Explanation of the importance of having a Bank account in Malta
The expansion of the Maltese economy in the past few years has led to an increase in the demand for banking services here in Malta. Consequently, number of existing banks and other Financial institutions had to adapt to conform with such new norms and this has also led to an expansion within the Banking Industry.
Advantages of Local Banking Options in Malta
The fact that Malta has integrated into the Pan-European system, anyone already holding a bank account with a European Bank does not necessarily have to open another bank account with a Maltese financial institution when deciding to either relocate or to relocate their business here in Malta. However there are instances where we would recommend to our clients to look into local banking options, depending on the needs and wants of the individual/business. Many local banking options offer a convenient and comprehensive banking experience through their wide range of products, services and expertise. One can mention various products and services being offered by local banks to both retail and corporate clients such as savings accounts with favourable interest rates, current accounts in multiple currencies, checking accounts, time deposits, lines of credit, overdrafts, both debit and credit cards, trade finance, foreign exchange services, direct lending, internet banking including user friendly and highly sophisticated mobile phone applications, cash letters of credit, chequebooks, ATMs and Electronic Point of Sale (EPOS) Systems. Individuals or corporate clients would also have dedicated account managers that would be taking care of any of their banking queries.
Business Bank Accounts: A Necessity for New Ventures in Malta
If you are starting a new business here in Malta, a new segregated business account would be needed. This would make your business looks more trustworthy as both clients and suppliers feel more comfortable paying and receiving payments to and from a business bank account held in the name of the company rather than dealing with a private account held in the name of the Director or the Ultimate beneficial owner of the company. There are also instances where banks will not accept to pay and receive business related transactions through a private bank account. In case your business would need any credit facilities, local banks will not lend money to a business unless the company would hold a business bank with that particular bank. When it comes to bookkeeping, it would be easier for reconciliation purposes to have a separate business bank account for your company.
The Challenges of opening a Bank Account in Malta
Due to an increase and more strict regulations in the banking sector, opening a bank account in Malta, has become a never ending process and sometimes people tend to get confused with such a complicated process. There are instances where business applying for a bank account would find lack of cooperation from local banks and will end up being left hanging without being able to initiate or continue with their daily operations. Sometimes the process of opening a local bank account would take several months until completed, and there are instances where applicants would also be refused by particular banks after waiting for initial feedback for several weeks. Fees for opening and maintaining a local bank account has drastically increased. Although such fees has increased, the expected level of customer service has not proportionally improved, and in some occasions clients would argue that the services being offered by the banks has instead deteriorated.
The Increased Scrutiny and Bureaucracy in Bank Account Opening in Malta
Having issues in opening a business bank account is one of the least things that anyone can expect when relocating the business here in Malta, especially after taking into consideration that we are still recovering from the repercussions that everyone has faced during the pandemic and the repercussions that still exists related to the war in Ukraine. Local Banks are being more bureaucratic and this might be the main reason for excessive delays in the process of opening a bank account here in Malta. Recently there has been an increase in requirements in order to open a bank account that has led to a demand for more clarifications and documentation from the applicants. The fact that more information is being requested, banks are taking longer in order to be able to scrutinise all the details provided. The increase in demand for more level of due diligence and information is a result of having banks being heavily regulated by the European Central Bank and the Malta Financial Services Authority. Banks would also need to show, especially after Malta has been temporarily grey listed for a short period of time, that they are fulfilling their regulatory obligations, when it comes to combating financial crimes. Nowadays, Banks are more focusing on the financial history of the applicant. The financial history of a company would makes it easier for bank’s compliance department to understand better the main source of income and source of wealth of the business or the individual. Source of funds and source of wealth would also need to be supported by realistic documentation, and sometimes by not providing the bank with what is expected would lead to a delay or a rejection of the application.
Onboarding Hurdles for New Businesses in Malta
One should always bear in mind that during onboarding process, banks would be analysing every little detail being provided in order to make sure that any risks related with the potential client would be mitigated. Sometimes new businesses would find it very difficult to provide as much as possible information and documentation to the bank as being at the very initial stage of their journey, people would only have rough estimates related with expected turnover, and the counterparties that they would be dealing with. This can also lead to some hiccups during the process of opening a bank account for your newly incorporated company.
The Benefits of Using Professional Services to open a Bank account in Malta
A bank account for your company is highly essential for day to day business. Finding the right banking partner for your company’s needs is also of utmost importance and plays an important role for the success of the business. As previously highlighted, bank account opening process sometimes can be problematic and not providing the correct or enough information to the bank might lead to delays in the process or consequently in the rejection of the application, hence the use of professional service when opening a bank account nowadays has become vital.
Here at Dr Werner & Partners, we can help you find the right banking partner by using our expertise and excellent relationships with both local and foreign banks. We try to make the process as easy as possible to offer our clients a customised solution, we would assure our clients that any banking related matters are handled in a timely manner and in a most professional way.
Conclusion
From our end we can guide you in choosing the best banking partner that would fit best for your company’s banking needs. We would make sure that all necessary due diligence and information required by the chosen bank would be provided in order to try to have the account opened in a timely manner. Our main aim is to make sure that our clients would get a bank account or multiple bank accounts for their company and knowing how important is to have the account quickly opened, through our good relationships with Banks, we would try to have the account opened within few weeks or sometimes even within few working days. Successfully opening a bank account for our clients does not mean that our service would be completed. From our end we would make sure that ongoing support related with banking queries is provided to our customers even after the account is fully operational.
Going through all the difficulties that one can encounter when trying to open a bank account here in Malta, we can conclude that nowadays it has become essential for businesses to seek professional services as this would increase the level of success in terms of bank account opening and business owners would also have more time to focus more on their business rather than spending their energy on trying to open a bank account for their business.
Disclaimer: The above-mentioned article is simply based on independent research carried out by Dr. Werner and Partners and cannot constitute any form of legal advice. If you would like to meet with up with any of our representatives to seek further information, please contact us for an appointment.
