All about
Malta ICO Licences

Legal Basis for ICO Licensing
Why Malta for your ICO Licence
ICO Requirements
ICO Licence Process
Licence Fees & Taxes
ICO Post-Licensing Obligations

Overview

The applicable ICO licence costs, including application and supervisory fees are found under the Virtual Financial Assets Regulations (Subsidiary Legislation 590.01), as issued under the VFA Act, Chapter 590 of the Laws of Malta as well as under the Innovative Technology Arrangements and Services (Fees) Regulations (Subsidiary Legislation 592.01), as issued under the ITAS Act, Chapter 592 of the Laws of Malta.

With respect to applicability of tax, at the outset it would be pertinent to point out that the income generated from the issue of tokens in an ICO is not subject to income tax.

Under the Guidelines on Income Tax Treatment of Transactions or Arrangements Involving DLT Assets, issued by the Commissioner for Revenue, the proceeds of an initial offering (or token generation event) is not treated as income of the issuer and the issue of new tokens is not treated as a transfer for the purposes of taxation of capital gains. Notwithstanding the aforesaid, gains or profits realised from the provision of future services or supply of goods or benefits to the token holder will represent income and will be subject to income tax.

ICO Licence Costs

Quick Overview

The issue of virtual financial assets in or from within Malta is subject to the following ICO licence costs, regulatory and/or professional fees:

  • Regulatory Fees (Whitepaper Registration Fee & Annual Supervisory Fee)
  • Fees related to the submission of a Systems Audit Report
  • Other professional fees for the appointment of key functionaries such as VFA Agent, Systems Auditor and Auditor.

Tax

Tax

No tax is imposed on capital raised in pursuit of an initial coin offering or token generation event. The proceeds of such issue are not treated as income of the issuer and the issue of new tokens is not treated as a transfer for the purposes of taxation of capital gains.

An initial offering  of ‘virtual financial assets’ entails an obligation of the issuer to perform a service or to supply goods or benefits to the token holder. Gains or profits realised from the provision of the services or the supply of goods will represent income.

Thus, corporate tax at the rate of 35% would be payable to the relevant tax authorities by the issuer on the profits generated from the provision of the services or the supply of goods but not on the capital raised pursuant to issue of tokens. It is important to note however, that a number of tax incentives may be applicable to your business model, thereby reducing the corporate tax due by the operator.

Regulatory Fees

Whitepaper Registration Fee

Upon submission of a whitepaper for registration, irrespective of whether the whitepaper is registered, issuers shall pay a one time non-refundable Application Fee of €8,000.

Annual Supervisory Fee

ICO licence costs include also an Annual Supervisory Fee of €2,000  to be paid by the issuer to the MFSA upon the submission of the certificate of compliance.

Systems Audit Report

Appointment of Systems Auditor

Issuers must appoint and have in place at all times a Systems Auditor. The fee charged by a licensed Systems Auditor may vary depending on the nature of the technology employed in the generation of tokens, and its features and characteristics.

Submission of Systems Audit Report

A whitepaper will not be registered by the MFSA unless it is satisfied that a Systems Audit Report has been drawn by the Issuer’s Systems Auditor and submitted for approval by the Malta Digital Innovation Authority (MDIA).

The processing fee for the submission of a Systems Audit Report with the MDIA is €3,000.

Key Functionaries

Key Functionaries

Other fees issuers must consider before issuing tokens in or from within Malta include:

  • Fees related to the registration and maintenance of a Malta company;
  • Fees related to the appointment of a VFA Agent;
  • Fees related to the appointment of a Systems Auditor;
  • Fees related to the appointment of an Auditor;
  • Fees related to the appointment of other key functionaries such as Money Laundering Reporting Officer and Compliance Officer;
  • Fees related to the live replication of the issuer’s servers in Malta (if such servers are not located in Malta).

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Top 10 Reasons to Choose Malta

How we can help

Gonzi & Associates, Advcocates, has extensive experience in this field and is able to provide specialised assistance to your business at all stages of the Malta ICO licence application procedure, including:

  • Malta Company incorporation and registration
  • Drafting of legal opinions on the legal nature of your cyrptocurrency to determine the applicable legal framework
  • Collection & preparation of documentation necessary for submission of your Malta ICO licence (registration) application
  • Advising and assisting in the drafting of a whitepaper
  • Drafting of ICO offering T&Cs
  • Assisting in the engagement of Key Functionaries, including VFA Agent, Systems Auditors, Money Laundering Reporting Officers (MLROs), director/s, auditors, and so on
  • Guiding through every stage of the whitepaper registration process
  • Providing post-registration follow-up assistance, including advising on applicable annual compliance exercises.

We can assist.