Setting Up a Crypto Exchange Business in Malta Under MiCA

Setting up a crypto exchange in Malta isn’t just about picking a nice office location and installing some servers. It’s about navigating one of the most detailed, rigorous, and strategically valuable regulatory systems in the world. Since December 30, 2024, every crypto exchange operating in the EU - including those based in Malta - must comply with the Markets in Crypto-Assets Regulation (MiCA). Malta’s version, the Markets in Crypto-Assets Act (Chapter 647), is now the official gateway for firms wanting to serve the entire European Union with legally compliant crypto services.

Why Malta? It’s Not Just About Tax

Many people assume Malta’s appeal is its low corporate tax rate. That’s part of it, but the real advantage is something deeper: EU passporting rights. If you get licensed in Malta under MiCA, you don’t need separate licenses for Germany, France, Spain, or the Netherlands. One license, 27 markets. That’s worth billions in operational savings and market access.

Malta didn’t get here by accident. It started with the Virtual Financial Assets Act in 2018 - one of the first real crypto laws anywhere. When MiCA came along, Malta didn’t scramble. It already had a working system. The Malta Financial Services Authority (MFSA) had been testing the waters for years. That means regulators know what they’re looking for. They’ve seen hundreds of applications. They’ve rejected bad ones. They’ve approved strong ones. And now, with Gate Technology Ltd getting its MiCA license on September 1, 2025, the path is proven.

The Four Things You Must Have

You can’t just walk into the MFSA with a pitch deck and expect a license. You need four pillars in place before you even submit an application:

• A full business plan - not a one-pager. This must detail your services (spot trading? custody? staking?), target markets, user acquisition strategy, and projected growth over five years. Be specific. Say “we expect 50,000 active users in Year 1” - not “we think we’ll do well.”
• A governance structure - your board, compliance officers, AML officer, risk manager. Each role must be clearly defined with CVs, proof of experience, and evidence they’re not on any sanctions list. The MFSA checks backgrounds hard.
• Financial resources - you need to prove you have enough capital to operate for at least 12 months without income. For a full-service exchange, that’s usually €250,000 minimum. You’ll need bank statements, investor letters, or audited projections.
• Cybersecurity and risk controls - cold storage, multi-sig wallets, penetration testing reports, incident response plans. The MFSA doesn’t accept “we use BitGo” as an answer. You need to show how you monitor, detect, and react to threats in real time.

What Services Are Covered?

MiCA doesn’t just cover “crypto exchange.” It breaks it into four clear categories:

• Crypto-asset service providers (CASPs) - this is you. If you’re trading, custodying, or facilitating swaps between crypto and fiat, you’re under this.
• Issuers of asset-referenced tokens (ARTs) - stablecoins pegged to euros, gold, or baskets of assets.
• Issuers of electronic money tokens (EMTs) - digital money meant to be used like cash, like a digital euro.
• Issuers of other crypto-assets - utility tokens, governance tokens, anything that doesn’t fit the above.

If you’re running a standard exchange, you’re likely applying as a CASP. But if you’re also launching your own token? You’ll need to cover both. The MFSA treats each as a separate compliance stream.

The License Process: Real Timeline

There’s no official timeline published, but based on Gate Technology’s experience and other licensed firms, here’s what you can expect:

1. Preparation (3-6 months) - This is where most fail. Gathering documents, hiring compliance staff, setting up infrastructure. Rush this, and you’ll get rejected.
2. Submission - You submit everything to the MFSA. They acknowledge receipt and assign a case officer.
3. Review (4-8 months) - The MFSA digs into every detail. They may ask for 10 revisions. They’ll interview your team. They’ll test your systems.
4. Decision - Approval, conditional approval, or rejection. Conditional means you fix one thing (like adding a second AML officer) and resubmit.
5. Passporting (1-3 months) - Once licensed in Malta, you notify other EU regulators. They have 20 working days to object. Most don’t.

Total time? 12 to 18 months from start to live trading. No shortcuts.

Taxes: What You Actually Pay

Malta’s corporate tax rate is 35%, but there’s a catch. The refund system lets eligible companies reclaim up to 6/7ths of that tax if profits are distributed to shareholders. That brings the effective rate down to around 5% for foreign-owned companies. But this only applies if you’re structured correctly - usually as a holding company with dividends paid out.

For crypto exchanges, trading profits are treated as capital gains. That means you pay tax when you sell assets, not when you trade them. Mining rewards? Taxed as income. Staking rewards? Also income. You need accounting software that tracks every transaction. The MFSA will ask for it.

Malta has over 70 double-tax treaties. If you’re serving clients in Canada, Singapore, or Brazil, you won’t get hit with withholding taxes on payments. That’s a huge edge over countries without these agreements.

Who’s Already Doing It?

Gate Technology Ltd is the first major name to get a full MiCA license in Malta. But they’re not alone. By late 2025, Coinbase, Kraken, and Bitpanda had also applied. Why? Because they’re all preparing for the EU-wide rules. If you wait until 2027 to apply, you’ll be behind.

These companies didn’t just apply because Malta is “crypto-friendly.” They applied because they need to operate legally in Germany, France, and Italy. And only MiCA-licensed firms can do that without risking fines, shutdowns, or customer lawsuits.

The Hidden Costs

Most people focus on the license fee. That’s €10,000-€25,000. The real cost is the people.

• A full-time compliance officer: €70,000/year
• A cybersecurity specialist: €85,000/year
• Legal counsel familiar with MiCA: €120/hour minimum
• Internal audit team: 2-3 people
• Monthly software licenses for AML tools: €5,000+

If you’re a startup with $500,000 in funding, you’ll burn through it in 10 months before you even open your doors. There’s no way around this. MiCA doesn’t make exceptions for “small players.”

What Happens If You Skip the License?

You might think, “I’ll just operate from outside the EU and serve Maltese clients.” That won’t work. MiCA applies to any service offered to EU residents - even if you’re based in Dubai or Singapore. If a German user signs up on your platform, you’re subject to MiCA. The MFSA works with Europol. They track IP addresses. They monitor payment flows. If you’re not licensed and get caught, you face fines up to 5% of your global revenue - or 10 million euros, whichever is higher.

Is This Right for You?

Malta is perfect if:

• You’re building a serious, long-term crypto exchange
• You want to serve EU customers legally
• You have the budget for compliance (minimum €1 million in runway)
• You’re willing to wait 18 months to launch

It’s not right if:

• You want to move fast and break things
• You’re a solo founder with no legal team
• You think “crypto regulation” means filling out a form online

What Comes Next?

MiCA isn’t static. The MFSA will keep updating its rules. New guidelines on token listings, custody standards, and AI-driven trading will roll out in 2026. You need a team that watches this daily. You can’t set it and forget it.

The future belongs to licensed players. Unlicensed exchanges will vanish from EU app stores, payment processors, and bank accounts. The market is shifting. Malta’s system is the gold standard. If you’re serious about crypto in Europe, this is the path.