Every few weeks an email lands in my inbox that reads roughly the same way: we are building a payments product, we want an EU licence, and we have heard Malta is fast and cheap. Two of those three things are wrong.
Malta is a serious place to licence an electronic money institution. My clients hold Maltese structures, Sabrina is on the ground in Valletta, and our firm has been guiding people through MFSA processes for years. But "fast and cheap" is not what this is. Anyone who tells you otherwise is selling you the application, not the outcome.
So here is the honest version: what an EMI licence actually permits, what it costs, how long it takes, and, most importantly, who actually gets one.
What an EMI Licence Actually Is
An Electronic Money Institution is licensed in Malta under the Financial Institutions Act (Cap. 376), the law that transposes the EU's E-Money Directive and PSD2 into Maltese law. The regulator is the MFSA.
An EMI can issue electronic money: stored value that customers load and spend. In practice that means e-wallets, prepaid and virtual cards, IBAN accounts for customers, and the full range of payment services that payment institutions provide. An EMI is the licence behind most of the fintechs you know that look like banks but are not banks.
What an EMI is not: a bank. It cannot take deposits. Customer funds are not lent out; they must be safeguarded, typically in a dedicated account with a credit institution, segregated from the EMI's own money. The MFSA's rulebook is explicit that financial institutions may grant certain credit but are prohibited from using customers' money to fund it.
This distinction matters commercially. If your business model depends on lending out customer balances, you need a banking licence, which is a different universe of capital and supervision. If your model is payments, wallets, cards, and moving money, the EMI is the right tool.
The Capital: 350,000 Euro Is the Entry Ticket, Not the Budget
The initial capital requirement for a Maltese EMI is €350,000, set out in the MFSA's Financial Institutions Rulebook FIR/03 and drawn directly from Article 4 of the E-Money Directive 2009/110/EC. It must be in place at the time of authorisation, and the MFSA expects you to demonstrate during the application process that the money is real and available. For comparison, a plain payment institution needs between €20,000 and €125,000 depending on the services. E-money is the expensive end of the non-bank spectrum, deliberately.
And €350,000 is only the floor. Once you are operating, the own funds requirement is the higher of the initial capital or 2% of average daily outstanding electronic money. Issue €50 million of e-money on average and your own funds requirement is €1 million, not €350,000. The rulebook also allows the MFSA to set a higher initial requirement where an institution combines activities. Growth in this business consumes capital by design.
Here is the practical point most applicants underestimate: the capital is the smallest of the large numbers. By the time you add advisors, staff, systems, and the operating losses of the first eighteen months, a realistic all-in budget for getting a Maltese EMI licensed and through its first year of operation is comfortably seven figures. I have never seen it done credibly for less.
The Application Path at the MFSA
The MFSA does not run a form-filling exercise. The process, laid out in Chapter 1 of the Financial Institutions Rulebook, looks like this in practice:
Preliminary stage. Before anything formal, you go through the MFSA's authorisation process, which includes a preliminary meeting. You must submit a presentation at least ten working days beforehand covering your full group structure, regulatory history, the exact licensable activities, a flow of funds diagram, three years of financial projections, an organisation chart showing who will actually be based in Malta, your IT platform and DORA compliance, outsourcing, and safeguarding arrangements. If the presentation is missing, the MFSA cancels the meeting. That tells you something about the tone.
The application. The formal application follows the EBA's guidelines on authorisation under PSD2: business plan, programme of operations, governance arrangements, internal controls, AML framework, security policy, and the rest. Every shareholder with a qualifying holding, every director, and every key function holder goes through the MFSA's fit and proper assessment: competence, integrity, and financial soundness, individually evidenced.
Substance. This is where dreams meet reality. The Financial Institutions Act requires Maltese financial institutions to carry out at least part of their business in Malta, and the MFSA requires applicants to identify, at the outset, the persons who will be effectively directing the business from Malta. In practice that means local executive directors, a Money Laundering Reporting Officer, a compliance officer, and internal control functions with real presence, plus an actual office. A brass plate and a nominee director do not survive first contact with the MFSA.
In-principle approval and pre-licensing. If the MFSA is satisfied, it issues an in-principle approval letter with conditions: final corporate documents, evidence of the paid-up capital, executed outsourcing agreements, recruitment of the key people named in your business plan, and the safeguarding account engagement with a credit institution. You have a maximum of six months from the in-principle letter to satisfy these conditions, otherwise the approval lapses. Then the licence is issued.
That last item, the safeguarding account, deserves its own warning. Finding a bank willing to hold safeguarded client funds for a new EMI is genuinely hard, in Malta and everywhere else. I have written before about the realities of Maltese banking. Start those conversations early, not after approval.
The Timeline: What the Law Says and What Actually Happens
The statute is optimistic. The Financial Institutions Act requires the MFSA to determine an application within three months of receipt of a complete application, and in any event within six months of receipt.
The operative word is "complete". The clock effectively runs from the point at which the MFSA has everything it needs, and requests for additional information restart the meter. The statutory three months describes the final stretch, not the journey.
The lived timeline is different, and I will mark this clearly as field experience rather than law: advisory firms working these files report that the end-to-end process for an EMI, from first engagement with the MFSA to licence in hand, typically runs twelve to eighteen months, with the preliminary stage alone absorbing two to four months. Our own experience with MFSA processes is consistent with that. Plan for eighteen months. If it comes in at twelve, celebrate.
Anyone promising you a Maltese EMI licence in six months is describing a timeline the MFSA does not recognise.
What It Costs to Keep the Licence
Malta revised its fee structure with effect from 1 January 2025, and the numbers moved decisively upward. Under the current Financial Institutions fees framework, the application fee is €10,000 for a single Second Schedule activity and €15,000 where an institution applies for both e-money issuance and payment services. Annual supervisory fees for an EMI start from a fixed component of €25,000 to €35,000, plus a variable component calculated on total assets or on transaction volumes and average outstanding e-money, capped at €250,000 per year.
Then the real costs begin, and here I will stay qualitative because they depend entirely on your model: an annual statutory audit by a Maltese audit firm; the salaries of an MLRO, a compliance officer, and risk staff who actually live and work in Malta, in a labour market where experienced compliance people are scarce and priced accordingly; directors' fees; office; regulatory reporting systems; and DORA-grade IT resilience. A lean but credible EMI compliance and governance setup runs to a meaningful six-figure sum every year before you have processed a single transaction.
Passporting: The Reason Malta Makes Sense at All
Why would anyone accept all this? Because of what comes out the other end: a licence that works in every EU and EEA member state.
The E-Money Directive applies the PSD2 passporting regime to authorised EMIs. Once licensed in Malta, you notify the MFSA, the MFSA notifies the host regulators, and you can provide services across the single market, through a branch, through agents and distributors, or on a pure cross-border services basis. One authorisation, one home regulator, roughly 450 million potential customers.
This is the trade every EU fintech licence represents: heavy entry requirements in exchange for the widest regulatory footprint in the world. Malta competes for this business against Lithuania, Ireland, and Luxembourg. It is smaller than all of them, which cuts both ways: you get a single regulator with genuine accessibility, and you get a regulator that remembers exactly who you are.
The Reputation Question: 2018 to 2022
Let me address the elephant directly, because your bank, your investors, and your host-state regulators will.
Malta had a brutal reputational stretch. The Daphne Caruana Galizia murder and its aftermath, bank failures, and years of criticism of its AML enforcement culminated in June 2021 with Malta being placed on the FATF grey list, the first EU member state to land there. It was a genuine shock to the system.
What happened next is the part that matters for anyone reading this in 2026: Malta executed its FATF action plan in a single year and was removed from the grey list in June 2022, one of the fastest exits any jurisdiction has managed. Beneficial ownership registers were rebuilt, the FIAU was resourced and started using its teeth, and the MFSA hardened its authorisation gate substantially.
The consequence is the Malta you meet today: slower, stricter, and more demanding than the Malta of 2015. I regard that as a feature. A licence from a regulator that waves everyone through is worth what it costs to get: nothing. A licence from a regulator that made you bleed for it travels well.
Who Actually Gets One (And Who Should Not Apply)
After years of watching these files succeed and fail, the pattern is not subtle.
Who gets licensed: teams with genuine payments or e-money experience in the management, a business model the MFSA can understand and stress, committed funding well beyond the €350,000, named individuals willing to relocate to or hire in Malta, and the patience to run an eighteen-month institutional process without cutting corners.
Who does not: the one-person fintech with a pitch deck and €400,000 total. I will say this as plainly as I can, because the licence brokers will not: if your total budget is not comfortably seven figures, do not start. You will spend a year and several hundred thousand euro discovering that the MFSA requires substance you cannot afford. The fit and proper test also quietly ends most applications where nobody on the board has ever operated inside a regulated financial institution.
A composite example from our practice, details blended as always: a founder with a working payments product in a non-EU market, two experienced hires willing to move, and institutional backing came through the process in around fifteen months and now passports across the EU. A two-founder startup with a beautiful app and €500,000 asked us the same year whether they should apply. We told them no, and pointed them at an agency model under someone else's licence until their numbers justified their own. That advice cost them nothing and saved them a fortune.
There is also a market in ready-made licensed EMIs. Be careful: any change in qualifying shareholding requires the MFSA's prior approval and a full fit and proper assessment of the buyer. You are not buying a shortcut, you are buying someone else's history plus the same scrutiny.
How We Work on These
Our firm has been structuring international setups since 2006 in the UK and 2008 in the US, and Malta has been a core jurisdiction for us since 2012. On licensing projects we work alongside specialised Maltese regulatory counsel: we handle the structure, the tax architecture around the licence vehicle, and the shareholder side, while Sabrina in Valletta deals with the ground game: incorporation, office, hiring conversations, and keeping the file moving when Maltese process slows down.
If you are seriously considering a Maltese EMI, the right first step is not the application. It is an honest conversation about whether your capital, your team, and your business model survive contact with the MFSA. That conversation is cheap. The wrong application is not.
Work with Sebastian
If an EU e-money licence is on your roadmap and you want a realistic assessment of Malta against the alternatives, that is exactly the kind of conversation I have every week. Book a consultation.
