FinanceMalta, the public-private partnership set up to promote Malta’s International Financial Centre, says that Malta currently enjoys a growing presence in four key sectors in the financial services industry − insurance, banking, trusts and funds, each of which registered a solid performance in 2011, with FinanceMalta being part of the instrument to attract business to Malta in a universal format, perfectly in line with the government’s vision and industry share. Malta is clearly establishing itself as a dynamic, cost-efficient and English-speaking domicile in the European Union for the financial services sector.

When Malta became a member of the EU, it became more visible in the eyes of international operators by becoming an option as a jurisdiction within the EU. This membership was the catalyst for the growth of the financial services industry. The setting up of FinanceMalta was a response to the growth of the industry and initially established by Joseph Zammit-Tabona, now Malta’s resident High Commissioner to the United Kingdom.

FinanceMalta’s chairman Kenneth Farrugia considers that looking at the employment side and how that has increased over the past five years, “the growth of the sector speaks for itself”. Today there are over 6,500 people in direct employment in financial intermediation, which is quite significant in a workforce of approximately 160,000. Farrugia cites “a robust, EU-compliant regulatory and supervisory framework as a major part in the development of the financial sector”.

Farrugia contends that sectors within the industry have become much more visible. “If you look at the growth of the funds industry as an example, 15 years ago we could describe the industry in just one word – ‘two’ – because we had two funds, two custodians and two asset managers. Today Malta has over 500 funds and in excess of 100 asset management companies, so the growth has been quite significant, predominantly in the last two or three years.”

When it comes to the speed of transposing regulations and international legislation, Head of Administration, Dr Bernice Buttigieg is firm, “Malta has a clear edge and this contributes significantly to our competitive advantage. In fact, Malta on the EU scoreboard ranks joint first with Denmark. We are efficient in transposing directives or European regulations into our national legislation. The reason behind this is because we’re small but we’re nimble, we can act very quickly and we don’t have a significant hierarchy.”

Operators complement Malta’s strong operational framework, and on the audit side all the major audit firms maintain a significant presence here. Malta’s highly developed legal framework and specialised legal service providers are part of the knowledge economy that continues to evolve and attract international business. “Malta’s communications infrastructure combined with the development we’ve had in the IT sector has allowed for the big telecom companies to invest significantly in this field and financial services has benefited off the back of that,” says Farrugia.

A growing body of insurers are finding their way to the island given the firm but flexible regulatory regime and access to excellent support services. Prospects for this sector look encouraging with Malta frequently being chosen ahead of competing jurisdictions.

Malta is also an emerging regional hub and key location for wealth managers, family offices, high net worth individuals and retirees. Given the favourable residency and tax laws, innovative investment vehicles (including specialist funds regimes and trust companies), excellent legal and accountancy services, and a warm and sunny climate, all within the European Union, the country has begun to appeal to a wide audience in this area says Bruno L’ecuyer, FinanceMalta’s Head of Business Development.

Setting up and running a business in Malta is definitely very competitive compared to other jurisdictions. While labour rates remain competitive, the national insurance contributions in Malta are capped. So combined with Malta’s advantageous fiscal framework, it becomes a compelling proposition.

The latest statistics released by the National Statistics Office show Malta has had substantial growth primarily in financial intermediation. Financial services are a significant contributor to GDP, edging towards 15 per cent of the economic mix.

At present, the funds industry is leading the sector, having added over 100 new listings in the first half of 2011. “We’ve had compelling growth in this particular industry,” maintains Farrugia, “it’s clearly a sign that the industry has become truly international because we are serving fund managers based in the US, Canada, Italy, UK, Switzerland, Czech Republic, Latvia, and beyond.”

Malta is host to the international banking community with its positioning as a financial services centre and contains institutions originating from 15 countries so far.

As a growing EU jurisdiction, Farrugia claims that Malta always looks “to the UK as the country we wish to emulate because they’ve had great success in financial services. It’s easy for us because we speak the language and all legislation in Malta is not only in Maltese but also in English.”

“We used to say that Malta is waiting to be discovered, but I think Malta is now being discovered today. The acceleration of foreign companies coming to the island is a manifestation of that. People are sometimes driven by perceptions, but you need to come to the island, meet with the government, the regulator and the operators and get a first-hand view of what Malta is really about. I think when people do that, then Malta is sold to them. We don’t want to keep Malta a secret anymore.”