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|Dream investments inc denver||Financemalta forex market also: Forward contract. Malta is perceived as a flexible and efficient jurisdiction for this kind of work due to its attractive corporate law and regulatory environment, as well as the advantageous fiscal treatment of locally financemalta forex market archview investment group aumsville used as vehicles for cross-border acquisitions. We attract entrepreneurs and investors from all over the world. Future Outlook Effective regulation and a highly personalised approach have helped Malta to establish itself as a fund servicing hub of international repute. The MSE is convinced that this new market has the potential to become a major pillar in the provision of capital financing to SMEs and will help Malta attract international business from countries such as China, Turkey, Italy, Spain, Eastern Europe and the Middle East. Malta has also extended this cell structure into a platform concept that involves a Recognised Incorporated Cell Company RICCproviding administrative services to any number of Incorporated Cells licensed as investment funds.|
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|American investment banks||For shorter time frames less than a few daysalgorithms can be devised to predict prices. Corporate formation is another important area of activity, and financemalta forex market company register today lists around 70, companies. AIFMs in Malta are now required to use a local custodian. Salaries are lower than in other Western European IT centres, such as the UK or the Scandinavian countries, thus enabling small- and medium-sized companies to develop new products at affordable HR costs. It is within the EU, and we will keep no secret that HR is becoming it that way. Popular Vehicles Incorporating a company in Malta only takes a few days. We feel that Malta has a strong proposition in these regards.|
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By introducing a strong supervisory framework as well as a competitive, transparent regime approved by both the EU and the Organisation for Economic Co-operation and Development OECD , Malta sought to distance itself from secrecy jurisdictions and tax havens.
Growing in Importance Over the years, Malta has accelerated its efforts to increase the depth and breadth of its finance industry. The scale of this transformation has been enough to help Malta be seen as an alternative to established European finance hubs such as Dublin, London and Luxembourg. The government believes there is still scope for expansion and has made prudently managed growth of the sector a top priority.
Financial DNA For an island nation of just , people, Malta has built up a remarkably diverse financial services portfolio. Today, close to 30 banks have established operations in Malta, although only a handful of these are active in the local market. Most use the island as a platform from which to conduct specialised asset financing, corporate banking and trade finance services. The insurance sector has experienced an upsurge due to the presence of expert insurance management services and EU passporting rights, and Malta is now regarded as one of the leading captive insurance domiciles.
While there are currently almost funds domiciled in Malta, the country is also increasingly attracting larger fund platforms, best-in-class service providers and sophisticated asset management activities. Corporate formation is another important area of activity, and the company register today lists around 70, companies.
Malta has also developed into an important wealth management location. Today, Malta hosts nearly 30 fund administrators and 60 insurance companies, ranging from well-known international names to smaller, niche establishments. Malta also boasts considerable expertise in the field of trusts and foundations, including many legal firms with in-house trust companies along with international organisations.
The country has gained a reputation for striking a good commercial balance, providing an appropriate legal framework without over-regulating in a way that might inhibit growth and innovation. This means companies benefit from streamlined procedures, reduced bureaucracy and lower regulatory fees. The MFSA is open and approachable and offers face-to-face meetings with international companies seeking to operate from Malta — a level of access which is rare in other finance centres.
Over the years, the MFSA has also worked together with the industry in developing the required capabilities, capacity and regulatory frameworks to move into new areas of business. To cement its position as a top domicile for the industry, Malta recently launched a new framework for the notification of Alternative Investment Funds AIFs , known as Notified AIFs, as well as rules for the establishment of loan funds. Renewed focus on the wealth management sector has also paid off.
Malta has updated its trust law, bringing it in line with the latest international developments, while the introduction of a citizenship-by-investment and new residency programmes helped promote Malta as a holistic lifestyle and wealth management location. Other sectors are also gaining importance. Malta has the largest shipping registry in Europe and is in the. Due to its strategic location, the country is also increasingly attracting the regional headquarters of businesses with a focus on the Middle East and Africa.
Worth a Career Move To guarantee a pipeline of talent and labour certainty for corporations, Malta has invested heavily in building up the competencies of its financial sector workforce. From homegrown talent to experienced international financial sector professionals, Malta today offers a diverse talent pool. In addition, industry-specific training is offered by a number of institutes.
Its Mediterranean island flair, coupled with opportunities for career progression, mean Malta is becoming an exciting destination for people considering a move abroad. However, the island has also sought to promote itself in overseas and developing markets, with special attention being paid to other financial hubs such as New York and Dubai.
In addition, Malta has negotiated favourable tax treaties with powerhouse growth markets such as China, India, Hong Kong and the US, with some 70 tax treaties in total. Its geographic position in the middle of the Mediterranean, and its close proximity to North Africa, also make it a good stepping stone for financial companies wishing to target the Arab world. Most law firms are affiliated with international networks, and many lawyers have post-graduate degrees in finance.
Clients can rest assured that they are dealing with professional firms. Trust and fiduciary providers need to be licensed by the MFSA and under new legislation, companies offering administrative and management services are also obliged to register with the authorities. The country is expanding its portfolio into profitable niche areas such as pensions and payments. In the area of payments, Malta is attracting growing numbers of e-money institutions and payment processors.
Securitisation has also been singled out as a future growth area, and Malta developed platform structures for securitisation transactions, introducing the Securitisation Cell Company SCC. As a politically stable and neutral country, Malta also has potential to become a centre for international arbitration, while its long-standing connections to North Africa and the Middle East make it a suitable jurisdiction from which to establish Sharia-compliant structures.
All stakeholders, financial service companies, support service providers and the regulator, are aware that speed to market is crucial these days. Traditionally, Malta has also enjoyed strong cost advantages. Malta is also keen on finding new niches for which it can develop the necessary regulation to attract business.
The close collaboration between industry and regulatory authorities is a key strength of, and augurs well for, the future of Malta as an IFC. However, throughout the years Malta has carefully protected its reputation. In fact, Malta has seen a flight of quality companies and tier-1 operators setting up on the island because of its status as a serious and well-regulated EU finance centre and the low reputational risk associated with it.
These features will help Malta to reinforce its position in the years ahead. The country is also determined to provide leadership in ongoing international discussions on financial regulation. The Mediterranean nation now confidently charts its path to the future. To lessen the economic distress, the country actively encouraged its population to look elsewhere for employment and better quality of life. Its well-diversified economy proves alluring to foreign companies, and Malta is placing more emphasis than ever on human capital seeking to attract professionals from abroad to support its booming economy.
Mediterranean Island Located at the southern tip of Italy and just over square kilometres in area, the Maltese Islands lie virtually midway between Europe and North Africa, some 90 kilometres south of Sicily and kilometres north of Libya.
The archipelago comprises Malta, Gozo and Comino. The main island, Malta, is 27 kilometres long and measures It takes just 45 minutes to cross Malta, reducing commuting times and increasing leisure time. A rocky Mediterranean island with dry and often windy conditions, Malta enjoys a typical Mediterranean climate, with the average temperature ranging from 12 degrees in winter to 30 degrees in summer.
The capital city Valletta is both the administrative and business centre of the country. Other main towns include: the popular sea-side towns of Sliema and St. The Phoenicians, the Romans, the Carthaginians, the Arabs, the Ottomans, the Knights of St John, the French and the British all ruled the island at one time and contributed to the mosaic that is modern Malta. Maltese is believed to have developed during the Arab occupation of the islands and is the only Semitic language to be written in Latin script.
International People Descendants of ancient Carthaginians and Phoenicians, with strong elements of Italian and other Mediterranean stock, the Maltese are truly an international people. With a history that has seen a succession of foreign rulers, the islanders have acquired an ability to adapt to new ideas and adopt them to. Since gaining independence from the UK in , Maltese politics has been dominated by two parties, both focused on attracting foreign investment and establishing a stable and competitive business environment.
Malta is also home to a growing expat population, attracted by strong economic growth and career prospects. Today, Malta is a parliamentary representative democratic republic, in which executive powers rest with the Prime Minister while the President fulfils the function of Head of State. The last general elections, in March , resulted in a landslide victory for Labour, at the expense of the centre-right Nationalist Party that had been in power for 15 years. The next parliament election is due in There is no doubt that Malta leads the region in many economic indicators.
Its small, open economy has proven to be remarkably resilient in the face of the global economic downturn. Malta has posted positive growth figures over the past five years and has regularly been among the best-performing economies in the EU. In , the economy grew by an impressive 6. The European Commission predicts a 4.
Diversified Economy Famous for its 7,year history and days of sunshine, Malta has become a top destination for tourists. In , close to 1. Global strength, local delivery Our local and worldwide based professionals offer a cross-border, holistic approach to issues related to tax, audit, financial advisory, enterprise risk, consulting and information technology. We make an impact that matters on our clients by offering world class capabilities and deep expertise to help them succeed wherever they operate in the world.
Find out more about Deloitte Malta at www. Life sciences and digital media are joining the traditional economic generators and creating a solid base of diverse operations from which Malta is competing on an international level. The country now aims to replicate this success in the aviation sector and has introduced new legislation to help achieve this.
With the help of foreign investment, Malta is seeking to add those economic activities to its list of exportable services. With St Paul gets shipwrecked on the Maltese Islands on the way to Rome. He spends some time on the island, in the process converting the local pagan population to Christianity. The Knights of Malta who arrived in together with the local population manage, against all odds, to defeat an invading Ottoman army and keep Malta a Christian bastion against Ottoman expansion. FDI stocks, the financial services sector is the dominant recipient of foreign investment.
In addition to the historical and strong commercial links with Italy and the UK, Malta also enjoys healthy trade with France, Germany and the Netherlands. For instance, trade with Asia, mainly China and India, is increasing. High Levels of Competitiveness Malta offers investors a secure and transparent environment in which to build or expand a business. The country has introduced business-friendly policies underpinned by a legal and regulatory framework that is fully harmonised with EU legislation.
Malta has also built up modern telecommunications and international transport links, while a full package of incentives that range from fiscal benefits to the provision of custom-built production facilities is available to investors. With great attention being paid to the next generation of its workforce, the country continues to invest heavily in education, and each year Malta sees a steady stream of new students entering higher education.
Following the expulsion of the French by the local population with the assistance of the British, Malta becomes part of the British Empire for the next years. Adaptable Malta Malta has attracted admirers for its success in transforming itself from a British military outpost into a well-functioning economy.
The country now pushes itself towards a more innovation-driven economy, as there is increasing awareness that raising productivity and increasing efficiency are critical if growth is to be sustained. Businesses also often cite a lack of human resources as a major impediment to growth, but the government is committed to addressing any shortcomings in this area.
Keen to see the sector heading in a new direction, the Maltese authorities are implementing novel concepts and are willing to partner with global innovators to create a better connected and more efficient transport system. The Voice of Malta Strong economic growth has transformed Malta into a confident nation which is now seeking to strengthen its position on the global stage. This will give Malta an opportunity to influence key EU decisions and set the agenda of the 28nation bloc.
While the EU, and the Eurozone, will remain the main focus of its foreign policy, Malta has a vocation to serve as a natural bridge between the European Union and North Africa and is committed to establishing stability in the region. However, the Maltese government seeks to raise its voice not only in political matters but is also making its presence felt on the fiscal front, where the government emphasises that it will stand its ground on issues such as tax harmonisation.
Its world-class business environment, cutting-edge technology, competitive labour costs, highly educated workforce and gateway position to European and African markets helped Malta attract companies and capital from Europe, Asia and the US. Investment, across all sectors,. The past years were not easy ones: we were surrounded by economic and political instability both in the north and south.
However, Malta is an optimistic country, and we moved forward. The Maltese economy continued on its expansion path. Growth accelerated to 6. The budget deficit has been shrinking gradually, and has been reduced to 1. We have much to be proud of. We have created employment opportunities and through the introduction of familyfriendly measures increased the female participation rate in the labour market.
We also attracted unprecedented tourist arrivals and reformed crucial sectors, including education, health and energy. Looking at our past and current success, I would also say that the key driving force has been that we are open for business. We attract entrepreneurs and investors from all over the world.
They come because Malta is a fantastic place to grow a business. We have a skilled workforce, firstclass technology and communications, the English language and a pro-business environment. For a small island state, our economy is also unusually diversified. All economic sectors contribute to our growth, and we are keen to diversify further. Currently, we are investing heavily in education and health, also with a view to make them exportable services industries.
What are the main reasons for this growth? This is true. One of the main reasons for our success is that we have solid, responsible regulation. Responsible regulation allows the sector to flourish. The reputation of the financial services sector was actually reinforced because of the resilience and stability it showed during the financial crisis. We also provide an environment conducive to business, offering investors stability and transparency in terms of corporate taxation and regulatory processes.
We believe that tax policy must remain the sole domain of individual governments in the European Union. While we are fully in support of a fair and ethical marketplace and have signed all exchange of information agreements, we do not think Europe should adopt a one-size-fits-all approach. Not all countries in the EU face the same economic realities. We obviously support all efforts in the fight against tax fraud and tax evasion.
We also believe that taxation is an important policy tool to direct economic activity and as such should remain an area of national competence. What is Malta doing to attract the best companies and the brightest talent? Our sound financial services regulation provides a solid base for growth. I believe we have not yet exploited our full potential, although we do not want to see the financial sector Malta owes much of its success to its openness dominate our economy.
We want it to grow in terms of welcoming foreign firms and proin tandem with our other economic pillars. Malta is a fantastic place to live and We have very high standards, and we do not invest in, offering the sea and the sun, culture believe we should lower or undermine them and history, business and investment.
Foreign to accommodate operators. Our due investors always comment favourably on diligence on companies, promoters our business environment and the and senior officials of companies efficient service they receive. We Financial services providers We do not just want to do not just want to attract benefit from streamlined attract business, but rather procedures, as well as lower the right type of business.
We business, but rather the right type of business. We demand fees and compliance costs are a reputable jurisdiction within the EU, and we will that operators are of a certain than elsewhere. However, keep it that way. It is within the EU, and we will keep no secret that HR is becoming it that way. This approach has been a challenge for many sectors. While key to attracting world-class companies to we are encouraging students to take up our shores, and I am sure it will help the sector finance-related subjects, we have also introgrow in the future.
My government is committed to providing the best possible operating enviMalta is a unique country, where both the ronment for financial institutions that come English and the Mediterranean influence can to Malta. We recently celebrated our 50th anniversary of independence and the 40th anniversary of being a republic, as well as 10 years of EU membership. About FinanceMalta Malta is internationally recognised as a brand denoting excellence in financial services.
It offers an attractive cost- and tax-efficient base for financial services operators looking for a European Union-compliant, yet flexible, domicile. It brings together, and harnesses, the resources of the industry and government, to ensure Malta maintains a modern and effective legal, regulatory and fiscal framework in which the financial services sector can continue to grow and prosper. We also offer training and re-training initiatives in order to help professionals remain informed.
Malta has diversified its finance sector tremendously in recent years. Could you describe the current level of activity in the industry? Malta has significantly strengthened its profile as an International Financial Centre. There is a positive outlook for the industry overall, and through speaking with various practitioners and operators in the industry, it is apparent that there is a healthy conduit of business across the key financial sectors. For example, in the asset management sector, we are experiencing the onset of an increased number of fund managers, establishing their operations in Malta.
Equally so, fund administrators have seen their business expand significantly as they are increasingly servicing fund clients not only domiciled in Malta but also funds. The same goes for our insurance sector where insurance companies have experienced strong growth in the overall level of gross premiums written.
All this activity also had a positive impact on the wealth management sector where service providers are experiencing increased interest from high-networth individuals, wealth managers and family offices. What is behind the growth in new sectors such as pensions and fintech operations that Malta is experiencing at the moment? And are you seeing growth in any other sectors? Pensions business, securitisations and fintech operations are emerging to be important new sectors.
The foundation for this growth can be attributed to the success in the asset management sector, where Malta has built up a wealth of expertise. With regards to payments, we have seen an increase in financial institutions registering under the Financial Institutions Act, with this figure more than doubling in three years. The global payments sector is going through significant changes driven by fintech operators, and Malta is emerging as a good base for e-money institutions and payment processors.
We are also seeing growth in the area of securitisation as it opens up certain assets. Recent statistics show an increase in securitisation vehicles in Malta. How does Malta attempt to distinguish itself from other European finance centres? We are constantly seeking to innovate — on a product and on a service level. This is not always an easy task.
EU directives are inducing harmonisation across the European financial services landscape, however there is always scope for innovation. At the moment we are also focusing on service. Speed to market is crucial these days, and the more efficient we are in servicing our clients, the more competitive we can become. It is important for the industry to act as the catalyst of innovation where this is not only embraced but also enabled. How has this played out so far? Events in the EU remained an integral part of our programme in ; however, going forward we have initiated the process of launching marketing initiatives beyond Europe, particularly in the US and the Gulf Region.
Looking ahead, we have events planned in New York,. We usually focus on three main areas: insurance, asset management and private wealth. We feel that Malta has a strong proposition in these regards. We are committed to sustaining the visibility of Malta in mainland Europe and at the same time reaching out to new markets. There are clearly opportunities in the aforementioned markets as well as in others such as South and West Africa, South America and India, which we hope to be able to reach out to in the coming years.
Our target is to showcase Malta to businesses where we feel there is a strong and relevant value proposition. For further information on membership categories and classification, visit www. Fees for new members will be calculated on a pro-rata basis. MSV Life p.
Finance Industry Stakeholders Ministry for Finance www. Edward Scicluna Minister for Finance. Ministry for the Economy, Investment and Small Business www. Custom House is a world leader in providing a full and independent administration service to the alternative investment industry.
With our industryleading technology, we cover an extensive range of structures and strategies. With offices in every major financial centre around the globe, Custom House has a long established history and reputation for evolving its technology and growing with its clients. Our expansive personalised administration service and commitment to each client is as important to us as it is to you.
We are dedicated to your growth. Malta has risen as one of the strongest economies in the EU. We have experienced phenomenal growth in recent years. In , our GDP grew by a record 6. Unemployment is at a historical low, sitting at 5. We cut income tax rates to make it more attractive for people to work, while offering incentives for more women to join, and for people reaching retirement age to remain in, the workforce.
We are also on a gradual. Our priority was to stimulate growth. Economics and finance can be very complicated, but essentially they are quite simple. It is like baking a cake. If you want your cake to be big, you need to increase your ingredients, for instance human capital, skills and investment. We have ensured strong regulatory measures are in place to minimise risk, and we are constantly adapting these in order to remain a stable and innovative jurisdiction. This is not about to change, and we always aim to do better.
Once we reach a certain level, we endeavour to use it as a springboard for further growth. Malta today excels in professions such as law, IT and accounting. Success does not come without its drawbacks. Despite our efforts, at times companies have difficulties finding the right talent. With labour shortages, comes wage inflation, and this can have a negative effect on competitiveness. However, we are open for people coming from other EU countries, and increasingly from non-EU countries, as we have realised how important this is.
We are also aware of competition. For instance,. Portugal and Ireland have become more costcompetitive as a result of the recession and its aftermath. But we are not resting on our laurels, and are focusing on other important areas, such as reducing bureaucracy, to attract companies and capital. We need to distinguish between anti-tax avoidance and tax harmonisation. We are against tax. Malta is no place for financial secrecy.
We stand ready to work with any initiatives seeking to reduce tax avoidance by big companies. BEPS offers several ways of achieving this. However, the problem lies in shortcircuiting the solution of tax avoidance through tax harmonisation. Tax rates are a measure to stimulate growth and attract investment, and hence they should be set on a national level. Countries in the EU do not face the same economic realities, nor do they have the same resources.
This is why we are not ready to accept a one-size-fitsall approach when it comes to taxation. The financial services sector in Malta has managed to weather the global economic turmoil and has proven its resilience. The sector employs 10, workers, and there are 5, licensed investment services firms operating across the insurance, pensions, asset management, trusts and other related sectors.
A recent survey found that back-office operations and headquarters will draw in most foreign direct investment in the coming years. What advantages does Malta offer financial services companies setting up in Malta? Malta scores high when it comes to economic stability. This is of utmost importance because it is a key criteria for many investors when choosing a country over another. In the increasingly homogenous finance industry constant innovation is also crucial.
We do not shy away from amending, changing and improving our legislative and regulatory framework for it to meet the needs of the business community. As a country, we are aware that nothing comes easy and you have to work for it. We have a high.
The ease of access to a single regulatory body, the Malta Financial Services Authority, is another important competitive advantage we offer. We do our best to create a proactive business environment, and make Malta a location of choice for foreign direct investment and international trade. Looking across the entire financial services industry, what segments could be developed further in Malta?
Malta has established robust banking, insurance, investment funds and wealth management. There is also room for expansion in international pensions and securitisation business, while we are observing opportunities emerging for the setting up of Shariacompliant investments. We are also very keen on maintaining the growth in the number of investment services providers setting up operations in Malta.
How do you view the development of the financial services industry given the increased efforts for tax harmonisation? Companies established in Malta benefit from an attractive tax environment, a. These make us competitive and have helped establishing Malta as an internationally recognised financial services hub. We are blessed with an excellent geographic location. Malta can act as a strong conduit to the North African market and vice versa to the European market.
We are an ideal entry point to Europe for operators based in the southern and south-eastern Mediterranean region. The Middle East will become a gateway to Asia. Hence, increased economic ties with Middle Eastern countries should be pursued further. The financial services sector is one of the key economic enablers for our country.
Its future potential is great. In fact, we expect the contribution to our GDP to double in the next decade. Given the increased competition by financial centres to attract capital and talent, what is Malta doing to provide a cutting-edge operating environment? We are currently looking at refining the Insolvency Act, while strengthening the arbitration system.
We are also considering the reintroduction of commercial courts comprising expert judges with specialist knowledge Malta offers foreign financial firms a number of advantages. Operators have Singapore have started also set up in Malta due to taking bold steps to the attractive regulatory engage in fintech.
How framework for financial does Malta seek to attract services. Our Englishinnovative financial speaking workforce and companies and start-ups? We are also constantly seeking We have been successful in attracting fintech to improve our operating companies, for instance in environment.
For instance, the payments sector, due to we are aware that an efficient competitive factors which judicial system plays an include the low operational important role in attracting costs and strong telecoms foreign investment, and are infrastructure. These actively addressing possible companies fall under the shortcomings in this area. We are actively exploring the possibility of developing a dedicated regulatory framework for fintech companies, including cryptocurrencies.
Digital currencies will soon be the order of the day; and technology will dictate the markets of tomorrow. We need to embrace these changes and take advantage of the opportunities they offer. For example, blockchain technology can become a useful tool in preventing money laundering due to its transparent nature.
If we succeed in creating a regulatory framework, Malta could play a key role in developing innovative applications while enhancing consumer trust in this new technology. Throughout the years Malta has always been watchful and diligent in protecting its reputation, and.
Malta as a finance centre has greatly benefited from political and economic stability. In fact, investors consider Malta as a base for various financial services, including insurance, banking and high-net-worth residence schemes. Malta has always been a pioneer in developing regulatory frameworks promoting stability and transparency. I am proud to state that there is no political divide in Malta when it comes to the development of the financial services industry.
On an international level, Malta is quick in transposing EU directives and has notable credibility when it comes to transparency and the exchange of information in regards to tax matters. This will remain the same in the future. Malta has a very strong skills base with thousands of professionals working in the financial services sector.
We have consistently invested in training, through the national higher educational institutions, such as the University of Malta and the Malta College of Arts, Science and Technology, and also private institutions. However, there is a challenge with economies of scale, and thus we consistently encounter difficulties to match the demand resulting from the strong growth of the industry.
Hence, to fill positions that require specialised knowledge that cannot be found locally, we have introduced special tax incentives for foreign professionals to take up jobs in our financial services industry. Our vision is to go global. We are determined to develop this sector further, and various initiatives are being considered in an effort to achieve this objective. We intend to transform Malta from a regional financial services hub into a truly international finance centre.
We have already established a proven track record for financial services innovation, and in many fields — just take our protected cell company legislation which is being mirrored by other European finance centres — Malta has become a role model. It is our intention to strengthen our court and arbitral system to position Malta as a dispute resolution hub for the Mediterranean region and beyond.
I am personally committed to this vision and intend to do what is necessary for Malta to achieve this status in the coming years. The past two years were characterised by the legislative and regulatory changes introduced by the EU to strengthen the financial system, which the MFSA implemented. Certainly the biggest change was brought about by the introduction of the Single Supervisory Mechanism under the European Central Bank; however, there were also a number of other regulatory developments.
For instance, the insurance sector was very much at the centre of our attention due to Solvency II, but we also introduced reinsurance special purpose vehicles. In addition, amendments to our Trusts and Trustees Act introduced the concept of a family trust, while the. Retirement Pensions Act came into force in It specifically makes reference to schemes set up as personal retirement schemes and is attracting new business to our shores. The MFSA has been very active in seeking ways to sustain dynamism in the funds sector.
One important development was the publication of the Loan Fund Rules in April , which have been revised recently, placing Malta at the forefront of this growing market. In early , we also launched a new framework for socalled notified Alternative Investment Funds, which can be promoted to qualifying or professional investors. How would you describe the transition to Solvency II, and what have been the main issues? The Directive was transposed into Maltese law in a timely manner by the end of.
This gave legal clarity to insurance companies as to the requirements being placed upon them from the beginning of Although we can only reach a conclusion on the transition when the companies start filing in their financial submissions throughout the year, we have received encouraging feedback and deem the majority of firms ready for the change.
Clearly, teething issues remain, particularly on the extensive reporting requirements introduced by Solvency II, but we are positive that overall the transition will be considered successful. How do you seek to position Malta to take full advantage of the CMU?
The EU process to unlock investment by updating. Recent initiatives such as the introduction of regulatory frameworks for loan funds, reinsurance special purpose vehicles and securitisation cell structures will find greater scope within the CMU.
We also monitor the potential impact of the CMU on the wholesale and institutional markets and internet-based investment intermediation to determine how best to reposition ourselves in this respect. What would you highlight as the main challenges that the MFSA is facing at the moment, and how do you plan to address them?
The financial crisis has radically changed the sector, but it has not stopped its growth. Growth in itself brings challenges and everybody — the industry, regulator and stakeholders — needs to respond to these challenges. This is a highly mobile sector, and now more than ever we have to anticipate change in order to protect our competitive advantages. We will therefore keep looking at how to achieve further growth, which niches to tap, and how we can continue to assist existing firms in expanding their operations in Malta.
We seek to continue identifying niches for growth — whether its new. While banking, investment and insurance services are well established, over the past years we have seen developments such as the setting up of occupational pensions and pension fund administrators. Creating a diversified sector is healthy for Malta, and we will keep moving forward on this path. We also expect to see further investment as Malta consolidates its position as a European financial centre that increasingly finds opportunities in global markets.
We will prepare ourselves for this future by strengthening our human resources base. Moreover, in the second half of , we will review all our processes and activities. This should lead to a radical redesign and modernisation of the MFSA aimed at improving productivity, efficiency and effectiveness. Malta is committed to implementing initiatives such as BEPS, while keeping its competitive interests in the foreground, Jean-Philippe Chetcuti remarks.
Small economies need to maintain flexibility in tax policies as they do not face the same economic realities as the larger countries. One of the many measures taken was to provide free childcare for working parents. Nonetheless, the industry agrees that these measures are not sufficient. Malta provides a very good opportunity for foreigners to work in view of its tax framework and double taxation agreements with a vast number of countries, Mark Spiteri also confirms.
Kenneth Farrugia emphasises that while Malta actively encourages professionals from other EU member states to work in Malta, it is more difficult to recruit talent from outside the EU. According to Juanita Bencini, Malta also needs to ensure that it has sufficient numbers of graduates coming through its educational system to be able to service the business of tomorrow.
There are several projects in the pipeline which are currently being discussed with the authorities. Malta needs to increase the talent pool to keep this in check. Malta has successfully introduced a number of innovative offerings, such as the Protected Cell Company. In this area, complacency is also enemy number one, Julian Mamo says.
Malta must retain what is working well, discard what is not and create new avenues for growth. This is not light touch regulation but sensible regulation based on a reasoned approach. He says it is important to achieve a balance between following strict rules to ensure the wellbeing of investors while taking into account different business models, industry sectors, risks and sizes. Malta has also proven that it can deliver, Ian-Edward Stafrace says. It is not only resilient when challenged, it is known to turn such challenges into opportunities.
I would advise investors not to commit in terms of domicile until they have looked at Malta as an option. A Ready Business is confidently connected. We confidently connect all your voice and data needs across the world.
Speak to us today and find out how you too can become a Ready Business. Maltese banks are ranked among the safest and best-run credit institutions in the EU, and the sector suffered no systemic shocks or banking failures.
There is a clear divide between the local retail banks and the internationally focused, specialised foreign banks that have been set up in Malta and which have almost no interaction with the domestic economy. Structural separation aside, Malta is feeling the effects of the new global banking landscape currently in the making.
While the industry has recently been witnessing various foreign banks consolidating and scaling down their operations in the country, Malta is receiving a boom in interest from specialist and niche institutions disrupting traditional business models and penetrating new markets with highly targeted products and services. Maltese banking history has seen a number of mergers and acquisitions that shifted the competitive landscape, as well as a period during which major institutions were nationalised.
The banking sector changed significantly, having been transformed from a tightly controlled publicly owned sector into one of liberalisation and foreign ownership. Malta also garnered attention when it joined the EU in , and the Eurozone in , as more banks discovered the country as a platform for business. Today, close to 30 credit institutions have a presence in Malta, offering a full set of banking services that range from retail and investment banking to trade finance and custody services.
Maltese banks practice a prudent business model and remain well capitalised, with ample liquidity and well-diversified portfolios. However, the defining factor of the banking sector is that it is sharply segmented and essentially divided into three clusters. These banks have extensive links with the Maltese economy and are thus systemically relevant.
The remaining assets are held by banks with limited links to the domestic market, as well as by international banks with no links to the domestic economy. They do not take local deposits, but rather focus on business with nonresidents or intragroup transactions supporting their parent banks, or concentrate their activities on areas such as trade and project finance, syndicated loans and investment banking.
The local banks are retail-deposit funded, and their loan portfolios are diversified in different sectors of the economy. They use Malta as a booking centre for foreign-exchange loans. Malta also proved to be fertile ground for specialised banks, niche players or institutions targeting regional markets. The bank was. With a well-developed network of correspondent banks and representative offices, we have the infrastructure and expertise to manage corporate banking for companies registered across international jurisdictions.
Being firm believers that economic achievement does not subsist on its own, we have pledged our commitment to our country to aim towards success while acting responsibly towards the society within which we operate. At Bank of Valletta we aspire to exceed customer expectations by offering a trusted, genuine and truly caring service, adding value every time we connect.
Bank of Valletta p. For many years, Malta has also been playing host to a number of Austrian banks, however, these banks have recently seen changes in their ownership structure. Deutsche Bank also had a presence in Malta, however, the bank is in the process of closing its operations in Malta as part of a decision to cut down overseas activities. Healthy Ratios A deep-rooted, conservative approach to banking adopted by the domestic banks in Malta has served the island well.
Bank funding depends on retail deposits rather than wholesale borrowing, and over the years, the banks have stuck to this conventional banking approach. The total capital ratio stood at around These levels were significantly above the minimum regulatory requirements. In , growth was mainly fuelled by the flow of customer deposits, which resulted in abundant liquidity levels for banks.
Recourse to other sources, such as interbank and eurosystem funding, remained modest during the year. According to the Central Bank of Malta, there is no evidence of an aggressive search-for-yield behaviour, despite the context of low yields and ample liquidity. Figures for the entire banking sector in show that the return on assets and return on equity of the banking sector in Malta stood at 0.
Opportunities and Challenges Strong economic growth has transformed Malta into a confident nation, which is now seeking to strengthen its position on the global stage. Although Malta is not pitching as aggressively as other nations for UK business, it is quietly positioning itself as an attractive alternative for companies seeking an address in the European Union. Concurrently though, Malta has to defend its economic model given the increased focus on tax competition in Europe.
The island stresses that its tax regime has withstood the tough scrutiny of the European Commission and that the country is supporting all EU and OECD initiatives to combat tax evasion. The issues being reported in international media are too big and too important to be ignored. Its world-class business environment, cutting-edge technology, competitive labour costs, highly educated workforce and gateway position to European and African markets helped Malta attract companies and capital from Europe, Asia and the US.
Investment, across all sectors, will remain a key driver of future growth. The Prime Minister has set the country the lofty challenge of turning Malta from the best in Europe into the best in the world. Malta is likely to emulate the success of global business locations such as Singapore and Dubai. Mimicking other places though is not an option.
Malta will need to draw on its own strengths to define and create its own 21st century identity. Our country is moving forward at a very fast pace, and it is one of the most successful economies in the EU. Our financial services sector is being kept under close watch at the moment. But we will also be proactive and engage with others to show how our systems are transparent and fully compliant with all legislations and regulations.
In , a financial deficit was turned into the first surplus in a generation. We want Malta to not only be an economic success story, but also a country that offers one of the best qualities of life to its people. The government is committed to achieving significant change in the social, physical and virtual infrastructure of the country. Malta is a Mediterranean country founded on European values and whose workforce has a can-do attitude that is second to none, that remains agile and able to meets new challenges as they arise.
I believe the future of Malta, and of any country or region, lies not on focusing on one thing, but on a wide range of ideas. We are a country where doing business is relatively simple and efficient when compared to other similar jurisdictions. We have a bottom-up approach to regulation, and the distance between the policymakers and the policy-takers is relatively short.
This means decisions can be taken in a much shorter period of time. Our challenge is that our employers are not finding enough employees. That is an issue we are tackling by formulating policies that ensure that our systems are open enough to receive workers. It is because of our workforce that we are able to work towards becoming a leader in the cryptocurrency and blockchain field.
The future is digital, and we must be on the frontline in embracing this crucial innovation. One of our focuses is to work towards a more inclusive Malta. Measures such as free childcare for all working or student parents, preand after school services and the commitment to tackle the gender pay gap, have led to more women gaining economic independence. About FinanceMalta Malta is internationally recognised as a brand denoting excellence in financial services.
It offers an attractive cost- and tax-efficient base for financial services operators looking for a European Unioncompliant, yet flexible, domicile. It brings together, and harnesses, the resources of the industry and government, to ensure Malta maintains a modern and effective legal, regulatory and fiscal framework in which the financial services sector can continue to grow and prosper.
FinanceMalta was set up in May We have seen strong cluster formations in certain sectors, particularly in asset management, insurance and private wealth. I think we have come a long way, but, despite these impressive achievements, we have to acknowledge the fact that the international financial services industry is a highly competitive one. This means that we need to ensure that Malta remains a compelling proposition for prospective investors seeking to establish or extend their footprint in Europe.
What could be done to strengthen the sector further? We need to continue refining the way we promote Malta and our financial services sector. I believe we need to be more strategic in this respect. We need to develop clear and attractive value propositions for the different markets that we are targeting. We can also do much more on the innovation front. We have been very successful in this regard, for instance with the introduction of the Notified Alternative Investment Fund and the Protected Cell Company for the insurance sector.
What sectors and markets offer growth potential for Malta? There are clear opportunities in the fintech space, and we are seeing huge interest in our blockchain initiative. However, for this to take off, I think it is important that regulatory and legal frameworks are in place that provide certainty to companies.
Securitisation is also an area, which we expect to see grow in the near future. In the wake of Brexit, we are also seeing interest from insurance and asset management companies. Morgan would move 3, people to Malta. We also have to keep in mind that not all companies in the UK are looking for a new base. The City of London is home to four groups of companies: multinationals that already have a presence in many EU.
We are therefore targeting companies in the last group as Malta offers an attractive proposition for companies that want to sell to European customers. France and Germany are also important. What type of business should Malta be going for these days?
Unlike some other finance centres, our financial sector is very well diversified, and we will continue to attract business across all segments. However, well-known financial services operators have also established a presence in the country or developed partnerships with local operators. Malta plays an important role from a regional perspective, and, as I have already mentioned, our EU membership makes Malta attractive for larger entities.
I think our particular speciality is helping start-up operations grow and thrive. We can already boast quite a few success stories of companies that came as start-ups to the island, grew from their base in Malta and today are respected players in their fields. Where do you see the future for Malta in financial services and how do you wish to position the country?
I think we need to take a step back and stop trying to be everything for everyone. We have strong asset management, insurance and private wealth sectors, and there are sub-sectors that we can grow and expand. But we also need to look at what made us successful so far. We were known for our ability to help companies get their products to market in a very short time and for the development of innovative regulatory frameworks.
Those two things were at the heart of our success. In my opinion, the growth that we have experienced in recent years has made us a bit complacent. We lost our drive, and we now need to reinvigorate it. I am convinced that we could do so much more if we focus better, and this should help us develop our roadmap for the next 10 years and beyond. For further information on membership categories and classification, visit www.
Fees for new members will be calculated on a pro-rata basis. Malta is becoming a solid top performer in economic terms, and the outlook is bright. In , our GDP grew by a record 6. Economic growth is expected to remain well above the EU average, inflation is expected to be moderate. We cut income tax rates to make it more attractive for people to work, while offering incentives for more women to join, and for people reaching retirement age to remain in, the workforce.
We are encouraging more innovation and research, especially in the financial services sector by providing an appropriate regulatory framework for cryptocurrencies and blockchain technology. Malta has commenced exchanging information in line with the Common Reporting Standard and has an activated information exchange network. For two consecutive years, we registered a fiscal surplus after years of carefully planned economic management that has turned the country around.
A balanced budget will remain one of our priorities. We are a small country, and we have the advantage that when we have an idea, we can run with it, get it through parliament and get the regulations in a much shorter time. Approach Our economic performance and strong track record are confirmed by the rating agencies. However, we are aware that all financial centres are at the moment passing through severe stress tests both nationally and internationally. But investors believe in us, and we will continue to be one of the competitive choices in the Mediterranean.
Like many other jurisdictions, we will look into further defining substance requirements, which would provide guidance to companies and service providers alike. Malta was and will always be after substance. We want real companies with real employees, and many of the companies operating out of Malta have done so for years. At times companies have difficulties finding the right talent.
With labour shortages, comes wage inflation and this can have a negative effect on competitiveness. However, Malta is open for people coming from other EU countries, and increasingly from non-EU countries. We are also aware of competition. But we are not resting on our laurels, and are focusing on other important areas, such as improving bureaucracy, to attract companies and capital.
The report noted an absence of harmful tax practices in relation to base erosion in general, as well as a strong commitment in relation to tax cooperation. We are envisaging a complete overhaul of our financial services regulator.
My wish is to create an entire new industry based on blockchain technologies and attract innovative startups. We are aware that our financial services sector has suffered a bit in recent times as a result of false allegations and media reports that have cast a bad light on the sector. It is one of my main priorities to get the sector back on track. Immigration will remain key to our future, and we have already smoothened the process for anyone looking at taking up a position in Malta, and we want to make sure that onboarding foreign professionals is as uncomplicated as possible.
The intention is to decrease bureaucratic procedures for companies and make Malta a natural choice for investors. Our regulatory framework for DLTs offers legal certainty to a space that is largely unregulated. The feedback so far has been tremendous, keeping in mind the companies that have already announced their decision of relocating and opening offices here. We will create a separate standalone registry of companies, as well as a new regulatory body overseeing the fast-growing blockchain sector, the Malta Digital Innovation Authority MDIA.
There will certainly be points of contact between these new entities and the MFSA, but we will be careful not to duplicate work. Brexit is an opportunity for our financial services sector, and we are seeing encouraging interest from the various sectors, where a number of players are considering setting up in Malta. We are working on the reform and modernisation of the MFSA. We are reviewing our business processes in order to improve efficiency and productivity. Our competitive advantage for a long time was our ability to give operators fast feedback, and we will address any speed to market issues.
We need to establish better, more responsive lines of communication. Our financial services sector has grown substantially during the past two decades. This growth has caused certain strains on the resources of the MFSA. We have a staff complement of people, and we plan to take on another people in the near future. The finance sector — as many other sectors of the economy — is finding it challenging to fill open positions due to the low unemployment rate.
Financial Services are an important pillar of the economy, and we will strive to achieve more growth in this area. Our regulatory framework has been the foundation upon which we have built our success. Now more than ever we need to remain one step ahead and create sound and innovative regulation that attracts business. While we have already attracted professionals from inside and even outside the EU, we need to produce more qualified individuals that could take on the top jobs in the sector.
The island is currently home to 25 banks, which continue to perform solidly. Malta offers remarkable growth opportunities for banks that are ready to seize a share of this business, but increasing the number of banks is a tough challenge. This means the island is now looking to attract established foreign institutions and medium-sized banking groups, rather than start-ups and smaller banking rivals, which may find the current conditions more challenging.
Maltese banking history has seen a number of mergers and acquisitions that shifted the competitive landscape, as well as a period during which major institutions were nationalised. The sector entered its most defining period in the late s and s when it was being transformed from a tightly controlled publicly owned sector into one of liberalisation and foreign ownership.
Malta also garnered attention when it joined the EU in and the Eurozone in , as more banks discovered the country as a platform for business. Today, 25 credit institutions have a presence in Malta, offering a full set of banking services that range from retail and investment banking to trade finance and custody services.
There is a clear divide between the local retail banks and the internationally focused, specialised foreign banks that have set up in Malta, which have almost no interaction with the domestic economy. The entire sector employs around 4, people. Three Clusters For more than two decades, the Maltese have looked with pride upon their banking sector, as it has received positive ratings and rankings.
The size of the banking sector stood at The remaining assets are held by banks with limited links to the domestic market They do not take local deposits, but rather focus on business with non-residents or intragroup transactions supporting their parent banks, or concentrate their activities on areas such as trade and project finance, syndicated loans and investment banking. The local banks are retail-deposit funded, and their loan portfolios are diversified in different sectors of the economy.
They use Malta as a booking centre for foreign-exchange loans. Malta has also proved to be fertile ground for specialised banks, niche players or institutions targeting regional markets. The bank was founded in Malta in and has set up offices in major cities across the world.
Malta has traditionally sought to attract larger players, however, there was a period in which Malta saw smaller, start-up banks coming to the island. While many of these banks are operating successfully, there were two particular cases, Nemea Bank and Pilatus Bank, which courted controversy. Bank funding depends on retail deposits rather than wholesale borrowing, and over the years, the banks have stuck to this conventional banking approach.
The total capital ratio stood at around These levels were significantly above the minimum regulatory requirements. Performance of the Core Banks The profitability of the core domestic banks decreased slightly in recent months but they still fared comparatively better than their euro area peers. The customer is at the heart of our strategic vision.
We aspire to exceed customer expectations, offering a genuine and caring service, built on trust and added value every time we connect. At Bank of Valletta we have a dedicated infrastructure, coupled with specialist expertise, enabling us to offer both our corporate and personal customers a comprehensive suite of banking and investment services.
Further information available from bov. The customer loan-to-deposit ratio increased to Non-Domestic and International Banks There are currently six non-core domestic banks operating in Malta. They offer only a limited suite of banking services to Maltese residents, usually restricted to deposit taking. In the first six months of , the balance sheet of these banks shrank by 5. This group of banks relies heavily on retail funding, financing around two-third of their business activities.
Although remaining positive, profitability of these banks narrowed. The international banks reported a contraction in their asset base of 5. However, this development was mainly driven by one bank, which reduced its exposures with other credit institutions in Turkey and the UK. International banks continued to rely extensively on wholesale funding, while their regulatory capital position remained healthy and exceeded the regulatory minimum.
The Effects of De-Risking Despite their positive performance, Maltese banks, as banks in other countries, are currently reviewing their business models and de-risking their portfolios by limiting their exposure to certain sectors of the economy, while also building up their capital buffers in accordance with European banking regulation.
This, the industry says, will most likely lead to safer, albeit less profitable, banks in future; however, in the short term it provides a number of challenges as more stringent regulations and compliance requirements have increased transaction costs for both banks and their customers. Due to the small size of the market, the island is of limited interest to international institutions, and global banks are weighing their rising compliance costs against potential.
However, the authorities are hopeful that initiatives driven by the G, the IMF and Financial Action Task Force FATF will help in addressing the global correspondent banking crisis, while banks in Malta are reporting that alternative arrangement have been found and that they have developed new relationships with global institutions. Wanted: More Banks However, the most pressing challenge remains the limited number of custody banks in Malta as this affects the growth of the fund industry.
Efforts to attract one or two medium-sized custodians to the island have been going on for years, but have remained unsuccessful thus far. Banks already established in Malta are also reporting that increased regulatory requirements and additional compliance checks are affecting their operations as they are making certain banking services more costly and processes tend to take longer than before.
There is a huge demand for more banks in Malta, with companies reporting that it is becoming increasingly challenging to source corporate banking services from Maltese credit institutions due to the fact that banks have become much more risk-averse and are keen to avoid overexposure to any one sector. The cost of compliance is enormous, whether in terms of people, technology or infrastructure, while rising capital requirements have become a significant constraint on the capital available for investment.
Opportunity Knocks To future-proof the finance centre and the economy in general, Malta needs to escape the paradoxical situation that global banking giants are reluctant to look at the country due to small market size, while there are not enough banks in the country to.
The sector agrees that the first bank to move into Malta would be able to attract a significant share of business. The island is also a land of opportunity for credit institutions looking for an EU-compliant, yet flexible, domicile that provides access to the EU market and the neighbouring countries of North Africa. The emerging economies of the region are in need of infrastructure development, offering opportunities in the area of project finance. E-Banking as an Opportunity With technology playing a key role in banking these days, Malta has already attracted a significant number of financial institutions focusing on digital services and is home to more than 40 financial institutions.
Credit card companies, payment service providers, payment gateways, card issuers and eWallets are licensed as financial institutions in Malta. Analysts agree that financial innovation will rise in importance in the coming years and that it may not be long before fintech companies enter the banking sector in a more decisive way.
The industry believes there is scope to attract more online banks and digital solution providers to the island in times when traditional banking models are challenged like never before and the global banking industry seeks to catch up with the digital age. Reimagining Banking As technology and regulation are reshaping the global banking industry, Malta is emerging as a centre for payment companies. But the challenge to attract banking players of a certain size and stature remains. Key industry figures comment that the pace and extent of regulatory change will continue to prove demanding to the sector for the foreseeable future, as will the continuation of a negative interest rate environment.
The trend for banks to consolidate and streamline their operations is likely to prevail for some time to come. At the same time, banks will also increasingly look at alternative ways to generate revenue by offering new digital and added value services to their customer base. Client profiling and data analytics are expected to play a bigger role in helping banks, both in Malta and abroad, to seize new opportunities. Taking advantage of the flexibility offered by its modest size, it offers a combination of highly personalised service, state-of-the-art technology, and cross-border connectivity.
A new SME and start-up-oriented market, as well as a Sharia equity index, have been launched to take the Exchanges operations to the next level. However, significant investments in infrastructure over the past years have paved the way for the MSE to realise its international ambitions. The Central Securities Depository CSD has also continued to expand its range of services that are on offer for listed and unlisted companies across Europe.
In , the Exchange proposed a number of initiatives to develop a liquid and efficient securities market and laid out the National Capital Markets Strategic Plan. By the end of , over half of the objectives had already been met, including the introduction of new products, the extension of trading hours and the launch of the Malta Stock Exchange Institute, which offers financial education courses. The old MSE index was a price index only, whereby the new index takes into consideration both the price fluctuations of the component shares as well as the dividends that companies pay.
It is based on the assumption that all dividends are reinvested into the index thus giving a better representation of the potential economic benefit of equity investments and the benefits of compounding. A Recognised Exchange The exchange has continued its investment in technology over the past year as part of the move towards integration with Target 2-Securities, the pan-European Security Settlement System developed by the European Central Bank, to which the Exchange migrated in June It has also achieved recognition from the UK tax authorities and has been granted recognised exchange status by the Securities and Exchange Commission in the US.
Listing Solution The MSE presents itself as an ideal place to accommodate specialist services and small and medium-cap companies, and is aiming to become one of the top three European stock exchanges catering for SMEs by the end of the decade. The MSE is convinced that this new market has the potential to become a major pillar in the provision of capital financing to SMEs and will help Malta attract international business from countries such as China, Turkey, Italy, Spain, Eastern Europe and the Middle East.
The MSE is projecting that by the end of some 20 companies would have been admitted to Propects. The ambitions of the MSE go beyond small cap companies, and the Exchange is marketing itself to larger cap companies as a gateway to European investors. These companies can look to Malta as a first step towards an eventual listing on the main European exchanges.
These instruments include debt securities, asset-backed securities, insurance-linked notes, convertible debt securities and derivative securities. Turnover in EURO. Every quarter, Dar Al Sharia will screen the equities traded on the MSE for possible inclusion with the index, while ensuring that the equities listed continuously comply with Sharia principles.
This new MSE Sharia Equity Index is seen as the first step towards establishing Malta as a centre for Islamic finance products, with a view to attracting the Sharia-compliant equities and Sukuk instruments to list and trade on the MSE. The MSE hopes that the index will generate interest from Shariacompliant fund managers in addition to Muslim investor communities all over the world, increase business for the Exchange, as well as raise awareness among Muslim companies interested in accessing the European capital markets through the MSE.
A Professional Environment What sets the Malta Stock Exchange apart is its very high standard of personal service, which provides a lot more support in the preparation for an initial public offering IPO than that provided on a larger exchange. In addition, costs and fees remain competitive while those making primary and secondary applications can expect a swift, well-organised process.
Both local and foreign companies can also benefit from ancillary services ranging from admission and trading to depository and custodial services. In , the MSE also doubled its daily trading, from three to six hours. Reaching Out The Exchange has always been at the forefront of initiatives to help develop Malta into an international financial centre. Despite its size, the MSE offers all the benefits of a well-regulated, transparent marketplace, with the added advantage of providing a personalised and swift service.
Looking ahead, co-operation will be a major theme for the Exchange, which is looking to develop its relationships with major global stock exchanges outside of Europe. The aim is to provide foreign exchanges with a white label solution, which they could offer to companies within their home markets who want to have a listing in the European Union.
Come Asset management companies have flocked to Malta in recent years, but the island needs to attract a global custodian if it wants to outgrow its reputation as a start-up domicile. Growth in the number of funds domiciled in Malta has remained relatively flat in recent years. The reason for this is widely being seen in the limited number of custodians offering services on the island.
Nonetheless, the infrastructure caters well for emerging funds and managers. Similar to other fund centres, Malta introduced a manager-led product that offers a faster time to market, while its well-known regime for Professional Investor Funds PIFs has been simplified. While big funds are unlikely to come to Malta in the short term, managers are increasingly choosing Malta as their base due to its EU membership and cost-effectiveness, and are launching funds not necessarily in Malta, but in other jurisdictions.
There is widespread agreement that Malta has reached a high level of sophistication on the fund administration and fund management side, and has emerged as a veritable start-up location bringing new funds to market. But it needs a boost in its banking and depository infrastructure to break into the big league. Defining Events Malta is a relatively young investment fund jurisdiction, challenging the more established centres in Ireland and Luxembourg. In the years that followed, the sector grew at a much faster rate than many professionals had anticipated.
Passporting rights for Undertakings for Collective Investment in Transferable Securities UCITS were introduced, and Malta experienced phenomenal growth in the field of alternative funds with its specialised regime for PIFs targeting financially literate, high-net-worth investors. Ironically, Malta also benefited from the financial crisis as more fund managers were forced to rethink their operating conditions, and so began looking for cheaper alternatives to the traditional European fund domiciles.
Over the past 14 years fund registration has more than tripled. However, asset managers report that today many of their clients are at least semi-institutional investors. Seasoned asset managers, in particular from offshore European jurisdictions, such as Switzerland and the Cayman Islands, have opened offices in Malta. According to the regulator, the Malta Financial Services Authority MFSA , the number of asset management companies applying for licences has grown from a handful of firms to 15 per year.
For example, in the field of fund administration over In , the island made the decision to streamline the PIF framework, which previously comprised three types of funds, to only one option targeting qualified investors. The rationale was that there was little demand for the other two categories due to similarities among the different fund regimes. The MFSA has also issued rules for the establishment of loan funds.
Many in the industry believe that this could help in attracting real estate and private equity managers. Our vertically integrated approach offers tailor-made administration solutions across the entire value chain of investment structures, from fund level down to local Special Purpose Vehicles. Investment funds can be formed in a number of possible vehicles, including open-ended and closed-ended corporate entities, trusts, limited partnerships and contractual funds.
While the investment company with variable share capital SICAV is, to date, the most widely used vehicle in Malta, the island enacted regulations which make it possible for a fund to be constituted as an Incorporated Cell in an Incorporated Cell Company ICC.
Malta has also extended this cell structure into a platform concept that involves a Recognised Incorporated Cell Company RICC , providing administrative services to any number of Incorporated Cells licensed as investment funds.
The SCC offers interesting structuring possibilities because it allows managers to package certain assets, such as real estate and other alternative investments, into book-entry securities that can be held in a fund portfolio. Managers are already noticing an increase in the use of securitisation vehicles by fund structures. The sector is also seeing the convergence of the capital markets and the fund market.
The EWSM allows for the listing of debt securities or asset-backed securities promoted solely on a wholesale basis. Just a year ago there were hardly any dedicated cryptocurrency funds, now investment in the sector has mushroomed.
The MFSA introduced a new application process and committed to certain turnaround times when reviewing fund applications. Fund promoters are also encouraged to meet with the regulator prior to applying for the authorisation of a fund to discuss the application of regulations.
In particular, if fund structures are complex, promoters find the accessibility of the MFSA beneficial and value the opportunity to have face-to-face meetings. Funds and managers in Malta have long been benefitting from a fiscally efficient tax framework. And while many other international centres have become expensive, Malta offers various other cost advantages: the cost of staff and office space is still below Western European levels, and professional and supervisory fees are also significantly lower.
They add extra weight to the small and medium-sized accountancy firms, and the large number of legal firms, that service the fund sector in Malta. While in certain cases there is a shortage of qualified staff for senior positions, the island has introduced special tax incentives for high-calibre professionals to relocate to Malta, making it relatively easy for firms to fill positions.
Trillions and Billions Fund custody is one area that needs to see substantial growth, with only a handful of firms offering custody services. AIFMs in Malta are now required to use a local custodian. At EU level, Malta is lobbying for the lifting of the requirement, arguing that member states should be granted the right to decide whether a custodian can be based abroad or not. The authorities are also hinting that a new custody bank is looking at moving into Malta in the near future; however, they are admitting that this is no easy task due to the size of the market.
While Malta has sought to position itself as an alternative to Dublin and Luxembourg, the challenge for Malta is in the trillions. Strategy for Growth Due to this mismatch, Malta had to rethink its approach and is now hosting the managers rather than the funds themselves, and specialising in providing the right environment for start-up managers to successfully grow their funds.
Malta has become a top management location due to its cost-effectiveness and other operational advantages. This also had spillover effects on the fund administration side, with fund administrators based in Malta now servicing funds in many other locations. The sector also hopes that the migration of service providers continues in the light of Brexit. Depending on the final trade deal between the EU and the UK, Brexit could make fund distribution and servicing more complex within Europe. Based on its vast network of some 70 double taxation treaties and agreements with foreign regulators ensuring a smooth trading environment, Malta provides distribution opportunities to countries in the Americas, the Middle East and Asia where in particular UCITS are welcome.
Future Outlook Effective regulation and a highly personalised approach have helped Malta to establish itself as a fund servicing hub of international repute. The hopes are high that this upswing will also be visible in Malta — provided that Malta successfully addresses the custody challenge.
Malta has become a top management location due to its costeffectiveness and other operational advantages. Are you a fund promoter or a fund manager seeking to set up your funds in a proven EU jurisdiction? Our professional team can assist you in assessing the various regulatory options for your strategy, investor base and intended distribution model, thereby ensuring that you opt for the right structure.
BOV Fund Services offers a comprehensive service covering the entire pre-and post-filing of the licence application process, up to the issue of the respective licences by the financial regulator in Malta. Our extensive experience also covers the provision of fund redomiciliation services from offshore jurisdictions to Malta, the handling of cross border mergers of UCITS funds, as well as the passporting of alternative and retail funds from Malta to other EU markets.
One major example is Brexit. Hopes in Malta are high that a number of brokers, insurers and captives will choose to open offices on the island, with its lower cost base and established international insurance sector being seen as key factors in its favour. The industry is extremely competitive and defined by price undercutting. Although the market has seen some form of consolidation in the past two years, insurers claim that market rates need to improve for the industry to remain profitable.
Private and commercial insurance was first developed between the two World Wars when a number of underwriting agencies representing British insurance companies set up on the island. This attracted insurers seeking a more cost-effective jurisdiction, as well as non-EU insurance companies or intermediaries seeking to tap into the EU insurance market. They are allowed to write directly into Europe, thus avoiding the need to engage additional, and often expensive, fronting insurers.
With a stated commitment to prudent regulatory oversight accompanies by innovation, efficiency and cost effectiveness, the MFSA has created an industry environment that allows companies to flourish and meet changing consumer needs. Both structures allow firms to write risks through cells within a core company and provide businesses with a cost-effective alternative to setting up a stand-alone insurance company.
Malta has also recognised the growing importance of insurance-linked securities ILS and catastrophe bonds, as well as the convergence of reinsurance and capital markets. The island has enacted legislation allowing for the formation of reinsurance special purpose vehicles RSPVs and securitisation cell companies SCCs.
They also allow Malta to attract reinsurance sidecars and hedge funds interested in entering the reinsurance business. These were made up of 46 licensed non-life insurance companies, eight life insurance firms, two composite and seven reinsurance enterprises.
Most of these companies sell insurance to clients outside of Malta. The insurance management community, consisting of 11 insurance managers, has greatly helped the sector to grow and develop. While this represents a marginal decline of 0. Competitive Pressures Expansion remains a major challenge for domestic insurance companies, especially in the non-life segment. This challenging environment has already resulted in a few overseas insurers withdrawing from the motor market during , while Mapfre Middleasea has acquired the business of Allcare Insurance after the company got into financial difficulties.
Insurers claim that rates need to be adjusted upwards for the sector to grow in a profitable and sustainable way. Meanwhile, insurers are looking at two avenues for growth. The first is bringing in new insurance products, such as pet insurance and products for bicycles. Insurers can also grow their businesses by tapping into the expanding economy and offering innovative and creative policies addressing other niche-market demands. There are some sectors, too, which have yet to be fully exploited by insurance firms, including oil and gas.
Some companies are also seeking growth outside of Malta, having entered foreign markets by offering specialised products. Solvency II was finally implemented and the uncertainty surrounding its introduction has vanished. The PCC regime is well placed to provide insur-. The MFSA expects that a number of insurance companies will open offices on the island in the coming months. The structure offers economies of scale, cost burden sharing and provides the cell with access to knowledge and management expertise pooled within the core of the PCC.
It is seen as the ideal structure for start-ups, which otherwise might struggle to comply with the new requirements. Insurance Managers and Brokers can also benefit from this structure. For instance, foreign consultants, brokers or managers could create their own cells in local insurance broker or management PCCs, through which they can service their clients across the EU, with less capital and cost than setting up stand-alone licensed companies.
Insurers offering or developing innovative solutions could use a cell in a PCC to test and deliver new applications, either by setting up their own PCC structure or by working with an established insurance company renting out cells. An SCC is a single legal entity that can establish one or more segregated cells for the purpose of entering into securitisation transactions, including insurance-linked securities transactions such as catastrophe bond issuances, longevity risk transfer transactions, collateralised reinsurance transactions and cell sidecars.
The main benefit of SCCs lies in their application as programme or platform structures, for instance if repeat transactions are envisaged, offering lower costs and quicker set-up time for each transaction. Foreign companies often choose Malta because it is an EU member state with dedicated cell legislation; however, they soon realise that there are several other advantages such as highly qualified insurance professionals and a businessfriendly environment.
This makes the country an attractive outsourcing destination for foreign insurance companies, managers, brokers and other intermediaries. Functions such as claims administration, analytics, customer care, policy administration, sales and distribution can be outsourced to Malta with a view to reducing costs.
With its innovative legislation and operational. In addition, insurance companies are exempt from paying duty on documents on the insurance of risks situated outside Malta and from paying contributions to the Protection and Compensation Fund with respect to the same risks. Growth Potential While the low interest environment will continue to pose a challenge to the sector as it affects the way insurance companies reserve and invest their funds, product innovation is seen as one measure to cope with this environment.
On the international front, Malta has become an important player in the insurance market, and the fact that the island has opened up to the insurance-linked securities market bodes well for the future. By offering EU passporting rights, a fiscally beneficial environment and competitive operating costs, the island is expected to remain a hotspot for EU and non-EU direct insurers seeking a cost-effective location.
It will be a magnet, too, for multinationals looking for reinsurance solutions and service providers with an international client base eager to enter the EU insurance market. To exploit its full growth potential, Malta only needs to ensure that it continues to offer innovative solutions, sustains a low cost base and maintains an efficient operating environment.
The island offers solutions for high-net-worth individuals looking for an investment vehicle, international workers planning for retirement and global corporations seeking pension schemes for their staff. Malta currently caters mainly to the UK market, and thus far no one really knows what impact Brexit will have on expat pensions based in Malta.
QROPS Destination The creation of international pension plans is a recent development, as the increasing mobility of people and jobs around the world prompted a shift away from the traditional idea of pension provision as a purely domestic service. Therefore, pension rights can be transferred into it without a UK tax charge. Money transferred into these schemes is free from UK inheritance tax.
However, the occupational pension fund sector has not yet risen to the fore, and according to practitioners the main reason is that the majority of service providers are not embracing the added complexity of such offerings, including IORPS, and the lack of a sustainable domestic occupational pension fund tax regime in Malta.
Expanding Segment Malta licensed its first six pension schemes in By the end of the island was home to 50 different pension schemes. The rapid growth that the sector is experiencing is due, in part, to the appeal of Maltese policies around regulation and taxation of international pensions. They were forced to de-list a large proportion of their schemes, and some of those operators relocated to Malta.
International pensions are governed by the Retirement Pensions Act which requires the registration and ongoing supervision of pension schemes, as well as service providers and scheme administrators, investment managers and custodians, through the MFSA, making Malta an attractive location for accrued pension funds for expatriates living around the globe. This is something that does not happen to such a degree in other countries and gives great comfort to pension holders.
Expats living within the EEA do not pay the charge, while those living outside need to pay unless they live in the same country as their QROPS is based. However, the fear is the charge could extend to pension transfers with European Union countries once Brexit has taken place. The country boasts a sophisticated telecommunications network and is serviced by a hard-working, Englishspeaking workforce.
This goes a long way towards reassuring potential clients that any advice they require is always readily available. With increased global mobility, the need for expat pensions and pension solutions for international companies is increasing. Although EU regulations have been in place to facilitate the set-up of pan-European pension plans, the marketplace has not really provided for cross-border pensions, despite demand from multinationals and individuals. However, barriers related to pensions for mobile workers are gradually being lifted.
While industry professionals believe that different taxation and regulatory systems will impede growth in the field of occupational pensions in the short term, they are convinced there is already great potential for private pension plans. By the time market momentum grows, Malta will have had enough time to perfect its service offerings and build up a track record, making it well placed to serve the pension requirements of the wider market.
Staying Ahead of the Curve Helping companies adjust to greater regulatory emphasis on substance, Malta continues to attract serious companies to do business on or from the island. With a growing supply of quality office space available for companies that wish to establish substance and physical presence, Malta presents itself as a location where this can easily be achieved.
With a regulatory framework that has been assessed numerous times, Malta has developed a reputation as a quality jurisdiction that offers strong regulation, high levels of transparency and good governance. Strong Regulations Malta has served as a corporate structuring base for several decades, since offshore companies were first introduced in the s. However, shareholders are entitled to refunds for the tax paid by the company.
Blockchain technology is poised to transform many industries. Several new initiatives, such as Clovyr, focus on dApp or decentralised applications. Malta has lately garnered an even faster momentum in pushing forward its status as Blockchain Island. FinanceMalta, a non-profit public-private initiative, was set up to promote Malta as an international business and financial centre, both within as well as outside Malta.
It brings together and harnesses the resources of the industry and government to ensure Malta maintains a modern and effective legal, regulatory and fiscal framework in which the financial services sector can continue to grow and prosper. Malta is internationally recognised as a brand denoting excellence in financial services. It offers an attractive cost- and tax-efficient base for financial services operators looking for a European Union-compliant, yet flexible, domicile.
FinanceMalta came on the scene at a critical time just as Malta entered the eurozone. Malta has some significant strengths to offer the industry such as a well-trained, motivated workforce; a low-cost environment; and an advantageous tax regime backed up by more than 60 double taxation agreements.
To these, FinanceMalta can add a world-class information and communications technology infrastructure, English as an official language, an enviable climate and its strategic location. The Board of Governors, together with the founding associations — The Malta Funds Industry Association, the College of Stockbrokers, the Malta Bankers Association, the Malta Insurance Association, the Association of Insurance Brokers, the Malta Insurance Managers Association and the Institute of Financial Services Practitioners — its corporate and affiliate members, and staff are committed to promoting Malta as a centre of excellence in financial services and international business.
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Past performance is not a reliable indicator of future results. The performance shown does not take account of any commissions and costs charged when subscribing to and redeeming units. Commissions and costs have a negative impact on performance. Malta Forex Advisory Lawyers Chetcuti Cauchi's expertise and familiarity with local regulatory processes and comprehensive licensing and compliance services ensure it is well placed to act as a one-stop shop financial services solution provider in Malta.
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