Investment Services
Licences from Malta
If
your
company is involved in the provision of financial services to residents of
the European Union, the United States and most other respectable
jurisdictions, it is usually required that the company is licensed to
provide these services. Brokers, stockbrokers, intermediaries,
trustees, fiduciary services providers, banks, insurance companies,
financial advisors and similar service providers cannot trade within the
EU, the USA and most other countries without being licensed (and therefore
controlled) by a respectable Financial Services Authority.
It is
now possible for Maltese registered companies to obtain Investment
Services Licences from the Malta Financial Services Authority. This
makes it possible for a Maltese licensed investment services provider to
provide investment services in most other jurisdictions since the Maltese
licence is recognized world-wide. Moreover, since Malta joined the
European Union in 2004, through the company passporting system, it is possible for Maltese Companies that hold an Investment Services Licence
from the MFSA, to provide investment services throughout the European
Union while still being regulated by the MFSA, rather than by the
Financial Services Authority in the jurisdiction where the services are
being provided.
Our
law firm can assist you with a full service to ensure that your
application is processed as speedily and efficiently as possible.
Under
Maltese Law, a company would require an
investment service for trading in the following activities:
dealing as principal or agent: buying, selling, subscribing for or
underwriting instruments as principal or agent;
arranging deals: arranging for another person to buy, sell, subscribe for
or underwrite instruments;
management and administration in relation to an instrument;
investment advice in relation to an instrument;
trustee, custodian or nominee services in relation to any instrument when
such services are related to the above services or to collective
investment schemes
There
are four categories of investment services licences.
Category 1
Authorisation to provide any investment service but not to hold or control
clients' money or assets nor to deal for their own account or to
underwrite. (This category does not include managers of collective
investment schemes).
Category 2
Authorisation to provide any investment service and to hold or control
clients' money or assets, but not to deal for their own account or to
underwrite.
Category 3
Authorisation to provide any investment service, to hold and control
clients' money or assets, and to deal for their own account and to
underwrite.
Category 4
Authorisation to act as custodians of collective investment schemes.
Application Process
It is normal practice for licence applications to be discussed with the
MFSA before formal submission of the application documents. The documents,
which are to be submitted, include the following:
-
A
comprehensive business profile
-
Board
resolution
-
A
financial resources statement
-
Audited
accounts (where applicable)
-
Projected
three-year financial statements
-
Memorandum
and articles
-
Auditor's
confirmation letter
-
Individual
questionnaires
-
A
copy of representation agreements
-
Insurance
policies.
Tax
Companies licensed under the Act and whose activities solely comprise the
provision of management, administration, safekeeping services or
investment advice to collective investment schemes are entitled to various
additional tax deductions. Furthermore, expatriate personnel employed with
such companies are not liable to tax on income relating to a number of
expenditure items incurred by the company for their benefit or that of
their immediate family.
A licensed investment services company is subject to Malta corporate tax
at 35%. However Malta's tax imputation system provides that on the
distribution of a dividend, the shareholders may claim a tax refund from
the Inland Revenue, thus bringing the effective tax rate down to 5%.
Please
note that the above information is provided to you free of charge.
However we would like to advise prospective enquirers that further
detailed information and advice will only be provided after a retainer
agreement has been signed.
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