Malta has benefited from the strong growth as an International Finance Centre (IFC). The financial services sector registered double-digit growth rates over the past three years at a time when other countries were in economic turmoil.

The country’s banks did not require government assistance during the international credit crunch; their strong capital adequacy and liquidity ratios served them well.
Having attracted a considerable number of financial institutions, Malta is a true alternative to established European finance centres such as London and Luxembourg.
Malta has strong banking, insurance, investment funds and wealth management sectors. They are underpinned by universally praised, EU-compliant legislation and regulation, a competitive tax regime, access to the world’s high growth markets and a pool of well-educated, experienced professionals.
The prestige that has resulted from the arrival of multinationals and some of the top-rated financial services firms can only help generate future growth.
About 9,000 people are directly or indirectly employed in the sector, and the government is determined to grow this further.

STABILITY, NOT COMPLACENCY

The country enjoys political stability, with the new Labour government committed to a pro-enterprise agenda and a determination to grow the economy and create jobs.
Labour also has innovative plans to cut bureaucracy, lower energy costs, increase female participation in the workforce and put out the red carpet for foreign investors.
Recognising that the economic prosperity of the country is inextricably linked with the quality of its human resources, Malta continues to invest heavily in education. 
Malta has continued to evolve the breadth and depth of its offering. Maltese companies have for some time played a major role in international corporate structuring and are still very sought-after tax-efficient vehicles. Today, it is the funds and insurance sectors that are currently experiencing the highest growth rates.  

WELL LOCATED

Malta has an enviable location in the Mediterranean, making it the ideal platform not only for business in Europe but in North Africa and the Middle East as well.

English, the lingua franca of international finance, is an official language of the country; all legal work is conducted in English.
Many companies site Malta’s EU location as a major reason for their decision to start operations in the country. It is well connected, with most major European cities little more than two or three hours away.
Malta’s EU membership provides companies with access to the EU’s massive internal market of more than 500 million people. 
Malta’s reach, however, does not stop at EU borders, and the country has sought to promote itself actively overseas and in developing markets. Aiming to ensure that it is a relevant jurisdiction for companies with clients in powerhouse growth markets such as China, India, Hong Kong and the USA, the country has negotiated favourable tax treaties with these countries. In total, Malta has signed about 60 double tax treaties and is constantly seeking more. The Malta Financial Services Authority has signed some 30 Memoranda of Understanding with other regulators to ensure a smooth trading environment for the financial servic es sector.
Malta’s geographic position, in the middle of the Mediterranean Sea and close proximity to North Africa, also makes it a stepping stone for financial services firms targeting the Arab world.
International companies setting up in Malta benefit from the country’s convenient time zone for doing business across the world: one hour ahead of GMT, enabling firms to span the global business day as office hours coincide with Asia in the morning, Europe throughout the day and the US in the afternoon.
Malta has an excellent telecommunications and broadband network, which allows businesses to communicate effectively with clients and customers across the globe. International connectivity is ensured by two satellite stations and four submarine fiber-optic links to mainland Europe. Constant investments in the sector have resulted in a network that is capable of carrying the required amounts of data both for today and future requirements. The upgrading of the telecoms infrastructure is geared towards future-proofing Malta’s status as a first-rate finance centre, as is the objective to attract, develop and retain a world-class workforce.

LOOKING TO THE FUTURE

It is the Government’s aim to continuously work in anticipating trends in financial services and seize opportunities. a recent imitative which has been the launch is the Global Residence Programme, allowing people from abroad with high incomes to take up residency here and pay tax locally. This programme will bring in significant revenues. It will also revitalise the property sector. There will be benefits for professionals such as lawyers and tax consultants and a boost for the financial services industry and the leisure and hospitality industries. In effect a number of new quality jobs have already been created within the private sector to support logistical and marketing operations related to the Global Residence Programme
As a politically stable and neutral country, Malta also has an appeal as a centre for international arbitration, while its long standing connections to North Africa and the Middle East make it a suitable jurisdiction to establish Shariah compliant structures.
Despite the current uncertain macroeconomic environment and recent rating downgrades, Malta’s Government remains confident that its well-diversified economy is resilient enough to withstand future shocks. The island’s banking sector has a low exposure to EU periphery debt, and the country’s fiscal deficit is expected to drop further this year.
Malta’s combination of a stable political and economic climate, coupled with the Mediterranean climate of year round warm weather, makes the country a top European location to mix business with pleasure. The outlook is good.


Dr Edward Zammit Lewis is the Parliamentary Secretary for Competitiveness and Economic Growth