Malta has established itself as a recognised European jurisdiction for the licensing and operation of EMIs, supported by a harmonised EU regulatory framework, an established financial services infrastructure and a sophisticated professional services environment. Over recent years, Malta has continued to attract fintech operators, payment service providers and cross-border financial technology businesses seeking access to the European market through an EU-regulated platform.
The Maltese EMI framework is principally governed by the Financial Institutions Act (Chapter 376 of the Laws of Malta), subsidiary legislation issued thereunder, the Financial Institutions Rules published by the Malta Financial Services Authority (“MFSA”), and the broader European regulatory framework established under the Electronic Money Directive (Directive 2009/110/EC) (“EMD2”) and the revised Payment Services Directive (“PSD2”).
As an EU Member State, Malta applies a regulatory regime which is substantially harmonised with European financial services legislation, enabling licensed EMIs established in Malta to potentially passport their services throughout the European Economic Area (“EEA”), subject to the applicable notification procedures and regulatory requirements.
At European level, however, the existing PSD2 and EMD2 framework is currently undergoing significant reform through the proposed Third Payment Services Directive (“PSD3”) and the proposed Payment Services Regulation (“PSR”). On 27 November 2025, the European Parliament and the Council of the European Union announced that a provisional political agreement had been reached on the PSD3 and PSR legislative texts.
One of the most significant structural reforms under the proposed framework involves the consolidation of the current Payment Institution and Electronic Money Institution regimes into a unified licensing category under which authorised payment institutions would also be permitted to issue electronic money. Under the proposed reforms, electronic money issuance would effectively become a regulated sub-activity within a broader payment services licence. Existing EMIs are expected to benefit from transitional grandfathering arrangements rather than being required to undertake entirely new licensing processes from the beginning.
Although the final implementation timeline remains subject to the completion of the European legislative process, market participants are generally anticipating the new PSD3/PSR framework to become operational by late 2027, together with transitional provisions applicable to existing authorised institutions.
Regulatory Framework and Scope of EMI Activities
Under Maltese law, an Electronic Money Institution is generally authorised to issue electronic money and provide certain payment services connected to such issuance. Electronic money broadly refers to electronically stored monetary value issued upon receipt of funds for the purpose of executing payment transactions and accepted by persons other than the issuer.
Licensed EMIs operating in or from Malta may, depending on the scope of their authorisation, provide services including the issuance of electronic money, execution of payment transactions, money remittance services, payment account operations, card issuance, digital wallet solutions and other regulated payment-related activities.
The MFSA acts as the competent supervisory authority responsible for the licensing, prudential supervision and ongoing regulatory oversight of EMIs established in Malta. Applicants are subject to detailed licensing assessments involving governance arrangements, operational structure, internal controls, financial resources, compliance systems and fitness and properness requirements applicable to shareholders, directors and senior management.
The regulatory environment has evolved significantly in recent years following broader European developments involving PSD2, the proposed PSD3/PSR reforms, enhanced AML/CFT supervision, operational resilience expectations and increasing scrutiny of fintech business models operating within the European Union.
Particular importance is now also placed on compliance with the Digital Operational Resilience Act (“DORA”) (Regulation (EU) 2022/2554), which became applicable on 17 January 2025 and has become a central regulatory pillar governing ICT risk management, cybersecurity resilience, incident reporting, outsourcing oversight and operational continuity obligations applicable to financial institutions, including EMIs operating within the European Union.
The EU Instant Payments Regulation (Regulation (EU) 2024/886) is similarly becoming increasingly relevant for payment institutions and EMIs operating within the SEPA framework, particularly in relation to Verification of Payee requirements, IBAN-name matching controls and operational expectations connected to SEPA Instant payment infrastructure.
Minimum Capital Requirements and Prudential Obligations
One of the central regulatory requirements applicable to Maltese EMIs concerns initial capitalisation and ongoing own funds obligations.
Under the current Electronic Money Directive framework as implemented in Malta, an EMI is generally required to maintain a minimum initial capital of at least €350,000. However, depending on the scale, complexity and projected activities of the institution, the MFSA may expect significantly higher levels of capitalisation in practice, particularly where the proposed business model involves substantial transaction volumes, cross-border operations, safeguarding complexities or heightened operational risk.
The €350,000 threshold remains the applicable minimum capital requirement under the current EMD2 framework. However, the proposed PSD3 and PSR reforms are expected to revisit prudential requirements applicable to payment institutions and electronic money issuers, including the possibility of increased capital and safeguarding expectations within the future consolidated licensing regime.
In addition to minimum initial capital requirements, EMIs are also subject to ongoing own funds requirements calculated in accordance with applicable prudential methodologies and transaction-based metrics established under EU law and MFSA rules.
Particular importance is also placed on safeguarding obligations relating to client funds, operational resilience, governance frameworks, cybersecurity controls, outsourcing arrangements and risk management systems. Applicants are generally expected to demonstrate sufficient local substance, effective management in Malta and adequate operational oversight structures capable of supporting regulated financial activities.
AML/CFT Compliance and Supervisory Expectations
Electronic Money Institutions established in Malta are subject to extensive anti-money laundering and counter-terrorist financing (“AML/CFT”) obligations deriving from Maltese law, EU legislation, Financial Action Task Force (“FATF”) standards and regulatory guidance issued by the MFSA and the Financial Intelligence Analysis Unit (“FIAU”).
The European AML framework is itself undergoing significant reform through the evolving Anti-Money Laundering Regulation (“AMLR”), the Sixth Anti-Money Laundering Directive (“AMLD6”) and the establishment of the new Anti-Money Laundering Authority (“AMLA”), which became operational on 1 July 2025. The AMLR and AMLD6 framework is expected to become fully applicable from 10 July 2027 and will materially affect governance, compliance and supervisory expectations applicable to EMIs and payment institutions operating within the European Union.
EMIs are generally expected to implement robust Customer Due Diligence (“CDD”), Know Your Customer (“KYC”), transaction monitoring, sanctions screening and internal reporting procedures proportionate to the nature and scale of their operations.
The supervisory focus placed on fintech and payment institutions has increased materially in recent years, particularly in relation to outsourcing models, agent networks, safeguarding arrangements, fraud prevention systems, governance standards and cross-border transaction monitoring. Regulatory expectations concerning board oversight, compliance independence and internal audit functions have similarly become increasingly sophisticated.
Corporate Structuring and Establishment of Maltese EMIs
From a corporate structuring perspective, Maltese EMIs are generally established through private limited liability companies incorporated under the Companies Act (Chapter 386 of the Laws of Malta). In practice, the use of Maltese limited liability companies remains the standard structure for regulated financial institutions due to their operational flexibility, separate legal personality and compatibility with EU licensing requirements.
Applicants typically establish dedicated Maltese operating entities through which the regulated EMI activities are conducted. Depending on the wider business structure, such entities may form part of broader international fintech groups involving holding companies, technology entities or foreign operational subsidiaries.
Particular importance is increasingly placed on local governance and substance considerations. The MFSA generally expects applicants to demonstrate meaningful operational presence in Malta, including local directors, effective decision-making processes, appropriate staffing arrangements and sufficient operational infrastructure proportionate to the scale of the regulated activities.
Licensing Process, Documentation and Estimated Timelines
The licensing process for a Maltese EMI generally involves multiple regulatory phases, including preliminary meetings with the MFSA, submission of formal application documentation, regulatory review, operational readiness assessments and final licensing approval.
The overall process may vary considerably depending on the complexity of the proposed business model, the quality of the application and the responsiveness of the applicant during the regulatory review phase. In practice, a full EMI licensing process in Malta may commonly require between six and twelve months from the initial preparation stage to formal authorisation, although more complex structures may require longer timeframes.
Applicants are generally required to submit extensive supporting documentation, including:
- detailed business plans and financial projections;
- programme of operations;
- governance and organisational structure documentation;
- AML/CFT policies and procedures;
- safeguarding frameworks;
- risk management and internal control policies;
- ICT systems, DORA compliance frameworks and cybersecurity documentation;
- shareholder and beneficial ownership information;
- fitness and properness documentation for directors and senior management;
- source of funds and source of wealth documentation;
- outsourcing agreements and operational arrangements;
- constitutional and corporate documentation.
The MFSA also places significant emphasis on the experience, competence and regulatory understanding of the proposed management team and ultimate beneficial owners involved in the structure.
Strategic Outlook for Malta’s EMI and Fintech Sector
Malta’s EMI and fintech regulatory landscape continues to evolve within an increasingly harmonised European supervisory environment. While the jurisdiction remains attractive for fintech operators seeking access to the EU market, the regulatory approach has become progressively more compliance-driven, prudentially focused and institutionally sophisticated.
The transition towards the future PSD3 and PSR framework, together with the continued implementation of DORA, the evolving EU AML package and Instant Payments Regulation obligations, is expected to materially reshape the compliance and operational environment applicable to EMIs and payment institutions across the European Union over the coming years.
As European regulation surrounding payment institutions, operational resilience, AML/CFT compliance and digital finance continues to expand, Malta is expected to retain strategic relevance as a regulated European jurisdiction capable of accommodating licensed financial institutions operating on a cross-border basis within the EU framework.
How Promethean Can Assist
Promethean advises fintech operators, payment institutions, EMIs, family offices and international businesses on the establishment and operation of regulated financial structures in Malta. Our team assists clients with corporate structuring, MFSA licensing procedures, regulatory analysis, governance frameworks, AML/CFT compliance, tax considerations and ongoing operational support within the evolving European financial services environment. For further information regarding EMI licensing and fintech structuring in Malta, please contact us.
