Maltese companies - obtaining license for gambling business in Malta

Licensing of gambling business is the goal not only of financial giants, but also of entrepreneurs with an average level of prosperity from around the world. After all, the trends in the development of this type of activity are obvious.

Gambling, or rather gaming business (legal and transparent) brings its owner a stable income. It is, of course, about online casinos, poker-rooms, which provide their services remotely.

Which country to select for registering online casino? Where will your gambling business be securely protected and get the most favorable tax treatment?

Such country is a member of the European Union, namely - Malta. Maltese companies are used by entrepreneurs of the world to conduct profitable and protected business.

Types of companies in Malta:

1. Private company with limited liability.
2. Public limited company.

Company registration in Malta: features

The required number of shareholders is at least two. They can be natural/legal persons.

The company must have a legal address in Malta.

In the sphere of responsibility of the company's financial director is the Company's Register. Also data on distribution of shares, register of shares of the guarantor(s), register of directors and other documents that may be needed when providing information on annual income are in his charge.

Depending on the type of company selected, the terms of its registration may vary. The key to the prompt completion of all registration procedures is timely provision of relevant properly issued documents.

Taxes for company in Malta

The fixed income tax rate is 35%. But at the same time, one should not forget about the system of tax refund, which can be used by shareholders of the holding and trading companies, reducing the tax burden to 0% and 5% respectively. Owners of shipping companies are exempted from taxation in Malta.

List of acts regulating the activities of the Maltese company.

1. Companies Act (1995)
2. Law on the Protection of Information (2001)
3. Law on Electronic Commerce (2001)
4. Electronic Means of Communication Act (1997)
5. Income Tax Act (1948)
6. Income Tax Management Act (1994)
7. Regulatory provisions for remote games
8. Law on the Prevention of Money Laundering (1994).

Why is it advantageous to register gambling business in Malta?

1. Malta is known for its participation in the EU and political stability. Moreover, the country is not in the list of offshore zones. These factors will positively affect the prestige of your business.
2. Maltese banks do not impose restrictions on opening of accounts.
3. The state image guarantees the confidence of potential customers.
4. It is possible to connect to a direct merchant account for processing credit cards on the Internet.
5. A licensed gambling company in Malta receives tax benefits on a par with commercial Maltese companies.
6. The owner of a gambling business has the opportunity to obtain a residence permit in Malta.

Important nuance:

Maltese company engaged in online gambling can not accept payments transferred by the US citizens, and it also does not operate with the cards of American banks. Therefore, the client base of the company should be expanded among the residents of the CIS countries and the EU.

Obtaining license to conduct gambling business in Malta

The system of conducting the gambling business in Malta today is perfectly regulated. That's why about 1/10 of all companies involved in the online gaming service are in Malta. Important role in the foregoing is played by the policy of the Maltese government, aimed at creating favourable conditions for business related to conducting of lotteries and organization of gambling. LGA or Lotteries&Gaming Authority is the official state body of Malta, which issues licenses to the subjects of gaming industry.

In contrast with the other jurisdictions offering licensing of remote gambling services (Gibraltar, Isle of Man, Alderney), Malta is the member of the EU, and the above fact opens the way for free movement of goods and services in the EU market.

Maltese laws regulating the licensing of remote gaming services was legalized in 2004. Further we introduce you to the main principles of the adopted rules:

1. The law is neutral with respect to the technologies of conducting a gambling business (via the Internet, mobile phone, fax).
2. The law allows all types of games (betting, P2P, Games in Communities, Leagues, Internet casinos, etc.).
3. Security for players is provided.
4. Operators gain a competitive advantage.
5. Obtaining a license for gambling in Malta. To obtain license, you need to:

• submit application,
• pass the verification of the LGA.

Before announcing the intention to obtain a license to organize gambling in Malta, it is necessary to register or buy a company in Malta. The registration process includes the following steps:

1. Payment of the registration fee.
2. Receiving exemption from payment of stamp duty.
3. Registration for payment of VAT.
4. Appointment of the financial director, shareholders (nominee).
5. Obtaining a legal address in Malta.

When applying for gambling license, registration fee is paid, which is not refundable.

After considering the application, the owner of the company receives a period of six months to fully establish the business. Then the LGA issues the appropriate license within about two weeks.

Classes of licenses

The rules for provision of remote services in the sphere of gambling business are as follows: any type of activity for which electronic communications facilities are used and one or more participants contribute funds for the further possible receipt of a prize must be licensed.

Licenses are divided into 4 classes:

Class 1 Remote Gaming License. It is obtained by operators of gambling business, associated with games based on frequent events. The operator/casino controls the gambling risk. This license includes such types of gambling as lotteries, casinos, slots, board games. The software of the licensee must include the RNG (random number generator), approved by the LGA.

Class 1 on 4 Remote Gaming License. This is a so-called sublicense that allows the organization of games "for luck" and "for experience," which are conducted under the license of Class 4. In this case, the operator of Class 4 may be the company owned by the Class 1 operator, or it may be an independent operator.

Class 2 Remote Gaming License. It is issued to operators who organize game activity based on a single event and associated with the risk and use of markets. These are the games in which online bets are made. The winnings are usually fixed (for example, bets on results in sporting events).

Class 3 Remote Gaming License.

This is a license granted to operators organizing games between participants, but the peculiarity is that operators receive only a commission without taking part in games, and therefore they do not share risks. Such license is issued for the organization engaged in exchange of bets, sweepstakes, poker-rooms, bingo.

Class 3 on 4 Remote Gaming License. It is issued for conducting a gambling business from the territory of Malta. The license can be obtained by operators, leading or supporting a gambling business from Malta under the license of Class 4.

Class 4 Remote Gaming License. It is obtained by software vendors that provide hosting and manage operators of remote games (under any license). They do not share risks, but only receive a commission.

Basic form of remote gambling business is online casino.

Initially, the operator is provided with a temporary license. The operator obtains an official license within the period of 6 months from the beginning of carrying out the activity

Three stages of applying for a license.

1. Examination and verification of the information provided regarding the candidate begins by the LGA. All nuances are considered, including those individuals interested in managing and financing business. Financial analysis of the business plan is carried out, and conformity of the technical part is assessed. Guarantees for payment of the winnings must be backed up by securities or other reserves.

The business plan should contain the following:

• goals of activity;
• structure of the company (human resources with indication of positions, business functions);
• types of games (casino, bets, poker, league, betting exchange, etc.);
• technologies used (telephone, fax, Internet);
• types of software;
• plan of activities for three years with a forecast of the balance sheet, marketing and financial plan (indicating the sources of financing) and a sales plan.

Shareholders and key managers provide:

1. Birth certificate.
2. Copy of passport.
3. Photography (passport format).
4. Certificate of no criminal record (from the candidate's country).
5. Balance sheet and report on the actual state of affairs.
6. Financial, as well as professional recommendation.
7. CV.
8. Existing license for gambling business (if necessary).

It is necessary to notarize all copies.

The first stage usually lasts 3-4 weeks.

The candidate receives a notification from the LGA about the successful completion of the first stage. Next, you must provide the following documents:

1. Registration Certificate, Memorandum of Association, Charter, information on the forms of activity.
2. Operational manual. It should describe the game management system, security measures, control methods, the procedure for backup or data disaster recovery, text information about the games.
3. Possible payment methods, type of payment system.
4. Contracts with partners, agents, branches.

These documents are usually reviewed within 3-4 weeks.

Temporary license is issued. A key person is appointed in the company; necessary testing of the service is performed; contracts for renting the office are checked, etc. As a result of the successful completion of all procedures, the candidate is provided with official gaming license that is valid for 5 years.

The game service management system should be located in Malta. The license is issued immediately after the candidate receives the Management System Certificate.

After five years, it is possible to renew the gambling license. To do this, you must declare about this desire no later than 60 days before the expiration of the previous license. In the event that there were no violations in the activities of the licensee, his request for renewal will be satisfied. The list of documents required for the renewal of the permission is generally the same as at the main stages of obtaining the initial license. But the LGA may require additional data on an individual basis.

Taxes for gambling business in Malta

According to the classes of licenses obtained, the operator pays the following taxes:

In addition, within a period of 15 days from the date of granting the license, annual license fee is paid (later on it is paid annually).

List of duties of key persons of the company

1. Monitoring of server status (integrity of seals). In case there have been any changes in hardware or software, this should be reported to the LGA.
2. Payment of relevant tax groups.
3. Providing information on company audit.
4. Data protection.

Also, official person should obtain access to the server system.

In conclusion, it should be noted that the success of the company's activities, as well as the positive response of the licensing authority to a request for permission for gambling online business in Malta, largely depends on the correctness and completeness of the documents to be filled in, and the professional approach to the process of registration of the company. To exclude unpleasant "surprises" and start a successful gambling business in Malta, apply for assistance of the lawyers from Law&Trust International. You can clarify more information about obtaining a license to conduct a gambling business in Malta with our lawyer during personal conversation in the office, by phone or in chat.