Electronic Money Institutions (EMIs) & Payment Service Providers (PSPs) in Malta

What is a PSP?

A Payment Service Provider (PSP) is a legal entity authorised by a national regulatory authority to offer payment services within the European Economic Area (EEA). In simple terms, PSPs enable individuals and businesses to send, receive, or manage money. These providers may include banks, Electronic Money Institutions (EMIs), or other licensed non-bank financial entities.

What is an EMI?

An Electronic Money Institution (EMI) is authorised to issue and manage electronic money, enabling digital financial transactions. To qualify as an EMI in Malta, two key elements must be present:

1. Prepaid electronic money
2. Capability to transfer electronic money freely to third parties

E-money is a digital alternative to cash, typically stored on prepaid cards, digital wallets, and mobile payment apps. This digital transformation enhances payment efficiency and security. Advantages for financial transactions, include:

• Convenience: Instant payments without the need for cash
• Security: Encrypted transactions reduce fraud risks
• Efficiency: Faster, borderless transactions for businesses and consumers.

EMIs are a subset of PSPs and are permitted to offer all the services a PSP can, plus they are uniquely allowed to issue and manage electronic money. Both must comply with EU regulatory requirements, but EMIs have stricter capital and safeguarding obligations due to their ability to hold and issue stored value.

 

Advantages of Obtaining an EMI or PSP Licence in Malta

Malta’s regulatory framework, governed by the Financial Institutions Act (Chapter 376 of the Laws of Malta) ('The Act'), provides a supportive environment for financial institutions. Key benefits include:

• Reputable Jurisdiction: A robust jurisdiction enjoying a good reputation offering several business incentives
• EU Passporting Rights: Expand operations seamlessly across EU Member States through a Maltese EMI licence. 
• Technological Infrastructure: Advanced digital infrastructure and fintech-friendly policies
• Skilled Workforce: A highly-skilled, English-speaking financial and compliance talent pool
• Regulatory Stability: A clear and efficient licensing process regulated by the Malta Financial Services Authority (MFSA)
• Corporate Tax: Malta adopts as full imputation system thereby eliminating double taxation 

These advantages collectively position Malta as a leading jurisdiction for obtaining an EMI Licence.

 

Regulatory Requirements for an EMI or PSP Licence in Malta

Any company seeking an EMI or PSP Licence in Malta must comply with the licensing requirements set by the MFSA under the Financial Institutions Act. The application process includes:

• Submission of the Licence Application: Companies must submit a detailed application form to the MFSA, ensuring all regulatory criteria are met.

• Compliance with the Payment Services Directive, Electronic Money Directive and Markets in Crypto-Assets Regulation (as applicable): Businesses can either apply for a new licence in Malta or hold an equivalent authorisation from another EU country.

• Regulatory Review: The MFSA assesses applications to confirm adherence to the Financial Institution Rules.

 

Permitted Activities for Financial Institutions in Malta

While EMIs are authorised, subject to prior approval from the MFSA, to issue electronic money, both EMIs & PSPs may engage in the following activities:

1. Providing payment services services including enabling cash and/or cash withdrawals to be placed on/from a payment account and the operations required for operating a payment account as well as executing payment transactions such as those from payment cards, direct debits and standing orders;
2. Granting credit related to certain payment services as detailed in the Act given that it is not granted from the funds received in exchange of electronic money and held in accordance with the relevant safeguarding requirements. 
3. Offering operational services and closely related ancillary services concerning the issuance of electronic money or the provision of payment services referred to in point 1 above. 
4. Conducting business activities other than the issuance of electronic money, in accordance with the applicable law regulating such activities 

It should be noted that EMIs, as legal entities, are able to issue electronic-money tokens under the Markets in Crypto-Assets Regulation, however this is subject to notifying the MFSA and issuing a whitepaper.

EU Passporting for EMIs & PSPs in Malta

 

A licence obtained in Malta to operate as an EMI or a PSP shall be valid in all Member States and shall allow the financial institution  to carry out its relevant authorised activities either through the establishment of a branch by exercising the right to establishment or by exercising its right under the freedom to provide services.

For example, a licensed EMI may also provide payment services and, or distribute and, or redeem electronic money in another Member State through an agent and, or a distributor, as applicable. In order to exercise such powers, a licensed financial institution is required to give notice to the MFSA of such an intention, which notice shall contain the necessary information as prescribed in the Act. 

Regulatory Requirements for an EMI Licence or PSP Licence in Malta 

To apply for a Electronic Money Institution or Payment Service Provider Licence in Malta, businesses must meet the following criteria:
 

• Minimum initial share capital: Licensed financial instituions shall ensure that their own funds do not fall below the amount of initial share capital, or the amount of own funds as calculated in accordance with the Financial Institution Rules, whichever is higher. 

 

• At least two individuals to effectively manage the Financial Institutions’s operations from Malta. Such individuals must have a good reputation and sufficient experience to occupy such roles. For the MFSA to form such an opinion, such individuals along other key personnel within the institution and any qualifying shareholders, will be subject to certain due diligence procedures as prescribed by the MFSA;

 

• Sound and prudent management and robust governance arrangements: Such arrangements must include a clear organisational structure with well defined, transparent and consistent lines of responsibility, effective procedures to identify, manage, monitor and report the risks to which it is or might be exposed, and adequate internal control mechanisms, including sound administrative and accounting procedures. The MFSA will also expect that a part of such management be effectively carried out in Malta; 

 

Administrative fee for Financial Institutions in Malta 

MFSA imposes the following costs on financial institutions: 

• a one-time application fee of €10,000 payable upon submission of a licence application, and 
• an annual supervision fee based on the institution’s balance sheet, with a minimum of €25,000 per year 

 

How BDO Malta Can Supports Financial Institutions in Meeting Regulatory Requirements 

Financial Institutions (FIs) are operating in an environment of heightened regulatory scrutiny, especially with the introduction of the Markets in Crypto-Assets Regulation (MiCA) and the Digital Operational Resilience Act (DORA). These frameworks bring new compliance requirements that FIs must address to maintain their authorisation and safeguard operational resilience.

BDO Malta provides end-to-end support tailored to the specific regulatory, operational, and technological needs of FIs. Our team helps clients assess their readiness, implement the necessary controls, and manage compliance obligations in a practical and sustainable manner:
 

• Strategic Guidance: We help you align your operational structure and business model with regulatory expectations across core areas such as governance, capital requirements, safeguarding, and reporting. 
• Licensing & Authorisation Support: Our team supports FIs at every stage of the licensing process—from preparing applications and business plans to liaising with the Malta Financial Services Authority (MFSA). 
• Compliance Audits: We conduct detailed assessments of your internal controls and procedures, identifying gaps and supporting alignment with applicable regulatory frameworks. 
• Policy & Document Review: We review internal documentation, including customer disclosures, risk frameworks, and governance policies to ensure consistency and regulatory soundness.
• Audit & Assurance Services: Our statutory and regulatory audit services provide transparency, financial integrity, and confidence to regulators, partners, and stakeholders.
• Corporate & Financial Management Services: Whether you’re setting up a new entity or relocating to Malta, we provide fully managed support including company formation, accounting, tax compliance, and financial reporting. 

 
 

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