Investments services in Malta fall under the regulation of the Investment Services Act enabled in 1994 and they are supervised by the Malta Financial Services Authority (MFSA). Malta Financial Services Authority supervises all financial businesses, enables rules to be followed by Maltese investment services institutions and promotes compliance management for investors wanting to open a company in Malta in the financial domain.
The Investment Services Act has been amended, so it follows EU regulations and offers investors wanting to set up a financial institution in Malta the regulatory framework to do so. Maltese companies holding a license in investment services can expand their services in EU member states without obtaining special licenses in the country they want to set up their business in.
According to the Maltese Investment Services Act, the notion of “investment” is not defined, but the instruments that can be used and the services that can be provided are named. So, in order to register a company in Malta, an investment services license must be obtained with the MFSA.
Investment services in Malta take the form of:
- investment advisors,
- fund management,
- securities markets,
- stock brokerage companies.
The instruments to be used when providing an investment service can be: shares, bonds, securities or foreign exchange transactions.
The Maltese investment license is required of those who want to deal as principal or as an agent, for those wanting to arrange deals, for investment managers, for those wanting to provide trustee services, for investment advisors and stockbrokers.
According to the Investment Services Act, the Malta Financial Services Authority can issue the following types of investment services licenses:
- category 1 license serves for dealers who receive and pass on orders and offer investment advice without controlling clients’ money or other possessions;
- category 2 license serves for dealers who offer investment services and who are allowed to control clients’ money and assets, but they are not allowed to operate as a multilateral trading company;
- category 3 license serves for dealers who can offer any kind of investment service and who can also control their clients’ money and goods;
- category 4 license is for dealers who can provide trustee or custodian services for Collective Investment Schemes.
The application process for obtaining an investment services license in Malta has three stages: a preparatory stage in which a meeting with the MFSA takes place and the application is submitted, a pre-licensing stage in which the approval is issued and the post-licensing stage in which all the requirements of the MFSA must be met.
Investors looking to register a company in Malta that has as a main business activity the investment services will benefit from:
- favorable taxation system,
- competitive start-up and operational costs,
- the right to expand in EU member states,
- skilled English speaking workforce,
- reputable banking services.