FinanceMalta, the public-private partnership set up to promote Malta’s financial services sector, recognises that, like jurisdictions everywhere, success in the financial services arena is the product of considerable vision, unstinting hard work and a clear strategic focus. Success and economic growth do not just happen. They must be nurtured and managed strategically to complement, enhance and accelerate what has already been achieved and to safeguard and strengthen existing competitiveness. By embodying the commercial elements of Malta’s international financial centre in the form of a brand, FinanceMalta is armed with a valuable tool that it continues to build, nurture and leverage in the marketplace.
Malta, like all small international financial centres, must realise and acknowledge that it is party to external events, often outside its control. No matter how well it may be doing internally, it is events in the external global economy that have a near-determining influence on its fate as a trusted EU onshore financial centre in the Mediterranean. By adapting to international events, by systematically participating in conferences and seminars across the financial services spectrum of niches, and by networking with peers, government officials and key decision-makers across the globe, together with local stakeholders and operators, FinanceMalta helps influence how successful its financial services brand is in attracting business and how much it grows. The results to date have been positive, with Malta emerging as a regional centre of excellence in financial services over the last five years. This is recognised by the World Economic Forum, putting Malta amongst the top 15 in the world, practically on a par with other established jurisdictions such as Singapore, Switzerland and Luxembourg.
Financial services is now a primary pillar of the local economy, accounting for some 12 per cent of gross domestic product. FinanceMalta contends that how the Maltese community responds to international challenges is the crucial factor in its competitiveness and its success. It must therefore be unceasingly vigilant in its monitoring and appraisal of any external influences which can affect its future and it must undertake appropriate corrective actions as necessary to protect and promote its competitive positions. The numbers, prima facie, are very encouraging. New companies being registered with the MFSA is on the increase: just under 10,000 in the past three years, the best year being 2011 when 3,458 new companies made the register. This has taken the employment tally for the financial services segment to approximately 10,000 when including the wider sector which supports the financial services industry, including legal, IT infrastructure, and other professional services.
Earlier this year, the world’s leading business broadcaster Bloomberg carried a major story on the jurisdiction under the headline, “Malta Lures Hedge Funds With 300 Days of Sun Aided by EU Rules” saying, “the number of funds in Malta and the amount of their assets are expanding.” Bloomberg reported at the time that the number of funds located in Malta had grown to more than 500 with $10.7 billion under management from 165 funds with less than €5 billion under management in 2006. This is a demonstration of the strength of the brand carefully managed by FinanceMalta’s nimble team.
Financial services is firmly established as one of the key pillars of the Maltese economy along with tourism, manufacturing and business services, providing over €1 billion of revenue to the economy. Its contribution to the national economy is growing, and the sector is benefiting from Malta’s productive labour force. Malta is a financial gateway to Europe. Its finance industry offers a number of attractions including a stable economy, liquid markets, skilled workforce, cost-efficient business infrastructure, and advanced IT support. Within itself, the financial services sector in Malta is very diversified. There are now 25 banks, more than 600 funds, and 54 insurance companies. New legislation introduced two years ago to allow the setting up of pension management schemes in Malta has resulted in 13 such schemes being managed from the islands.
Malta’s open economy has so far managed to steer clear of importing the debt crisis afflicting its neighbours. This has been a clear result of the stability of its economy. FinanceMalta recognises that in order for the brand to compete internationally, its services and facilities have to be cutting edge and among the best in the world. With a well-regarded education system, Malta is in an excellent position to continue providing the human resources necessary for the sector to grow. Programmes administered by the MFSA, the Institute for Financial Services Practitioners, the Malta International Training Centre, the Malta Institute of Accountants, the Malta Institute of Management, the Institute of Financial Services and FinanceMalta, among others, are encouraging more students to go into finance. In addition, scholarships are available to help students further their studies and achieve the excellence Maltese professional service providers are renowned for. The government is also offering tax credits for those students specialising in finance through the ‘Get Qualified’ scheme.
As the complexity of managing Malta’s financial services brand continues to gain traction, FinanceMalta chairman Kenneth Farrugia said: “Malta’s small size is not a drawback, but on the contrary, this has become a key advantage as it enables ease of access and rapid decision-making which is highly difficult to achieve in other larger jurisdictions. Equally important, it is pertinent to point out that in view of the growth of the business and the common vision of both the industry and the government for financial services to develop into one of Malta’s key economic pillars, there is a very strong culture of ‘getting things done’ in Malta − this being a fundamental underpinning of the industry’s value proposition and clearly a differentiating competitive factor.”
For further information visit www.financemalta.org