Practice Areas > Investment Services, Fintech & Capital Markets > Blockchain & ICOs > VFA Services > Class 3 > Fees & Costs
Overview
The applicable Malta Class 3 VFA licence costs, including application and supervisory fees are found in 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.
The ‘Guidelines on the Income Tax Treatment of Transactions or Arrangements Involving DLT Assets‘ issued by the Commissioner for Revenue are also a point of reference in determining the tax liability with regard to VFA licence holders.
VFA Licences Costs
Quick Overview
The operation of a Class 3 VFA Service is subject to the following licence costs, regulatory and/or professional fees:
- Regulatory Fees (Application Fee and 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
Gains or profits realised from the operation of a VFA services represent trading income. Thus, corporate tax at the rate of 35% would be payable to the relevant tax authorities by the licence holder on the profits generated from the provision of the services. 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
Application Fee
Upon submission of a licence application, applicants shall pay a one time non-refundable Application Fee of €14,000.
Annual Supervisory Fee
VFA licence costs include an Annual Supervisory Fee of to be paid by the licence holder to the MFSA annually upon the submission of the audited financial statements. The applicable Annual Supervisory Fee will depend on the revenue generated by the licence holder, as follows:
- For revenue of up to €250,000, an Annual Supervisory Fee of €12,000.
- For further tranches of €250,000 [up to a maximum of €50,000,000], an additional €800 per trance or part thereof.
Systems Audit Report
Appointment of Systems Auditor
Licence Holders must appoint and have in place at all times a Systems Auditor (or an IT Auditor where the service does not utilise ‘innovative technology arrangements‘). The fee charged by a licensed Systems Auditor may vary depending on the nature of the technology employed in the provision of the VFA service.
Submission of Systems Audit Report
A licence application submission will not be deemed complete by the MFSA unless it is satisfied that a Systems Audit Report has been drawn by the applicant’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 applicants must consider before submitting a licence application 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 or IT 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/or Compliance Officer;
- Fees related to the establishment and maintenance of a Live Audit Log
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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 Class 3 licence application procedure, including:
- Malta Company incorporation and registration;
- Drafting legal opinions to establish the legal nature of your services and technologies to determine the applicable legal framework;
- Assistance in the collection & preparation of documentation necessary for licence application submission, including business plan, financial projections and internal policies;
- Drafting Maltese-law aligned T&Cs governing the provision of your services;
- Assisting in the identification and appointment of Key Functionaries, including VFA Agent, Systems Auditor or IT Auditor, Money Laundering Reporting Officer (MLRO), Non-Executive Director/s, Auditor, etc.;
- Providing post-registration follow-up assistance, including advising on applicable annual compliance exercises.
- Registration of your trade mark in the Malta trade mark register and the register of the European Union Intellectual Property Office as necessary;
- Providing general legal advice and assistance as required.