REGULATION
substance structures. The direction of EU policy is clear: genuine substance is the non-negotiable price of access to treaty benefits and favorable tax treatment. In the Maltese context, substance means genuine economic activity on the island. For a B2B gaming operator, this requires board meetings held in Malta with minutes reflecting real deliberation on strategic matters; key management functions based in Malta with sufficient presence to credibly direct and control the company from the island; employees with relevant expertise whose presence is genuine rather than nominal; and physical premises that reflect the scale and nature of the business 15 . The MGA's own substance expectations have been reinforced by the banking sector's approach to corporate account management 16 . Malta's banks apply rigorous AML and substance criteria independently of the MGA's regulatory requirements. A company that presents itself as operating from Malta but cannot demonstrate a credible physical and operational presence will encounter significant banking difficulties — severe in the gaming industry context given the centrality of banking to payment processing and operational cash management. The substance requirement is not unique to Malta. Every EU member state imposes substance requirements under its domestic tax law and the ATAD framework. The question is whether the professional infrastructure to support genuine substance at proportionate cost is available 17 . In Malta, the availability of qualified professionals to act in management roles, the physical office market, and the quality of life that attracts international executives and employees to relocate ar e
all relevant factors that support the establishment of genuine substance in ways that smaller or less developed jurisdictions cannot match.
Candid Assessment: Where Malta Falls Short An analysis that addresses only Malta's strengths would be of limited value to practitioners. Several genuine limitations deserve honest treatment. The banking environment is the most consistently cited operational challenge 18 . Malta's banks apply detailed and time-consuming due diligence procedures to corporate account opening. The process for a newly licensed B2B operator can extend to several months, and applicants who cannot demonstrate strong substance, clear revenue sources, and a credible business model face the realistic prospect of rejection. This is not an indictment of Malta's banking sector, which is appropriately cautious given the AML exposure of the gaming industry, but it is a genuine operational constraint that clients must plan for with realistic timelines. The domestic labor market is finite 19 . Malta's population of approximately 550,000 represents a ceiling on the absolute number of experienced gaming professionals available locally, and two decades of industry growth have driven significant salary inflation in key roles. Operators who build their Malta headcount without a realistic recruitment strategy and compensation framework frequently encounter higher-than- anticipated labor costs and turnover. The cost of living and property market have risen substantially over the past decade 20 . For operators relocating international
15 See OECD, 'BEPS Action 13: Country-by-Country Reporting' and related substance guidance, and the discussion in Mondaq, 'The Importance of Substance' (2020) 16 MFSA, 'Supervisory Priorities 2025', mfsa.mt. AML compliance, including enhanced due diligence for gaming-related corporate accounts, is identified as a supervisory priority 17 European Commission, 'Business Environment Rankings' (2024) 18 EY, 'Malta as a Business Location — Investment Survey' (2024). 51% of foreign direct investment companies in Malta identified banking access and AML procedures as a significant operational challenge 19 NSO Malta labor market data (2025). Salary inflation in key gaming roles has been a consistent feature of the Malta market across a five-year period 20 NSO Malta, 'Property Prices Index Q4 2024', nso.gov.mt
IMGL MAGAZINE | SEPTEMBER 2026
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