Click here to view the October newsletter
The Markets in Crypto-Assets Regulation (MiCA) is revolutionizing the European crypto industry. For the first time, crypto service providers (CASPs) across the EU can operate under a single, harmonized licensing framework, replacing the patchwork of national regulations. This opens unprecedented opportunities for exchanges, wallet providers, custodians, and token issuers aiming to scale across the European Single Market.
Among all EU jurisdictions, Malta stands out as the leading gateway for MiCA licensing. Leveraging its early adoption of the Virtual Financial Assets Act (VFA) in 2018, Malta combines regulatory maturity with a robust fintech ecosystem, political stability, and a regulator experienced in blockchain supervision. For crypto businesses seeking EU-wide market access, Malta offers a credible, efficient, and cost-effective entry point.
Why Malta is the Ideal Choice for MiCA Licensing
Malta earned its nickname, “Blockchain Island,” by being among the first EU countries to implement dedicated crypto rules. The experience gained from regulating VFA license holders has made the transition to MiCA smoother for both firms and regulators. Today, Malta provides:
- Proven compliance infrastructure tailored to digital asset businesses
- Access to EU-wide markets via passporting rights
- Attractive tax incentives, with effective corporate tax rates as low as 5% for eligible shareholders
- Professional support ecosystem, including legal, accounting, and governance services
- Smooth transition for existing VFA license holders
The Malta Financial Services Authority (MFSA) supervises MiCA licensees, known for being approachable yet thorough, with a track record in fintech and blockchain oversight.
MiCA License Classes in Malta
MiCA divides crypto-asset service providers into three classes, based on the services offered and capital requirements:
- Class 1: Advisory, order execution, transfers, portfolio management. Minimum capital €50,000. Ideal for brokers and advisors.
- Class 2: Adds custody and exchange services (crypto-fiat or crypto-crypto) to Class 1 activities. Minimum capital €125,000. Suitable for exchanges and custodians.
- Class 3: Full trading platforms including Class 1 & 2 services. Minimum capital €150,000. Required for large-scale trading operators.
Higher classes provide broader authorisations but come with stricter compliance and operational requirements.
Structured Application Process
Obtaining a MiCA license in Malta typically takes 4–9 months, depending on complexity:
- Company Setup: Incorporate a Maltese company and appoint key officers, including a local director.
- Documentation: Prepare a detailed business plan, governance framework, AML & IT policies.
- Submission to MFSA: File the complete application with fees.
- Completeness Check: MFSA verifies documentation (approx. 25 working days).
- Regulatory Review: Assessment of governance, financials, risk management, and compliance systems (approx. 40 working days).
- Conditional Approval: Subject to meeting final requirements like capital deposits, staffing, and office arrangements.
- License Grant: Full authorization to operate and passport across the EU.
Who Should Consider a Malta MiCA License
Malta’s MiCA license suits a wide range of crypto businesses:
- Exchanges and wallet providers
- Custodians and broker-dealers
- Token issuers targeting EU clients
- Platforms with centralized DeFi elements
- Existing VFA license holders seeking an efficient transition
Applicants must demonstrate fit-and-proper management, transparent ownership, sustainable financial resources, and a local presence including directors and staff in Malta.
Transition Options for VFA License Holders
Companies already regulated under the VFA Act before December 2024 benefit from:
- 18-month transition period until July 2026
- Continued operations while completing MiCA application
- Simplified application process
- Reduced fees, sometimes up to 50% off
Passporting: EU-Wide Market Access
One of MiCA’s biggest advantages is passporting. A license granted in Malta allows CASPs to operate across all EU countries without obtaining additional national approvals. License holders simply notify the MFSA, which informs relevant regulators. Operations can begin within 15 calendar days, making expansion to Germany, France, Italy, and the Netherlands seamless.
Fees and Ongoing Compliance
MiCA licensing costs in Malta are competitive:
- Application Fees: €10,000 (Class 1) – €25,000 (Class 3)
- Annual Fees: €10,000 – €50,000
- Supervisory Levy: 0.05% of annual transaction volume (capped at €250,000)
- Ongoing obligations: Quarterly reporting, annual audits, AML & IT reviews, and board meetings in Malta
Tax and Legal Advantages
Malta offers one of the most favorable environments for international crypto businesses:
- Standard corporate tax rate: 35%, with refunds often reducing effective tax to 5%
- No VAT on crypto trading services
- Access to 70+ double taxation treaties
- English-speaking legal and professional environment
- Residency and relocation support for executives and founders
How 1st Step Supports MiCA Licensing
Navigating MiCA in Malta requires strategic planning. 1st Step assists at every stage:
- Company formation and local substance solutions
- Drafting business plans, governance frameworks, AML and IT policies
- Staff recruitment and direct liaison with MFSA
- EU passporting strategy and expansion planning
- Ensuring scalable and compliant operations for long-term growth
With 1st Step, crypto businesses gain a fast, reliable, and efficient path into the European market under MiCA.
Click here to view the October newsletter
