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An applicant might qualify as a start-up undertaking and be able to benefit from some compliance contribution deductions. Approved start-ups will benefit from a moratorium period of 12 months in which they are exempt from paying compliance contribution although they are still required to submit the monthly declaration. Fixed license fees will still be due.
In exercise of the power conferred by article 76A of the Lotteries and Other Games Act (Cap. 438 of the Laws of Malta), the Malta Gaming Authority has issued the following directive in order to lay down the procedure whereby an entity may be recognised as a start-up undertaking, in terms of regulation 9 of the Gaming Licence Fees Regulations (S.L. 438.12).
Following the coming into force of the Gaming Licence Fees Regulations, an entity who is not a remote gaming licence holder, but is applying for a remote gaming licence, may apply to the Authority for the entity to be recognised as a start-up undertaking, whereby the entity would be able to benefit from some compliance contribution deductions. In order for an entity to qualify as a start-up undertaking, a request in writing must be made by the entity during the licence application phase. The Authority cannot accept applications for an entity to be recognised as a start-up undertaking after a remote gaming licence has been awarded. An entity shall only be deemed to be a start-up undertaking upon receipt of a written confirmation, electronic or otherwise by the Authority, and the Authority shall be vested with discretion to determine whether a person is a start-up undertaking in terms of set regulations.
A start-up undertaking shall mean an entity who, at the date of the licence application, fulfils all of the following criteria:
- An entity has been established or operational in the same or a related sector for less than five (5) years;
- Provided that, unless the business is operated in a different form, ‘established’ shall refer to the date of registration of a limited liability company, the date of the agreement establishing a partnership, the date of registration as a self-employed person, or as may otherwise be determined by the Authority;
- In the case of a body corporate, that entity has not yet distributed profits;
- In the case of a body corporate, that entity has not been formed through a merger or, if formed through a merger, all body corporates that formed part of the merger satisfy, in aggregate all the critical envisaged herein;
- That entity has not acquired the business as a going concern or, if so, the acquirer and the acquired both satisfied all criteria envisaged herein;
- That entity has generated actual revenue from the same, or a related, sector during the previous financial period amounting to less than ten million euro (EUR 10,000,000), provided that where the financial period cannot be determined, or is not applicable, the previous twelve (12) calendar months shall be taken into consideration;
- That entity is not part of, or controlled by, a corporate group whose actual revenue in the same, or a related sector exceeds ten million euro (EUR 10,000,000);
- That entity is not subject to the requirement of a Government concession to offer the gaming service in accordance with the proviso to regulation 4 of the Gaming Authorisations Regulations:
Provided that in the case of a body corporate, if the entity referred to in this sub-regulation has taken over the business from any person having a qualifying interest in the former, the provisions of this sub-regulation shall extend accordingly to the person having a qualifying interest in the applicant, provided further that actual revenue referred to in paragraphs (e) and (f) shall be determined on the basis of generally accepted accounting principles and practice as defined in article 2(4) of the Compliance Act.
An approved start-up would also benefit from a moratorium period of 12 months, in which the entity is exempt from paying compliance contribution, although it is still required to submit the monthly declaration. Once the 12 running months during which a start-up undertaking is exempt from the compliance contribution expire, the compliance contribution shall start to accrue in terms of the Gaming Licence Fees Regulations. However, if only the minimum payable amount in terms of the same compliance contribution shall be due, the amount due as a minimum compliance contribution shall be pro-rated according to the remainder of the non-exempt licence period.
For any further information regarding start-up undertaking criteria, the Gaming Team at CSB Group would be more than willing to answer any queries or offer any assistance as may be required. Please feel free to contact us at [email protected].
We have worked closely with CSB Group since February of 2015. They have been instrumental in helping us establish our Malta office and continue to aid us with their stellar legal and accounting services. Malta has proven to be an excellent location to establish our business, however, setting up a company with many international shareholders has been a complicated task. CSB Group has guided us along this process and we are quite satisfied with the results.
AQblue Limited | Tom Druk, CEO
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