience health issues.
Culture and the Arts. From pop to high-brow, from all-genre gigs to opera, film and theatre festivals, performances and vernissages, Malta is abuzz with events that suit the most discerning of tastes.

Other Advantages of the Malta Nomad Residence Permit

The Nomad Residence Permit enables holders to retain their current employment-based in another country whilst legally residing in Malta. The Permit is open to individuals who can work remotely and independent of location, using telecommunications technologies.

Malta already hosts and welcomes digital nomads from the EU. This community of entrepreneurial digital expats make the most of what Malta has to offer in terms of lifestyle and climate, while it seeks to network with like-minded people who can give value to the community. Residency Malta’s

For further information about other areas of specialisation

by MK Malta21st February 20200 comments

Public Procurement & Tendering

Dr Adrian Mallia, Partner and Head of Procurement Services, has considerable experience advising both Government and Governmental entities, as well as private clients, on issues relating to public procurement and tendering, across a number of sectors including waste management, health, information technology and telecoms, construction and engineering, maritime and transport, and energy.

Apart from his 20 years of experience in the field, Dr Mallia brings extensive knowledge to the table, having represented a wide array of clients in different industries, but also Government entities in a broad spectrum of sectors.

Dr. Adrian Mallia
- Partner

115A Valley Road
Level 2, BKR 9022
Birkirkara, Malta

+356 20161010
E-Mail

Tender Management

With hundreds of public tenders being issued annually by Government entities, businesses of all sizes can benefit greatly from selling their services, works and goods. Our Tender Management services are aimed at assisting businesses in identifying tender opportunities, successfully submit-ting tender bids and representing clients before the Appeals Board and Court of Appeal.

Contract Management

In today’s highly competitive economic environment, efficient Contract Management is critical to any business’ financial and operational performance. Through our Contract Management services, we manage all our clients’ contractual requirements including the negotiation, drafting and monitoring of contracts for goods and services whilst our legal team also represents clients in litigation, arbitration and dispute resolution scenarios.

Procurement Advisory

Properly managing all procurement and supply chain activities not only keeps business operations running smoothly, it also helps reduce costs of goods and services by identifying better and more effective sources of supply. Our Procurement Advisory services are designed to assist clients implement efficient procurement strategies and processes across their organization.

Healthcare Industry

ICT Industry

Waste Management

Maritime & Transport

Construction Industry

Energy Industry

Bidding on a tender?

Get in touch with one of our experts for support throughout the tendering or public procurement process.

Drafting of Tenders, Joint Ventures and Tender Bids - MK Malta

Drafting & Joint Ventures

We help private entities and joint ventures to draft and submit their bids once a tender has been issued. Similarly, but from the other side of the spectrum, we are also sometimes engaged by government entities or authorities in order to help draft a tender prior to it being issued to the public.

We assist in compilation of the documents necessary for the bid including:

Compliance exercises
Grant of works and services concessions
Legal requisites of the respective bid
Drafting of framework agreements
PPPs/PFIs
Negotiations under multiple procurement frameworks.

Mk Malta offers Compilation of documents necessary for tender bids

Drafting a tender or bid?

We support businesses throughout the tendering process using multiple procurement frameworks.

Pre-Contractual Remedies and Annulment of Contracts

We have assisted clients on a number of occasions to successfully obtain pre-contractual remedies prior to the submission of tender bids, including in cases where tender documents contained discriminatory conditions or other conditions contrary to law.

We have also assisted clients to obtain the annulment of contract signed by contracting authorities in cases where the contracts were signed by a contracting authority that did not follow mandatory public procurement rules.

Tender Litigation

We regularly, and successfully, assist clients to lodge appeals before the Public Contract Review Board and before the Court of Appeal in its Superior Jurisdiction.

Public Service Concessions

Public Service Concession contracts have increased considerably in the past 20 years. These are contractual arrangements whereby the government and its entities relegate specific public services or works to private operators. Since such services or works are outsourced to the private sector, the private operator is remunerated by the business generated by the specific service or works, whilst also adhering to certain conditions imposed by government.

Why Choose Us?

Drawing on decades of experience in public and private procurement settings and in the field of Corporate Law, MK Malta is uniquely positioned to offer its clients a comprehensive suite of procurement services. Clients choosing MK as their procurement partner, can concentrate on their core business whilst leaving all their procurement, tendering and contracting needs in the hands of our team of experts. Our clients ultimately benefit from:

Increased Competitive Advantage

Reduced Business Risk

Greater Profitability

Are you servicing the public sector?

We have considerable experience in this segment, having assisted a number of clients to successfully litigate awards of concessions.

by MK Malta16th January 20200 comments

Fintech Cryptocurrencies & Blockchain

Virtual Financial Assets & Fintech

Michael Kyprianou Fintech Partners Ltd is a licenced VFA Agent (virtual financial assets agent) Maltese entity composed of a team of dedicated experts who provide services such as advisory, licensing and registrations of activities related to Fintech, Cryptoassets, Blockchain and other ancillary services including company incorporations and banking. MK VFA Fintech Partners is an entity that forms part of the group of companies belonging to the Michael Kyprianou Advocates & Legal Consultants. Michael Kyprianou is a top Tier International Legal Consultancy Firm with offices in various jurisdictions such as Cyprus, Dubai, London, Greece, Ukraine and Malta. The firm is Top ranked in the Legal 500 and according to Gold Magazine is the 3^rd Largest in size in Cyprus.

We are constantly keeping up to date with movements in the industry and market, often participate and speak at events conferences held all over the world and regularly write and publish topical pieces on our website and also other reputable Crypto related websites such as Medium and Cryptovest.

Together with our partners, we provide a one-stop shop service. We carefully picked, friendly smart team of experts have varied backgrounds which include areas such as Financial Services, Banking, Technology and Investment Services. Our crypto dedicated team are not just lawyers but are also true firm believers of the Crypto movement and paradigm shift the world is currently facing. Due to relationships with lawyers usually lasting for a long period of time we firmly believe that choosing a lawyer is like choosing a partner in marriage and therefore it is essential you pick the right partner. One of our most core values is ensuring that we have a good personal relationship with our clients, and therefore use open communication channels during the process of guiding clients to reach their goals and make their desired business operations materialise.

Financial Services in Malta

Get in touch with one of our experts for a free consultation, where we can guide you on how to leverage the benefits of Malta as a FinTech hub.

Fintech in Malta

Malta is presenting itself as a Fintech Centre of the Mediterranean. Malta is the world’s first jurisdictions to have launched a solid legal framework in Blockchain and Cryptocurrency, and at the same time providing a new framework for start-ups and well-established entities that wish register and certify their (DLT) Distributed Ledger Technologies. Our little island also encourages start-ups to test their products and systems in a sandbox environment. This has been seen happening particularly in relation to Gaming Companies following approval by the Malta Gaming Authority (MGA). The (MFSA) Malta Financial Services Authority is currently in the process of creating its own sandbox and Business Incubator, similar to the one produced by the FCA in the UK. The (UOM) University of Malta, together with the (MITA) Malta Information & Technology Agency has also released its own innovation centre. There are numerous big players such as OKEX and Microsoft who have chosen Malta as their hub due to Malta being so welcoming and taking the initiative needed to regulate and validate this space.

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The Blockchain Island

Malta is small but mighty! It is one of the first country in the World to have produced a legal framework for Crypto and Blockchain. It is at the forefront of promoting innovation and adoption.

On the 4th of July of 2018, the Maltese Parliament passed three bills which become hard law in November 2019. This move granted interested players (be them token issuers or service providers) some legal certainty and sheds light on how they should set up and if their activities fall under a licensable activity. The reason one should opt for a legitimate set up and apply for registration or a licence for certain activities/services is to protect all investors and third parties involved and maintain market integrity. The industry is still maturing and needs protection. Competent authorities will ensure that companies and business offering such services have the correct set up (eg competence, capital and good governance procedures) which will in turn validate the industry.

The three new relevant acts are;

The Malta Digital Innovation Authority Act
The Innovative Technological Arrangement and Services Act – which provides that technological arrangements (smart contract, DLT, Blockchain) should be audited and certified to ensure technologies people are promising in their whitepaper and business plan. (TECH FIRST APPROACH)
The Virtual Financial Asset Act – Includes legal processes for registering and issuing new tokens on the market and licensing of crypto service providers (such as exchanges, brokers, custodians).

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Our Services

Legal Opinions

STO – Security Token Offering

ICO – Initial Coin Offering

Licences

Request your Free Consultation

But First – Why Malta?

Malta has been perceived as a crypto friendly attractive jurisdiction from the very start. This is because the Maltese Government and Prime Minister have been working behind the scenes with a team of experts since 2015 on drafting a Top A Class Crypto & Blockchain Tripartite Regulatory framework. For this reason Huge Innovators and Early Influential Pioneers in this space such as Binance, Microsoft and Okex chose Malta as a base to set up shop from.

The Big Public MISconception that – “Malta is slow and full of Delays” explained:

Let us go down memory lane a bit to explain this historical revolutionary regulatory set up. The reason why this misconception evolved is twofold:

Firstly is that from months before the new Virtual Financial Assets Regulations actually came into force (hard law) consultation papers leading to the enactment of legislation were being published and many local as well as international Media players and participants working in this space started spreading the news like wildfire which resulted in a massive hype type atmosphere all around the world. So when the actual law came into place Last November 2018 (and therefore just a few months ago) people expected that everything was already in place and set up and ready to go from new authorities to new specialised needed persons such as VFA Agents being licenced and specialised Systems Auditors being registered (will expound on VFA Agent and Systems auditor below)

Secondly to explain a bit better and in order to understand and get the full picture; the new the law requires that two sets of key persons are in place before issuers can register Whitepapers to issue tokens on the market and Service Providers can get certain licences (which I will be defining below).

So first the Virtual Financial Assets (VFA) Agent: Anyone who would like to do or apply for any crypto/blockchain related activity or licence must do so through a VFA Agent. Therefore certain classes of persons such as Lawyers, Accountants and Auditors with proven sufficient knowledge, background and experiences who would like to service clients in the crypto/blockchain space first had to/have to, go through a licensing process which entails, written and oral exams, business plans, high fees and more!

Secondly Systems Auditors: The new ITAS regulation highlights that technological arrangements (wallets, blockchains, smart contracts ect) being promised in whitepapers, prospectus papers and business plans need to be checked/audited and certified by persons known as Systems Auditors. Any persons/company who feels qualified and experienced enough to check technical arrangements must apply with the new Malta Digital Innovation Authority to be registered as such a person to offer such service which incidentally is a sin a qua non with licensing and registration of crypto/blockchain based activities.

Is the Systems Auditor requirement a Drawback or Advantage?

If the technology being promised in whitepapers and business plans is flawed or non-existent then so is the token or service you are offering and promising flawed or non-existent! The idea is to ensure that all those products and services being offered from Malta and Licenced in Malta are meeting the markets expectations. Malta is slowly gaining a strong reputation in the industry for being one of the best jurisdictions to launch or get licensed from as its positive ‘Tech First Approach’ attracts quality persons (Quality over quality!)

The Good News – What is Malta’s current status?

Today there are a number of Licenced VFA Agents, Systems Auditors registered with the MDIA and certain new Crypto / Blockchain / Fintech related authorities and registries were created and are now fully set up and equipped in terms of knowledge and resources. Things are finally taking off, licence applications are being submitted, whitepapers are being registered, techies are all flocking over and all those building blocks who form part of the movement from governments to service providers to entrepreneurs and crypto enthusiasts in general are all very excited and are enjoying being a part of the foundation being built.

Any other benefits of choosing Malta?

Y-e-s!

Firstly Malta’s efficient favourable corporate tax rates – After applicable tax rebates are deducted corporate tax on profits/dividends is reduced to 5% for trading companies and 0% for Holding Companies.

Secondly Malta is a Bilingual Jurisdiction with its second language being English! Therefore the English Language will be used to communicate with persons such as authorities, regulators, service providers, lawyers etc.

A third benefit is the Maltese competent authorities’ attitude and approach. They are known for being open, friendly, and helpful. Meetings with them are actually not the normal intimidating stern encounter one would expect. Dealing with a regulator in relation to a project or licence is an ongoing long term situation whereby face-to-face meetings and countless e-mail exchanges come in to play so this decision is actually more important than one may thing and should not be taken for granted.

Another plus of choosing Malta is the big international talent pool it provides as well as the authorities being in favour of businesses bringing in (relocation) persons from abroad be them from the EU or non EU so long as they prove to positively contribute to Malta’s talent pool and have proven sufficient knowledge.

Safety First! – Malta is a very safe place to live, and probably one of the safest in all Europe or the world. Besides maybe for maybe just a couple of roads, any person of any age can walk at any time anywhere on the island with no worries at all.

An obvious or perhaps surprising fact is that Malta forms part of the European Union (EU) machine, therefore it is easy to passport business activities across all countries of the EU with a simple notification procedure.

Last but not least which may not be a benefit per se but maybe a bonus is the 300 days of sunshine we get each year.

Another plus which is also worth mentioning is that due to a heavy presence of many crypto, Blockchain and Fintech players on the island there are many meet ups and events continuously being organised to keep the community acquainted and give people a forum to pick each other’s brains.

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LEGAL OPINIONS

A Legal Opinion could be requested for a number of reasons such as a token issuer would want to list on an exchange/trading venue. Since till now there is no consensus between Member States as to token classification, sometimes definitions may differ. For this reason an exchange located in a particular jurisdiction may request a legal opinion from a Maltese Lawyer.

The Maltese regulator (MFSA) has provided us with a Financial Instrument test (or rather as I prefer to call it a token classification test) in order to see which of the four categories your token classifies as.

These four categories are the following:

E-Money Token (falls under EU definition of Electronic Money)
Virtual Token (tokens which cannot be traded on secondary markets),
Financial Instrument (Security tokens) or
Virtual Financial Asset token (i.e none of the above by default – such as Bitcoin).

In our legal opinion we would state that the opinion is based on this test which was conducted to correctly classify your token according to Maltese law and will also explain the different above mentioned token categories.

INITIAL COIN OFFERING – ICO / IEO

An ICO is a method which allows issuers to raise Finance through private placement or crowdfunding platforms or both. Due to all the scams and bad apples which gave the industry such a bad name unless a Whitepaper is registered with a reputable competent authority thereby ensuring that certain practices and procedures were thought of and adhered to, many potential investors/token buyers might not feel as comforted in purchasing the said token and many exchanges may not list the said tokens.

An IEO is essentially an ICO launched through the facilitation + incubation style of help offered by certain reputable Exchanges (the exchange plays a similar role to a sponsor or investment bank in an IPO). Exchanges have seen a window opportunity whereby they can play a part and use certain expertise they have to guide chosen vetted issuers launch their ICO together with other key partners such as Lawyers and developers. No man or issuer in this case is an Island and in such an immature industry sometimes it is more beneficial for key players to work together to achieve success.

In order to launch your ICO from Malta some of the key features which are needed and which we would take care of for you include:

Formation and Incorporation of a Maltese Entity
Taking the Financial Instrument i.e token classification test
Whitepaper Drafting or vetting (Your Whitepaper is your most important Marketing Tool!)
Whitepaper Registration with the authority
Systems Auditor referral – To check and certify technological arrangements promised in your Whitepaper.
Ongoing assistance until all milestones are reached (including compliance and KYC oversight during crowdfunding sales)
Appointing key persons needed: Anti Money Laundering Officer (MLRO), Custodian (Bank for fiat currencies).

We could also form part of your advisory board and take care of roping in the right partners from our excellent network in order to provide you with a full service and therefore extending to partners such as; tokenizer (techies needed to assist in creating tokens, wallets, blockchain), primary markets platform (marketing + crowdfunding), AML/KYC partners and more.

Investment capping: Token Buyers/Investors who are not deemed to be professional/accredited persons may purchase up to 5,000euro in tokens. Professional/accredited persons have no limit. This capping is in place in order to protect retail investors since the market is largely made of newbees.

More Details in an article written by one of our experts here -> Article

Get more information related to ICO

SECURITY TOKEN OFFERING (STO)

STO’s have certainly gained a lot of traction over the past few months amongst both start-ups and also established successful companies. An STO is very different to an ICO. Unlike an ICO, a security token represents an investment contract into an underlying investment asset, such as stocks, bonds, funds or commodities.

Malta has taken the same stance as ESMA (European Securities and Markets Authorities) in that Security Tokens are essential traditional securities with the difference being that the rights and obligations linked to the security are embedded on a token and recorded on a Blockchain or a DLT.

The Maltese legislator (till now) has decided to regulate STOs in a similar manner to IPOs and therefore much of the traditional EU securities regulations such as MIFID and the prospectus document exemptions found in the Prospectus Directive will still apply. Therefore although there are some different legal applications and processes between traditional securities and STOs we would advise that companies already have some sort of a track record before they start preparing to do an STO.

Malta has published a consultation paper providing some guidance when it comes to Security tokens and how capital market players should approach shifting their operations to DLT or blockchain. A couple of key points which were covered include the type of Blockchain or DLT application which should be used (permissioned or permissioned DLT) and whether Security Token Issuers Companies need to have 3 years financial history.

Security Token Offerings include: Equity Tokens, Bond Tokens and Commodity Tokens.

Some key benefits are: better retail investor reach, more liquidity, fractional ownership, and faster settlements.

The process/requirements which we will assist you with include the following:

Corporate structuring or re-structuring
Drafting of a Prospectus document together with our partners (unless an exemption applies in which case an Offering Document will suffice) to be registered and approved by the relevant authorities
Liaising with Primary Markets partners (sponsors/investment bank)
Listing on Exchanges (Secondary Markets)

Latest STO news: The Maltese Stock Exchange (MSE) has signed a Memorandum of Understanding (MOU) with OKEX stating that they are launching an STO Exchange. This is huge news for STO enthusiasts since this move adds another player and layer for the infrastructure for Capital Market players looking to move into tokenisation and Blockchain/DLT.

Various international players such as the Swiss Stock Exchange, Australian Stock exchange and a French based CSD have all confirmed that they have shifted to DLT. This shows how the ecosystem is slowly forming and the different players needed to complement each other in this new ecosystem have started to make the shift. These players will give issuers the comfort they need to also make the shift and in time important components such as liquidity will be satisfied!

The emergence of stablecoins are also interesting in the realm of capital markets since they could satisfy and replace banks when it comes to the post trade settlement layers. Read more on what stablecoins are in article written by one of our experts here -> https://medium.com/@justinescerriherrera/the-good-the-bad-and-the-stable-could-the-emergence-of-stablecoins-cause-financial-instability-e16f7c193027 .

We could form part of your advisory board and take care of roping in the right partners from our excellent network in order to provide you with a full service and therefore extending to partners such as; tokenizer (techies needed to assist in creating tokens, wallets, blockchain), primary markets players, AML/KYC partners and more.

Article written by one of our experts in relation if STOs will reshape the Capital Markets: -> Article

Send us an enquiry about the Security Token Offering

LICENCES

Firstly why bother getting a licence?

Due to so many hacks, scams and money being lost over the last few months and years many crypto related service providers are opting for a licence in order to get better validation/reputation and ensure investor/consumer protection.

Some of the licences one may opt and which we could assist you get are:

Licence for the ‘Reception and transmission of orders +/or provide investment advice in relation to crypto’.

This covers the activity of executing orders in relation to crypto on behalf of third party buyers and sellers. If for example you bring two or more investors together for the buying or selling of bitcoin thereby bringing about a transaction between those investors you would be caught by this licensable activity.

This Class licence does not authorise licence holders to hold or control client’s assets or money.

Custodian (Wallet Providers) – Licence in order to hold or control clients’ virtual assets.

Acting as custodian or nominee holder of a virtual financial asset and, or private cryptographic keys; or holding a virtual financial asset and, or private cryptographic key as nominee, where the person acting as nominee is so doing on behalf of another person.

This class licence authorises licence holders to receive and transmit orders on behalf of others and also hold or control clients’ assets or money.

Custodians are responsible for ensuring good record keeping and segregation of clients’ assets and must also appoint a compliance officer.

Dealing on own Account Licence.

This means the ability to trade against proprietary capital resulting in the conclusion of transactions in one or more virtual financial assets.

In other words this means when a firm puts its own books at risk. An example is when it comes to ‘matched principal trading’ – If a firm executes client orders by standing between clients on a matched principal basis (back-to-back trading), it is both dealing on own account and executing orders on behalf of clients. Another example is when it comes to positions arising from client servicing (for example when the firm acts as a systemic internalizer), or position taking which includes propriety trading and positions arising from market-making.

This class licence also allows licence holders to hold or control client’s assets.

Investment Advice Licence.

Giving, offering or agreeing to give to persons in their capacity as investors or potential investors or as agents for an investor or potential investor, a personal recommendation in respect of one or more transactions relating to one or more virtual financial assets (cryptoassets).

General investment research reports which do not contain a personal recommendation would not constitute investment advice.

Placing of Virtual Financial Assets on the market Licence.

The marketing / placing of newly-issued virtual financial assets or of virtual financial assets which are already in issue but not admitted to trading on a DLT exchange, to specified persons and which does not involve an offer to the public or to existing holders of the issuer’s virtual financial assets.

Crowdfunding Platforms (Primary Markets) would classify as a service which places tokens/virtual assets on the market.

Crypto Exchanges

When it comes to Crypto Exchanges one must first state what sort of tokens they would like to list in order to determine what sort of exchange and applicable laws will apply. There are two types of Exchanges: An exchange which lists Security Tokens i.e An STO Exchange or an Exchange which lists non-security tokens (Eg Bitcoin and Ether) which in Malta is called a Virtual Financial Assets (VFA) Exchange. VFA Exchange platforms may be an exchange for: Crypto to Crypto or Fiat to Crypto or Crypto to Fiat.

Class Licence Holders may hold or control clients’ assets or money in addition with any other VFA service.

Licensing Requirements include: Fit and Proper Tests (Shareholders, Directors and Key Persons), Initial Share Capital (730k), some physical presence (Local Registered Office, local Director, local Compliance Officer) and a Business Plan.

Malta’s progressive approach to innovation, fintech, iGaming and crypto has attracted a large number of key players such as E-Money Institutions, IT & DLT experts and is also home to most of the largest iGaming companies in the world.

Crypto fund Licence

A fund is a vehicle whereby a pool of investors invest into the underlying assets of the fund be them real estate, equity, crypto or a mixed portfolio assets. Professional Investment fund (PIF) and Alternative Investment Funds (AIF) are two popular vehicles used.

These types of vehicles are usually more popular when raising money from professional (accredited) investors as opposed to retail investors. In fact The PIF may be self-managed or managed by a fund manager. PIFs can be only be sold to qualifying investors with a minimum amount of 100k.

Alternative Investment Funds (AIFs) are fast becoming one of Malta’s favoured investment fund vehicles. A key benefit of AIFs is the availability to passport marketing activities introduced by the Alternative Investment Fund Managers Directive (AIFMD), which regulation has incidentally attracted non-EU fund managers to set up shop in Malta. The island’s successful Professional Investor Fund (PIF) regime was however retained offering fund promoters diverse structuring opportunities.

PIFs and AIFs are essentially practically the same with just a few differences: The PIF regime is lighter and more flexible then an AIF however can only be offered to accredited / professional investors and its marketing activities may not be passported. An AIF may be passported across all other EU jurisdictions however when it comes to selling to retail investors certain restrictions do apply (Eg certain borrowing and marketing/passporting restrictions).

Some key Licensing Requirements include:

Competence
Board of Directors
Compliance Officer
Auditor
External Valuer
Manager
MLRO
Custodian
Initial Share Capital- 300k
Offering document

Listing is optional.

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We take you all the way!

In order to maximise efficiency and assure the highest quality and service we together with our trusted partners provide a one-stop-shop service and therefore in addition to guiding you through any desired registration or licensing procedure/s we may also assist you with:

Company Formation and Incorporations
Compliance Function
MLRO Function
Advisory Board Appointments
Company Formation and Incorporations
KYC/AML Providers
Directorships
Bank Accounts
IT / Tech Services
Tax Advice and Structuring
Accounting
Auditing
Systems Audit referral
Other Licences (E-Money Licence, or investment services category licences)

Stay Tuned and keep updated on the crypto world and markets by reading and following our latest articles and videos written and featuring our experts in the field!

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Dr. Justine Scerri Herrera

Justine is a warranted Maltese warranted lawyer who obtained a Doctorate (LLD) from the University of Malta and a Law Master’s Degree (LLM) from the University of Groningen in the Netherlands. Justine started her legal career in the courtroom as a Criminal and Civil Litigator but quickly moved on to work in the corporate world where she gained experience in other sectors, namely the Financial Services and Investment Services sector/Capital Markets.

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T:+356 20161010

E:justine.scerriherrera@kyprianou.com

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