Malta

Online Gaming Operations in Malta
22 April 2006

To obtain a licence from Malta you need first to set up a Malta company which  will then apply for the licence.

After that there is an application process that normally takes around 12 weeks to complete.

The information requested with the application will normally include:

Details about directors and shareholders of the Malta company including:

Copy of passport
Good conduct proof - from local lawyer
Details of the gaming software to be used
Business plan.

Here are the GUIDELINES issued by the Lotteries and Gaming Authority of Malta to assist you in learning more what is needed for a licence application.

For a poker site the malta gaming tax is 10% of the net rake ( i.e. rake less bonuses etc) but subject to a maximum of Lm200,000 ( US$500,000 per year)

The income tax on a Malta company is 35% of the profits made, but with our system of refunds of taxes, the actual tax will come down to 5%.

For a licence to be issued in Malta, the servers have to be based in Malta. There are companies that provide you with this service and the band width that you would require.

Getting a licence from Malta is serious business and there are strict rules and regulations to cover this. Having serious regulations will make players feel more secure and therefore will add to your site's attraction and success. This is why the major gaming sites - eg Betfair, are moving their business to Malta. The island is now considered to be a leader in this industry, not because getting a licence here is easy, it is not, but because the industry is regulated seriously but with flexibility.

Our office already services a number of internet gaming sites and we shall be very happy to assist you both in getting a licence and establishing operations in Malta. Our fees will vary upon the services you require and these can be discussed when you know exactly what your requirements are.

=================================================

contact us for more details

Serious gaming companies understand the importance of a reputable licence. Being perceived by players as safe and credible will provide greater credibility to online game sites and therefore assist in making them more competitive on the market.

Malta offers the E-Gaming Industry a package that few other jurisdictions can match. The Remote Gaming Regulations issued in early 2004 by the Lotteries and Gaming Authority continue to enhance on the existing rules and further enhances Malta’s reputation as a jurisdiction to be trusted by both players and operators.

The Authority will grant licences to operate gaming offices to such persons who have demonstrated “appropriate business ability to conduct the betting office successfully”.

The new rules provide for four different classes of licences, namely:

Class 1 – Remote Gaming Licence for online gaming
Class 2 – Remote Gaming Licence for online betting office
Class 3 – Promotion and abet gaming from Malta
Class 4 - Hosting and managing only gaming operations, excluding licences itself.

Licences are issued for a minimum period of five years and may be extended for further periods of five years each.

Licensing Requirements

Obtaining a gaming licence in Malta is a serious affair and in the interest of the consumers and the local reputation, the Authority would require to know that the applicant can meet the licence obligations. The licensing procedure is quite extensive but thanks to the professionality of the persons involved, this procedure should not take more than 5 to 6 weeks.

The application for a gaming licence requires the following documentation:

1. Detailed profile of the promoting company
2. A copy of the last audited accounts of the promoting company, where applicable
3. A business plan indicating the economic activity – including job creation if any – which will be carried out from Malta
4. A plan of the premises earmarked for adoption as a call center.
5. Personal details of all shareholders having more than 5% interest in the local operations.

Basic Requirements

• Both hardware and software involved in the operations must be located in Malta, and there exist companies that can provide this service without the need for the licensee to obtain its own premises.
.
• The activities of the International Trading Company are limited to those carried outside Malta. No Maltese resident is permitted to place bets with such a company.

Licence Fees

On submission of application form – Lm1,000 (US$2,700) for any class of remote gaming licence.

On Issue of any Remote Gaming Licence – Lm3000 (US$8100) per annum. Such a licence is normally issued for a 5 year period.

On application for renewal of any Remote Gaming Licence – Lm500 (US$1,350)

Taxation

On online gaming – Lm2000(US$5400) per month for first six months and Lm3000(US$8100) per month for the entire duration of the licence period.

On Class 4 Licences – Lm0.0 (NIL) per month for first six months and Lm1000(US$2700) per month for the next six months and Lm2000(US$5400) per month for the remaining period of the licence.

Online betting operations – one half of one per centum (0.5%) on the gross amounts of bets accepted

Online betting exchanges – one half of one per centum (0.5%) on the sum of all net winnings calculated per player per betting market.

Online pool betting – one half of one per centum (0.5%) on the aggregate of stakes paid.

Provided that in no case will the maximum of tax payable per annum by any licensee in respect of any one licence, exceed Lm200,000.

Company Registration

A Malta based gaming operation must be carried out by a Malta registered company as specified in Regulation 4 of the Remote Gaming Regulations (LN176/2004). For non resident applicants we further recommend that such e-gaming operation be carried out through an INTERNATIONAL TRADING COMPANY (ITC) registered in Malta for that purpose. Although such a company is considered an ONSHORE Malta company and taxed at the standard 35% company tax rate, through a series of refunds, the shareholders of such an ITC will end up receiving back 30.83% of the taxation paid in Malta when the company profits are distributed as dividends. This actually brings down the effective tax rate on profits to 4..17% .

EU Laws

The EU presently does not regulate gambling and in accordance with the EU principle of solidarity, EU member states are free to regulate the matter at a national level. In fact the EU welcomes Malta’s approach to attract and regulate the online gaming industry.

In a number of test cases, the European Court of Justice has held that the Treaty of Rome applies to the sector since online gaming is classified as a service and therefore guaranteed by one of the four freedoms enshrined in the treaty of Rome.

An important aspect to remember is that in order to benefit from the application of the Internal Market Principles and provide cross border services within the European Union one should be established in the EU. Malta, being an EU member since 1st May, 2004, offers such an opportunity which few other e-gaming jurisdiction can match.

What Malta Offers

Tax Advantages

• Low taxation on gaming
• A low tax onshore tax regime -4.17% of taxable profits
• A network of double taxation agreements

Other Advantages

• A sound legal and financial system
• A sound ICT infrastructure
• Legislation on betting and e-commerce
• Strong regulatory bodies
• A solid international reputation
• Skilled work force
• Low cost of doing business
• State of the Art telecommunications facilities
• An internal market of circa 500 million EU citizens.
 

Disclaimer

The above information is being provided as a general guide only and should not be considered as a substitute for professional advice.