Obtaining a Forex Licence in Malta
Malta is an attractive option for Foreign Exchange Service providers due to its accessible regulator, competitive market, favourable business environment and sound regulatory regime. The country is known worldwide as a European financial service centre. It attracts numerous entrepreneurs involved in currency exchange: vendors of specialized software seeking a main office, asset managers, currency trading platforms and others interested in entering the European market.
Malta Forex Regulations
The EC has been considering more closely the regulatory framework of the Foreign Exchange Industry at the EU level. The European Securities and Markets Authority (ESMA) strongly advises investors in Forex to work only with authorised service providers.
In Malta the investment services connected to currency exchange are regulated by the Investment Services Act implementing Directive 2014/65/EU on markets in financial Instruments (DMFI).
The Investment Services Act and Forex Licensing
The acquisition or holding of foreign exchange in order to make investments is subject to licensing and authorisation by the Malta Financial Services Authority (MSFA). The licenses for investment services are classified in three categories: i) Category 1 for companies that provide advice regarding investments or receive and transmit orders connected to foreign exchange; ii) Category 2 for traders involved in riskless principal transactions i.e. the performance of two corresponding trades; and iii) Category 3 for market makers conducting business on their own account.
Malta Foreign Exchange Passporting
Forex rights are not automatically transferable or “passportable” in other European countries under the DMFI. On the other hand, if the provided services include the use of CFDs, derivatives, options, futures, security-based swaps, interest rates/yields, currencies or regulated ancillary services, the provider may qualify for a passporting procedure.
Our company offers a number of services in the general fields of business set-up, licensing and compliance with the regulatory framework.
Set-up and Pre-Licensing Stage
At this stage we facilitate the arrangement of meetings at the MFSA for discussion of your foreign exchange activities in the country and the preparation of the necessary documentation for licensing. The required documents include a business plan and various official forms.
Our team also offers advice in choosing the most convenient legal entity, also with respect to tax burden, depending on the type, scope and scale of the activity. We provide assistance in the choice of partners, subcontractors / external providers, financial institutions and payment methods.
Post-Licensing Stage and Regulatory Compliance
Once the license is granted, the Forex service provider must maintain compliance with all requirements for license holders established by the applicable EU regulations also valid in Malta. We provide comprehensive advice to ensure full compliance with the statutory requirements, including preparation of regulatory returns, reports and policies, and handling of notifications. We also consult our clients on the conditions for license holders imposed by the regulator.
Advisory Lawyers in Foreign Exchange
Our team has extensive experience with the Maltese regulatory processes. We provide comprehensive services to facilitate licensing and ensure compliance, thus our company offers a complete solution for Forex trading in the country. Our Advisory Group has ample industry expertise and provides a range of services from licensing, compliance and taxation (both personal and corporate) to accounting and general management of the foreign exchange project. Our employees are affiliated to respected associations such as the Council of the Institute of Financial Services Practitioners (IFSP) and the Institute of Taxation, different investment service sub-committees, the Institute of Accountants, the Chamber of Advocates and the Society for Trusts and Estates Practitioners.