Each country forms its own requirements for gambling operations. We analyzed the factors affecting Georgia and Malta business success.
Each country is unique in terms of any business type rules, especially when it is about gaming industry. The awareness of basic principles, licensing rules and tax obligations gives a chance to significantly simplify the jurisdiction choice for conducting gambling projects while forming their success basis. The work permit obtaining process in the country is the key feature.
We are glad to provide our readers with a comparative description of the main gambling business aspects in Georgia and Malta after analyzing the information from freely available sources.
Gambling business in Georgia
Georgia’s free industrial zones are deemed one of the most progressive economic zones in both former and existing CIS countries. For example, Kutaisi’s free industrial zones, located in Georgian city, which has got the same name, despite its brief existence (it was discovered in 2015), has already earned economic jurisdiction center fame. Gambling is deemed one of the most profitable and prosperous branches in Kutaisi.
Gambling business is a part of the entertainment industry and is completely legal in nature, according to Georgian law. Therefore, you can get a permit to both conduct land-based gambling business as well as open a casino or slot machine hall and betting company, online casino, totalizator or to provide services as a lottery operator within jurisdictions.
The main Georgia’s free industrial zones license obtaining benefits:
- legal status and jurisdiction loyalty related to tax and customs legislation;
- an opportunity to get a permit remotely;
- an opportunity to open merchant accounts in foreign jurisdictions, as well as the ability to conduct large international business.
Gambling license obtaining conditions in Georgia
The permit obtaining conditions to engage in the gambling business are established by the country’s gambling regulator.
The first condition is at least one manager (director) presence, whose identity hasn’t been disclosed, according to Licensing Gaming expert. Both minimum company’s monetary capital requirements as well as quarterly or annual reporting requirements are absent. The licensee must open an account in one of the Georgian banks. There are no requirements for recruitment or a fixed office in the country. In addition, licensees are not subject to such taxes: income tax, real estate property and dividends.
It’s required to provide certain documents, namely the beneficiary’s passport, company registration data (extracts from the register), i.e. a legal entity, license fee payment receipt, games and slots list with the rules, owner’s and top managers’ criminal record absence certificate as well as the document confirming the beneficiary’s residence in order to apply for a license.
Company registration, obtaining a license for the gambling services provision, as well as opening a bank account in Georgia will cost approximately €9600.
The nominal service will cost €10000 in the first business year in the country and €3800 starting from the second year of working in the jurisdiction. An accelerated permit receipt (by calculation for today) may require an additional amount of about $750.
Gambling business in Malta
Malta is one of the most popular jurisdictions for the gambling business, even though the rules for licensing operators have been changed since 2004. The fact the country is a member of the British Commonwealth of Nations contributes to the country’s attractiveness. The special status has been provided due to the fact that Malta is the first country in the European Union, which launched online gambling market on its territory.
«Currently Malta is one of the most global online gambling jurisdictions in the world. The country provides four gambling licenses classes in the country. The first-class license gives a chance to provide online casino and lottery services, as well as random number generator use-based games. The second licensing class is provided for the betting companies operation. The third class will be required for the advertising services provision by the operator, as well as poker games organization. The fourth class licenses are required for the software developers, used for gambling organizing and conducting”, – according to Licensing Gaming.
Lots of companies apply for the specialists’ help in order to reduce time costs since the license obtaining process in a jurisdiction is a rather complicated, burdened by certain requirements.
Gambling business experience is one of Malta license obtaining requirements.
Gambling license obtaining conditions in Malta
Certain documents list is required to get gambling services provision permit in Malta:
- request (the document will be accepted after paying €2330 fee);
- brief biographical information about the beneficiaries;
- business founders passports copies;
- company’s regional certificate;
- charter and memorandum of association;
- partners’ recommendations, which may be lawyers or company executives;
- certificate of no criminal record;
- audit report.
In addition, the applicant must provide a business plan and software data, which will be used by the operator in the work.
The required license processing deadline takes about 18 weeks.
Taxation and licensed payments
The tax system for the gambling business in Malta implies each individual article to correspond to the licensing classes.
Thus, the licensee, who owns the first-class permit, is obliged to pay €4660 tax in the first six months of the company’s operation, then from 6th months to a year the tax rate rises to €7000.
Second-class license holders, who provide the users with sports betting services, pay 0.5% of the accepted rates amount.
Profits from third-class licenses are subject to a tax rate of 5% given the difference between the company’s expenses and revenues.
The company, which is engaged in development, is exempted from paying taxes for the first six months after obtaining a fourth-class license. Then the company pays €2330 from the 7th to the 12th month. Further, the tax rate rises to €4660 and is valid until the permit expiration.
Besides Malta provides a high threshold for annual tax deductions, which can’t be exceeded – it is €466000.
Gambling license in Georgia is issued by entrepreneurs who, prior to the prohibits introduction, worked in Ukraine or Russian Federation. This is due to geographical location, neighboring markets knowledge as well as the customer’s mentality specifics. In addition, Georgia has got a loyal tax system and a single license for all gambling services types provision right.
“Maltese license is certain quality and company’s status and quality indicator. It is attractive due to the special license holders position, issued in one of the EU countries, despite certain difficulties in design, gambling regulator’s requirements rigidity and high cost”, – according to Licensing Gaming specialist.