Gambling License Malta (Gaming License Malta) 

In the middle of 2003 the Maltese government amended its legislation with regard to online betting and games of chance to the effect that from then on it became possible to obtain a licence to open an online betting office or casino. This new type of legislation makes it very attractive for many firms to set up in business in Malta as the licence has high security features and it is possible, from now on, to advertise online betting or casinos within the area of the EU and to offer one’s services as an operator or agent (EU freedom of establishment). The licence is issued by the Lotteries und Gaming Authority. This authority is responsible for the monitoring and regulation of the e-gaming business. The licence is issued for 5 years and can be extended thereafter.

Learn more: Gambling LicenCeS And BASIC CONSIDERATIONS FOR SERVICE PROVIDERS - Our exposee regarding Gambling licences can be downloaded here


Gambling License (online casino-sports betting-gaming license): Malta

Applying for a Licence:

The following steps must be gone through and the following documents submitted:

  • A business plan, including a profit & loss account plan for the first 2 years, a CV and a copy of the passports of all the directors.
    A bank reference and a copy of any available licences.
    The fully completed application forms.
  • The setting up of an international trading company in Malta enjoying “foreign shareholder status”.
  • Engagement of a service provider for setting up the servers and internet service (the servers must be hosted in Malta).
  • Presentation and inspection of all the games along with the relevant rules as well as the associated software. The accurate recording and description of all the software and games and how they work.

Advantages of Malta as a Location Compared To Other Countries

Malta is a member of the European Union. Consequently, the EU freedom of establishment comes into play with regard to the law on gambling, and the decisions of the European Court concerning the freedom of establishment. It is exactly on this basis that the possibility exists of a company domiciled in Malta that has a gambling licence being able to offer its services and advertise throughout the EU. However, in some instances, there is a legal clash with internal laws. The presentation of the legal consequences would go beyond the present paper. However, we will gladly advise our clients with effect to these.

Setting up a company operating out of Malta also has advantages for EU residents from the point of view of tax law: the effect of the EU parent-subsidiary company directive, the EU directive on mergers, the failure of national regulations with regard to additional taxation (e.g. the tax legislation in Germany which applies to non-residents, § 8 of the German Foreign Transactions Tax Act ) to have any effect, and the effect of the EU freedom of establishment. In addition, Malta has a double-taxation agreement with almost all the important industrial countries, that is, the shielding effect of a DTA is available.

Within the EU, Gibraltar and England exist as alternatives. However, Gibraltar has high demands: a business operation must be established in Gibraltar in the normal business way. In addition, the authorities demand that people who are resident in Gibraltar be employed at the gambling company. England is actually a good location for providers of games of chance. On the downside there are the high costs compared to Malta and the high gambling and business taxes.

For purely reseller services (the client becomes an affiliate partner of existing companies with a gambling licence) Cyprus may also be suitable. Pure reseller services are allowed on Cyprus without a licence, that is, all that is required is to set up a company in Cyprus with business premises in Cyprus.


Gambling Licence in Malta and Possible Tax Arrangements

Internally (that is, in Malta) there is the possibility of setting up a holding company in Malta and a limited company in Malta. Provided that the holding company in Malta is under foreign ownership, there is a tax refund, with the result that the tax burden, at Maltese level, works out at 5% in the end. However, Malta is considering abolishing the tax privilege of holding companies. In this context - but also when designing a Maltese holding company - it is useful to set up an EU holding company as the owner/shareholder of the Maltese company. On the basis of the EU parent-subsidiary company directive the  EU holding company collects the dividends from Malta tax-free and does not tax proceeds purely from holdings. In addition, an EU holding company can invoice the (Maltese) subsidiary company for carrying out holding duties, which correspondingly reduces the taxable income at the level of the (Maltese) subsidiary company. Cyprus or Holland are possibilities as locations for an EU holding company.

The following rules apply with regard to direct investments in the Maltese gambling company or holding company:

 

  • Distribution to a natural person outwith Malta:

Tax paid at source in Malta in accordance with the double-taxation agreement, as a rule a tax rate at source of 15%. If there is no DTA, then tax is paid at source at the full rate for Malta.

  • Distribution to a legal person outwith Malta:

Outside the EU: tax at source in Malta in accordance with the applicable DTA, as a rule tax a tax rate at source of 5%. Within the EU: effect of the EU parent-subsidiary company directive (that is, tax-free collection of dividends), provided that the preconditions of the EU parent-subsidiary company directive are met.

In order to prevent being charged a high rate of tax at source in Malta, it is useful, once again, to interpose an EU holding company. Cyprus offers advantages in this connection, as Cyprus does not, in principle, subject further distributions to non-Cypriots to any tax at source, irrespective of whether a double-taxation agreement exists or not.
 
 

Necessary Preconditions for a Gambling Licence in Malta

First of all, the business premises must be located in Malta. This assumes that a person who is resident in Malta will act as a director of the limited company in Malta. On request, we can appoint a lawyer in Malta as a trust director or full-time director. In addition, a proper place of business must exist in Malta, simply having a registered office or a “letter-box” does not count as having a proper place of business in this sense. Domiciliation is possible in this case at a business centre in Malta, with a company sign, postal address and the forwarding of mail, one’s own telephone number and the taking of calls in person using the company name, and a fax service. We will gladly assume responsibility for linking up with a suitable business centre. As outlined above, the gambling service must be hosted on a Maltese server. There are precise requirements in this connection with regard to the location of the server and the security of the server. The server locations must be kept under seal, and only the Gambling Authority of Malta or the director of the Maltese Limited company, accompanied by an official of the Gambling Authority, has access.