No company shall be granted a licence unless:
(a) its initial capital whether in Euro or in any other currency acceptable to the competent authority are equal to such amount established by the competent authority in a Rule and as may be appropriate for the activities to be undertaken by the applicant;
(b) there are at least two individuals who will effectively direct the business of the financial institution in Malta;
(c) all qualifying shareholders, controllers and all persons who will effectively direct the business of the financial institution are suitable persons to ensure its prudent management;
(d) the competent authority is satisfied that the financial institution has sound and prudent management, and has robust governance arrangements, which include a clear organisational structure with well defined,transparent and consistent lines of responsibility, effective procedures to identify, manage, monitor and report the risks to which it is or might be exposed, and adequate internal control mechanisms, including sound administrative and accounting procedures:
Provided that such arrangements, procedures and mechanisms shall be comprehensive and proportionate to the nature, scale and complexity of the services provided by the institution;
(e) the competent authority is satisfied that, where there are close links between that company and another person or persons, such links do not through any law, regulation, administrative provision or in any other manner prevent it from exercising effective supervision of that company under the provisions of this Act or any Financial Institutions Rule:
Provided that the company shall, after being licensed under this Act, inform the competent authority forthwith of any change in circumstances concerning the application and shall be further required to provide the competent authority with information necessary to monitor compliance with the conditions referred to in this paragraph on a continuous basis.
Financial Institutions in Malta are subject to strict regulation and supervision. However such regulations are by far less onerous to those applied to Credit Institutions. There are several Benefits of Financial institutions in Malta which include a wide network of tax treaties and an very attractive tax regime.
Contact our law firm for further information on the procedure and relevant documentation required for setting up of a Financial Institution in Malta.