Why have so many firms chosen a Malta gaming license as their preferred way of operating? This page will answer that question in great detail, helping you to understand whether locating your gaming firm in Malta is a wise decision.
As you will see from the layout of this site, we have multiple languages available to us. This means that should you wish to make an application for a gaming license, we can arrange for translators and interpreters to assist during the process.
The Maltese population are essentially tri-lingual with Maltese and English being the official languages and most school children having been taught Italian to a good standard.
The country is a member of the European Union3, having joined on 1st May 2004. The Maltese Lira was replaced by the euro on 1st January 2008.
Being a member state of the European Union is important for conducting international business. Though gaming firms face regulations in each EU nation, they are allowed to operate from one country and provide games and services into others, meaning that the entire population of the EU can be your customer from your Maltese base of operations and online presence.
The climate is well known for endless blue skies and hot sunny days for most of the year. This has made the country a very popular destination with tourists from more northerly parts of Europe all year round. As such, tourism is a vital part of the economy.
Malta is a very densely populated country with the majority of the population living in the north of the country. The main residential areas of Sliema, St Julian’s and Gzira are all on the coast and have many foreign residents.
These locations have something of a positive feedback loop in place. There are many foreign residents in these areas, which attracts the office based igaming firms to locate there. That of course creates jobs, which encourages more people to move to these areas. This means that Gzira and Sliema – and to a lesser extent, St Julian’s and Portomaso – have a ready built experienced workforce in place.
It is also worth adding that the sunny holiday nature of Malta brings lots of new people to the island each year. Many of these are young people who have recently completed school or university and are looking for employment opportunities. This adds to the vibrancy of the local workforce because it is possible to find computer literate multi-lingual staff to be customer service representatives and administrators locally for your international online presence. Relatively speaking, Malta is a lower cost alternative than most of Europe for wages and operating expenses.
Moving inland, there are a number of cities with less foreign residents and, subsequently, cheaper prices and a different economy. Such cities include Mosta, Naxxar and Birkirkara.
The capital city is Valletta. It is an incredibly historic fortified city with ancient and protected buildings and imposing churches on every street. The city is a UNESCO World Heritage site4.
Valletta is mostly a centre for shops, tourists, politicians and lawyers. Its lack of parking, supermarkets and general day-to-day conveniences make it a difficult location for many people to live in. Therefore, Valletta has a small and highly concentrated population. Most companies located here – with the exception of law firms – do so for the prestige of the address, rather than the usefulness of the location.
Fiscally, the country is an onshore jurisdiction as are all EU member states. However, there are a variety of rules in place that make Malta an interesting location for conducting business of many kinds. For example, the country has one of the most successful shipping registries in the world. This success has prompted the creation of an aircraft registry which is growing in reputation internationally.
There are rules that make it very interesting for a company to relocate and pay a lower rate of corporation tax. The small size of the local population makes it less attractive to move to reach the Maltese market, instead it becomes very appealing to relocate and reach an international market or the EU. The makes the country appealing to many types of online business that sell digital products or services.
These rules, as they relate to personal taxation have made the country popular as a destination for retirement with many different European nationalities. The combination of great weather, English speakers, low taxes and low living costs will always be attractive!
Malta Gaming License
At the time of writing it is believed that there have been more than 500 applications made for a Malta gaming license with the Malta Lotteries and Gaming Authority5. Many of the leading operators in the world are now based in Malta and if the growth that the sector has shown since 2004 continues, Malta will likely become the leading jurisdiction for gaming in the world.
All the forms of interactive gaming – such as lotteries, betting exchanges, casinos and casino games – can be operated from Malta. The rules enable the use of any form of distance communication – such as the internet, mobile devices and telephone.
There are many factors that make Malta appealing to operators, including:
– Malta is the only country within the EU which regulates remote gaming
– Malta has a reputation of being operated out of a well-regulated jurisdiction which safeguards the interests of both operators and players
– Malta has a very attractive fiscal regime
– Malta has an efficient and relatively inexpensive gaming license process
– license fees are transparent and known in advance
– established financial services institutions, including payment gateways
Four Classes of Malta Gaming Licenses
Class One – operators managing their own risk on repetitive games (casino-type games, skill games and online lotteries)
Class Two – operators managing their own risk on events based on a matchbook (fixed odds betting, pool betting and spread betting)
Class Three – operators promoting and abet gaming from Malta & taking a commission from promoting and/or abetting games (P2P, poker networks, betting exchange and game portals)
Class Four – operators hosting and managing online remote gaming operators, excluding the licensee himself (software vendors developing platforms from which gaming operators can operate).
Who Can Apply?
All operators of remote gaming in or from Malta must possess a valid license of the relevant class as set out in the First Schedule of the Remote Gaming Regulations6. Applicants must satisfy relevant criteria to obtain a gaming license in Malta7, amongst other things they must be:
1. A registered company in Malta (we are able to assist with this aspect of the application and it’s ongoing management)
2. They must satisfy the “fit and proper persons” test. This involves rigorous due diligence on all persons (individual or corporate) who have a significant stake in the Malta gaming company
3. Demonstrate business, financial and technical ability to carry out the gaming operation in Malta
4. Demonstrate the solvency of the enterprise in order to ensure player winnings and deposit returns are safeguarded
The enterprise must make reports and bi-annual accounts, incident reports, monthly players balances, clients funds bank statements and decommissioning of gaming and control systems equipment.
Proper accounts and records which show a true and fair view of the financial position and state of affairs of the licensee and shall, within 60 days from the end of its financial year, file with the Authority an audited set of financial statements. Interim financial statements shall also be submitted to the Authority within thirty days from the end of the half yearly period.
Normally the reviewing of documentation by the Lotteries and Gaming Authorities takes no longer than 12 to 14 weeks. The duration between the system audit and the approval of the application takes another 2 weeks.
The Key Official
A condition to the issuance of a Licence is the appointment of a Key Official8. The key official is a director of the company who must be physically resident in Malta and who is to serve as the direct point of communication between the Lotteries and Gaming Authority and the Licensee.
The Key Official shall be responsible to personally supervise operations and ensure compliance with applicable laws, regulations, LGA Directives and conditions of the License.
Malta Gaming License Application Fees
Application Fee: Euro 2,330 (one time fee)
Certification Fee : approx Euro 2,500 (one time fee)
License Fee: Euro 8,500 (yearly fee)
Corporate tax of 35%. Shareholders benefit from a substantial refund of the tax paid by the company, whereby on distribution of dividends they have the right to claim certain refunds of the tax paid by the company.
The effective rate of tax payable by the company of around 5% on profit is applicable.
Malta Gaming License Taxes
The gaming taxes9 liable relate to the class of license held by the enterprise. They are:
Class 1 – EUR 4,660 per month during the first 6 months after issue of the license; EUR 7,000 per month subsequently for the entire duration of the license period.
Class 1 on 4 – EUR 1,200 per month
Class 2 and Class 2 on 4 – 0.5% of the gross amount of bets accepted
Class 3 and Class 3 on 4 – 5% on net income (net income is defined as revenue from rake less bonus, commissions and payment processing fees)
Class 4 – No gaming tax for the first 6 months of operation; EUR 2,330 per month for the subsequent 6 months and EUR 4,660 per month subsequently for the entire duration of the license. Provided that the hosting platform shall also pay a monthly tax of EUR 1,165 for every operator it hosts and which operator is licensed by the government or competent authority of an EEA Member State (not being Malta).
Total Business Planning
This license and business structure is generally the main element of operations for companies. However, most also form a subsidiary in Gibraltar as an additional part of the structure. This subsidiary is tasked with purchasing advertisements (both online and offline) for the group, with the benefit of being able to do so VAT free.
About The Author
Geraldine Noel is a lawyer with Acumum based in Gzira, Malta. She has many years of experience in Maltese and European law and specialises in helping companies with their legal formations.
If you would like to discuss your individual situation to assess your eligibility, please complete the form below and I will contact you.