Malta Banking

Malta has an excellent banking centre which has shown continued growth amidst global recession. The more old-fashion risk-averse attitude of the main local banks has ensured their stability and a number of new banks are taking root in Malta offering savings products.

Corporate Banking

There is generally no requirement for Maltese companies or structures to bank in Malta though many chose to do so. In the case of regulated entities or companies having very large share capitals a bank account in Malta may be necessary at least at the formation stage but this does not preclude the possibility of also opening foreign bank accounts.

Taxation
Local companies pay tax on income paid by Maltese banks at an effective rate of 10%. The holding by Maltese companies and other vehicles of bank accounts elsewhere is commonplace and in such cases income in Malta will be subject to tax at an effective rate of 10%.

Choice of Bank
Local providers in Malta usually cultivate relationships with two or three local banks and are usually best placed to present options to their clients. The choice of bank will depend on the reputation of the bank, the type of activity intended and the urgency of the application. All Maltese banks operate in accordance with EU-wide Know Your Client (KYC) rules.

Retail Banking
Malta has three main high-street banks (Bank of Valletta, Banif and HSBC) along with a host of private banks which offer all the usual services.

Merchant Services (Payment Gateways)
Malta is one of the world’s leading online gaming destinations and accordingly has an excellent merchant services industry. This is provided by the banking sector and by a variety of local Maltese and international providers which can integrate with the Maltese banks. The banking sector in this area is highly risk averse however local gateway providers exist to service all types of card processing needs.

Mortgage Financing
Maltese banks are generally very conservative and aside from mortgages over local property and some limited factoring opportunities lending is tightly controlled. It is this conservatism which has seen Maltese banks sail through the global recession but it can make Malta an unattractive destination for borrowing. For vessel financing please see our main article on Malta’s maritime industry. Maltese banks are generally not in a position to offer back-to-back loan financing but mortgage given against cash security (to conceal the connection between a company and the source of its funds) is possible.

Factoring
Malta’s banking sector is highly conservative but some factoring opportunities may exist over either local income or the return of tax to the shareholders (under the sixth sevenths or five sevenths refund systems) may be available.

Anonymous Banking
Malta is not a suitable choice for anonymous banking.

Prepaid Credit Cards
A number of local banks issue prepaid credit cards.The use of prepaid credit-cards may be an effective means to achieving anonymous payments or transfer of money in countries with unreliable banking systems or where other payment systems are not trusted. Since they are also associated with tax evasion, anonymous purchases and the avoiding of national restrictions on the use of online gaming sites they can be problematic since they may either trigger card processors’ anti-fraud mechanisms or attract unwanted attention from banks or tax authorities. Additionally Malta treats the regulation of issuers of eMoney separately from the regulation of banking and it is possible to obtain an eMoney only licence. For a full discussion of the regulation of eMoney issuers in Malta please see our main article in the regulated activities section.

Foreign Exchange
Foreign Exchange in Malta is effected by banks and by a number of local companies. Local banks are usually willing to offer vanilla options for forward dated forexs which allows clients to hedge against risks in currency movements for example if they are paid in a GBP or USD but have expenses arising in EUR. Foreign exchange is licensable in Malta.

Safety Deposit
Safety deposit boxes are offered by several banks in Malta and costs are generally very reasonable.

Trading Accounts/Custodian Services
The major local banks offer trading account and stock custodian services (for the holding of locally listed securities and those listed elsewhere) though they are more expensive than stockbrokers they may be desirable in some cases where few trades are envisaged since banks may be considered to be more financially stable than stock brokers.

Personal Banking

Taxation
Residents pay tax according to their tax status (for a full discussion of the types of residency and their tax treatment please see our main article on Maltese residency). Non-residents are not taxed on income arising from interest in Malta.

Choice of Bank
Local providers in Malta usually cultivate relationships with two or three local banks and are usually best placed to present options to their clients. The choice of bank will depend on the reputation of the bank, the type of activity intended and the urgency of the application. All Maltese banks operate in accordance with EU-wide Know Your Client (KYC) rules.

Retail Banking
Malta has three main high-street banks (Bank of Valletta, Banif and HSBC) along with a host of private banks which offer all the usual services.

Anonymous Banking
Malta is not a suitable choice for anonymous banking.

Deposit/Savings Account
Placement of funds on long term deposit accounts will lock them for a longer term but the interest rates will be higher. Accounts of this sort are usually subject to a significant minimum deposit level and some increased due diligence requirements and are offered by all local banks including a number of private banks which do not offer retail banking.

Prepaid Credit Cards
A number of local banks issue prepaid credit cards.The use of prepaid credit-cards may be an effective means to achieving anonymous payments or transfer of money in countries with unreliable banking systems or where other payment systems are not trusted. Since they are also associated with tax evasion, anonymous purchases and the avoiding of national restrictions on the use of online gaming sites they can be problematic since they may either trigger card processors’ anti-fraud mechanisms or attract unwanted attention from banks or tax authorities.

Foreign Exchange
Foreign Exchange in Malta is effected by banks and by a number of local companies. Local banks are usually willing to offer vanilla options for forward dated forexs which allows clients to hedge against risks in currency movements for example if they are paid in a GBP or USD but have expenses arising in EUR.

Safety Deposit
Safety deposit boxes are offered by several banks in Malta and costs are generally very reasonable.

Trading Accounts/Custodian Services
The major local banks offer trading account and stock custodian services (for the holding of locally listed securities and those listed elsewhere) though they are more expensive than stockbrokers they may be desirable in some cases where few trades are envisaged since banks may be considered to be more financially stable than stock brokers.

Depositors’ Guarantee
Malta’s depositors’ guarantee level is, like most EU countries, currently 100,000 EUR.