Why the World's Most Ambitious Fintech and Payments Businesses Are Choosing Malta
The decision of where to licence an Electronic Money Institution or a Payment Service Provider is one of the most consequential strategic choices a fintech founder or payments business can make. The jurisdiction you choose determines your regulatory credibility, your access to markets, your tax position, your ability to attract banking partners, and in many cases, the speed at which your business can actually begin operating. Get it right and you have a foundation built for scale. Get it wrong and you spend years fighting friction that should never have been there.
Malta is increasingly the answer that serious operators arrive at when they work through this decision rigorously. This article sets out why, with specific reference to the regulatory framework maintained by the Malta Financial Services Authority, the commercial ecosystem that has developed around financial services on the island, and how the combination of both creates a proposition that is genuinely difficult for competing jurisdictions to match.
It also sets out where Malta has limitations, because any analysis that does not acknowledge them is not worth reading, least of all by the sophisticated operators and advisors who will be reading this one.
The MFSA: A Regulator That Understands the Business
The Malta Financial Services Authority is Malta's single integrated financial services regulator, covering banking, insurance, investment services, trusts, and non-banking financial institutions including EMIs and PSPs. It is the authority responsible for licensing, supervising, and where necessary taking enforcement action against electronic money institutions and payment service providers operating in or from Malta.
EMIs in Malta are authorised and supervised under the Financial Institutions Act, Chapter 376 of the Laws of Malta, and operate in full compliance with the EU's Electronic Money Directive (EMD2) and the Payment Services Directive (PSD2). This is not a bespoke local regime. It is EU law, implemented and supervised by a national authority with two decades of experience applying it in a commercial fintech context.
What distinguishes the MFSA in the view of the operators and advisors who work with it regularly is not permissiveness. The MFSA's standards are high, its due diligence is thorough, and it takes its obligations under EU law seriously. What distinguishes it is engagement. The MFSA has built a reputation for being accessible to applicants at the pre-application stage, for providing clear guidance on what it expects, and for running a process that, when applications are properly prepared, operates with reasonable efficiency. Preliminary consultations with the MFSA are available before formal submission and are genuinely valuable. The regulator's willingness to engage substantively at the pre-application stage is not a universal feature of EU regulators, and it makes a material difference to the quality of applications and the efficiency of the process.
The MFSA does not simply process applications. It engages with them. For a business building a serious EMI or PSP operation, that distinction matters enormously.
In 2024, Malta issued 12 new EMI and PSP licences, ranking it alongside Germany in terms of new authorisation volume, a remarkable achievement for a jurisdiction of its size. As of March 2025, there are 36 electronic money institutions and 30 payment institutions authorised by the MFSA to operate in Malta, a concentrated and commercially significant cluster of regulated payments businesses in a small, well-connected EU member state.
The Regulatory Architecture: What You Need to Know
The licensing framework for EMIs and PSPs in Malta is built on two licence types under the Financial Institutions Act. An Electronic Money Institution licence permits the holder to issue electronic money and to provide the full range of payment services set out in the Payment Services Directive, including the execution of payment transactions, issuing of payment instruments, acquiring of payment transactions, and the granting of credit related to certain payment services. A Payment Service Provider licence covers the provision of payment services without the right to issue electronic money.
For an EMI, the minimum initial capital requirement is EUR 350,000, which must be fully paid up at the time of authorisation and maintained on an ongoing basis. Own funds must not fall below this level, and the MFSA monitors this through its ongoing supervisory framework. For a PSP, the minimum initial capital varies depending on the specific payment services being provided, starting at EUR 20,000 for money remittance services and rising to EUR 125,000 for services including payment account management and the execution of payment transactions.
The application process requires the submission of a detailed application package including a comprehensive business plan with financial projections, a risk management framework, anti-money laundering and counter-terrorism financing policies and procedures, a safeguarding framework for client funds, a governance and organisational structure, and fit and proper documentation for all directors, senior managers, compliance officers, the Money Laundering Reporting Officer, and qualifying shareholders. Every individual in a key function role is subject to the MFSA's rigorous assessment of their competence and integrity.
A real presence in Malta is required. The MFSA expects that the EMI or PSP has effective direction from within the country, which means at least two qualified senior individuals based in Malta with the experience and authority to run the regulated entity. This substance requirement is taken seriously and assessed on an ongoing basis, not just at the point of licensing.
The typical timeline from submission of a complete and well-prepared application to full authorisation is four to nine months, depending on the complexity of the business model and the quality of the initial submission. This timeline is materially better than several competing jurisdictions, including Ireland, where applicants are routinely experiencing timelines of twelve to eighteen months or longer, and the UK, where FCA authorisation for EMIs has in many cases extended to two years or more.
The Passporting Right: Europe from a Single Licence
Once an EMI or PSP licence is granted by the MFSA, the licensed entity has the right to passport that authorisation across all European Union member states and European Economic Area countries. This means the entity can offer its electronic money and payment services in any of the thirty EU member states and three EEA states, either by establishing a branch in the target country or by providing services cross-border remotely, through a notification procedure rather than a full local licensing process.
The commercial significance of this right is difficult to overstate. A single MFSA authorisation, obtained in Malta, gives a payments business access to a market of over 450 million potential customers across the EU and EEA. It means that a business which has properly structured its Maltese EMI can serve clients in Germany, France, the Netherlands, Italy, Spain, Poland, and every other EU and EEA market without obtaining a separate local licence in each country.
One licence. One regulator. Thirty-plus markets. The EU passporting right, available to every Malta-licensed EMI and PSP, is the most powerful market access tool available to any European payments business.
This right is explicitly not available to UK-licensed entities following Brexit. A business licensed only by the FCA has no automatic right to provide services in EU markets and must seek separate authorisation in each EU jurisdiction where it wishes to operate. This is one of the most commercially significant consequences of Brexit for the payments sector, and it is one of the primary reasons that a significant shift in new EMI and PSP authorisations has been observed from the UK toward EU jurisdictions including Malta since 2018.
The Tax Framework
Malta's corporate tax framework has been addressed in the context of iGaming and gaming services, but it is equally relevant and equally advantageous for EMIs and PSPs. The headline corporate tax rate of 35 percent, applied under the full imputation system, is reducible to an effective rate of as low as 5 percent through the dividend refund mechanism available to qualifying shareholders. This is the lowest effective corporate tax rate available in the European Union.
For EMI and PSP operators, this tax position represents a significant structural advantage over the competing jurisdictions that are most commonly considered. Ireland's standard corporate tax rate is 12.5 percent. Luxembourg's effective rate for financial services operations typically falls in the range of 17 to 24 percent. Lithuania's corporate tax rate is 15 percent. Cyprus, which operates an IP box regime and a 12.5 percent headline rate, offers a competitive position but does not match Malta's effective rate under the dividend refund structure.
Malta also has a network of over 70 double taxation treaties covering most of the world's significant markets. For a payments business with shareholders or operations in multiple jurisdictions, this treaty network has genuine value in structuring the group efficiently and compliantly. The combination of low effective corporate tax, treaty access, and EU membership makes Malta's fiscal framework one of the most complete available to a European payments operator.
How Malta Compares: The Jurisdictions in Context
The table below sets out a factual comparison of Malta against the jurisdictions most commonly evaluated by EMI and PSP applicants. The figures are drawn from publicly available regulatory sources and reflect the position as of mid-2025.
Jurisdiction
Min. Capital
Typical Timeline
Passporting
Tax (Effective)
Language
Malta
EUR 350,000
4 to 9 months
Full EU/EEA
As low as 5%
English
Lithuania
EUR 350,000
6 to 9 months
Full EU/EEA
~15%
Lithuanian
Ireland
EUR 350,000
12 to 18 months
Full EU/EEA
12.5%
English
Luxembourg
EUR 350,000
9 to 12 months
Full EU/EEA
~17%
French / Lux.
UK (FCA)
EUR 350,000
12 to 24 months
None (post-Brexit)
25%
English
Cyprus
EUR 350,000
6 to 12 months
Full EU/EEA
~12.5%
Greek / English
A few observations on the table that are worth making explicitly. Lithuania, which emerged as a dominant EMI licensing hub following Brexit, is experiencing a tightening of its regulatory approach. Licensing volumes have declined, licence withdrawals have increased, and the Bank of Lithuania is placing significantly greater emphasis on substance, governance, and the sustainability of business models. Firms in higher-risk sectors and those targeting offshore markets are facing increased scrutiny. For businesses that chose Lithuania primarily for speed and low barriers, the environment has changed materially.
Ireland remains a highly respected jurisdiction with a strong regulatory reputation, but the Central Bank of Ireland's approval timelines have become a significant practical constraint, particularly for businesses needing to reach market within a defined timeframe. Luxembourg's position as a financial centre of global standing is beyond question, but the cost base for operating there is substantially higher than Malta, and the regulatory and legal environment, while excellent, is not English-language.
The UK, post-Brexit, offers no EU passporting rights and a regulatory timeline that has extended considerably in recent years. For businesses whose primary target market is EU-based, the FCA route is not a practical primary option.
Cyprus is a genuine alternative and shares some of Malta's characteristics, including EU membership, a competitive tax regime, and an English-speaking professional community. The choice between Cyprus and Malta often comes down to ecosystem depth, specific sector expertise, and the quality of available professional advisors. In the payments and fintech sector specifically, Malta's concentration of experienced professionals and its cross-sector ecosystem, including iGaming, financial services, and technology, creates an environment with advantages that are not easily replicated.
The Ecosystem Advantage: iGaming, Fintech and the Cross-Sector Effect
One of Malta's most distinctive and underappreciated advantages as an EMI and PSP jurisdiction is the nature of its commercial ecosystem. Malta is simultaneously the European capital of online gaming, a significant fintech hub, a growing cryptocurrency and digital assets centre under the MiCA framework, and an established base for international corporate and financial services operations.
For an EMI or PSP, this matters commercially in a way that a purely regulatory analysis misses. The iGaming industry, which generates hundreds of millions in economic value from Malta annually and employs nearly 15,000 people on the island, is one of the most payments-intensive industries in the world. Gaming operators need robust, fast, reliable payment processing. They need multi-currency capabilities, smooth e-wallet integration, and the ability to serve players across dozens of markets. They need counterparties who understand the compliance requirements of the sector and can move quickly.
A Maltese EMI or PSP is not entering a payments market in abstraction. It is entering a market where the demand for payment services is concentrated, sophisticated, and immediately accessible. The iGaming operators, affiliate networks, software providers, and technology companies based in Malta represent a ready-made client base for a well-structured payments business. The proximity is not just geographical. It is relational, operational, and regulatory, since many of the same compliance frameworks, AML obligations, and governance standards apply across both sectors.
Malta's payments businesses do not have to go looking for clients. The clients are already here, in one of the world's most payments-intensive commercial ecosystems, operating within the same regulatory framework and speaking the same language.
The fintech sector in Malta has grown significantly, positioning the island as an alternative finance hub to Dublin, London, and Luxembourg for companies that want EU access, an English-language environment, and a regulator that engages constructively with innovative business models. The presence of cryptocurrency and digital asset businesses operating under MiCA, alongside traditional financial services and iGaming, creates a cross-sector dynamic where partnerships, commercial relationships, and operational synergies develop organically.
For an EMI or PSP building its client base, its banking relationships, and its commercial network, being in Malta means being at the intersection of all of this. It is an advantage that cannot be replicated simply by obtaining a licence in a jurisdiction that lacks the same density of relevant commercial activity.
CSB Group: The Team Behind Malta's Leading Financial Services Operations
CSB Group has been one of Malta's most established and respected professional services firms for decades. Our involvement in Malta's financial services sector, including the licensing and ongoing management of EMIs and PSPs, reflects the same breadth and depth of expertise that has made us the most recognised corporate services provider in the iGaming sector for four consecutive years at the SiGMA Europe Gaming Awards.
Our dedicated legal and regulatory team brings together professionals with specific expertise in the Financial Institutions Act, the MFSA's application process and ongoing supervisory requirements, PSD2, EMD2, AML and counter-terrorism financing compliance, corporate governance, and the broader EU regulatory framework within which Maltese EMIs and PSPs operate. This is not a team assembled to tick a box on a service list. It is a team with real, tested experience in preparing and guiding applications through the MFSA process, and in supporting the ongoing compliance and governance requirements of licensed institutions once they are operational.
We have acted for some of the most significant names in the payments and fintech sector operating in or from Malta. While client confidentiality means we do not disclose specific relationships without our clients' consent, our track record in this space is known to the MFSA and to the professional advisory community in Malta, and we are confident it speaks for itself.
The CSB Group one-stop-shop model for EMI and PSP clients works as follows. We advise on the optimal corporate and licence structure before any commitment is made. We handle company incorporation in Malta, including the preparation of constitutional documents, share capital structuring, and the appointment of directors and officers. We prepare the full licence application package, including the business plan, financial projections, risk framework, AML and KYC policies, safeguarding arrangements, governance documentation, and fit and proper submissions for all key personnel. We manage the dialogue with the MFSA through the application process, addressing queries, providing supplementary information, and maintaining the regulator relationship that makes a material difference to timelines.
Once the licence is granted, we provide ongoing corporate secretarial services, regulatory compliance support, accounting and audit coordination, and the day-to-day governance infrastructure that keeps a regulated entity in good standing. We assist with the passporting notification process for clients who wish to extend their services into other EU and EEA markets. And through our wider network of partners, we assist with banking introductions, office solutions through Regus Malta at regus.com.mt and property acquisition or rental through Malta Sotheby's International Realty for executives and key personnel relocating to the island.
From the first conversation about whether Malta is the right jurisdiction, to the moment your EMI or PSP is licensed and operational, and through every compliance cycle thereafter, CSB Group is the team alongside you.
What our clients consistently tell us is that the value of working with CSB Group is not just the quality of any single service line. It is the fact that the whole is greater than the sum of its parts. A client who comes to us for an EMI licence does not have to coordinate between five different firms for company formation, regulatory advisory, legal documentation, banking introductions, and office space. It is all available through one trusted relationship, managed by a team that knows Malta, knows the MFSA, and knows the payments sector from the inside.
A Final Word on Substance and Credibility
The regulatory landscape for EMIs and PSPs across Europe has tightened considerably in recent years, and the direction of travel is clear. Regulators across the EU are placing greater emphasis on genuine substance, on governance structures that are not merely on paper, on compliance functions that are adequately staffed and resourced, and on business models that are sustainable and transparent. The era of minimal-substance, lowest-cost licensing is over.
Malta's position in this environment is a strong one. The MFSA's standards have been consistently high, which means that a Maltese EMI or PSP licence carries genuine credibility in the market. Banking partners, payment networks, and commercial counterparties understand what it means to be MFSA-licensed. The MGA's model, where regulatory quality protects the value of the licence, is one that the MFSA follows in the financial institutions space as well. The result is that Malta-licensed EMIs and PSPs carry a reputational premium that matters commercially.
For businesses that are serious about building a regulated payments operation that can scale across Europe, that can withstand regulatory scrutiny, and that can build the banking and commercial relationships that growth requires, Malta and the MFSA offer a foundation worth building on. And CSB Group is the team that can help you build it.
We would welcome the opportunity to discuss your specific requirements in confidence.
About the Author
Roger A. Strickland Jr. is a Director at CSB Group, one of Malta's most established and respected professional services firms. With extensive experience across corporate services, financial institution advisory, and regulated industries, Roger has built a reputation for delivering results through a combination of deep local knowledge, strong professional relationships, and a genuinely client-focused approach. He is a recognised figure in Malta's financial services and gaming communities, and leads CSB Group's engagement with clients across the EMI, PSP, iGaming, and fintech sectors.
