Malta has positioned itself as a self-proclaimed "Blockchain Island," emerging as one of the few EU jurisdictions with a clear regulatory framework for crypto assets and services. The Maltese government formally recognized and regulated cryptocurrency-related businesses years ago to foster innovation in the technology sector.
Like other financial service providers in Malta, cryptocurrency businesses fall under the supervision of the Malta Financial Services Authority (MFSA), which safeguards the integrity of the financial industry and ensures consumer protection.
Malta’s Cryptocurrency Regulatory Framework
Malta Digital Innovation Authority Act (MDIA Act)
Enacted on July 15, 2018, the MDIA Act established the Malta Digital Innovation Authority (MDIA) to accelerate Malta’s growth as a hub for technological innovation.
Key Objectives of MDIA:
- Promote policies that support technological innovation.
- Encourage the adoption of advanced technologies.
- Protect Malta’s reputation in the tech sector.
- Align national regulations with international standards.
- Collaborate with regulators on AML/CFT, data protection, and fair competition.
Innovative Technology Arrangements and Services Act (ITAS Act)
Passed on November 1, 2018, the ITAS Act introduced regulations for emerging tech solutions, including:
- Registration requirements for tech service providers.
- Guidelines on transparency, integrity, and compliance.
- Definitions for DLT-based solutions (e.g., decentralized ledgers, cryptographic security).
Virtual Financial Assets Act (VFA Act)
The VFA Act (2018) forms the backbone of Malta’s crypto regulations, covering:
- Classification of crypto assets (e.g., virtual tokens, electronic money).
- Licensing for crypto service providers.
Three License Types Under VFA Act:
- VFA Agent – Facilitates compliance for issuers and service providers.
- Whitepaper Registration – Mandatory for public crypto offerings (valid for 6 months).
- VFA Service Provider License – Required for businesses offering crypto services.
Crypto Licensing in Malta
Types of VFA Licenses
| License Class | Capital Requirement | Application Fee | Annual Fee |
|-------------------|-----------------------|-------------------|--------------|
| Class 1 (Advisory) | €50,000 (or €25,000 with PII) | €3,000 | €2,750+ |
| Class 2 (Wallet/P2P) | €125,000 | €5,000 | €4,500+ |
| Class 3 (OTC/Market Making) | €730,000 | €7,000 | €6,000+ |
| Class 4 (Exchange/Custody) | €730,000 | €12,000 | €25,000+ |
Application Process
- Appoint a VFA Agent (mandatory intermediary).
- Submit Documentation (business plan, compliance structure).
- MFSA Review (3–6 months).
- Pre-Licensing Phase (3 months for adjustments).
- Final Approval (compliance verification).
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Taxation & Compliance
Key Tax Rates
- Corporate Tax: 35%
- VAT: 18%
- Stamp Duty: 2%–5%
Tax Incentives
- Exemptions for ICO fundraising.
- No tax on Bitcoin-to-fiat conversions.
- 15% fixed rate for Highly Qualified Professionals (HQP).
Setting Up a Crypto Company in Malta
Steps to Incorporate
- Register a Ltd/Plc (private/public limited company).
- Secure Local Office (physical/virtual address).
- Bank Account Setup.
- Apply for VFA License.
Requirements:
- Minimum 1 director & 1 secretary.
- Local AML Compliance Officer.
- Audited Financials (annual submission).
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FAQs
Q: How long does it take to get a Malta crypto license?
A: ~9 months (including approval and compliance checks).
Q: Can a foreign-owned company apply?
A: Yes, but a local office is mandatory.
Q: Are stablecoins regulated under VFA Act?
A: Yes, if classified as a Virtual Financial Asset (VFA).