On-shore VASP in Malta
Locally-incorporated VASP that operates under full local jurisdiction, holding all required licenses and registrations.
On-shore VASP is conditionally permitted in Malta with a local entity, subject to AML obligations and high licensing burden.
Verdict Details
- Permitted
- conditional
- Local entity required
- Yes
- Licensing burden
- High
- Last updated
- 2026-07-13
AML Obligations
- AML/KYC policies must be submitted as part of the licence application (mt.licensing.application-submission-file-form-with)
- Subject to the Prevention of Money Laundering Act (Chapter 373) and PMLFTR regulations, which transpose EU 5th AML Directive 2015/849/EU (mt.aml.prevention-of-money-laundering-act)
- Ongoing compliance with VFAA and MiCA AML/CTF requirements, supervised by MFSA (mt.aml.virtual-financial-assets-act-vfaa, mt.aml.markets-in-crypto-assets-regulation-mica)
- Full due diligence and fit-and-proper assessments by MFSA (mt.licensing.reviewdue-diligence-mfsa-assesses-fitproperness)
- Tax reporting registration required with MTCA for Registered Crypto-Asset Service Providers under forthcoming DAC8 guidelines (transposition expected by late 2025) (mt.licensing.malta-tax-and-customs-administration)
Key Restrictions
- Must be incorporated as a Maltese company (mt.licensing.company-setup-incorporate-maltese-company)
- Must hold a Class 4 VFA Services Licence covering the specific services offered (exchange, custody, payment processing) (mt.licensing.exchanges-eg-crypto-trading-platforms, mt.licensing.custody-providers-eg-safekeeping-va, mt.licensing.payment-processors-eg-va-payment)
- Pre-licensing consultation with MFSA required via Statement of Intent (mt.licensing.pre-licensing-consultation-submit-statement-of)
- Post-licensing conditions must be met before commencement — e.g., local office, governance requirements, and MFSA confirmation (mt.licensing.post-licensingpre-commencement-meet-governanceoperational-conditions-eg)
- Must demonstrate ability to comply with MiCA and national implementing legislation (Markets in Crypto-Assets Act, Cap. 647) (mt.licensing.demonstration-of-ability-to-comply, mt.licensing.markets-in-crypto-assets-act-chapter)
- Ongoing compliance with VFA Rulebook (Chapter 3 on Service Providers) and MFSA guidelines (mt.licensing.vfa-rulebook-chapter-3-on)
Key Risks
- Dual regulatory framework complexity: VFAA (existing) + MiCA/Markets in Crypto-Assets Act (2024) creates transitional ambiguity (mt.licensing.virtual-financial-assets-act-vfaa, mt.licensing.markets-in-crypto-assets-act-2024)
- Bill 107 (MiCA Title V transposition) currently under deliberation — future CASP licensing requirements are not yet settled (mt.licensing.bill-107-currently-under-deliberation)
- DAC8 transposition expected by late 2025 — tax reporting obligations and RCASP registration may introduce additional compliance burdens (mt.licensing.malta-tax-and-customs-administration)
- High operational cost: capital requirements, local incorporation, physical office, and multi-stage licensing process (mt.licensing.application-submission-file-form-with, mt.licensing.post-licensingpre-commencement-meet-governanceoperational-conditions-eg)
- MFSA has discretion over fit-and-proper assessments and pre-commencement confirmation, creating timeline uncertainty (mt.licensing.reviewdue-diligence-mfsa-assesses-fitproperness)
Evidence
This verdict synthesizes the following facts. Each fact links to its primary source(s).
Exchanges (e.g., crypto trading platforms, OTC, brokerage): Class 4 VFA Services Licence covering reception/transmission, execution of orders, and exchange services.
Custody Providers (e.g., safekeeping VA, crypto wallets): Class 4 VFA Services Licence, emphasizing client asset segregation and security.
Payment Processors (e.g., VA payment solutions): Class 4 VFA Services Licence for VA-to-fiat or VA transfers.
Pre-licensing Consultation: Submit Statement of Intent; confirm services, get feedback on model.
Company Setup: Incorporate Maltese company; conduct Financial Instrument Test; draft policies/business plan.
Application Submission: File form with MFSA, including Memorandum/Articles, audited statements (if applicable), proof of capital, AML/KYC policies.
Review/Due Diligence: MFSA assesses fit/properness, compliance.
Approval in Principle: Conditional license issued.
Post-Licensing/Pre-Commencement: Meet governance/operational conditions (e.g., local office); commence upon MFSA confirmation.
Virtual Financial Assets Act (VFAA), Chapter 590: https://legislation.mt/eli/cap/590/eng/pdf
VFA Rulebook (Chapter 3 on Service Providers): https://www.mfsa.mt/wp-content/uploads/VFA-Rulebook-issued-in-terms-of-VFAA-27.11.2018.pdf
Demonstration of ability to comply with MiCA and national implementing legislation
MiCA (Markets in Crypto-Assets Regulation): Fully enforceable as of December 30, 2024, with Titles III and IV (covering stablecoins) effective from June 30, 2024
Act XIV of 2024: Transposes MiCA Titles III and IV into Maltese law
Markets in Crypto-Assets Act, 2024 (Cap. 647): The national implementing legislation
Bill 107: Currently under deliberation, aimed at transposing MiCA Title V on Crypto-Asset Service Providers (CASPs)
Malta Financial Services Authority (MFSA): Supervises entities authorized under the Markets in Crypto-Assets Act (Cap. 647), including crypto-asset service providers (CASPs) and issuers offering crypto-assets to the public or seeking trading admission.
Malta Tax and Customs Administration (MTCA): Handles crypto-asset tax reporting, with registration required for Registered Crypto-Asset Service Providers (RCASPs) under forthcoming DAC8 guidelines (transposition expected by late 2025).
Markets in Crypto-Assets Act (Chapter 647 of the Laws of Malta): Principal legislation transposing MiCA, effective 2024; governs issuers and CASPs, with MFSA powers for licensing, penalties, and subsidiary rules.
Virtual Financial Assets Act (VFAA) – The foundational legislation enacted in 2018 that first regulated cryptocurrency in Malta
Markets in Crypto-Assets Regulation (MiCA) – EU-wide regulation implemented in Malta through Act XIV of 2024, which integrated Titles III and IV concerning Asset-Referenced Tokens (ARTs) and E-Money Tokens (EMTs)
Prevention of Money Laundering Act (Chapter 373, Laws of Malta) and associated PMLFTR regulations, which transpose the EU's 5th AML Directive 2015/849/EU
Virtual Financial Assets Act (VFAA), 2018: Core pre-MiCA framework (https://legislation.mt/eli/cap/647/eng – note: linked to Markets in Crypto-Assets Act).
Markets in Crypto-Assets Act (Cap. 647): MiCA implementation (https://legislation.mt/eli/cap/647/eng).
Verdict Attribution
- Source:
- AI-Generated · Unreviewed
- AI synthesized:
- 2026-07-13 (deepseek-chat)
- Last updated:
- 2026-07-13
- Confidence:
- medium
This verdict was produced by an AI model from the underlying facts. Confirm with counsel before relying on it for material decisions.
Conditional — an on-shore VASP in Malta must be locally incorporated and obtain a Class 4 VFA Services Licence from MFSA through a multi-stage process (pre-licensing consultation, application, fit-and-proper review, approval-in-principle, post-licensing conditions) under the VFAA and Markets in Crypto-Assets Act (MiCA implementation), with Bill 107 potentially introducing additional CASP requirements.
Questions this verdict aims to answer
- What license(s) are required to operate locally?
- What capital, governance, and reporting obligations apply?
- What is the application process and timeline?