Malta Company with Online Gaming License in Malta

Regulation in Malta

Nevertheless, online gambling is well regulated in Malta. The different classes of licences are described below. In any case, online gaming companies operating from or in Malta will need to be regulated.

Different classes of licenses

Malta has three main types of remote gaming licences (classes 1, 2 and 3) and a fourth category for the supply of operating software to one of these three classes (class 4). Licence holders may apply for a class 1, 2 or 3 licence by using their own software or by using the software of an existing class 4 licence holder (in which case the licence is referred to as class 1 out of 4, class 2 out of 4 or class 3 out of 4 respectively). The different classes have different licensing requirements and different tax rates which are set out in the table below.

Class 1

This is the highest level of regulation, the licensee manages its own risks and operates online casino games, lotteries and so on.

Class 2

This is a sports (or match) betting licence in which operators manage their own risks based on fixed odds.

Class 3

This is intended for operators that promote betting games between players such as poker networks, bingo, betting exchange, etc.

Class 4

This concerns the hosting and management of online gaming software. In addition to their own tax obligations, these licensees must also pay an additional fee for each hosted operator they host who does not have a class 1, class 2 or class 3 licence.

Class 1 of 4

An online casino or lottery license managed with Class 4 licensed software.

Class 2 of 4

A sports betting operator using Class 4 licensed software.

Class 3 of 4

Player-to-player operator using Class 4 licensed software.

Taxation

Online gambling licensees must also be local businesses and must pay local corporate tax. In addition to this, they must also pay the gambling tax (see below).

Corporate income tax

In Malta, the corporation tax is effectively 5%. In fact, all Maltese companies pay 35% of tax, but 6 / 7 of the taxes paid are effectively refunded to their shareholders if they are not Maltese. For a detailed explanation of the companies and more details on their tax treatment, please visit our main page on private Maltese companies .

Gambling Tax

In addition to the 5% tax paid in addition, licensees must also pay the gaming tax, the rate varies by class and is shown in the table below.

Value Added Tax (VAT)

Gaming companies are exempt without credit. This means that, unlike most other businesses, VAT is a cost that cannot be recovered. The Maltese VAT rate is 18% (the lowest in Europe) and a number of international suppliers have set up joint venture schemes to reduce the amount of VAT leakage by outsourcing certain services (particularly marketing) to non-European suppliers. The effectiveness of such schemes will depend on how they are set up and operated on an ongoing basis. For services that cannot be outsourced, VAT will represent a cost premium of 18%.

Other taxes

Malta does not impose capital gains tax, withholding tax or any other tax on companies with foreign shareholders.

License fees

The following costs are charged by the regulator. These fees do not include charges due for the provision of local services such as assistance with licence applications, incorporation, provision of local directors and key managers, etc.

Application for an Online Gaming License in Malta

The game licenses of Malta are also issued for a period of five years, then renewed for another five years, and so on. The three-step licensing process is explained in the table below and requires the appointment of a key local official.

Role of the senior manager

The principal officer must be approved by the regulator and is required to personally supervise operations in Malta and ensure compliance with local laws. They play a key role as an interface with the regulator, must be directors of the holding company and must be resident in Malta. Almost all local suppliers have pre-approved key officials who can be hired to fulfil this role subject to a satisfactory customer acceptance procedure. As this area presents the greatest risk for local service providers, it is likely to constitute the bulk of their costs. For candidates who are considering relocating themselves or their staff to Malta, our main article on residence in Malta may be of interest.

Licensing process

The licensing process takes place in three stages, with negotiation beginning at the end of the second stage. These steps are therefore explained here and summarized in the table below.

Step 1

First, Step 1 involves the identification of all persons involved, including shareholders, beneficial owners (holding at least 10%), intermediate holding companies or other entities, directors, officers and key management personnel. This area mainly involves the collection of KYC (Know Your Client) documents such as passports, proof of address and background checks (e.g. police checks and online database searches). The documents requested at this stage will include all due diligence (DD) documents and a business plan. The time required to complete Phase 1 depends on a variety of factors, including the complexity of the structure, the number of beneficial owners, whether applicants such as the key official are known to the regulator, the time required for referrals to be made. returned and how busy the regulator is at the moment. It is best to allow one to two months to complete this process. A non-refundable fee of EUR 2 330 is paid at this stage and, once this is completed, the regulator will indicate that the applicant should proceed to step 2.

Step 2

Then step 2 is to understand all operational and technical issues, including systems and procedures. At this stage, a thorough review of all internal systems and controls, outsourcing arrangements (including joint venture arrangements, where applicable) and other operational issues is conducted. If a random number generator (RNG) is used, the regulator will then request an independent assessment of the RNG. Following this, a pre-production audit is undertaken (and the corresponding fee is payable) and a letter of intent is issued following the successful completion of the operation. This is effectively a provisional licence authorizing the operator to begin negotiations immediately for a period of six months.

Step 3

Finally step 3 occurs during the first six months of operation after the issuance of the provisional license of the second step and if success leads to the granting of the full license (at this point the license fee must be paid). Stage 3 involves a second audit (the post-start audit) during which the supervisory authority verifies that the systems approved in stage 2 have been properly implemented. Following the issuance of the licence, the licence holder will be subject to ongoing regulation, which may take the form of inspection visits by the regulator.

Summary

Other costs associated with the licensing of online games in Malta

The bulk of the fees listed above include those owed to the regulator, gaming and corporate taxes, and fees owed to the local service provider (if applicable) for processing the licence application, drafting the business plan, appointing directors or key officers. In addition, there may be other associated costs related to local hosting, if required, registration of the applicant company (for a full discussion of the Maltese companies, please see our main article ), although this can be grouped with other services and cost of accounts. and financial audit (mandatory for all companies). Accounts and auditing in Malta are among the cheapest in Europe and for a full description of accounting services in Malta please see our main article .

If you are interested in playing online games in Malta, please contact our team of specialists.