NEWSector Guide

Malta Financial Services – Funds, Payments & Banking

EU-regulated financial services with passporting rights and tax efficiency

Malta has developed a sophisticated financial services sector regulated by the Malta Financial Services Authority (MFSA). As an EU member state, Malta-licensed entities benefit from passporting rights across the European Economic Area (EEA), making Malta an attractive jurisdiction for UK financial services firms seeking continued EU market access post-Brexit.

Malta's Financial Services Industry

Malta's financial services sector has grown substantially over the past two decades, establishing the island as a significant European financial centre. Regulated by the Malta Financial Services Authority (MFSA), the sector encompasses investment funds, payment institutions, e-money issuers, investment services firms, banking, and insurance.

The jurisdiction offers a compelling combination of EU membership with full passporting rights, English as an official language, a legal system based on common law principles (with civil law influences), and an experienced, accessible regulator. Combined with Malta's competitive corporate tax framework, this has made Malta particularly attractive for international financial services operations.

For UK financial services firms, Malta offers a practical route to maintain EU market access. The MFSA has experience with UK firms and understands the commercial realities of operating across multiple jurisdictions. Malta has also positioned itself as a hub for fintech and blockchain-related financial services, complementing its more traditional fund and insurance sectors.

Single Market Access

English

Official Language

450M+

EU Consumer Base

70+

Double Tax Treaties

Key Financial Services Sectors in Malta

Investment Funds

UCITS and AIFs with EU passporting

Payment Institutions

PSD2 and EMD2 licensed entities

Investment Services

MiFID II compliant firms

Banking

Credit institutions and lending

Insurance

Insurance and reinsurance structures

Fund Services

Administration and custody

Investment Funds in Malta

Malta offers a comprehensive range of fund structures for both retail (UCITS) and professional/institutional (Alternative Investment Funds) investors. The fund industry benefits from Malta's EU membership, enabling distribution across the single market, combined with tax efficiency at the fund level.

UCITS Funds

Undertakings for Collective Investment in Transferable Securities are retail-facing funds with full EU passporting rights. UCITS benefit from a harmonised regulatory framework across the EU, enabling distribution to retail investors in all member states with minimal additional regulatory burden.

Suitable for retail distribution across EU with investor protection standards

Professional Investor Funds (PIFs)

Professional Investor Funds are Malta-specific fund structures available to qualifying investors. PIFs offer flexibility in investment strategy and structure while maintaining appropriate investor protection for professional and experienced investors.

Minimum €100,000 investment threshold, flexible investment strategies

Alternative Investment Funds (AIFs)

AIFs encompass hedge funds, private equity, real estate funds, and other alternative investment strategies. Malta AIFs benefit from AIFMD compliance, enabling marketing to professional investors across the EU through the passport.

AIFMD compliant with EU marketing passport for professional investors

Notified AIFs

Notified AIFs benefit from a simplified notification regime for smaller funds. Where assets under management fall below the AIFMD thresholds (€100 million for leveraged funds, €500 million for unleveraged closed-ended funds), lighter regulatory requirements apply.

Lighter regulation for smaller funds below AIFMD thresholds

Fund Structures Available

Malta offers flexibility in legal structure for investment funds:

SICAV (investment company with variable capital)

INVCO (investment company with fixed capital)

Unit Trusts (contractual funds)

Limited Partnerships

Fund Tax Treatment

Malta funds typically benefit from tax-efficient treatment:

Exemption on capital gains at fund level

No withholding tax on distributions to non-residents

Access to Malta's treaty network

Participation exemption on subsidiary income

Payment Institutions & E-Money

Malta has become a significant hub for payment institutions and e-money issuers, particularly fintech companies seeking EU passporting rights. The MFSA licenses Payment Institutions (PIs) under the EU Payment Services Directive (PSD2) and Electronic Money Institutions (EMIs) under the Electronic Money Directive (EMD2).

Malta-licensed PIs and EMIs can passport their services across the entire EU/EEA without requiring additional licenses in each jurisdiction. This makes Malta attractive for payment and e-money businesses seeking to serve the European market from a single base.

Licensing Framework

License enables:

EU-wide passporting rights to all 27 member states and EEA countries
Direct SEPA access for euro payments
E-money issuance capability (EMI license)
Card issuing and acquiring services

Regulatory Requirements:

Minimum capital requirements (€125,000 PI / €350,000 EMI)
Fit and proper assessments for directors and key personnel
Comprehensive AML/CFT compliance framework
Safeguarding of customer funds

Services Covered

Payment Services

Account services, payment execution, money remittance, payment initiation services, and account information services under PSD2.

E-Money Services

E-money issuance, prepaid cards, digital wallets, and stored value products. EMIs can also provide all payment services.

Open Banking Services

PSD2 Account Information Service Provider (AISP) and Payment Initiation Service Provider (PISP) licenses.

Banking and Insurance Services

Malta also hosts a banking sector regulated under EU banking directives and a significant insurance sector, particularly for captive insurance and protected cell companies. Both sectors benefit from EU passporting and Malta's tax-efficient framework.

Banking Licenses

Malta hosts over 25 licensed credit institutions, including branches of international banks. The MFSA issues full banking licenses under the CRD/CRR framework, enabling deposit-taking, lending, payment services, and investment services with EU passporting rights.

Banking licenses require significant capital and robust governance frameworks. Malta offers access to TARGET2 for euro payments and benefits from EU deposit guarantee scheme participation.

EU-wide passporting under CRD
Deposit guarantee scheme protection
TARGET2 and SEPA access

Insurance Structures

Malta has developed as a hub for insurance and reinsurance, particularly for captive insurance structures. The jurisdiction offers Solvency II compliant licensing with EU passporting rights for insurance undertakings.

Malta's Protected Cell Company (PCC) legislation enables efficient structuring of insurance programmes, allowing multiple cells with segregated assets and liabilities under a single legal entity.

Captive insurance companies
Protected cell companies (PCCs)
Reinsurance vehicles
Solvency II compliance with EU passport

Frequently Asked Questions

What financial services licenses does Malta offer?

Malta offers comprehensive financial services licensing through the MFSA including: investment funds (UCITS and AIFs), payment institutions under PSD2, e-money institutions under EMD2, investment services firms under MiFID II, banking licenses under CRD/CRR, and insurance undertakings under Solvency II. All EU-regulated licenses come with passporting rights across the 27 member states and EEA.

Can Malta-licensed firms passport to the EU?

Yes, Malta is a full EU member state, so MFSA-licensed firms can passport their services across all 27 EU member states and EEA countries without requiring additional licenses in each jurisdiction. This is done by notifying the MFSA of the intention to passport, and the MFSA coordinates with the host state regulator. Passporting is available for funds, payment institutions, e-money institutions, investment firms, and insurance undertakings.

What types of investment funds can be established in Malta?

Malta offers: UCITS funds for retail investors with full EU passporting, Professional Investor Funds (PIFs) for qualifying investors with €100,000+ minimum investment, Alternative Investment Funds (AIFs) with full AIFMD compliance and EU marketing passport for professional investors, and Notified AIFs with lighter regulatory requirements for smaller funds below AIFMD thresholds. Fund structures available include SICAVs, INVCOs, unit trusts, and limited partnerships.

What are the capital requirements for a Malta payment institution or EMI?

Minimum capital requirements depend on the license type and services offered. Payment Institutions typically require €125,000 minimum capital for full payment services. Electronic Money Institutions require €350,000 minimum capital. Both must also maintain ongoing capital requirements calculated based on transaction volumes and demonstrate adequate systems, controls, and fit and proper personnel.

How are Malta investment funds taxed?

Malta funds benefit from a tax-efficient framework. Funds structured appropriately typically enjoy exemption on capital gains at the fund level, no withholding tax on distributions to non-resident investors, access to Malta's double taxation treaty network for treaty benefits on underlying investments, and potential application of the participation exemption on qualifying holdings. Tax outcomes depend on fund structure and investor profile.

What is Malta's protected cell company (PCC) legislation?

Malta's PCC legislation allows the creation of companies with multiple "cells" that have segregated assets and liabilities. This is particularly useful in insurance for creating multiple captives under a single legal entity, in funds for creating umbrella fund structures with separate sub-funds, and for other applications requiring asset segregation. Each cell's assets are protected from the liabilities of other cells and the core company.

Official Sources

The information in this guide is drawn from official Malta regulatory sources. For the most current information, please refer to:

Malta Financial Services Authority — mfsa.mt FinanceMalta — financemalta.org Commissioner for Revenue — cfr.gov.mt

Last Updated: February 2026

Structuring a Malta Fund or Payment Institution?

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