When setting up a payments business, choosing the right jurisdiction is one of the most critical decisions you’ll make. A reputable jurisdiction not only ensures that your business complies with global standards, but it also enhances trust, expands business opportunities, and offers access to a stable financial infrastructure. In an increasingly globalized and highly regulated financial environment, operating in a well-regulated jurisdiction is not just a legal requirement—it’s a strategic advantage.
Here are key reasons why selecting a reputable jurisdiction for your payments business matters:
1. Regulatory Compliance and Stability
Operating within a jurisdiction known for its regulatory stability offers peace of mind. Reputable jurisdictions maintain transparent and well-established legal frameworks, providing certainty for businesses navigating complex financial regulations. For a payments business, this ensures clear pathways for compliance with international standards, such as Anti-Money Laundering (AML) and Know Your Customer (KYC) requirements.
2. Customer Trust and Reputation
Consumers and businesses alike are more likely to trust payment providers that operate under the watchful eye of respected regulatory bodies. A jurisdiction with a reputation for integrity and regulatory compliance sends a strong signal to customers that your business adheres to the highest standards of financial conduct. This builds long-term trust and confidence, both of which are key to growth in the financial services industry.
3. Access to Financial Infrastructure
A well-regulated jurisdiction provides access to stable and efficient financial infrastructure, including banking services, payment networks, and liquidity. This is vital for payments businesses that rely on these systems to process transactions, issue payments, and ensure compliance with cross-border regulations. A reputable jurisdiction ensures that your business can operate seamlessly in the global financial ecosystem.
4. Legal and Tax Advantages
A reputable jurisdiction often offers a balanced legal framework that provides businesses with strong protections while maintaining competitive tax rates. Unlike tax havens, where businesses may face scrutiny or sanctions, operating in a jurisdiction with a credible legal and tax system ensures that your payments business is protected and seen as legitimate by global regulators and partners.
5. Global Expansion and Investment Potential
Payment companies often seek to expand their services internationally, and being based in a reputable jurisdiction makes this easier. Investors are more likely to fund businesses that operate from a stable and respected location. Moreover, companies operating in reputable jurisdictions have smoother access to international markets, creating growth opportunities without the risk of regulatory roadblocks.
6. Risk Mitigation Against Financial Crime
Payment businesses are highly vulnerable to financial crime, including fraud, money laundering, and terrorist financing. Reputable jurisdictions enforce robust AML and KYC requirements that help prevent financial crime, protecting both your business and the wider financial system. Additionally, operating from a respected location ensures that your business is less likely to be de-risked by banks or financial institutions.
Why Malta is the Ideal Jurisdiction for Your Payments Business
Malta has positioned itself as a leading hub for payments businesses, fintech startups, and international financial services. As a member of the European Union, Malta adheres to stringent EU regulations, offering both regulatory certainty and access to a large, integrated financial market. Here’s why Malta stands out as the ideal jurisdiction for setting up a payments business:
1. EU Membership and Regulatory Alignment
Malta’s status as an EU member state gives it direct access to the European financial market and ensures it complies with EU directives on financial services, such as PSD2 (the second Payment Services Directive) and strong anti-money laundering regulations. This alignment with EU regulations offers payment businesses both credibility and the ability to passport their services across the European Economic Area (EEA), opening up a broad customer base.
2. Robust Financial Regulatory Framework
Malta’s financial sector is regulated by the Malta Financial Services Authority (MFSA), known for its stringent yet business-friendly regulatory framework. The MFSA ensures that all payment providers comply with global best practices and international standards, providing your business with a solid foundation for operations. The authority also supports innovation, particularly in fintech, making it a favourable location for new and growing payments companies.
3. Growing Fintech Ecosystem
Over the past decade, Malta has established itself as a key player in the fintech space, attracting startups and established companies from around the world. This vibrant fintech ecosystem means your payments business will be part of an innovative community, allowing for collaboration, networking, and access to cutting-edge financial technology.
4. Competitive Corporate Tax Regime
Malta offers an attractive corporate tax regime, which is particularly advantageous for international businesses. While the standard corporate tax rate is 35%, companies can benefit from tax rebates and deductions, effectively lowering the tax burden. Additionally, Malta has an extensive network of double taxation treaties, which further benefits businesses engaging in cross-border activities.
5. Skilled Workforce and Multilingual Talent
Malta’s labour market boasts a highly skilled and multilingual workforce, making it an ideal location for international payment businesses. The financial services sector is one of Malta’s largest industries, ensuring a deep pool of talent with expertise in payments, compliance, and fintech innovation. English is one of Malta’s official languages, which is a significant advantage for businesses looking to serve international markets.
6. Strategic Location and Connectivity
Located in the heart of the Mediterranean, Malta serves as a strategic gateway between Europe, North Africa, and the Middle East. This geographic advantage is particularly beneficial for payments businesses looking to serve multiple regions. Malta’s excellent digital infrastructure and connectivity to global financial markets further enhance its attractiveness for fintech and payment companies.
7. Government Support for Innovation
The Maltese government is highly supportive of fintech innovation, offering various incentives and schemes for businesses operating in the financial services and technology sectors. This pro-business environment encourages payments companies to innovate and grow, with regulatory bodies working in tandem with the industry to foster a forward-thinking regulatory landscape.
How Contact Advisory Services Can Help You Obtain a Financial Institution License
Navigating the complexities of obtaining a financial institution license, especially in a reputable jurisdiction like Malta, can be a daunting task. The licensing process involves strict regulatory requirements, thorough compliance checks, and the need for a well-prepared business plan. This is where professional advisory services, such as Contact Advisory Services, play a crucial role in streamlining the process and ensuring success.
1. Expertise in Regulatory Requirements
Contact Advisory Services has extensive experience in navigating the legal and regulatory frameworks necessary to obtain a financial institution license. They work closely with the Malta Financial Services Authority (MFSA) and are well-versed in the application procedures, compliance requirements, and the documentation needed to meet Malta’s high standards for licensing.
2. Tailored Compliance Solutions
Compliance with EU financial regulations, including AML and KYC requirements, is essential for obtaining a financial institution license in Malta. Contact Advisory Services provides tailored compliance solutions, ensuring that your business adheres to the necessary legal frameworks. This includes assistance with drafting compliance policies, procedures, and training staff on regulatory requirements.
3. Business Plan and Documentation Preparation
A critical part of the licensing process is the submission of a detailed business plan, along with all necessary documentation. Contact Advisory Services helps payment businesses prepare robust business plans that meet MFSA standards, ensuring that every aspect of the application process is covered—from corporate governance to financial projections.
4. Liaison with Regulatory Authorities
Dealing with regulatory authorities can be time-consuming and complex. Contact Advisory Services acts as an intermediary, managing all communications with the MFSA and other relevant bodies. This helps expedite the approval process and ensures that your business receives timely feedback and guidance during the application phase.
5. End-to-End Support
From the initial application to obtaining the final license, Contact Advisory Services provides end-to-end support for businesses. This comprehensive assistance includes advice on corporate structuring, legal representation, and ongoing compliance monitoring, allowing you to focus on building your payments business while ensuring that all regulatory obligations are met.
Conclusion: Malta – A Strategic Choice for Your Payments Business
Setting up your payments business in a reputable jurisdiction is essential for regulatory compliance, operational stability, and long-term growth. Malta offers all the benefits of a reputable jurisdiction, backed by its alignment with EU regulations, robust financial infrastructure, and business-friendly environment. With its growing fintech ecosystem, competitive tax structure, and strategic location, Malta stands out as an ideal destination for payment providers looking to establish a global footprint.
With the support of Contact Advisory Services, you can confidently navigate the licensing process, ensuring that your business meets all regulatory requirements while positioning itself for success in one of the most respected financial jurisdictions in the world.