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20 24 Malta’s International Investment Guide
MaltaInvest2024
Contents Chapter 3
Chapter 1
Why Malta?
Residency
Overview 30
Overview 80
Stability Through Crisis 37
Malta’s Residency Schemes
82
Macroeconomic and Fiscal Structure
38
Maltese Exceptional Investor Naturalisation
82
Legal System 40
Malta Permanent Residence Programme
84
Access to Finance 41
Malta (Global) Residence Programme
87
Taxation 42
Malta Retirement Programme
89
Access to Talent 44
Nomad Residence Permit 90
Malta’s Attractive Ecosystem for Financial Services
Malta Startup Residence Programme
92
Expanding Horizons of Care
96
Setting Up Shop in the Med
100
46
Chapter 2
Setting Up Your Business In Malta Overview 52
22
Chapter 4
Where to Start 54
Real Estate
Licensing and Support 56
Overview 110
Gozo 59
Who Can Buy Property in Malta?
112
Tax Planning 62
The Property Purchase Process
115
Setting Up a Company in Malta
Opportunities for Foreign Investment
116
64
Malta Stock Exchange 67
Special Designated Areas 119
Facilitating Malta’s Investment Potential
70
Commercial Property 120
Wishing for a Bird’s Eye View on All of Your Businesses?
74
A Trusted Name in Turnkey Solutions
124
Contents
Chapter 5
Chapter 8
Financial Services
Shipping & Aviation
Overview 130
Overview 196
Investment Funds 134
Ship Registration 199
Private Wealth 140
Aircraft Registration 203
Banking 142
Mobile Assets Protected Cell Companies
207
Insurance 145 FinTech and Virtual Finance
147
Mapping Out a Vision for the Future
148
A Business-friendly Approach, on the Doorstep of Europe
152
Chapter 9
Tourism Overview 210 Malta’s Tourism Product 214 Events 217
Chapter 6
A Cruise Destination 218
Industry
Investment Opportunities 221
Overview 158 Manufacturing 160
Boosting the Economic Benefits of Tourism in Malta
224 228 230
Pharmaceuticals and Life Sciences
162
The Maltese Islands: Your Premier Destination for MICE Excellence
Information Communication Technology
166
A New Dawn for a Heritage Icon
Areas of Growth 169
Chapter 10 Chapter 7
Useful Information
Gaming
Overview 234
Overview 174
Local Contacts 235
Industry Update 176
Diplomatic Missions 242
iGaming in Malta 178
Personal Tax Rates 245
The Malta Gaming Authority
181
Double Taxation Agreements
Remote Gaming Licensing and Regulation
182
Infrastructure 248
246
Esports, Gaming Development and Extended Reality 186 ‘Commitment to Evolution is One of Our Key Strengths’ 190
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The Three Cities. Photo: Inigo Taylor
MaltaInvest2024
Malta Invest: Malta’s comprehensive international investment guide
I
t is our pleasure to welcome you to another edition of Malta Invest, Malta’s first comprehensive international investment guide focusing on Europe’s fastest-growing economy. As the world is swept up in new challenges and rapid developments, Malta stands as an island of relative stability that keeps defying expectations by weathering storms with a resilience deeply appreciated by all who invest here. The country is not immune to the devastating impacts of war, inflation and energy shocks, but has responded to all these with willingness to go against the grain, providing the basis for growth in various sectors operating from the islands. From mainstays like financial services, tourism and iGaming to new opportunities in aviation, artificial intelligence and the superyacht sector, most industries active in Malta continue to develop in line with the shifting global economic scenario. These are buoyed by ongoing investment in niches with high upside potential as well as significant support for businesses and households through energy and fuel subsidies. Malta’s economic growth has been fuelled by a population boom as people move to the islands to fill labour market gaps, with a quarter of the workforce now born abroad. Meanwhile, the country has also become home to a significant number of high-net-worth individuals and investors, many of whom benefit
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from the several residency schemes on offer. It is no secret that visitors often fall in love with Malta, buying properties in luxury developments or even historic palazzos in the old stomping grounds of the Order of the Knights of St John. Malta Invest has gained respect and recognition as a reputable source of information for many potential investors looking at Malta as a destination of interest for their investment quest. In this edition of Malta Invest, we provide extensive content and information across various sectors. Our aim is to assist potential investors in their decision-making process by presenting facts, providing context and offering invaluable insights from stakeholders in each sector covered. In this one-stop guide, investors will also find out about the schemes and incentives extended by the Maltese authorities to encourage private enterprise, get to know the key public and private players that can facilitate your investment journey, and be informed of current and imminent policy and economic developments. Our ultimate objective is to help investors make sensible and sustainable investment decisions. In our 2024 edition of Malta Invest we have also picked the brains of industry leaders, major investors and locally based protagonists in business and investment across sectors, whose contributions have added value, local insight and practical
Editorial Photo: Inigo Taylor
PUBLISHER
Content House Group Mallia Buildings, 3, Level 2, Triq in-Negozju, Zone 3, Central Business District, Birkirkara CBD3010 Malta T: +356 2132 0713 E: info@contenthouse.com.mt contenthouse.com.mt Malta Invest 2024 is published, produced and owned by Content House Group Ltd and its relevant subsidiary companies.
EDITOR Robert Louis Fenech HEAD OF SALES & BUSINESS DEVELOPMENT Marie Claire Camilleri
advice to potential investors. Our gratitude goes out to all those who contributed to making Malta Invest 2024 a treasure trove of information for investors with a hunger for opportunity and the vision to make a difference. In our effort to put this edition in the hands of a wider audience, we have continued to work with our global distributors to ensure that we are reaching out to business leaders, CEOs, people in management, professionals, and entrepreneurs. We genuinely hope to deliver valuable insights that can assist and support investment decisions. The extensive distribution of Malta Invest is a first for Malta. We take great pride in having successfully secured invaluable distribution in strategic locations and major cities, including London, Paris, Geneva, Frankfurt, Zurich, Dubai, Brussels, and Valletta, at leading business centres, investment banks, corporate firms, business-oriented hotels, private members’ clubs, embassies, first and business class airline lounges, and private jet centres. If you are reading this, we would like to extend our utmost welcome, and hope that you will find our 2024 edition of Malta Invest to be insightful, enjoyable, and most of all, relevant to your business and investment needs.
h
l
c e n e F s i u o L t r e b Ro
CREATIVE DIRECTOR & DESIGN Nicholas Cutajar HEAD OF DIGITAL & MARKETING Raisa Mazzola ACCOUNTS & CREDIT CONTROL MANAGER Marvic Cutajar
Content House Group Ltd would like to thank all the protagonists, sponsors, partners, advertisers, and all relevant private companies and public companies that have embraced this project and assisted the project team in the collation of information. The publisher would also like to thank all participants and interviewees who accepted to feature in this publication. Moreover, the publisher extends its gratitude to the entire project team who have made this project a success, and to the local and international distributors. The publisher cannot be held liable for any information that is published in this publication. Every effort has been made to ensure accuracy of information. The publisher cannot be held responsible for any decision based on the content published in Malta Invest, which is solely aimed as an informative guide. The content appearing in this publication does not necessarily reflect the views of Content House Group Ltd, or of its subsidiary companies, as the publisher. All rights reserved. Reproduction in whole or in part without written permission of the publisher is strictly prohibited. Malta Invest is strategically distributed for free in London, Paris, Frankfurt, Geneva, Zurich, Brussels, Dubai, and Valletta. In the UK, the publication is distributed in select luxury hotels, private members’ clubs, investment banks, leading corporate firms, London embassies, airline gate services, private jet centres, and at the Eurostar Lounge at London St Pancras. In Paris, Frankfurt, Geneva, Zurich, Brussels, and Dubai, Malta Invest is strategically distributed in select embassies, top corporate firms, and F&B airline lounges. In Malta, Malta Invest is distributed to leading businesses, companies and corporate firms, as well as to prominent business leaders and CEOs, banks, business centres, financial institutions, Government agencies, and ministries, as well as embassies and consulates. Malta Invest is also sold at leading newsagents.
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20 24
CHAPTER 1
Why Malta?
Malta’s International Investment Guide
MaltaInvest2024
Overview
Valletta. Photo: Inigo Taylor
I
f you find yourself wondering why a multitude of individuals opt to live, work and invest in a couple of small islands in the heart of the Mediterranean Sea, you’re certainly not alone. Many share your curiosity about how Malta, the European Union’s tiniest nation, manages to rank among its most prosperous economies. The answer, in short, is that Malta is a cosmopolitan country offering opportunities for both individuals and businesses. Abundant options for investment and employment, an array of activities and attractions, and the delightful Mediterranean climate characterise life in Malta. However, the deeper allure becomes apparent upon exploring the intricate tapestry of opportunities that
30
Malta weaves, a story that unfolds within the pages of this publication. Malta has become a magnet for international investors, drawing them in with a blend of security, support, and enticing avenues for wealth creation and preservation. Its resilient and diversified economy has weathered various storms, maintaining social, political and economic stability over seven decades of self-determination. A unique combination of agile policymaking and a welcoming approach to business has propelled Malta into the global spotlight. Moreover, the nation hosts a sophisticated financial sector catering to an international
CHAPTER 1 Why Malta?
Malta FAQs Is Malta in the European Union? What about Schengen? Malta has been a European Union member state since 2004 and joined the Schengen Area in 2007.
clientele and a thriving iGaming ecosystem that sets global standards. Meanwhile, noteworthy growth is registered in sectors such as shipping, aviation, pharmaceuticals, aquaculture, ICT, and chemical manufacturing, all underscored by Malta’s commitment to knowledge-based industries. Strategically positioned at the crossroads of north and south, east and west, Malta’s geographical significance has been acknowledged for millennia, shaping its rich cultural heritage. British rule, which ended in 1964, bestowed the gift of universal English proficiency, now an official language and the language of business. With minimal natural resources, successive governments have made substantial investments in education, nurturing a highly skilled workforce crucial for economic progress. This foresight has led to the creation of diverse niches that fuel Malta’s rapid and remarkably stable economic growth, defying the expectations for a small and open economy. Island life necessitates robust connectivity, and Malta excels in this regard. Despite its peripheral location, major European capitals are easily accessible, thanks to Malta International Airport’s extensive network linking to around 100 destinations. Foreign investment in Malta is facilitated by service providers attuned to the needs of incoming operations, offering cost-effective solutions compared to other financial destinations. The overall cost base, from human resources to real estate, remains competitive, making Malta an attractive choice for investors. Beyond these practical aspects lies a wealth of additional reasons that continue to captivate discerning investors. Malta boasts reliable digital infrastructure, excellent healthcare and a culture of innovation in technology and finance. Its diverse industries mirror the eclectic nature of those drawn to the islands, encompassing individuals, families, startups, and multinationals. Whatever your requirements, rest assured that Malta stands ready to meet them, inviting you to become part of its vibrant and thriving community of investors.
What other international organisations is Malta a member of? Since Independence, successive Maltese governments have chartered a course of active international participation in structures like the United Nations, the Council of Europe, the Commonwealth, and the Organisation for Security and Co-operation in Europe. Is Malta safe? Malta is considered a very safe country where theft and violence are largely restricted to isolated incidents. What is the political system in Malta? Malta is a stable parliamentary democracy with two major political parties represented in Parliament. What are the residency options available? Foreign investors have several residency options available to them. These range from full citizenship through naturalisation to retirement schemes and special residency options for digital nomads. You can find out more on the subject in the relevant chapter (see p. 80). Can I buy property on the Maltese Islands? Yes, although holders of foreign passports are limited to only one residential property unless it is in one of several Special Designated Areas around the islands. For more information, see the chapter on real estate (see p. 110). How’s the weather? Malta enjoys over 300 days of sunshine every year, with mild winters and hot summers. Little wonder that it is such a popular vacation spot!
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MaltaInvest2024
Policy Innovation is Malta’s Economic Strength Malta has exhibited remarkable economic drive in carving out and nurturing new productive niches that play to the country’s strengths while meeting the high standards expected of a European Union member state. An iGaming Powerhouse 15,774
14,950
16,000
12,398
14,000
11,747
12,000 10,000 8,000 6,000 4,000
1,413
1,247
1,081
2,000
1,495 338
332
314
284
0
2019
2021
2020
No. of companies
Gross Value Added (in millions)
2022 No. of full-time equivalent employees
Source: Malta Gaming Authority
A Rapidly Growing Aviation Sector 2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022 2023*
92
104
128
155
176
213
243
265
298
392
534
625
762
839
900 800
Number of registered aircraft
700 600 500 400 300 200 100 0
* As of July 2023. Source: Transport Malta
8.8%
10 8
5.4%
6 4 2 0
Average share of sectoral GVA
Annual increase in GVA over the last decade
Percentage of workforce employed in the sector
1,107
12 10
1,000
8 6 4
800
84.1M
57.9M
600 400
452
2 0
200
2014
2022 Gross tonnage of merchant fleet Superyacht registrations
32
1,200
Source: Transport Malta
0
Superyacht registrations
8.4%
Malta Boasts the Largest Merchant Shipping Fleet in Europe and the Largest Superyacht Register in the World Gross tonnage of merchant fleet (in millions)
Financial Services is a Crucial, Ever-growing Industry in Malta
MaltaInvest2024
Victoria
Mġarr
Ċirkewwa
Gender Population in Malta
47% female
53% male 34
CHAPTER 1 Why Malta?
Overall Population in Malta
Population Density
542,051
1,720
/km2
as at end 2022 (2011; 417,400)
St Paul’s Bay
St Julian’s
Sliema
Industrial Areas
Valletta Smart City
Central Business District
The Three Cities
Mdina
Airport Safi Aviation Park
Freeport
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CHAPTER 1 Why Malta?
Stability Through Crisis ll Va
et ta C
I
n a global era plagued by myriad challenges, where terms like ‘polycrisis’ have been coined to encapsulate the magnitude of the issues faced, Malta is a place that provides stability amidst the prevailing uncertainty. While no nation is entirely shielded from the ripple effects of global developments, Malta has navigated its path with a strategic foresight that has, thus far, proven to be remarkably resilient. Europe is still reeling from the repercussions of Russia’s invasion of Ukraine and the impact of the sanctions imposed. The resulting energy price shock has filtered through the economy, leading to inflation unseen in decades. The medicine prescribed by the European Central Bank, which has raised interest rates to record highs, has not been without its side effects, as some European nations lurch towards recession while others register anaemic growth. By the end of 2023, the decrease in economic activity had further weakened governments’ ability to sustain subsidies meant to cushion the effects of inflation, with several support schemes being rolled back across the continent, raising fears that the austerity measures that characterised the response to the Great Financial Crisis may be making a return. The unfortunate evolving conflict in the Middle East is somehow set to further complicate the global and European landscape for 2024. Although the impact of the current state of affairs in Ukraine and the Middle East is certainly being felt in Malta, the situation on the islands remains stable – public finances allowed the Maltese authorities to take the bold step of subsidising energy and fuel prices to keep them frozen at pre-
ru ise
Po r
t. P ho
to: Inig pandemic levels. oT aylo r The outlay has been enormous, representing some 5 per cent of all Government spending since 2021. While the country has not been spared from inflation, given its heavy dependence on imported goods, including food, this commitment to energy price stability has allowed households and businesses alike to continue spending and investing.
The characteristics of the Maltese banking system have also shielded the economy from the high interest rates seen across Europe. Local banks are highly liquid thanks to significant holdings of customer deposits, allowing their loan books to be funded without recourse to European Central Bank finance. Indeed, Malta has the lowest passthrough of interest rates of any eurozone country. This does not mean that credit is cheap, and in various instances corporate borrowers could still expect to pay rates that are higher than the eurozone average. For many businesses, however, the ability to plan for the long term has been worth the premium. The combination of energy subsidies and stable interest rates has ensured that domestic demand – a key driver for the Maltese economy – has remained robust, generating solid economic growth and providing the basis for continued private and public investment. Strong GDP growth also allows the Government to run deficits while keeping debtto-GDP in check, ensuring that public finances remain sustainable in the long run.
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MaltaInvest2024
Macroeconomic and Fiscal Structure
M
alta’s economic resilience is perhaps best illustrated with reference to two events that left deep impacts on the European economy. In the late 2000s, the country registered solid performance during the Great Financial Crisis and subsequent sovereign debt crises that affected many of its European neighbours. Fast-forward to this decade, and we can see the Maltese economy’s rapid recovery from the impact of the COVID-19 pandemic to register the largest GDP growth in the EU in 2022 and 2023. It is expected to retain this position in 2024. In between these two major crises, Malta was frequently in Europe’s pole position for economic growth. Public debt stood at 54 per cent in 2023, forecast to rise marginally to 55 per cent by 2025. This still leaves further room to manoeuvre for the Government, which is expecting to run a deficit in the medium term to mitigate the financial implications of global geopolitical events. Most of this debt (80 per cent) is held by Maltese financial institutions and the local investing public. Broadly speaking, Malta is a net importer of goods and a net exporter of services. Its top material exports include petroleum products, pharmaceuticals, electronics and fish, while its main services exports are related to the tourism and travel, remote gaming, financial services, and professional and technical consulting sectors. Moreover, most foreign investment in Malta – over 80 per cent – is direct, with foreign companies often choosing to establish a physical presence in the country. International economic and social assessments position the country among the better global performers. The United Nations Human Development Index puts Malta in the highest category, while the Social Progress Index, which determines how countries provide basic human needs, well-being and opportunity for their citizens, lists Malta as a Tier 2 country, indicating a high level of social progress, a ranking shared with highly developed countries like the US, the UK, France, Austria and Singapore. Paceville, St Julian’s. Photo: Inigo Taylor
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CHAPTER 1 Why Malta?
Key Economic Indicators Strong, Consistent Growth Real GDP Growth Rate by Volume 12.00 10.00 8.00 6.00 4.00 2.00 0.00
2012
2013
2014
Malta
2015
2016
EU-27
2017
2018
2019
2020
2021
2022
2023*
2024*
Eurozone
*Projected. Source: 2012-2021 Eurostat, 2022-24 European Commission
54.4%
10,000
52.3%
9,003
7,989
54%
54.3% 6,960
42% 5,702
5,639
5,678
5,739
70 60 50 40 30
4,000
20
2,000
10
0
0
2012
2013
2014
Total debt
2015
2016
2017
2018
2019
2020
2021
2022
Debt as % of GDP
6,000
5,390
5,226
8,000
5,586
10,000
4,855
Total debt ( millions)
12,000
44.8%
48.5%
54.3%
14,000
55.9%
61.6%
65.9%
65.8%
Stability of Public Finances General Government Debt and Debt as a % of GDP
2023*
Debt as % of GDP
*Projected. Source: National Statistics Office, Central Bank of Malta
A Diversified Economy
Credit Ratings Moody’s
Fitch
A2 A+
stable May ‘23
stable September ‘23
S&P
DBRS
A- Ahigh
stable June ‘23
stable October ‘23
Other 8.8%
Gaming 9.6%
Real Estate 5.8%
Manufacturing
7.5%
Retail, Accomodation & Food Services 18.2%
Financial & Insurance Services 8.8%
Public Sector 16.8% Professional Support & ICT Services 24.5%
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MaltaInvest2024
Legal System
O
ver a century and a half of British rule shaped Malta’s corporate, legal and judicial systems, which will be familiar to those used to common law frameworks. These systems – essential to the smooth functioning of business – have since been strengthened through the implementation of regulations and directives emanating from the EU. The judicial system is trusted, and while speed is not generally considered one of its virtues, cases related to business disputes are prioritised through a commercial section within the Civil Court. This court handles applications related to matters regulated by the Companies Act, the Competition Act, the Consumer Affairs Act, and the Malta Competition and Consumer Affairs Authority Act. This move has been deemed a success by the business community, which has benefitted from shorter case durations and subject-specific expertise. Further reform is in the pipeline, with the establishment of a dedicated Commercial Court with jurisdiction over maritime, trademarks, intellectual property and patents slated for 2024, allowing those with commercial interests on the islands to have the peace of mind afforded by a specialised court committed to resolving disputes in a timely and effective manner.
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Law Courts, Valletta. Photo: PabloMendo - iStock
CHAPTER 1 Why Malta?
Access to Finance
M
alta’s banks stand ready to support commercial projects through a wide array of off-the-shelf and bespoke financial products. The banking sector is mature, providing services comparable to those available in other leading financial centres, including advanced internet banking and the ability to open accounts in foreign currencies. Banks are also well-capitalised and highly solvent, while their strong customer deposit base has largely shielded the Maltese economy from the effects of increasing interest rates.
the Financial Action Task Force was short-lived, but the tight controls introduced in response remain firmly in place. In practice, this means that individuals and businesses looking to open a bank account need to provide extensive documentation including, among others, identity documents and banking reference letters for each director and beneficial shareholder of a company. The upshot is that the local financial system is more secure than ever, setting Malta on the road to regaining its reputation as a jurisdiction of excellent repute.
The Malta Financial Services Authority is responsible for bank licences, of which there are around 25, ranging from mid-sized local banks to branches of foreign institutions and specialised operations. Most have competitive fees while providing tailor-made banking solutions, including trade and project finance, custodian banking and specialist wealth management services. Be warned, however, that opening an account may be a bigger hurdle than one may expect. Malta’s greylisting as a financial jurisdiction by
Mdina. Photo: Inigo Taylor
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MaltaInvest2024
Taxation
St Julian’s. Photo: Inigo Taylor
T
here is no denying that Malta’s tax regime plays a pivotal role in positioning the country as an attractive destination for investment. Maltese tax law provides for highly advantageous rates for non-resident foreign investors through a framework that is equal parts simple and complex. First, the simple part: Malta does not levy withholding taxes on dividends, interest, royalties, and proceeds from liquidation distributed to non-residents. These is no separate capital gains tax and no wealth or inheritance taxes. Stamp duty is levied on the transfer of moveable and immoveable assets, but companies carrying out international activities are exempt. This leaves income tax as the main instrument of corporate taxation. From there on, it is less straightforward. Profits are taxed at a flat 35 per cent rate, with double taxation avoided by exempting shareholders from listing dividends as income in their tax return (known as the imputation system). What really makes Malta stand out as a highly effective jurisdiction for tax planning, however, is the option for shareholders to reclaim a portion of the income tax paid at company level. This can reduce the effective tax rate significantly, often to just 5 per cent. More details are presented in the next chapter (see p. 62).
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The advantages of this system are well-recognised and much appreciated by the many foreign companies that have established a presence in Malta to mitigate their tax exposure. For companies incorporated in the country, global profits can be taxed in Malta, while those incorporated abroad but whose business is controlled or managed in Malta are subject to the Maltese regime for all income earned in Malta, all gains realised in Malta, and crucially, all income from abroad to the extent it is remitted to Malta. Companies operating in multiple jurisdictions require a sufficient degree of substance in their Maltese operation to be eligible, typically by having directors’ and shareholders’ meetings in Malta, and ensuring that all decisions in relation to the company are taken on Maltese territory, such as at a registered office with employees. Since 2019’s introduction of a Patent Box Regime, refunds can also be claimed on income derived from qualifying intellectual property – a solution particularly attractive to companies operating in the FinTech or blockchain spaces. Maltese tax law also makes special provisions for holding companies, consolidated groups and investment vehicles, among other formations, and offers the possibility of relief when tax is incurred abroad (see p. 62), making available a wealth of opportunities for advantageous financial setups.
CHAPTER 1 Why Malta?
Global Minimum Corporate Tax: Delayed The OECD minimum corporate tax rate for large multinationals generating annual revenues over €750 million is not expected to be implemented by Malta for some time yet. The Maltese Government announced in late 2023 that corporate taxation will remain the same in 2024 while pointedly noting that EU countries may delay its introduction by up to six years beyond 2024. The Government has also repeatedly stated that any reform will be gradual and have a neutral impact on the public coffers, making it clear that it will not be using the new rules, when they are eventually introduced, to extract more tax revenues. Once implemented, the new minimum rate will impact close to 700 companies based in Malta, which may expect their effective tax rate to increase a little during the transition period, although supplemental measures are being prepared to ensure that Malta remains an attractive jurisdiction for these large enterprises. In the long term, Qualified Refundable Tax Credits in line with EU and OECD rules will be used to maintain Malta’s competitive edge in tax planning, as per statements issued by the Ministry for Finance.
Consumption Tax Malta levies a tax on consumption in line with most other European Union countries. The Value Added Tax (VAT) is paid in only one country under EU rules, and the standard rate is set at 18 per cent in Malta. Certain economic activities are subject to reduced rates, with accommodation, for example, subject to a 7 per cent VAT rate. Medical accessories and domestic help services, among others, fall under the 5 per cent rate, while food, pharmaceuticals and all exports are charged 0 per cent. Certain sectors may benefit from competitive VAT calculation, including ship and aircraft registrations (see p. 200), so be sure to consult a financial advisor to see whether your investment is eligible.
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MaltaInvest2024
Access to Talent
A
s a knowledge-based economy, human resources lie at the heart of Malta’s success. Continual investment in education has shaped a highly skilled local workforce recognised for its tenacity, dedication and ability to think outside the box. Foreign companies with operations on the islands speak well of Maltese workers, with the main issue lying instead in availability, thanks to an unemployment rate hovering below 3 per cent. To overcome this limitation, many companies have turned to foreign workers, with a full quarter of the working population having been born abroad. The freedom of movement that comes with EU membership has proven useful in this respect by extending the potential pool of talent to the 200 million-strong EU workforce. Meanwhile, there are a number of schemes and incentives designed to make the recruitment of workers who are not EU citizens (known as third-country nationals, or TCNs) as seamless as possible. Certain roles in high demand may also benefit from a beneficial income tax rate of 15 per cent, a measure many employers find helpful in attracting top foreign talent to the islands. Shortly before publication, the Maltese Government announced that work is underway to consolidate several schemes into one framework. Prospective employers can find out more about the latest changes by contacting JobsPlus, the state employment agency, and Identità, which deals with visas and work permits. Recruitment and head-hunting firms active in Malta can also provide further insight about labour market trends that may be of assistance to new or potential entrants to the Maltese business ecosystem.
Photo: Israel Andrade - Unsplash
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MaltaInvest2024
Malta’s Attractive Ecosystem for Financial Services Financial services add substantially to the Maltese economy. Here, FinanceMalta Chairman George Vella tells Julian Micallef Tagliaferro about the publicprivate entity’s continued initiatives in support of Malta’s standing as an international financial centre, shares his insights on the National Strategy for Financial Services launched in 2023, and expresses his eagerness to see more investment with a sustainable perspective.
Photo: Inigo Taylor
T
he financial services sector contributed over €1 billion to the Maltese economy during 2022, according to the country’s financial regulator. Put in perspective and to better understand its significance to the economy, during that same year, Malta’s gross national income amounted to around €16 billion. FinanceMalta was established in 2007, bringing together industry players and Government-appointed representatives to promote Malta as an international financial centre. It leverages the advantages that Malta presents to the industry, including a well-trained English-speaking workforce, an efficient fiscal regime coupled with over 70 double taxation agreements, a robust infrastructure for information and communications technology, a cost-competitive environment when compared to the traditional hubs and major cities, and the country’s strategic location, as well as a Mediterranean touch with good weather experienced throughout most months.
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In 2023, the National Strategy for Financial Services was launched by the Malta Financial Services Advisory Council – set up to, among others, develop a long-term strategy for the financial services sector in Malta – listing some 175 initiatives towards this aim. FinanceMalta is heavily involved in its implementation and Chairman George Vella is focused on the next steps to continue advancing the needs of the industry. Malta already boasts a well-established centre for international financial services. The pace of growth continues as more initiatives are underway to amplify its attractiveness to business. Among others, one should expect a stronger push for more products on the Malta Stock Exchange (MSE). Offerings of sustainable finance instruments and derivatives are next on the cards, following the success of the first green bond launched on the MSE in July 2023. Valued at €25 million, it was fully subscribed within hours, attesting to the market’s appetite for this
CHAPTER 1 Why Malta?
type of instrument. Mr Vella anticipates more such bonds in the near future, which should continue to narrow the gap between what is on offer in this area on the international scene and what is available in Malta. George Vella considers now to be a good time to connect financiers’ urge to invest, with their eye on the bottom-line, with the call to ensure a more sustainable way of doing things. On this, he contends that “green bonds are only a small part of being sustainable.” With the introduction of ESG requirements, Mr Vella notes that such operations merge profitability with reaching environmental and social objectives. Sustainable finance, continues Mr Vella, is allowing bankers and financiers to allocate funds to the right priorities. FinanceMalta’s membership in the World Alliance of the International Financial Centres (WAIFC) provides an international context to the work being done and a source of knowledge for the entity. Indeed, officials of FinanceMalta are ever-present in various fora around the world, representing the stakeholders that form part of the organisation, attracting both investment to Malta as well as assisting Malta-based investment into other jurisdictions. There is also close collaboration with other organisations working to promote Malta as a brand in the FinTech space, as the economic sectors are often interlinked. Mr Vella notes that the country is now at an interesting juncture, looking out for the new economic model of the next 30 years. Digitalisation is one of the key elements that will be incorporated into any solution looking forward, and the Chairman observes that “financial services should move that way.” A comprehensive study by Mastercard on Malta’s FinTech sector, presented during FinanceMalta’s annual conference in September 2023, sheds light on the country’s ecosystem and the main players in this quickly growing segment, and makes recommendations for further improvement. It also underlines the international company’s commitment to enhance payment services in Malta. Mr Vella believes that companies such as Mastercard and Visa could be of great assistance as the sector develops further. Attracting more venture capital is also high on the agenda. Mr Vella notes that “there is still a lack of venture capital” on the Maltese market, however, he hints that “more is on the way”.
He shares a success story of a company that sells artificial intelligence solutions to several industries and was included in the InsurTech100 for 2023, a list of 100 of the world’s most innovative InsurTech companies selected by a panel of industry experts and analysts; a testament to the quality that abounds on the Maltese entrepreneurial landscape, and to the possibility for venture capitalists to scout for and secure good opportunities. While noting that foreign companies settling in Malta, of which there are many, tend to list in other jurisdictions, Mr Vella predicts that this will change. Economic sectors Malta is particularly well-positioned in are being analysed to identify any issues relating to local listings. Addressing these is expected to entice listings to the Malta Stock Exchange. As for ESG-related requirements, these present a new reality. Mr Vella is adamant that these requirements must be met, adding that “the past language is no longer relevant.” He admits that, as with anything new, a huge ramp-up period is to be expected. An online portal – maltasustainablefinance.org – was created specifically by FinanceMalta to provide more information on sustainable finance and aimed at becoming a reference point for investors interested in projects that fulfil the sustainability criteria. The portal aims at enhancing understanding, advocating for, and assisting in the advancement of sustainable finance undertakings in Malta. The focus may be on green. However, as Mr Vella points out, Malta’s small island status and its historical links to the sea present a unique opportunity to explore the vast potential of the blue economy. Various ideas have already been brought to the table and are waiting to be implemented, but he envisions many opportunities for investment in this sector as its potential is yet to be fully harnessed. As the landscape changes, with an increased focus on sustainability, the prospects look more positive than ever. Malta’s role as an international financial services centre is set to continue growing. FinanceMalta’s proactive approach, particularly on sustainable financing, its foresight on future developments, and its willingness to assist investors and enhance the Maltese financial services ecosystem, goes a long way in ensuring that with the right outlook, the best results are secured.
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CHAPTER 2
Setting Up Your Business In Malta
Malta’s International Investment Guide
MaltaInvest2024
Overview
F
oreign investors and entrepreneurs – be they multinationals or startups – will find plenty of support during their set-up phase and throughout the course of their business journey on the islands. Malta has been welcoming foreign investors for half a century, and has, over the last two decades, developed a structured, multi-faceted system of incentives and assistance to facilitate foreign investment in the country. As with anything else, entering a new business environment without the right introductions and guidance can be daunting, and can make the process unnecessarily difficult. But foreign investors can rest assured that they will find assistance through a host of public and private organisations; and like everything else in life, more often than not, the maximum benefit is derived when relationships are nurtured with both. If you are seriously thinking of relocating to Malta, local knowledge is going to make all the difference, and it pays to take the time to get to know the extensive assistance available to investors, be it in the form of grants, tax benefits or industrial space. This can be achieved by going through the websites of various public bodies, and particularly by engaging the right advisory firm as early in the process as possible. Corporate services providers and advisory firms hold the keys to this understanding, and more generally, to maximising the potential offered by Malta’s legal, corporate and tax frameworks. They can also explain in full detail the requirements for obtaining work permits for employees, setting up a Maltese company, securing residency, applying for licences, opening bank accounts, and everything else a prospective investor should know. Malta’s corporate services providers have built a reputation for their tenaciousness on behalf of their clients’ interests, and the engagement of these local partners
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should be a priority for anyone considering Malta as a destination for investment of any kind. These highly skilled and no less experienced professional advisors know the local landscape well, and stand ready to walk alongside you as you explore everything Malta’s growing economy has to offer. Then, depending on the kind of business activity being considered, investors may line up meetings with the local stakeholders that can provide grease to the gears of their Maltese journey. For manufacturing of all kinds, and for research and innovation projects, Malta Enterprise, the country’s economic development agency, should undoubtedly be the first port of call. Those interested in iGaming initiatives would do well to establish early contact with the Malta Gaming Authority, which stands ready to provide guidance on regulatory matters. Meanwhile,
CHAPTER 2 Setting Up Your Business In Malta Sky Parks Business Centre, Malta International Airport
prospective investors in gaming, broadly understood, will find ample help from Gaming Malta, which supports the development of the iGaming, video game development and esports sectors, as well as initiatives related to augmented and virtual reality (see p. 187). Tourism and hospitality operators may open a line of communication with the Malta Tourism Authority, which is directly involved in promoting the country as a destination and managing the tourism product, including through the licensing of all hospitality establishments. For financial services, the Malta Financial Services Authority can give counsel regarding the regulatory framework, while FinanceMalta, a public-private partnership, may provide crucial insight on market-related matters. For all these sectors and more besides, a good place to begin is the list of some of the different public and private entities that make up the Maltese business community which can be found in Chapter 10.
In summary, anyone entertaining the idea of establishing a business in Malta, whether it is a branch of an established company, a back-office department, a startup, or indeed an innovative business model, can kick-start their journey by engaging a local advisory firm and following that up by flying to the islands for a meeting with the relevant authorities, agencies and private associates for that sector. The benefits of a faceto-face interaction on Maltese ground cannot be overstated. What Malta offers is more than offices and incentives. It is a whole ecosystem of willing, trusted partners that can provide value to any international business. Ultimately, the whole structure in Malta is always geared at attracting all sorts of legitimate foreign investment to our shores.
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MaltaInvest2024
Where to Start
H
aving mentioned Malta Enterprise, it is worth delving into some of the many services the agency can provide to potential investors. Cultivating a good relationship with Malta Enterprise can yield numerous benefits, and while it is very possible to set up business in Malta without its involvement, why would you? Its officials are highly attuned to the needs of the Maltese economy and foreign investors alike, and can highlight potential issues before they arise, while providing the necessary solutions. The agency does more than simply give advice, however. Its programme of initiatives and incentives, which its officials can guide you through, are designed to amplify the benefits of investing in Malta and give a competitive edge to beneficiaries. Its services include pre-investment fact finding to acquaint potential investors with the realities of operating out of Malta, allocation of industrial space, access to finance, investment credits, and bespoke schemes to assist in a company’s export activities, research and development, and more. Its one-stop-shop platform for business, Business 1st, provides a single point of contact which serves as the gateway to Government business information and services. An investor
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can therefore not only register a company, apply for a tax number, and indicate whether they will be employing people, but also obtain the requisite permits to operate in regulated sectors, such as tourism or catering – all in one place. A comprehensive effort undertaken over the last years to digitise and unify Government records is set to bear fruit in 2024 through the launch of a new online portal, promising to further cut bureaucracy and make incorporation in Malta easier than ever. To extract the utmost value from these services, companies and individuals looking to start operations in Malta should start a dialogue with Malta Enterprise at the earliest stage possible, and be frank about the goals of their investment, as well as their needs. The team has extensive experience in lending an ear and extending a hand – use it!
The below is just a small sample of the different incentives and schemes offered by Malta Enterprise, which can prove pivotal for investors. For a comprehensive list and further details, visit its website maltaenterprise.com. Research and Development The aim of this incentive is to assist industrial research and experimental development activities required by industry. It can be applied to provide support for pilot studies, for example, or to undertake experimental development, like commercially usable prototypes. The incentive can also facilitate collaboration between industry and academia by funding the secondment of experts from universities to enterprise.
Access to Finance (Soft Loan) This is a financial instrument through which Malta Enterprise can loan up to 75 per cent of the costs related to an approved project, up to €1 million. Eligible undertakings include those engaged in a manufacturing or service activity. The scheme can be used to accelerate plans in establishing new products or entering a new geographic market, addressing environmental concerns and digitising processes.
Startup Finance Through this measure, Malta Enterprise can provide startups with an advance of up to €400,000, or €800,000 if the startup qualifies as an innovative enterprise.
Micro Invest Micro Invest encourages undertakings to invest in their business to innovate, expand and develop their operations through a tax credit equivalent to 45 per cent (65 per cent for Gozo) of eligible expenditure.
Business START Business START offers seed and growth funding with an initial grant of up to €10,000 to help startups develop their business proposal and determine the feasibility of their business idea, prior to seeking third-party equity. Applicants with a viable business plan may receive additional support linked to employment which may reach up to €25,000 per quarter, up to a maximum of €200,000.
Allocation for Industrial Land and Space Working with INDIS (see p. 249), the entity responsible for managing Malta’s state-owned industrial zones, Malta Enterprise helps companies to set up or expand operations in Malta by allocating developable space or space in existing buildings for any number of uses.
Invest Invest aims to sustain the regional industrial and economic development of Malta by facilitating initial investments through the setting up of new establishments, expansion of existing facilities and diversification of existing businesses. Support may be awarded through loan guarantees, interest rate subsidies, cash grants, and tax credits.
CHAPTER 2 Setting Up Your Business In Malta
Malta Enterprise Schemes
Smart and Sustainable Investment Grant In line with efforts to make the European Union climate-neutral by 2050, Malta is incentivising the twin digital and green transitions by providing funding for businesses developing more sustainable processes. Beneficiaries can obtain a cash grant of up to €100,000, capped at 50 per cent of the eligible costs in machinery and equipment, with a further tax credit of €40,000 awarded against certain criteria.
Business Development This measure facilitates new business initiatives, expansions and transformation activities that lead to new opportunities, additional employment, increased competitiveness or widening market reach. Support is awarded in the form of a tax credit or a cash grant.
Priority Areas While each scheme has different eligibility criteria, investments related to Malta’s strategic economic development objectives will be best placed to receive the most generous support. These include: manufacturing management of waste and environmental solutions research and development activities provision of industrial services and solutions to manufacturing operations digitisation of processes software development (including video games and entertainment systems) health, biotechnology, pharmaceuticals, and life sciences
projects related to the green and blue economies maintenance, repair and overhaul of aircraft and other electromechanical equipment artisanal works services that by nature are not limited to geographic scope and are scalable internationally projects that may lead to an increase in business performance and innovation
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MaltaInvest2024
Licensing and Other Support
B
usinesses do not need a trade licence to operate in Malta. However, many activities require industry-specific licensing to ensure that standards are met and regulations enforced. The various semi-autonomous entities are staffed by professionals with in-depth knowledge of their sector, and generally act as advisors and partners, as well as regulators. For those companies involved in the below listed sectors, it is advisable to establish early contact with the relevant authority. Their assistance can make all the difference.
Regulatory Authority
Regulated Activity
Malta Tourism Authority
Accommodation and catering
Transport Malta
Aviation and maritime
Malta Digital Innovation Authority
Blockchain
Malta Further and Higher Education Authority
Education
Malta Financial Services Authority
Financial services
Malta Gaming Authority
iGaming
Malta Medicines Authority
Pharmaceutical and life sciences
Malta Communications Authority
Telecommunications
Apart from Malta Enterprise, corporate services providers and the various regulators, there are other entities it is worthwhile building a relationship with. These include the business associations present on the islands, with the Malta Chamber of Commerce, Enterprise and Industry, the Malta Chamber of SMEs, the Malta Employers Association and the Gozo Business Chamber being the major non-sectoral ones. They serve as a platform for networking and knowledge sharing, and are highly active in the publication of research, guidance and proposals to improve the country’s business landscape. Their contact details can be found in Chapter 10, along with those of many others representing sector-specific interests. Many foreign investors find that membership in such associations can be highly rewarding, facilitating their entry into the Maltese business community and generating new opportunities.
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Meet Marika Tonna Marika Tonna is the CEO of Business 1st, a joint venture between Malta Enterprise and the Malta Chamber for SMEs. As the Maltese Government’s main point of contact for the business community and aspiring entrepreneurs, it is a holistic business support centre for business in Malta. Business 1st was set up as the Maltese Government’s main point of contact through which entrepreneurs can carry out all the required procedures for the setting up, running and development of business in Malta. What type of businesses do you assist at Business 1st? Our focus at Business 1st is to assist microenterprises during the business lifecycle. Most of our clients are startups that come either to register as self-employed or ask for information on setting up and running a business in Malta. We also assist clients in accessing the incentives offered by our mother entity, Malta Enterprise, and other Government agencies. Lately, we are seeing more and more foreign nationals interested in setting up small businesses in Malta.
How easy or complex is it to open a business in Malta? It depends what type of business one wants to set up and what genre of business it is. Within a few minutes, one can register as a self-employed person and start operating, as long as a licence is not required. For third-country nationals, the process is a bit more complicated, as they need a licence from JobsPlus before they can set up as self-employed in Malta. Limited liability companies need to register the business with Malta Business Registry (MBR). This is usually done through a
Business 1st is seeing more and more foreign nationals interested in setting up small businesses in Malta.
CHAPTER 2 Setting Up Your Business In Malta
Local Insight
corporate services provider. There are also costs involved for company registration and these costs vary depending on the type of company, the services being used and the size of the company. Partnerships are also registered at MBR. Most businesses do not need a licence to operate, but some do. In the latter case, the regulatory framework of the authority concerned would need to be adhered to. For example, short-let rentals, restaurants and hotels all need a licence from the Malta Tourism Authority, which incidentally has an office at Business 1st. Not all regulatory frameworks are the same – some sectors, such as gaming and banking, are much more regulated.
What is Business 1st doing to make Government procedures for business simpler? We are working on a digital business portal that will change the way Government interacts with business. The aim of this portal is to create a paradigm shift from the traditional approach where multiple services are accessed separately to one where multiple submissions are made from a single point. Therefore, it will allow users to open, run and close a business, and apply for incentives and other services from 38 different Government entities in a seamless manner. In the near future, businesses will not be asked to fill in form after form. Instead, the portal will present an interactive and more efficient alternative. For example, when setting up a business, it first asks whether the user is Maltese, European, or a third-country national, and then whether the entity being established is a company, a partnership or a self-employed person. It will also ask about the line of work the new entity will be involved in. It will then have builtin intelligence to determine what information is required by the different Government entities involved in setting up that business and the clients will be asked to provide information accordingly. The portal is being built on the ‘once only’ principle and the sharing of data between the different Government entities.
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MaltaInvest2024
Local Insight
Paul Mifsud is CEO at Sparkasse Bank Malta plc, and is responsible for the implementation of company strategy and overall management of the bank’s business. He was instrumental in developing the bank’s presence in Malta, developing the investment services/wealth management division as well as steering the bank to become a major player in fund custody in Malta. What are the main advantages Malta brings to the table for prospective investors?
What advice would you offer, based on your expertise, to prospective investors?
Along the years, Malta has proven time and time again to be a jurisdiction that is quick to adapt to changes, as well as overcome challenges. Most importantly, Malta has been a resilient jurisdiction during global financial crises. As an EU country, Malta is a fast adopter of EU regulation and has a legal framework that facilitates business and the establishment of regulated entities that could passport services throughout the rest of the EU.
As I mentioned, it is imperative to engage with professionals that can provide good and unconflicted advice on the proposed project. Speaking to your preferred banking partner on the island early on in the set-up stage may also help with guidance on structure and substance.
What about the challenges? Do you think there are areas that could pose a hurdle to investment? No country is perfect, and Malta is no exception. We are all aware of the recent greylisting that Malta managed to turn around and remove itself from in record time. The biggest challenge currently facing Malta is its size and infrastructure – due to the growth in its economy, the population of Malta has grown exponentially and is currently experiencing signs of ‘over growth’.
What are the first steps one should take when investing or setting up a company in Malta, from a financial point of view? Critical in the success of establishing an entity in Malta is the engagement of a professional firm that can provide guidance through the set-up stage but also with the ongoing responsibilities in maintaining a company in good standing. A licensed professional corporate services provider will be able to assist with a reality check on the feasibility of a project, especially if the prospect is related to a licensable or regulated activity.
Overall, do you believe that Malta offers good financing options to foreign investors? Sparkasse Bank has built a successful business in Malta over the years by offering services to local and international customers, and has seen its business grow. This growth in itself is clear evidence of the good work being done locally and the willingness from international customers to establish businesses locally.
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Malta has proven time and time again to be a jurisdiction that is quick to adapt to changes, as well as overcome challenges.
Photo: Bernard Polidano
Meet Paul Mifsud
CHAPTER 2 Setting Up Your Business In Malta
Gozo
S
etting up business in Gozo is in practice the same as doing so in Malta, but there are several important considerations that prospective investors should keep in mind. The smaller island is also the less developed, and is known for its rustic charms among residents and tourists alike. In fact, tourism makes up a greater portion of its economy than Malta’s, and investment in this area can be expected to generate healthy returns. Underneath the greenery, however, lies a robust manufacturing sector and a growing tech industry, the latter centred around the Gozo Innovation Hub. Gozo is perhaps best known as a favoured place for expats to retire, but this is counter-balanced by its notable popularity among digital workers keen to carve out their own slice of Mediterranean paradise without venturing too far from civilisation. Gozo lies at the heart of Malta’s efforts to green and digitise its economy, and there are a number of attractive incentives available for those looking to establish operations on the island. Many business support schemes include more advantageous terms for Gozo-based companies. The Micro Invest scheme, for
example, allows Gozitan enterprises to obtain a tax credit for up to 65 per cent of their investment, compared to 45 per cent for Maltese ones. There are also various incentives specific to Gozo, like reduced costs on inter-island transport for manufacturing enterprises and several different wage support measures. Prospective investors should consult Malta Enterprise and the Ministry for Gozo for the latest information. Gozo Innovation Hub Housed in a campus-style layout with two main buildings, the Gozo Innovation Hub is the home of the island’s knowledge-based economy. Managed by INDIS, the larger building is a 9,000sqm business centre split into units of various sizes, while the smaller building houses shared ancillary facilities like a conference hall and meeting rooms. Space in the Gozo Innovation Hub may be used by operations involved in, among others, back office and financial management, market research, media and audio-visual services, and new technologies like AI and machine learning, bioinformatics, cybersecurity, and the Internet of Things (IoT).
Gozo Innovation Hub. Photo: INDIS
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MaltaInvest2024
Tax Planning Marina di Valletta. Photo: Inigo Taylor
M
alta offers foreign investors a highly attractive tax rate that is effectively the lowest in the European Union. This has served to attract companies from all over, which benefit from the ability to mitigate their tax burden and maximise profits. Coupled with the lack of withholding taxes on dividends, interest, royalties, and proceeds from liquidation distributed to non-residents, the absence of a separate capital gains tax, and no wealth or inheritance taxes, Malta makes for an interesting proposition for those seeking tax efficiency. Meanwhile, the country’s extensive network of taxation treaties and the provision of unilateral tax relief protects investors and entrepreneurs from incurring double taxation.
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depreciation, unrealised losses and profits, and all expenses incurred in the production of income, as well as the interest expense on capital invested. Once the profits are distributed to shareholders as dividends, these are entitled to claim a tax refund on the taxes paid by the company. The refund rates depend on the kind of income declared by the company, and vary from two-thirds to 100 per cent, although the portion most companies qualify to obtain as a refund is six-sevenths, generating an effective tax rate of 5 per cent.
To make the most of the opportunities afforded by Malta’s status as a fully onshore tax-efficient jurisdiction, it is essential for investors to engage local tax advisors that can identify the right structure for their particular needs.
Following an agreement reached by the Organisation for Economic Cooperation and Development and the European Union, a new minimum corporate tax rate of 15 per cent for companies generating combined revenues over €750 million is in the works. However, Malta does not plan to introduce this measure in the short term, and plans to combine it with other incentives that will maintain the country’s competitive edge in this area (see p. 43).
The Tax Refund System In Malta, a corporate income tax of 35 per cent is levied on the profits of all business concerns, calculated after adjusting for
Tax Relief The tax code also allows for tax relief in the form of a tax credit, which is granted when foreign income would have already been
CHAPTER 2 Setting Up Your Business In Malta
subject to tax abroad. Where the tax incurred abroad is over the 35 per cent rate effective in Malta, the effective rate is basically nil. Tax relief provisions are calculated prior to the disbursement of profits and hence before the application of a tax refund. The system, known as a flat rate foreign tax credit, allows companies to add 25 per cent of the net income received in Malta to their local income, and deduct eligible expenses from this total. Then, once the tax due in Malta is calculated, based on this amount, the tax credit can be deducted from the tax charge. This credit is limited to 85 per cent of the Maltese tax due before deducting the credit itself. Transfer Duties Another key tax levied in Malta is stamp duty, also referred to as duty on documents. It is currently set at 5 per cent for the transfer of immovable property in Malta and for the transfer of shares in a company whose main holdings are in real estate. . In other cases, the transfer of company shares is subject to a 2 per cent duty, although mergers, de-mergers and other kinds of corporate re-organisation are exempt. A considerable number of
other instances of acquisition or disposal of marketable securities are also exempt, including transactions involving licensed collective investment schemes and companies with over 50 per cent foreign shareholding conducting more than 90 per cent of their business outside of Malta. Qualifying Participation Tax Rules Malta’s tax code provides for dividends and capital gains related to income derived from subsidiaries to be exempt from tax in Malta. These provisions draw particular interest from multinational conglomerates looking for an efficient holding structure, as well as from investment portfolios involved in the ownership, management and administration of equity holdings in other companies. Eligibility hinges on a number of factors. Notably, less than half the entity’s income can be derived from passive interest, although other conditions may be applied. Once again, the services of a local tax professional conversant in the nuances and possible benefits of the Maltese tax system will be crucial.
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MaltaInvest2024
Setting Up a Company in Malta
I
nvestors, companies, financial corporations, and other entities looking to establish a base in Malta can typically do so in a number of days. Registration with the Malta Business Registry can be done remotely and is relatively inexpensive. Companies registered in Malta require a Maltese address – often the office of the corporate services provider entrusted with the task. Accountancy, management consultancy and legal firms also provide such a service. For private limited liability companies - the preferred vehicle for foreign investment - registration entails the submission of the new company’s bylaws, including the authorised and issued share capital, details of the shareholders, directors and other key persons, and a deposit slip showing the paid-up share capital credited to the company’s (not necessarily local) bank account. The Malta Business Registry will then issue a certificate as proof that the company is authorised to commence business, although further operating licences are needed if the company is active in regulated sectors like financial services and pharmaceuticals. No licences or permits are needed for nonregulated business activities. Shares may be held directly, by nominee, or in trust, and there are no restrictions on the nationality or residency of Maltese company shareholders. Additionally, foreign companies can transfer their domicile to Malta without dissolution and the establishment of a new entity, reducing associated time and costs. Companies registered in Malta must have at least one director and a secretary, who are responsible for the company’s proper administration and management, including compliance with Maltese legislation. The company secretary must be a natural person and can also be a director, but they may not, however, be the sole director, unless the enterprise is registered as a private exempt company.
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Accounting & Audit Requirements Company accounting in Malta follows the EU Single Accounting Directive, transposed into Maltese law through the introduction of the General Accounting Principles for Small and Medium-Sized Entities (GAPSME). Public companies must however conform to the International Accounting Standards Board’s (IASB) Financial Reporting Standards (IFRS). Either way, investors are assured that financial statements are in line with prevailing European and global standards of clarity, accuracy and usefulness, generally including a balance sheet, a profit and loss account, notes to the accounts, a directors’ report, and an auditors’ report (with certain allowances for small companies). Other Requirements Upon receiving official confirmation of the company’s existence from the Malta Business Registry, the next steps include registration for VAT and income tax with the Commissioner for Revenue. If the company will engage employees, it must also register with the national employment agency, JobsPlus. Altogether, these registrations can be expected to take up to one week, after which the company is fully set up and ready to operate.
Cenk Kahraman is CEO at Finance Incorporated Ltd, which provides a full range of financial services and infrastructure solutions aimed at corporate, individual and institutional clients. He is an ex-banker with 20+ years of experience, and has amassed international banking experience, especially in payments and treasury products. What are the main advantages Malta brings to the table for prospective investors? The favourable tax system, various tax planning solutions, nonbureaucratic processes, and reduced red tape to start a business; all these contribute to making Malta a business-friendly environment for foreign investors. Moreover, Malta’s location makes it a desirable EU country for investors, allowing efficient international business trade activities and attracting diverse cultures from various regions.
What about the challenges? Do you think there are areas that could pose a hurdle to investment? As a small island with limited land and natural resources, it is perhaps no surprise that one of Malta’s challenges is its dependence on imports, which can greatly impact economic health. Another challenge is the shortage of human resources, which is crucial for business continuity, operations and growth.
Overall, do you think Malta is offering the right infrastructure and incentives to potential foreign investors?
Photo: Bernard Polidano
Meet Cenk Kahraman
CHAPTER 2 Setting Up Your Business In Malta
Local Insight
Yes, Malta is offering attractive and favourable infrastructure, incentives and benefits to foreign investors. However, there is a need to invest more in the nomad employee framework in order to attract the right talent and bring more skilled workers to Malta.
What advice would you offer, based on your experience, to prospective investors? Resource planning, especially when it comes to human resources, is key. Ensure you have the right HR team who understands your company’s needs and culture in order to source the right talent to fit your company.
As an expat business leader, what is the overall sentiment of foreign investors who have chosen Malta for the relocation of their business concern, in your experience? From a services industry perspective, having the capability to provide service to Malta and Europe as a whole is a very strong motivator for business leaders; coupled with Malta’s friendly state institutions and tax incentives, it creates the right formula for business leaders.
Resource planning, especially when it comes to human resources, is key.
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MaltaInvest2024
Local Insight
Chris Vassallo Cesareo is the Managing Director of Domestica Ltd, which has been operating in the furniture business for the past 40 years. He is currently President of The Malta Chamber of Commerce, Enterprise and Industry. What are the main advantages that Malta brings to the table for prospective investors? When speaking to members of The Malta Chamber who have relocated from another country, they mention a number of factors. Language is a key factor. Malta has two official languages – Maltese and English. Given our long history as traders across the seas, we have always prided ourselves on our ability to communicate. The use of English also speeds up integration for those coming here with families. Our commercial laws are based on British law, which many jurisdictions are familiar with, and, as a member of the European Union, we apply all the latest regulations and directives. So, for those currently in the EU, Malta could be an attractive alternative location, and those outside may use Malta to passport services into the Union. The financial incentives offered by Government also play a role, encouraging foreign direct investment in sectors like manufacturing, ICT development activities, call centres, healthcare, pharmaceuticals, biotechnology, aviation and maritime services, education and training, and logistics. These incentives are underpinned with a can-do attitude. Our members comment positively about their day-to-day dealings with various entities and authorities. Many international companies use Malta as a stepping stone to gain access to the EU and to hold assets here that they have purchased in the EU. The general efficiency and ease of doing
business is another big pull, whether it is in setting up trading companies or in the maritime sector. The island lifestyle, meanwhile, with our Mediterranean climate, is an attraction for talent from overseas, especially from northern climates with largely inclement weather and much shorter winter days. This applies to young workers as well as those with families.
What is the overall sentiment among investors who have chosen Malta for the relocation of their business concern? Our members, including those who own medium to large companies, continue to inform us that living and working in Malta is efficient, peaceful and attractive from an incentive point of view. Some of these members relocated to Malta decades ago, and today are still growing and expanding their operations in Malta. International names to mention are STMicroelectronics, TOLY and Playmobil.
How does The Malta Chamber assist and support prospective investors? The Malta Chamber is the voice of local business. We represent and support our members at all stages of business development. We have seen a number of areas in which members reach out to us. One example is introductions, such as B2B meetings. It is very satisfying to hear business partners mention that they met up at Chamber events. We also see members who need support when liaising with the Government on a number of issues, including new legislation sometimes originating from the EU.
The general efficiency and ease of doing business in Malta is a big pull factor.
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Photo: Roberto Runza
Meet Chris Vassallo Cesareo
CHAPTER 2 Setting Up Your Business In Malta Malta Stock Exchange, Valletta. Photo: Ceri Breeze - iStock
Malta Stock Exchange
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he Malta Stock Exchange (MSE), in Valletta, provides companies access to Malta’s capital market. Over the years, it has evolved into a fully-fledged platform for the admission and trading of financial instruments, namely bonds and equities, once these would have been granted admissibility to listing by the Malta Financial Services Authority or any other competent authority in recognised jurisdictions. In addition to the Regulated Main Market, the MSE has a market for securities specifically designed for institutional investors called the Institutional Financial Securities Market which is also regulated. The MSE also operates the Prospects multilateral trading facility which, although unregulated, provides a more cost-effective opportunity for startups and SMEs to raise up to €8 million in capital. The MSE has an in-house Central Securities Depository (CSD) that is linked with Clearstream Banking. The CSD offers a
comprehensive range of services including maintenance of registers, clearing and settlement, securities administration, as well as custody services. Furthermore, it is worth mentioning that as part of its Corporate Social Responsibility, the MSE runs an education institute (the MSE Institute) with the aim of disseminating and increasing financial literacy among investors and market participants alike. Over the past few years, the MSE witnessed a surge in primary market activity as more enterprises have turned to the Maltese investor community to finance their projects, including some companies whose major operations are outside of Malta. They are attracted by the enthusiasm shown by local investors for securities, with most corporate bond issues being fully subscribed. Indeed, this is evident from the fact that, since 2019, companies have raised over €1.2 billion through 59 separate bond issues on the Malta Stock Exchange.
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Photos: Bernard Polidano
Facilitating Malta’s Investment Potential
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Malta Enterprise, the public entity entrusted with boosting economic development on the Maltese Islands, is committed to liaising with local and international businesses, as well as investors, to source and simplify opportunities for growth. For, as its CEO Kurt Farrugia tells Rebecca Anastasi, it firmly believes in “being a helping hand” along each stakeholder’s investment journey.
Mr Farrugia credits the ability to do so to Malta’s “political, social and industrial stability,” with the high standards held by businesses and staff working on the island an integral part of this offering. “A general sentiment echoed by international investors – as well as a belief which is ingrained in everything that we do – is the fact that Maltese workers share values of adaptability, flexibility and a commitment to expertise, allowing them to deliver the best of what’s required. Quality is also at the heart of the local business community’s
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e have been creating opportunities across industries for decades,” asserts Kurt Farrugia, the CEO of Malta Enterprise, the governmental entity responsible for stimulating economic growth in the country by expediting opportunities and connections. “We’ve managed to create new economic niches within established sectors be they manufacturing, aviation, pharma and technology. These include companies that are providing pain relief for patients, with the help of medical cannabis, those developing more advanced methodologies in the science of reproduction, as well as enterprises in the pharmaceutical sector, producing treatment for COVID-like diseases. Moreover, there are firms working on writing lines of code to bring digital games to life or working on a futuristic interaction through the use of the Metaverse and mixed reality. This is not to mention other organisations utilising biometric data to enhance security for banks or AI companies analysing feelings and trends,” he says.
operations, as has been seen through our strength in responding to the COVID pandemic and its effect on businesses. This could only be achieved via the resilience and efforts of our business community that found Government entities willing to support them so the community was able to bounce back,” he states. Moreover, the islands have been a “trustworthy operational base,” with investors committed to the country for decades, as evidenced through myriad expansions across industries. “For instance, giants in the manufacturing sector, including STMicroelectronics, Playmobil, Methode, Trelleborg and Seifert are all brands that have been mainstay members of our foreign direct investment community,” he continues. Across diverse domains, the country’s “efforts to reduce bureaucracy have been effective, and we assert the highest level of quality as required by industry.” Indeed, Government entities are focused on devoting time and energy to “serve as a 360° concierge welcoming service” to those who invest in the islands, aiming to make the process as “expedient and smooth as possible.” This will also be coupled up with the soon to be launched National Business Portal, which will cut on duplications by liaising with Government entities and making life easier for even the smallest of businesses. Malta’s diversified economy has contributed to this increased interest, Mr Farrugia asserts, adding that, while the country’s firm economic foundations have, so far, been based on the tourism,
“A general sentiment echoed by international investors – as well as a belief which is ingrained in everything that we do – is the fact that Maltese workers share values of adaptability, flexibility and a commitment to expertise.” 71
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“Businesses that refuse to acknowledge the importance of sustainability will get left behind in a world which is ever-changing.”
iGaming, manufacturing and financial services sectors, investment in other fields has grown in recent years. He cites “AI, Big Data, IoT and DLTs” as “niche sectors in which Malta could position itself as a world leader.” Malta, he continues, “is also targeting the medical cannabis sector, while the sunny island has also become a favourite in the growing digital games and digital creativity markets.” The pharmaceutical sector remains attractive for investors seeking opportunities on the island. “We continue to attract investment from all over the globe. Over the last months we have announced various multimillion investments in the industry, for example through the manufacturing firm, Kelix Bio Malta – producing injectables for use in oncology – as well as Torrent Pharma, which specialises in, among others, cardiovascular, gastro-intestinal and women’s healthcare solutions,” he says. MedTech, the CEO continues, is also gaining ground. “From medical device manufacturing to remote healthcare, Malta has the skills geared for this sector,” he explains, pointing to companies such as Baxter, Cardinal Health, Metallform, and Deep Health which have all invested in a future in Malta and are operational on the island. Moreover, Mr Farrugia asserts, “the aviation industry is taking off,” with the Unmanned Aerial Vehicle (UAV) domain – which deals with the design, manufacturing and operation of drones – also “shaping a new exciting sector.” Elaborating further, the CEO asserts that “Malta can truly become a test bed in the drone/Vertical Take-Off and Landing/UAV sector, attracting companies working on particular categories of innovative prototypes that are tested safely here before entering larger markets.” An example within this space is Dronamics, which has invested in a cargodrone airline – the first of its kind – to speed up delivery and turnaround times for customers.
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Malta’s position in the middle of the Mediterranean also makes it a gateway to further investment in the blue economy, focusing on activities centred on the sustainable use and development of the world’s seas. In this regard, the country’s unique selling points include its “vast exclusive economic zone; its accessible shores for prototyping and pilot testing; the strong maritime sector; as well as the island’s shipping registry,” the CEO explains. As a jurisdiction, he adds, Malta is “capable of not only supporting but, more importantly, sustaining” investment in this area. Indeed, across sectors, Malta Enterprise “eases the growth of existing investments in Malta as we believe in giving opportunities to businesses to grow into their full potential and being a helping hand along their business journey.” To this end, it offers “multiple schemes which aim to target different business sectors from startups to SMEs and even larger companies.” With regards to the former, the organisation guides and
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assists “startups through their inception, scale-up and further growth. Each startup is assigned a relationship manager, who will direct their attention to the various support schemes that they qualify for. Malta Enterprise can introduce startups to other Government bodies and can facilitate contact with the finance and education sectors, as well as corporate services providers (CSPs) and other enablers.” Mr Farrugia asserts that over the next few years, the entity will continue to provide “constant assistance to enterprises” and to “engage in frequent discussions” to “better understand when to adjust the assistance as required.” Moreover, the CEO believes that a focus on sustainability will be “the way forward for businesses and that early adopters will flourish. As such, we want to create schemes which help businesses move in that
direction and understand that being green is profitable and important.” He refers to the launching of Malta Enterprise’s Smart and Sustainable Investment Scheme, a programme which financially supports organisations investing in greener and more sustainable processes, and most recently the ESG grant supporting reporting of these standards. “Businesses that refuse to acknowledge the importance of sustainability will get left behind in a world which is ever-changing,” Mr Farrugia asserts. These priorities will enable Malta Enterprise to keep fulfilling its promise of assisting entities and investors make the right choices. “We want to attract companies and startups which are some of the best in their fields. These companies bring quality employment and have the potential to grow and make Malta their home,” he concludes.
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Wishing for a Bird’s Eye View on All of Your Businesses?
Mantvydas Matthew Narusevicius. Photo: Inigo Taylor
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CHAPTER 2 Setting Up Your Business In Malta Mantvydas Matthew Narusevicius. Photo: Inigo Taylor
CSPex is a software solution tailored to the needs of business owners. Here, the trio behind the innovative portal tell Julian Micallef Tagliaferro about all the ways it can simplify life for startups and large enterprises alike.
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he image of the business owner as a flustered individual taking call after call and operating multiple devices to stay on top of their company’s operations is a familiar one. It is a trope used in countless media productions, and with good reason – running a business is no easy task. Indeed, staying on top of a single business is hard enough, but what about several? How does a business owner keep a finger on the pulse of the countless operations involved? This was the conundrum facing Mantvydas Matthew Narusevicius, Managing Director of WFDM, as the number of companies under his watch continued to expand. And it is this situation that CSPex was designed for. Offered by WFDM and MS Smart Software Solutions, CSPex is a multi-functional portal that makes all of the relevant data visually accessible on just one panel showing the ins and outs of all ongoings, providing a realtime overview and facilitating better decision-making.
Initially solely focusing on head-hunting for talent, WFDM was founded by Mr Narusevicius in 2020, quickly developing a reputation as a reliable partner to employers and jobseekers. Since then, it has branched out into other sectors. WFDM’s appetite for diversification is evident, with numerous business lines across the group of companies. And with an ever-increasing presence across the globe through its range of networks, over the span of a few years it now offers a wide array of solutions to businesses on an international scale. Indeed, the group is constantly looking for new ventures, rapidly growing along the way. It is currently investing substantially in the development and introduction of technological tools, with the aim of providing solutions to consolidate the vast amount of data channelled through the various software applications necessary for its varied operations.
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This is where MS Smart Software Solutions came in. A Malta-based enterprise established in 2021, it boasts an experienced team of software developers and corporate administrators. Smelling opportunity, WFDM got further involved in the company, paving the way for a dynamic partnership between Mr Narusevicius, Jonathan Scerri and Hakan Gökhan Mamacı. The company has since launched CSPex, a revolutionary solution to the day-to-day running of any business. CSPex provides a two-way channel of communication which facilitates the involvement of all stakeholders, be they owners, internal personnel, external professionals or clients. It also centralises communication with clients, having the potential to encompass all interactions, whether these are in the form of live chats or email correspondence. Delving into the technical aspects, Mr Scerri – Director at MS Smart Software Solutions – explains that by linking up all the data, CSPex is also useful for professionals tasked with analysing business operations, such as auditors, easing the workflows involved. These efficiency gains directly result in a decrease in billable hours – a win-win situation, with the software “reducing both costs and bureaucracy” across several fronts. It also centralises document management, a feature which is becoming increasingly important as more documents are archived online and the growing acceptance of e-signatures does away with the need to keep hard copies. Significantly, CSPex integrates within its portal myriad systems, including those related to accounting, anti-money laundering and risk assessment, payments and banking, mail servers, and applications with reporting capabilities.
“These efficiency gains directly result in a decrease in billable hours – a win-win situation, with the software reducing both costs and bureaucracy across several fronts.” 76
Jonathan Scerri. Photo: Inigo Taylor
Combining all these features in one platform attests to the potential that the software presents in a highly competitive environment where data is key and its quick analysis provides an edge to the end-user. CSPex, continues Mr Scerri, facilitates a “bird’s eye view of the business” in real time. The software is designed to take into account various modes, depending on the client’s business needs, from starter packages to solutions that handle large enterprises. This tiered availability of different features positions the software as a helpful tool for all kinds of users, from smaller startups looking for digital assistance to large corporations with a need for sophisticated technological solutions. Among the companies that could benefit most from the use of such software capabilities are those in the real estate segment, those with property portfolios, recruitment entities, and subcontracting companies with more complex operations. The list is endless as, in truth, any operation would benefit from having
this portal within its tech toolbox. It could also be of interest to private individuals handling considerable information flows.
beckon, with the company having as an immediate target the United Arab Emirates.
The beauty of CSPex is its ability to link up different applications and deliver one admin panel for all the information channels, empowering the end-client with all the data that is needed while enhancing relationships, particularly for business owners and those in management positions.
As Mr Narusevicius shares, “the sky’s the limit!”, as the company continues to pursue further goals in providing solutions that give that competitive edge to the end-client to deliver the desired results.
Mr Mamacı, Director at MS Smart Software Solutions, notes that similar portals have already been developed for industry. The tech firm has experience with several other applications already on offer, including an audit application and portals servicing business-to-business (B2B), business-to-client (B2C), and B2B2C. System integrations are also provided. He underlines that MS Smart Software Solutions is not a single product company.
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“The beauty of CSPex is its ability to link up different applications and deliver one admin panel for all the information channels, empowering the end-client with all the data that is needed while enhancing relationships, particularly for business owners and those in management positions.”
Hakan Gökhan Mamacı
CSPex is a customisable system that can also be white-labelled, attesting to the flexibility being placed on this product even at the design stage, with the technical teams involved based in Malta and Turkey. The product, moreover, allows for scalability, with companies able to keep on using the same software as they grow into larger, more complex organisations. Mr Narusevicius continues that with such a product, the company is filling identified gaps in the market with improved solutions, or as he well puts it, it is “not reinventing the wheel, but making one that would be a lot better!” Mr Mamacı concurs, as the product is built to integrate well with existing technology, making its introduction in companies as seamless as possible, drastically reducing training needs. Malta is serving as a testing ground for CSPex, and a stepping stone with this product for WFDM and MS Smart Software Solutions. Mr Narusevicius describes it as a game-changer, and other markets
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Residency
Malta’s International Investment Guide
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Overview
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on-Maltese individuals can gain residency in Malta in several ways, including through a variety of schemes, some of which were designed to attract high-net-worth individuals. Over the years, Malta has refined these residency schemes to tailor to the needs of affluent individuals and their families, investors, retirees, digital nomads, and others. One notable advantage of these schemes is that they grant beneficiaries the convenience of hassle-free travel within the Schengen Area and advantageous tax status. This chapter provides detailed explanations of the individual economic considerations, eligibility criteria and application requirements for each of Malta’s residency schemes, but it is always worth highlighting what it is about Malta, exactly, that draws people from all over the globe.
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Certainly, it is impossible to reduce Malta’s continuing allure to a single factor. This is partly attributed to the incredible diversity of foreign individuals now residing on the islands, making up over one quarter of the country’s total workforce Moreover, as many residents can attest, there is so much to love about life in Malta. Business-oriented individuals will point to the ease of establishing business and social connections, the authorities’ readiness to provide assistance, and the many opportunities created through Malta’s tenacious efforts to develop its economy. Those looking to preserve and grow their wealth might instead single out the quality of financial services providers and the benefits afforded by the jurisdiction’s regulatory frameworks and tax code. These qualities are
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to suit every taste, whether you prefer to chill by the pool of a luxury resort, take over a private villa, or charter a yacht and spend time out at sea. More active types may prefer to go diving or take part in water sport activities, while the lush countryside provides ample hiking opportunities with stunning vistas. Meanwhile, those interested in cultural activities will be pleased to know that the calendar is packed with high-quality events aimed at both domestic and international audiences, along with a richly authentic array of cultural festivities. Such lifestyle activities are also at the heart of Malta’s relational way of doing business, creating myriad networking opportunities for those looking to immerse themselves in the islands’ community. All this takes place against the backdrop of a breath-taking architectural landscape boasting three UNESCO World Heritage Sites and countless other attractions related to the country’s chequered history, which has led to Malta being dubbed an open-air museum. No wonder that so many rank the decision to come to Malta among the best they have taken!
Tigné Point, Sliema. Photo: Inigo Taylor
extensively covered in other chapters, so it is perhaps pertinent to here explore those elements that round out Malta’s value proposition, and make it so popular not merely as a domicile, but a real home where individuals from all over the world, of all (decent!) backgrounds, can live their best life. The macro marketing pitch for Malta, especially when directed at attracting tourism, may lean a bit too heavily on its gorgeous weather. Any concern of it being overhyped is however quickly dispelled when speaking to any foreign resident in the country. Living in Malta, from a weather perspective, is a luxury. No matter one’s financial goals, they all taste sweeter under clear blue skies and ample sunshine, in daytime temperatures that range from 17°C to 32°C. Moreover, the islands offer a vast array of leisure activities
Since everyone speaks English, new arrivals tend to integrate quickly, helped along by a growing ecosystem of legal, real estate and childcare service providers, to name a few. The healthcare infrastructure is nothing short of excellent, and the private schools geared towards a mostly foreign pupil population have stellar reputations. Meanwhile, for all the hustle and bustle and growing cosmopolitanism, Malta remains among the safest countries in the world. Theft and violence are largely restricted to isolated cases, and most people say they feel safe walking alone at all times of day and night. These elements, together with an unblemished national security record and stable political climate, make Malta particularly attractive for those who value personal safety and peace of mind, such as young families and retirees. The mix of nationalities one can find on the islands is a throwback to times gone by, when Malta was a cosmopolitan hub at the crossroads of north and south, east and west. Today, Malta is once again a meeting point of cultures and perspectives, where old meets new, tradition meets progress, and for many who land in the country, where they meet their new home.
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Malta’s Residency Schemes
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here are several residency schemes available for those seriously considering Malta as a residency destination. All these schemes offer holders full travel flexibility to and from the islands, and the right to move freely within the 26 countries of the Schengen Area without any visa requirements for up to 90 days in each 180-day period. Meanwhile, permanent residents can also freely repatriate any capital or income resulting from the sale of property or encashment of investment. Beyond that, however, there are important differences in terms of eligibility, application requirements and tax implications (bearing in mind that Malta does not impose any wealth, inheritance, estate, or gift taxes). Maltese Exceptional Investor Naturalisation There are many reasons why a person may seek a second passport, but at the heart of all of them lies a desire to increase the options available. Many describe it as an insurance policy, granting peace of mind that a safe European country is always there should the need arise. Having more than one citizenship also makes things like opening bank accounts or businesses away from home a far smoother process. Finally, but no less importantly, is the unparalleled freedom of movement conferred by a Maltese passport, which grants visa-free or visa-on-arrival access to 185 countries, ranking among the top 10 worldwide. Since Malta is an EU member state, Maltese citizens benefit from all the bloc’s rights and protections, including the freedom to settle anywhere within its borders. Of course, Maltese citizen rights extend to other vital areas, including free healthcare and free education. The Maltese Exceptional Investor Naturalisation (MEIN) scheme is designed to attract individuals of standing and their families, who can contribute to the country’s economic development. Applicants for the citizenship-by-residenceand-investment programme are therefore subject to a thorough due diligence process to ensure that those granted Maltese citizenship are truly respectable individuals whose inclusion in the Maltese family is merited. The programme is currently the subject of litigation before the European Court of Justice, despite an overhaul of its rules in 2020. Infringement proceedings by the European Commission began in April 2022, and the case was referred to the court in September of that year.
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Brussels essentially asserts that the scheme is in breach of EU law because citizenship is granted without any obligation for the beneficiaries to have “real ties” to Malta. However, the Maltese Government disputes that view, maintaining that it was correct in its interpretation of EU treaties. Malta also insists that citizenship is a wholly national competence subject and therefore falls outside the purview of EU supervision. At publication date, the proceedings are ongoing. MEIN Tax Implications Beneficiaries of the MEIN programme are subject to the regular Maltese personal tax rates on income arising in Malta. Income arising abroad which is not remitted to Malta falls beyond the purview of the local tax authorities, while capital and capital gains remittances are untaxed. MEIN Eligibility Criteria Nationality: Applicants can be citizens of any country except those currently subject to international sanctions. This list may be updated from time to time, so it is recommended to refer to the MEIN FAQ on the Community Malta Agency website (komunita.gov.mt). Capital: No particular capital requirements. Background check: The due diligence process conducted by the Maltese authorities is considered the most stringent in the industry. It involves obtaining police clearance after thorough checks through Interpol, Europol and other agencies’ databases, followed by an assessment of the documentation provided as evidence for the sources of funds and wealth by antimoney laundering and terrorism financing professionals. Finally, assessors compile all the information collected and draw up a risk matrix developed over years of experience to ensure decisions are taken systematically and transparently. Applicants must also be ready to provide extremely detailed documentation. Passport copies and birth certificates must be
apostilled and copies of contracts must be certified, while bank statements and transactions will be requested. Malta touts the scheme as a way to attract talent that can add value to the country, and the due diligence applied ensures the focus is on quality, not quantity. MEIN Application Application and duration: An application must be submitted through a Licensed Agent. Citizenship is granted for life and is hereditary. Property: Upon approval, applicants are obliged to either rent or purchase property in Malta. Rent must be a minimum of €16,000 yearly, while a purchased property must have a minimum value of €700,000. Applicants must retain the property for at least five years from the date of issue of the certificate of Maltese citizenship. Residence card fee: The main applicant must pay a non-refundable application fee of €10,000 to obtain initial residence. The fee for each dependant is €1,000. Due diligence fee: The main applicant must pay a non-refundable fee of €15,000 to allow the Maltese regulator to undertake its strict, four-tier due diligence process, with each dependant over the age of 18 subject to an additional €10,000 fee. Third parties sponsoring an application must also pay a due diligence fee of €15,000. Application fee: All applicants must pay a non-refundable €1,000 fee on submission of their application.
Upon passing an initial background check, applicants are granted a residence permit (against proof of property lease or purchase). Citizenship is only considered after applicants have resided in the country for a minimum of 12 months. This does not mean that Malta must be an applicant’s primary abode during this period. Instead, a genuine link to the country must be established. To ensure a smooth process, applicants are typically urged to spend an amount of time in Malta, whether on one long trip or multiple shorter ones, and to enrol in social or professional bodies. Once deemed eligible to apply for citizenship, applicants have four months to do the following: Citizenship fee: All applicants must pay a €500 fee as part of their application for naturalisation. Exceptional investment: Applicants who have been resident in Malta for three years are required to make a contribution of €600,000 to the National Development and Social Fund (NDSF), or €750,0000 for those applying after one year of residency. An additional €50,000 contribution is required for each dependant.
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Donation: Applicants must make a donation of at least €10,000 to a local philanthropic, cultural, scientific, artistic, sport, or animal welfare association registered with the Commissioner of Voluntary Organisations. Once these criteria are met, applicants are invited to take an Oath of Allegiance to the Republic of Malta and its fundamental democratic values, followed by the issuing of Maltese passports. More information about the Malta Exceptional Investor Naturalisation programme can be found on the website of its operator, Community Malta Agency, a dedicated Government-run agency (komunita.gov.mt).
Full Maltese and European Union citizenship
Portomaso Tower, St Julian’s. Photo: Inigo Taylor
Visa-free/visa-on-arrival travel to 185 countries
Malta Permanent Residence Programme The Malta Permanent Residence Programme (MPRP) is the country’s main residency-by-investment scheme. Eligibility hinges on property investments and Government contributions. Apart from the main applicant, the scheme applies to up to four generations of their family. MPRP Tax Implications Residence holders through the MPRP may fall under statutory Maltese tax rules, with eligibility determined by the domicile, ordinary residence and source of income. MPRP Eligibility Criteria Nationality: Applicants must be citizens of a country that is not in the EU or EEA, and cannot be Swiss. They also cannot be citizens of countries currently subject to international sanctions. It is recommended to refer to the MPRP FAQ on the Residency Malta website (residencymalta.gov.mt) for an up-to-date list of such countries. Capital: Applicants must present proof of ownership of capital assets of at least €500,000, out of which a minimum of €150,000 must be liquid financial assets like stocks, bonds, funds, and bank deposits (but not cryptocurrency). Income: Proof of sufficient financial resources to maintain themselves and their dependants without recourse to social assistance must be presented. Background check: Applicants must have a clean criminal record and must not pose any threat to national security, public policy, public health, or public interest.
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Local Insight
Charles Mizzi boasts extensive experience in a gamut of marketing and management roles, having spent 27 years working in these capacities across various public and private organisations. Today, he is the CEO of Residency Malta Agency, the Government entity that administers and promotes a number of Malta residency programmes, a role he has held for the past four years. What are the benefits of residency in Malta? Malta is one of the safest countries in the world, and an Englishspeaking nation with access to world-class health services as well as reputable educational institutions. We enjoy island life, a mild climate and excellent connectivity. All these factors make Malta a very enticing country for individuals and families to which to relocate. Persons of good conduct who would like to invest in Malta as a way of gaining permanent residency for their families may find the Malta Permanent Residence Programme (MPRP) a beneficial migratory pathway that works for them.
Which are the most popular residency schemes? The MPRP has always been a popular programme, despite competing programmes and jurisdictions. Families from non-EU nations seek second residency as a kind of insurance, a Plan B for when things go wrong – such as economic downturns or geopolitical shifts – in their country of origin or domicile. The effects of the COVID lockdowns served to intensify this demand, as people realised the value of the freedom that movement gives. The pandemic also spurred the incidence of remote working, as people realised they could work from home, and from anywhere really, without losing out on productivity. On the back of this, Residency Malta launched its Nomad Residence Permit, which has grown steadily in popularity since then. Our Startup Residence Programme is quite new, but we have already seen significant interest from non-EU entrepreneurs who are considering relocating their ventures.
Photo: Bernard Polidano
Meet Charles Mizzi
How have Malta’s residency schemes changed over the past years? The oldest programme is the MPRP. In truth, we have been consistent in our propositions, always aiming to give the best possible solutions and value to applicants, while keeping in mind the economic benefits to be garnered by the country. There have been no great variations over the years. Our efforts at improvement go into offering service excellence to licensed agents and their clients, as well as maintaining the rigorous due diligence processes to ensure that only persons of good conduct are granted residency in Malta.
What one key piece of advice would you give prospective applicants to Malta’s residency programmes? Applicants need to be aware of our stringent due diligence processes. Our advice is to submit complete and correct information for the application file and as many details as possible. This will enable our team to conduct appropriate searches to get the full picture of the applicant and any dependants. It is based on such information and subsequent findings that decisions whether to approve or decline are made.
We have been consistent in our propositions, always aiming to give the best possible solutions and value to applicants, while keeping in mind the economic benefits to be garnered by the country.
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Local Insight
Meet Roderick Cutajar Roderick Cutajar is the CEO and co-Founder of immVest International Ltd, an approved accredited agent specialising in the provision of residency and citizenship by investment solutions. He is also at the helm of Gallant Management Consultancy Ltd, which offers strategic HR solutions for enterprises, as well as immVest Properties Ltd, a company specialising in real estate advisory. What are the benefits of applying for residency in Malta? There are many benefits but the most important ones are the opportunity to settle indefinitely on the islands of Malta, thus acquiring permanently a second home in Europe, and visa-free access in the Schengen zone for six months in every 12 months. There are of course other residency schemes available, however the Malta Permanent Residency Programme (MPRP), launched in 2016 and run by Residency Malta Agency, continues to attract hundreds of investors to Malta. The programme is based on a very robust legal framework.
believes it is not in breach of the principle of sincere cooperation, as stipulated in Article (43) of the Treaty of the European Union (TEU), and that its legislative framework of citizenship by investment fully respects the provisions as laid down in the Treaty of the Functioning of the European Union (TFEU). From a personal standpoint, should a decision be taken to stop the programme, many local agents, and Malta’s economy, will be impacted negatively. I believe the programme may be amended – and there is room for that – to satisfy all parties.
What is the process by which prospective applicants can start their enquiries and how does immVest International aid in this regard? As an accredited agent, and one of the most experienced on the island, immVest International has submitted hundreds of successful MPRP and residency-to-citizenship cases. All enquiries are attended to in a timely and professional manner by our team of lawyers and experts in the immigration business. We guide prospective applicants to make the appropriate selection for them and their families. Malta’s programmes are very popular, and whoever applies is made aware immediately of the thorough due diligence processes. We do our own KYC (passport check, identity check, adverse media checks, etc) prior to on-boarding clients. immVest International collaborates with international reputable immigration companies interested in promoting Malta and the Maltese programmes.
What, in your view, is the potential impact of the EU’s proceedings against Malta’s residency-to-citizenship scheme? Malta’s residency-to-citizenship programme is one of the most rigorous, in terms of enhanced due diligence. It is pertinent to point out that for an application to be accepted, it must go through a significant number of checks and balances. Trained and skilled due diligence experts scrutinise the data and information provided by applicants, especially net worth and source. Komunità Malta, the agency managing and leading the residency-to-citizenship programme, has already stated that the Government of Malta
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Malta’s programmes are very popular, and whoever applies is made aware immediately of the thorough due diligence processes.
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MPRP Application Application and duration: An application must be submitted through a Licensed Agent. As the name implies, the MPRP offers permanent residence rights to beneficiaries, as long as the conditions continue to be met. Property: Upon approval, applicants are obliged to either rent or purchase property in Malta. Rent must be a minimum of €10,000 annually in the South of Malta/Gozo or of €12,000 in the rest of Malta. Purchased property must have a minimum value of €300,000 in the South of Malta/ Gozo or €350,000 in the rest of Malta. This qualifying property must be held for a minimum period of five years. Renters may switch their lease for a purchased property during this time, but an owner cannot switch to a lease. Application fee and Government contribution: Applicants must pay a non-refundable application fee of €40,000. Additionally, a contribution of €28,000 (if purchasing a property) or €58,000 (if renting) must be paid to the Government. This covers the main applicant, their spouse, and any non-adult children. Other dependants, including adult children, are subject to an additional contribution of €7,500 each. Donation: Applicants must make a donation of €2,000 to a local philanthropic, cultural, scientific, artistic, sport, or animal welfare association registered with the Commissioner of Voluntary Organisations. Applicants must also be in possession of a valid travel document, comprehensive health insurance and, when travelling across Schengen, must take out travel insurance. More information about the Malta Permanent Residence Programme can be found on the website of its operator, Residency Malta (residencymalta.gov.mt), a dedicated Government-run agency.
Malta (Global) Residence Programme When compared to the MPRP, the Malta Residence Programme and the Malta Global Residence Programme (M(G)RP) offer much the same benefits through a different structure. The upfront contribution required is smaller, in exchange for a minimum yearly tax obligation, which is calculated at a discount rate. Taxation can be further optimised through Malta’s extensive network of double taxation agreements (see p. 246), with this special treatment extending to the residence holder’s family too. The M(G)RP does not have a minimum stay requirement, but applicants must not spend more than 183 days in any other jurisdiction in any single calendar year. The requirements and benefits of these two programmes are identical, the only difference being that while the Malta Residence Programme is only available to EU/EEA passport holders, the Malta Global Residence Programme is open to citizens of all but a few countries. M(G)RP Tax Implications Residence holders through the M(G)RP are granted special tax status, with 0 per cent applied on income from foreign sources not remitted to Malta and a beneficial flat rate of 15 per cent on income earned abroad that is remitted to Malta. M(G)RP Eligibility Criteria Nationality: Applicants cannot be citizens of countries currently subject to international sanctions. It is recommended to refer to the MPRP FAQ on the Residency Malta website (residencymalta.gov.mt) for an up-todate list of such countries. Capital: No particular capital requirements. Minimum tax: M(G)RP beneficiaries must submit an annual tax return showing they have paid at least €15,000 in taxes (i.e. must remit at least €100,000 to Malta every year). Income: Proof of sufficient financial resources to maintain themselves and their dependants without recourse to social assistance must be presented. Background check: Applicants must have a clean criminal record and must not pose any threat to national security, public policy, public health, or public interest.
Free movement in Schengen Area
Tax planning benefits
M(G)RP Application Application and duration: An application must be submitted through a Licensed Agent. An important difference between this scheme and the Malta Permanent Residence Programme is that an M(G)RP permit is issued for one year, with its renewal subject to the presentation of evidence that the minimum tax requirement, along with all the other conditions, has been met.
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The Grand Harbour, Valletta. Photo: Inigo Taylor
Property: Upon approval, applicants can either rent or purchase property in Malta, which will be their principal place of residence worldwide. Rent must total a minimum of €8,750 annually if located in the South of Malta/Gozo or of €9,600 in the rest of Malta. Purchased property must have a minimum value of €220,000 in the South of Malta/Gozo or of €275,000 in the rest of Malta. Application fee: The application must be accompanied by a fee of €5,500 (if the qualifying property is in the South or in Gozo) or of €6,000 (if it is anywhere else). This covers the main applicant, their spouse, and any dependant children.
15 per cent flat rate on all income remitted to Malta
Applicants must also be in possession of a valid travel document, comprehensive health insurance and, when travelling across Schengen, non-EU nationals must take out travel insurance. More information about the Malta Residence and Global Residence Programmes can be found on the website of Malta’s income tax department, the Commissioner for Revenue (cfr.gov.mt), which is the entity responsible for the schemes.
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Low upfront cost
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Malta Retirement Programme The Malta Retirement Programme (MRP) gives retirees from all over the world the chance to live out their twilight years in their own little slice of Mediterranean heaven. Long considered an ideal place to retire, Malta offers excellent late-life lifestyle opportunities and topclass healthcare services. The scheme is open to pensioners – that is, persons who are not in employment and who receive pension income of any kind, as long as it is paid out periodically. Beneficiaries must reside in Malta for a minimum of 90 days in each calendar year, although this can be averaged out over a five-year period. They must also not reside in any other jurisdiction for over 183 days in any calendar year. Of particular note is that the MRP contains provisions for a ‘special carer’, referring to an individual who has been providing ‘substantial and regular’ care to the beneficiary or their dependants. Beneficiaries may have more than one household staff living with them in the qualifying property. MRP Tax Implications Residence holders through the MRP are granted a special tax status with pension income remitted to Malta taxed at an attractive flat rate of 15 per cent. Income arising in Malta is charged at a flat rate of 35 per cent. MRP Eligibility Criteria Capital: No particular capital requirements.
Background check: Applicants must have a clean criminal record and must not pose any threat to national security, public policy, public health, or public interest. MRP Application Application: An application must be submitted through an Authorised Registered Mandatory. Property: Upon approval, applicants must purchase or rent a property in Malta as their principal place of residence. Purchased property must have a minimum value of €275,000 (€220,000 if the property is situated in Gozo or the South of Malta). A rental agreement must meanwhile be for a minimum of €9,600 per year (€8,750 if the property is situated in Gozo or the South of Malta). Application fee: The MRP application fee is €2,500. Health insurance: Applicants must have global health insurance and must provide evidence that they can maintain this indefinitely. Applicants must also be in possession of a valid travel document, and, when travelling across Schengen, non-EU nationals must take out travel insurance. More information about the Malta Retirement Programme can be found on the website of Malta’s income tax department, the Commissioner for Revenue (cfr.gov.mt), which is the entity responsible for the scheme.
Minimum tax: MRP beneficiaries must submit an annual tax return showing they have paid at least €7,500 in taxes for the main beneficiary and another €500 per annum for every dependant. Income: At least 75 per cent of the individual’s income must derive from a pension, with a maximum 25 per cent coming from other sources. Proof of sufficient financial resources to maintain themselves and their dependants without recourse to social assistance must be presented.
Maximise pension income with a flat 15 per cent tax rate
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Nomad Residence Permit As workers become increasingly untethered from the strictures of the office, the number of digital nomads has increased significantly. The phenomenon accelerated in the aftermath of the COVID-19 pandemic, when many companies were forced to adapt their internal infrastructure and give their employees the tools to work from anywhere. Similarly, professionals and creatives working on a freelance basis, requiring just a laptop and an internet connection, are realising that they can live better, and more cheaply, in locations away from the big economic hubs. Why pay exorbitant rent in a rainy city, when you can get a beachfront apartment for half the price? This question lies at the heart of the digital nomad experience. Malta ticks all the right boxes for digital nomads, who find a lively community of like-minded individuals, plenty of hot-desking and co-working spaces – not to mention cafés – and nationwide 5G connectivity, enabling them to work anywhere. The Nomad Residence Permit (NRP) is tailored to the needs of these location-independent workers. Its headline attraction is that it allows non-EU nationals to live in a European country and take advantage of the Schengen Area’s free travel rules. Since its introduction in 2021, over 1,000 people have obtained the NRP, enticed by its low application fee, short processing time, and of course, Malta’s allure. NRP Tax Implications Under the current conditions, holders of a Nomad Residence Permit are required to continue paying taxes in their respective employment jurisdiction. Malta is reviewing the nomad tax structure, although specific details had not yet been released by publication date. NRP Eligibility Criteria Nationality: Applicants must be citizens of a country that is not in the EU or EEA, and cannot be Swiss. They also cannot be citizens of countries currently subject to international sanctions. It is recommended to refer to the NRP FAQ on the Residency Malta website (residencymalta.gov. mt) for an up-to-date list of such countries. Nature of work: NRP applicants cannot work with or for a Maltese company, and cannot offer their services locally. They must show that they fall into one of three categories: (a) They work for an employer registered in a foreign country and have a contract of work; (b) They are a partner or shareholder in and conduct activities for a company registered in a foreign country; or (c) They offer freelance or consulting services under contract to clients whose permanent establishments are in a foreign country.
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Access to Schengen Area
Excellent IT infrastructure and a thriving community
Income: Applicants must be able to prove that they earn a gross annual income of €32,400. Background check: Applicants must have a clean criminal record and must not pose any threat to national security, public policy, public health, or public interest. NRP Application Application and duration: NRP applications can be submitted directly by the applicants themselves to Residency Malta, the agency operating the scheme. The permit is valid for up to a year and is renewable twice, for up to three years. Property: Applicants must present a valid rental or purchase agreement upon approval of their application. Application fee: Each applicant must pay a non-refundable administrative fee of €300. This only covers the particular individual, so the same fee applies to each dependant. Permit renewal requires the repayment of this fee. Visa requirements: Successful applicants who do not require a visa can proceed to Malta upon approval, but citizens of over 90 countries do require a visa to enter Europe. Applicants from these countries must obtain a national visa from the state-run Identity Malta agency before travelling to Malta. Applicants must also be in possession of a valid travel document, comprehensive health insurance and, when travelling across Schengen, must take out travel insurance. More information about the Nomad Residence Programme can be found on the website of its operator, Residency Malta (residencymalta.gov.mt), a dedicated Government-run agency.
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Malta Startup Residence Programme Introduced in 2022, the Malta Startup Residence Programme (MSRP) is an important addition to Malta’s efforts to cultivate a local startup scene, which has grown in leaps and bounds over the last years. Events, incentives and incubators can only go so far when prime candidates for investment reside halfway across the world, an issue the MSRP solves by supporting founders, core team members and their respective families who are not nationals of EU countries to gain a foothold in Malta. Through the MSRP, beneficiaries obtain the stability needed to create and effect long-term business plans, supported by Malta Enterprise, the main contact point for startups and scaleups looking to set up operations in Malta. Notably, these support measures do not require founders to give up equity in the company. Apart from the many benefits of Malta’s business and cultural environment, startups also receive the kind of personal attention that is difficult to find in larger jurisdictions. This openness to one-to-one dialogue and active engagement to find the right solutions is one of the features entrepreneurs and investors mention most frequently when asked about their experiences in Malta, cementing the country’s reputation as a natural home for innovation. MSRP Tax Implications Beneficiaries of the MSRP must live and pay taxes in Malta, and fall under statutory Maltese tax rules (see p. 245). MSRP Eligibility Criteria Startups will be considered eligible if they are engaged in innovative economic activities that are enabled through knowledge and technology. They must provide services or products that are not readily available on the market, or which will be provided through a novel process. Preference is given to startups involved in high-end manufacturing, industrial services, software development, life sciences, and blue, green and sustainable industries. Nationality: Applicants must be citizens of a country that is not in the EU or EEA, and cannot be Swiss. They also cannot be citizens of countries currently subject to international sanctions. It is recommended to refer to the MSRP FAQ on the Residency Malta website (residencymalta.gov.mt) for an upto-date list of such countries. Position: Applicants must be the founder or co-founder of an enterprise which has been registered for not more than seven years, and which has not taken over the activity of another enterprise or formed through a merger. Core team members must have full-time employment contracts with the startup, with gross salaries of at least €30,000.
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Investment: The startup incorporated in Malta is required to have a tangible investment or paid-up share capital of at least €25,000. If more than four co-founders apply for the MSRP, an additional €10,000 must be placed for each additional cofounder. Income: Applicants must prove sufficient financial resources by providing a bank statement. Background check: Applicants must have a clean criminal record and must not pose any threat to national security, public policy, public health, or public interest. They must also not have had previous applications for residency or citizenship rejected, in Malta or abroad. MSRP Application Application and duration: MSRP applications, including a business plan, can be submitted directly by the applicants themselves to Malta Enterprise. The permit is valid for three years and is renewable for another five years, as long as the startup still meets the eligibility criteria. Application fee: Each applicant must pay a non-refundable administrative fee of €750. This only covers the particular individual, so the same fee applies to each dependant. Applicants must also be in possession of a valid travel document, comprehensive health insurance and, when travelling across Schengen, must take out travel insurance. More information about the Malta Startup Residence Programme can be found on the website of its operator, Residency Malta (residencymalta.gov.mt), a dedicated Government-run agency.
Access to business support measures
Includes core team members and families
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Local Insight
Harald Roesch has been the CEO of Melita – one of Malta’s foremost telecommunications companies – since 2016, after having helmed other European companies operating in the sector, including blizoo (Bulgaria) and Kabel BadenWürttemberg (Germany). Prior to his move to Malta, he also spent six years working with leading global management consulting firm, McKinsey&Co. What are the benefits of living in Malta, as an individual and as a business leader?
What would you say are the pros and cons of investing in Malta?
Since I am European, and Malta is, of course, part of the EU, working in Malta has been a relatively simple, unbureaucratic step. Being in the industry that I’m in, I really appreciate the connectivity Malta enjoys – Malta is the only country to have nationwide gigabit internet, 5G and NB-IoT networks. Of course, I am biased, but when I travel and struggle with a slow internet connection or no mobile signal – even in other European countries – I am reminded that sometimes we take this unique strength Malta possesses for granted! Malta’s sunny climate, rich history and the Mediterranean way of life are also appealing. Since I first joined Melita, I’ve really noticed a difference in the variety and quality of foods available; today we can enjoy the renowned health benefits of the Mediterranean diet, but also enjoy cuisines from across the world. Having English as an official language is an added benefit.
From an investment perspective, Malta’s economy has experienced the highest growth in the EU in the past years. Malta’s compact size can be a limitation, as there are obvious limits to market growth, which often results in stiff competition between local players. From Melita’s perspective, this is a reason why we have a distinct team focused on melita.io, with the remit of growing our IoT (Internet of Things) business beyond Maltese borders.
I really appreciate the connectivity Malta enjoys – Malta is the only country to have nationwide gigabit internet, 5G and NBIoT networks.
Photo: Bernard Polidano
Meet Harald Roesch
What advice would you give those who are considering making Malta their home? We are all different, so, as with any new move, do your homework. Think about what you want from where you live, think about what you enjoy doing, and what opportunities the move will bring. If possible, come to Malta and visit different neighbourhoods and schools. If coming for work, visit potential offices to see whether you feel you would fit in. From a professional perspective, working in a smaller country can mean that your remit is much broader than a role in a bigger country. Some people will enjoy that, others may feel overwhelmed or stifled by the smaller horizons.
What advice would you give those who are considering investing in Malta? Malta’s steadily growing economy offers ample opportunities for businesses to thrive. One of Malta’s biggest advantages is its EU membership and its adoption of the euro. This not only facilitates trade and commerce but also promotes political and financial stability. This robust financial health, combined with its low inflation rate – especially when compared to some other EU countries – makes Malta a reliable place for investment. The Maltese workforce is well-educated, but due to the strong economy and low unemployment rate, recruiting might be challenging.
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Local Insight
Meet Dimitris Papas A Greek national, Dimitris Papas has spent most of his career in logistics, freight forwarding, project management, and communications. After working for DHL Express in his home country, he moved to Malta, where he manages the firm’s local operations as Malta Country Manager. What were your reasons for choosing to become a resident here in Malta?
How easy was it to settle down on the island, both socially and at work?
My work gave me the opportunity to move to Malta. Career development within the DHL Group is strongly encouraged and new professional challenges abroad have always interested me.
I consider myself as being easily adaptable and able to change, so settling down, from a personal point of view, has not been difficult. From a work perspective, DHL offers the same processes and services worldwide, so what we do is replicated globally, which is why we are the foremost logistics company in the world.
What have the benefits been for you, as an individual and as a business leader? The benefits have been plenty. I work in a modern, professional environment. I’m also given the opportunity to understand, and to deal with, challenges faced by a relatively small business community as well as the broader society on the island. For instance, we have an issue with congestion in Malta, so what we’ve done is include more pick-up/drop-off points in various localities, and we’ve also set up a service hub in Sliema, with plans to open another one up in the north of the island, since we also get many customers from Gozo, as well as in those areas further from the centre. We’ve also seen that Maltese businesses frequently feel cut off from the rest of Europe, being an island in the middle of the Mediterranean, so we try to provide solutions that give them a competitive advantage.
What sets Malta apart from other jurisdictions offering similar residency opportunities? Malta offers an opportunity for growth in an environment which is conducive to doing business. It offers the opportunity to innovate, with the electrification of our ground fleet being a notable example. To elaborate on this point, we’ve finalised an order for 14 electric vehicles to replace our diesel fleet; we’ve also been transitioning our management vehicles to hybrid or electric. Malta offers us the possibility to do that with ease – the fact that we’re a big multinational also helps since we can make that capital investment.
What would you say are the pros and cons of investing in Malta? The size of Malta can be both a pro and a con. What I mean here is that the island offers opportunities, it boasts a strong businessfriendly culture but, on the other hand, competition is restricted, meaning that pricing and quality can be left lacking on occasion.
Working in Malta gives me the opportunity to understand, and to deal with, challenges faced by a relatively small business community as well as the broader society on the island.
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Residence
Residence Programme
Global Residence Programme
Retirement Programme
Nomad Residence Programme
Startup Residence Programme
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
No
No
No
No
15% flat rate
15% flat rate
Not covered
Not covered
No tax
No tax
Not covered
Not covered
No tax
No tax
Not covered
Not covered
Yes
Free movement Schengen
Tax
Duration
Yes Yes Yes Facilitated travel Global No No to 185 countries Consult Income remitted Progressive rate 15% flat rate financial advisor Capital gains No tax No tax No tax Wealth/ No tax No tax No tax Inheritance Lifetime 5 years 1 year
Renewal Open to
Property requirements
EU/EEA/ Switzerland Rest of the world
1 year
Unlimited
1 year
3 years
N/A
Unlimited
Unlimited
Unlimited
N/A
Up to 3 years
Up to 5 years
Yes
No
Yes
No
Yes
No
No
Yes
Yes
No
Yes
Yes
Yes
Yes
€300,000€350,000 €10,000€12,000pa
€220,000€275,000 €8,750€9,600pa
€220,000€275,000 €8,750€9,600pa
N/A
€500,000 (of which liquid: €150,000)
Sufficient without social assistance
Sufficient without social assistance
€220,000Required, €275,000 no minimum €8,750Required, €9,600pa no minimum Sufficient without social €32,400 assistance; 75% minimum gross annual or more income must be pension income
€636,500€786,500
€70,000€100,000
€5,500-€6,000 €5,500-€6,000 € 2,500
€ 300
€ 750
N/A
N/A
€ 15,000
N/A
N/A
If bought
€ 700,000
If leased
€16,000pa
Means test
Estimated cost for individual Upfront cost applicant Minimum annual tax
€ 15,000
€ 7,500
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Permanent Exceptional Residence Investor Naturalisation Programme
N/A N/A €25,000 minimum share capital/ investment
Mdina. Photo: Inigo Taylor
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Expanding Horizons of Care
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Photos: Inigo Taylor
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Formerly known as Apex Group, Uniplural has evolved from a focused care management business into a versatile organisation boasting a multifaceted portfolio of nursing, cleaning, childcare and hospitality services. Yet, as co-Founder and Chairman Aaron Axiaq tells Rebecca Anastasi, community and compassion will always remain at the heart of its offering.
A
aron Axiaq, the Chairman and one of the founders of Uniplural Group – an organisation which specialises in the provision of care services within local communities – has been eager to start the next chapter in the enterprise’s evolution for a while now. “We’re heading towards new ventures,” he smiles, explaining how the firm has changed: “We’ve restructured, further diversifying our portfolio of services, but we have stayed – and will always remain – consistent to our core values of care, compassion and integrity,” he says. The firm was first established in 2012 as Apex Community Care by Mr Axiaq and his business partner, Claire Bellizzi, who, today, oversees the educational strand of the business, as well as fulfilling the role of Director of Quality Assurance and Standards. “The year before last, in 2022, we celebrated our 10-year anniversary, and there was a lot to celebrate: we’ve grown bigger and stronger since we first started, and we’ve continually innovated; this is something we’re proud of and we hope to continue pushing the envelope over the next 10 years or so, too.” The business was initially founded to provide nursing and caring services, on the ground, away from hospitals and in people’s homes.
“I’m a nurse by profession and we could see that this was a gap which needed addressing,” Mr Axiaq recalls. The partners quickly expanded their company, opening their first childcare centre just a year later. This was in line with their ethos of empowering local communities through care solutions which could transform lives. Indeed, shortly after, the organisation added cleaning services to its spate of offerings. “We really wanted to offer a form of holistic assistance, which could also be personalised to ensure that our clients could feel independent and have their unique needs addressed,” he explains. The company quickly expanded, growing from a team of five to over 400 employees. Today, among them are the staff and management of six childcare centres, an accredited academy training hub, as well as, more recently, a boutique hotel and a restaurant. “When we began hiring a significant number of employees, we soon recognised a challenge. Maltese workers seemed to be inclined towards pursuing opportunities outside the caregiving and service sectors. However, we received numerous applications from individuals of other nationalities, particularly third-country nationals. Consequently, we concluded that it was imperative to maintain consistency across our team,” he shares.
“We really wanted to offer a form of holistic assistance, which could also be personalised to ensure that our clients could feel independent and have their unique needs addressed.” 97
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As a result, in 2019, the Apex Academy was born, in order to “teach prospective employees those standards expected from them, so that we could place them on the job, ready to work,” Mr Axiaq explains. The academy is accredited by the Malta Further and Higher Education Authority (MFHEA), and provides full and part-time courses in healthcare, childhood education, social care management, paediatric emergency first aid, and customer service management, among other streams. “Students can choose their career focus and acquire their skills to enter the sector,” Mr Axiaq says. Human resources, of course, remain an issue, he continues, with time persistently invested in the training and the retaining of talent. “Finding good people is a continuous struggle, and you’re always fighting to keep them, as well as to ensure they’re always trained to a high standard,” he observes. However, Uniplural is
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committed to this ongoing pursuit of quality across its revenue streams, a dedication to excellence that can have a wider and lasting positive impact on people’s homes and lives. “Ultimately, what all our projects have in common is the promise of ‘care’. We started the business with this simple affirmation, and it has been our guide throughout the journey,” he says. The founders hope to expand Uniplural beyond Malta’s shores over the next few years. “We’re exploring various options, including opportunities across continents. We know we’re ambitious, but we believe the sky is the limit in terms of seeking out a chance to broaden and bolster the group’s possibilities,” Mr Axiaq asserts. This year, closer to home in Mqabba, Uniplural will open a large, state-of-the art childcare centre. “I believe it will truly be a gem on
the Maltese Islands, one-of-a-kind. With a decade of experience in this sector, we understand the needs and aim to fill the gaps we have experienced. We are creating a fully digitised family hub featuring sensory rooms, and a children’s performance theatre. As it will be located next to the old airport runway, we will also have a transport theme, specifically focusing on aviation,” he outlines. The centre is expected to accommodate 100 children, and will be open from 6 am to 6.30 pm, to provide parents with flexibility. “We’re also launching babysitting services, allowing couples to enjoy their evenings, while knowing that their child is in good hands,” he adds. Investing so heavily in the potentials offered by the Maltese market – albeit across various endeavours – is not always easy, Mr Axiaq attests. “Malta is a small country and there’s a lot of business going around so, sometimes, you cannot expand as much as you would
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“Ultimately, what all our projects have in common is the promise of ‘care’. We started the business with this simple affirmation, and it has been our guide throughout the journey.”
like. While investing in the country is attractive, it comes with its challenges. However, the advantage of small-scale logistics and being an EU member – having English as an official language – balances these difficulties,” he asserts. Additionally, he has strong faith in the quality of Maltese talent but acknowledges that many leave for opportunities abroad, leading to a brain drain that he believes should be addressed. Looking ahead, Mr Axiaq is keen to continue strengthening Uniplural’s legacy and solidifying the positive impact the group has made so far. “While we’ll keep seeking new ways of operating and diversifying, we’ll also ensure we offer the level of service expected of us. This is vital since we remain committed to our values of delivering compassionate care to the community, and letting integrity guide our business decisions,” the co-Founder, says, concluding.
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Setting Up Shop in the Med
Residency Malta CEO Charles Mizzi shares how the Government agency is seeking to entice up-and-coming individuals to consider Malta their new home, while building their businesses.
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n recent years, the local Government has adopted a proactive approach to attract startups, particularly highly innovative ones, to its shores. One such initiative is the Malta Startup Residence Programme, which Residency Malta – the Government agency responsible for managing residency programmes in Malta – is operating in collaboration with Malta Enterprise – the country’s economic development agency tasked with attracting new foreign direct investment, as well as facilitating the growth of existing operations. Intended for non-EU nationals, “the Malta Startup Residence Programme is designed to attract the founders – as well as core employees and respective immediate family members – of upand-coming enterprises to reside in Malta while launching their
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startup venture,” explains Charles Mizzi, Chief Executive Officer of Residency Malta. “As an agency, our business vision is to meet the ever-changing migratory needs of third-country nationals globally, while bridging those needs with our country’s sustainable economic goals.” The programme grants a three-year residence permit (which can be extended for a further five years) to entrepreneurs seeking to set up shop within the European Union, thereby gaining access to the Single Market, with all the advantages that come with it. “The launch of the programme was a new venture for Residency Malta, and it brought with it its own challenges, but we are already seeing a keen interest,” Mr Mizzi notes.
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Being a specialised programme, the application process is different when compared to other more straightforward programmes. “Before applying for the residency itself, applicants need to satisfy a rigorous pre-application set of criteria which are related to the entrepreneurial aspect of the venture. For instance, the business idea needs to be innovative, and most importantly viable, in order for the application to be considered. This is crucial. Founders also need to secure appropriate funding, as well as ensure they have a clear plan for market access and internationalisation in place. All these factors contribute to the time it takes for the pre-application phase to conclude,” Mr Mizzi explains.
Photo: Bernard Polidano
“The Maltese startup ecosystem is growing fast. We boast a strong infrastructure, excellent connections and connectivity, and access to corporate services. English being the language for doing business is a very big advantage and foreign founders find this a big plus in comparison with other countries. We also fare comparatively well when it comes to the cost of doing business and the cost of living,” Mr Mizzi continues. For eligible startups, Malta Enterprise also sweetens the deal further, by offering dedicated funding packages. “This is the Government’s commitment to the growth of the local startup ecosystem. Aiding startups in their formative years with financing is considered crucial to the success of a venture. This is another plus point for those considering Malta for relocation.” Life in Malta has its allure and is considered an attractive element in the entire equation. “Founders living here will enjoy the benefits of a Mediterranean island lifestyle, albeit being very well-connected to the metropolitan cities of Europe. The excellent climate, fantastic cuisine, access to top-notch educational institutions and worldclass healthcare, and hospitable people, all contribute to make the experience the more enticing,” Mr Mizzi states. The programme offers founders the peace of mind to focus entirely on what they do best – building their startups. “It is a medium-term residency programme, after which applicants will be eligible to apply for longterm residency, as long as the business is still meeting the committed targets.”
Eligible applicants need to expressly have a concrete intention to develop business in Malta. This needs to be supplemented by a tangible presence in Malta which is not limited to business, but also includes residency. Moreover, applicants need to provide proof that they are in a position to financially support themselves and any other dependants they may have. The incorporated startup in Malta is required to place a tangible investment capital of no less than €25,000. In cases where more than four co-founders apply for the Malta Startup Residence Programme, an additional €10,000 needs to be placed per additional co-founder. The maximum number of co-founders eligible for the programme is limited to six. The programme is open to virtually any sector of the economy, though there are preferred areas. “Applicants must propose ventures which promise to generate income, which are not limited to one geographical market, and which are new and innovative or else substantially improved when compared to similar products on the market. In line with the country’s economic strategy, companies operating in manufacturing, software development, health, biotechnology, pharmaceuticals, and life sciences, together with eco startups involved in the blue, green and sustainable industries are seen in a brighter light!” Residency Malta is aware that the programme is in its infancy, yet is convinced of its immense potential on the international stage. “We are focused on brand building and generating programme awareness, reaching out via international business platforms which are relevant and effective. The interest has so far been very encouraging, with the US and UK being significant potential markets of interest. We trust that this programme truly holds the potential to attract some wonderful individuals, creating a meaningful partnership between the entrepreneurs and Malta as a whole,” Mr Mizzi concludes.
Detailed information about the Startup Residence Programme can be found at startup.residencymalta.gov.mt For comprehensive information about Malta Enterprise initiatives and funding, refer to startinmalta.com
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More Than Care Homes: Supporting a Fulfilled Life for Seniors
T
he Imperial and Casa Antonia, both operated by St George’s Care Ltd, are synonymous with quality and with the genuine care offered to their residents. The care homes support independent life and active ageing with a plethora of excellent geriatric services which ensure residents are kept in the best of health physically, mentally, socially, and spiritually. By shifting the focus away from prolonging life and towards improving quality of life, the homes aim to give residents the tools and opportunities they need to live a fulfilled life. The Imperial Hotel’s 150-year-old legacy has been meticulously restored to an exceptional standard and converted into a unique, luxurious care home, reviving its historical grandeur. With 6,000sqm of recreational and entertainment space, the home has become a hub of culture and activity for its residents as well as the surrounding community. The complex includes a wellness centre with a gym, hydrotherapy pool and physiotherapy centre, massage and beauty centre, coffee shop, chapel, multipurpose hall, and several social spaces. Key to ensuring active ageing for all is an effort to involve residents in the planning and execution of recreational and social events, enabling them not only to decide on which direction they wish the activities to take, but also to be committed and involved in the planning, execution and valuation stages of each event. Recently, resident-led clubs have been launched, including the book club and a residents’ choir, focusing on areas of interest which may be less mainstream.
Our dedicated activity organisers use input from residents to create an enjoyable and varied daily programme of activities. We encourage and offer an active social life and events programme, which we believe provides companionship and opportunity to stimulate body and mind. In addition to the popular weekly favourites like bingo, mass, live music, cinema nights, and crafts, we also organise cultural excursions and wine-tasting events. Living within a high-end care home also relieves residents of the mental load of organising their household chores and day-to-day needs. At The Imperial and Casa Antonia all these needs are catered for by our inhouse housekeeping, laundry and maintenance team and healthcare department. A team of nurses and qualified care assistants provides medical care and assistance with activities of daily living to residents. The team ensures that care is provided in accordance with current best practice, the latest research and innovation in the industry, and according to the agreed standards, legislative requirements and relevant regulations. Central to our social lives and our physical health is our diet. Each home in the St George’s Care Group has its own team of in-house chefs, cooks and serving staff to ensure that a healthy and homely diet is provided to all residents. Meals are served in our restaurants, with residents ordering at the table.
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CHAPTER 4
Real Estate
Malta’s International Investment Guide
MaltaInvest2024
Overview
M
alta’s real estate market stands as a beacon of investment opportunity, a fact underscored by the island nation’s limited land supply and a population that continues to expand, driving property values skyward over the past decades. With rare and brief downturns, the market exhibits periods of rapid growth followed by relative stability, witnessing property prices doubling approximately every decade. On the surface, Malta’s real estate sector appears foolproof, but successful investment hinges on understanding the market’s intricacies, particularly during the ongoing phase of price consolidation. In this chapter, we aim to equip you, the reader, with invaluable insights to embark on your property search with confidence. It’s essential to grasp the unique dynamics of Malta’s real estate landscape. Property ownership is notably fragmented, predominantly driven by small-scale investors, with corporate involvement in less than 10 per cent of residential transactions. The Maltese have a strong cultural inclination toward homeownership, with around 80 per cent owning their residences. Additionally, Malta’s entry into the European Union spurred a surge in demand, fuelled by professionals relocating to the islands for opportunities in iGaming and financial services. This phenomenon has turned a good percentage of the Maltese population into landlords, acquiring a second or a third property to lease out to expats. Spinola Bay, St Julian’s. Photo: Inigo Taylor
The influx of non-local talent also addressed the labour needs of the construction, retail and hospitality sectors, augmenting demand for residences, including high-end properties, partly due to residency schemes’ property-related requirements. The paradigm shift in local investment strategies has transformed the real estate landscape. What was once a nation of second-home owners has now become a thriving buy-tolet market, a primary avenue for local investment. Given that a substantial portion of Malta’s private wealth is tied to real estate, the sector enjoys steadfast Government support. This backing ensures market stability, even in challenging times, as
110
exemplified during the COVID-19 pandemic, where tax cuts on property transactions fuelled unprecedented sales, both in volume and value. Investors in Maltese real estate benefit from three pivotal factors: high occupancy rates, relatively low operating costs and low to moderate taxation on buying, renting and selling properties. Occupancy, as mentioned earlier, remains high, but it’s crucial to monitor recent developments and future expectations, as elaborated further in the subsequent pages.
CHAPTER 4 Real Estate
Real Estate with Exceptional Returns 2023
2021 2022
2020
2019
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
250
1999
House Price Index
200
100%
150 100
increase between 2014 and 2022
50
205
202
198
180
182
152
137
120
104
98
100
93
91.1
89.8
89
94
97
95.5
92.5
84
69
61
56
54
50
0
Source: Central Bank of Malta, Grant Thornton, Dhalia
Residential Property Sales Volume 14,305
16,000 14,000 12,000
38%
increase in properties sold since 2014
10,400
10,000
Rental prices increased by
61%
8,000 6,000 4,000
over the 10-year period to 2023
2,000
Source: Grant Thornton, Dhalia
0
2014
2022
Source: National Statistics Office
Holding property incurs virtually no costs since Malta does not impose municipal or estate taxes. The only propertyrelated taxes pertain to buying, selling and renting real estate. Rental income is taxed at a flat 15 per cent rate, with landlords having the option to include it in their annual tax return, subject to deductions, taxed at regular income tax rates. Both options apply universally to individuals and companies, with the 15 per cent withholding tax rate generally preferred. For property purchases, a 5 per cent stamp duty is levied, while sales incur an 8 per cent tax, known as capital gains or final withholding
tax. Sellers are exempt from sales tax for properties used as a primary residence for at least three years, while selling a property held for under five years allows for a reduced rate of 5 per cent, provided specific conditions are met. It’s important to note that taxes on property transactions are calculated on the total price, minus the value of movables. This chapter aims to provide a comprehensive understanding of Malta’s real estate market, arming you with the knowledge needed to navigate this thriving investment landscape.
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MaltaInvest2024
Who Can Buy Property in Malta?
I
n view of the limited supply of property, there are certain restrictions on the purchase of Maltese real estate by foreigners to ensure a level playing field. Maltese and European Union citizens who have resided in Malta for at least five continuous years can purchase any amount of property they like, but those who have not been resident for at least that period of time need to obtain an Acquisition of Immovable Property (AIP) permit before being able to buy a second residential property. No such permit is required when buying one for commercial use. Prospective buyers from outside the EU are subject to further restrictions. They need an AIP permit to buy any property except that situated in Special Designated Areas (SDAs, see p. 119), and can only acquire commercial real estate for touristic or industrial use, or for uses that contribute to the development of the Maltese economy. A reliable property consultant can provide further guidance.
Maltese and EU citizens with 5 years continuous residence
Maltese and EU citizens without Non-EU citizens 5 years continuous residence
Primary Residence
No restrictions
No restrictions
Prior authorisation required
Secondary Residence or any other immovable property
No restrictions
Prior authorisation required
Prior authorisation required
Property in SDA
No restrictions
No restrictions
No restrictions
No restrictions
Permit only granted for tourist or industrial development, or uses that contribute to the development of the Maltese economy
Immovable property for business activities
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Valletta. Photo: Inigo Taylor
No restrictions
CHAPTER 4 Real Estate
Local Insight
One of the few women operating at the top echelons of real estate and construction in Malta, Denise Xuereb is the CEO of AX Real Estate and Director of Development and Construction within AX Group. She is also Vice-President of the Malta Development Association. Responsible for AX Group’s Construction and Development division, she has overseen some of Malta’s largest and most prestigious development projects, including the construction of the new Parliament Building and the restoration of St John’s Co-Cathedral, as well as other in-house projects such as The Verdala Terraces and the redevelopment of AX ODYCY Hotel and Lido. Like several other local groups of companies, AX Group, which is today active in a number of sectors, was started as a development company. What is it about the local real estate market that has consistently created wealth? Property development forms the foundation of AX Group’s operations. While we maintain a diversified portfolio, the common thread is our commitment to acquiring, developing and managing assets for long-term investment. This approach holds true whether it involves properties in the hospitality, healthcare or other sectors, and it has consistently yielded wealth through capital appreciation.
Malta’s property market has tended to move independently of global and regional developments in real estate, seemingly shielded from the occasional downturns typically experienced in foreign markets. Why is this the case, and do you expect it to continue in the medium-term? Malta’s strategic location, combined with its limited land availability, sets it apart and brings the forces of supply and demand into play. These factors also grant Malta’s real estate market the potential to operate independently of global or regional trends. While I believe this will persist, Malta must also refine its development strategies.
What particular benefits and challenges should foreign investors in Maltese real estate look out for? Foreign investors in the Maltese real estate market encounter a mix of opportunities and challenges. Malta’s stable economy and EU membership offer favourable conditions for investment. English
Malta’s real estate market has the potential to operate independently of global or regional trends.
Photo: Rene Rossignaud
Meet Denise Xuereb
proficiency eases communication, and tourism provides rental income prospects. Malta also offers various tax benefits to foreign investors in real estate. These incentives include tax breaks on rental income and capital gains, potentially reducing the overall tax burden associated with property ownership. On the downside, high property costs, competition, regulatory changes, and bureaucracy are hurdles. Limited land resources can drive up prices, and environmental concerns persist. Investors must balance these factors to make informed decisions in this dynamic market.
Looking at the next five years, what developments can investors expect in Malta’s real estate landscape? Based on key indicators, Malta’s real estate landscape is set to evolve in response to environmental concerns, economic factors, technological advancements, and shifting buyer preferences. Sustainability, affordability initiatives, technological adoption, and changes in property preferences are anticipated to be prominent trends over the next five years. One pivotal trend centres around sustainability and eco-conscious developments. As global awareness of environmental issues continues to grow, there is a heightened demand for real estate projects that prioritise sustainability. I would expect to see an increase in green building practices, energy-efficient designs and eco-friendly features integrated into new developments, as these initiatives not only align with environmental concerns but also cater to the preferences of modern buyers. One prominent trend is the increasing desire among people to seek residences that offer not only comfortable living spaces but also ample access to open areas. This growing demand for properties with a connection to nature and outdoor spaces reflects the changing preferences of homebuyers and renters alike. Moreover, we foresee a strong emphasis on the creation of communities within these residential areas. People are not just looking for houses; they are seeking environments that foster a sense of community and belonging. Ensuring the long-term sustainability of Malta’s real estate market hinges on a pivotal principle: prioritising quality developments over quantity. While the drive for growth and investment is important, it is equally critical to safeguard Malta’s unique attributes and natural resources. This approach not only serves the best interests of the local environment and community but also ensures that investors continue to perceive the island as an attractive and viable destination for their investments.
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MaltaInvest2024
Local Insight
Dhalia is one of the largest privately-owned real estate agencies in Malta and Gozo. With a background in IT and software development, Alan Grima joined Dhalia as CIO in 2008, before taking a seat on the Board of Directors and being appointed CEO in 2016. What are the particular elements that make Malta an attractive place to buy real estate, for foreign investors? There are various reasons why Malta is an attractive location for real estate investment. Our strategic location in the Mediterranean, right at its centre, provides us with a geostrategic advantage. Additionally, we have a vibrant and deep-rooted culture, a steady and thriving economy, as well as a robust legal infrastructure. We have a very warm climate and beautiful beaches, the people are English-speaking, and we enjoy an overall Mediterranean lifestyle, all of which contribute to making Malta a very attractive option for foreigners.
Malta offers a series of incentives aimed at foreign property buyers. These include refunds on stamp duties for first-time buyers and reduced property transfer taxes under certain conditions. Additionally, the Malta citizenship and residency programmes provide pathways for both residence and citizenship to qualifying property investors. These programmes not only facilitate travel within the Schengen Area but can also offer investment optimisation opportunities. Meanwhile, Special Designated Areas are popular among those looking for an investment property and store of value.
Looking at the last year, can you identify any trends in Malta’s property market?
How have investments in these areas performed, historically?
Over the past year, we have observed an increase in demand for luxury properties and seafront homes, which highlights the attraction that the islands hold for high-net-worth individuals. There has also been a noticeable increase in interest in properties that offer remote working facilities, which is probably due to the global shift towards hybrid work models and environments. Moreover, regeneration projects in historical areas have also resulted in more demand for traditional properties.
Historically, investments in Malta’s Special Designated Areas (SDAs) have proven to be very attractive. These zones permit unrestricted property ownership and often come with modern amenities, integrated services and high-end finishes. Consequently, properties within SDAs consistently register capital appreciation and have also shown resilience even during economically challenging periods, hence making them a reliable investment.
We have observed an increase in demand for luxury properties and seafront homes, highlighting the attraction that the islands hold for high-net-worth individuals.
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What benefits and incentives are foreign property buyers eligible for?
There have been differing interpretations given to Malta’s property data, with some heralding a slowdown and others insisting that the market is as strong as ever. Dhalia has partnered with Grant Thornton to produce an annual market update. In light of the findings contained therein, what is your analysis of Malta’s real estate sector, and what is your prognosis for the coming years? Our partnership with Grant Thornton has provided us with a unique perspective on Malta’s property market. Our analysis shows that certain segments of the market are more dynamic than others, with specialised properties and luxury properties showing robust demand. We anticipate that these segments will continue to perform well in the coming years, thanks to planned infrastructure improvements and continued foreign investment.
Photo: Bernard Polidano
Meet Alan Grima
CHAPTER 4 Real Estate
The Property Purchase Process
T
he hardest part of buying a property is finding the right one for your needs. The Maltese property market is hot – and therefore it is not uncommon for a well-priced property to be sold on the same day it is first advertised. Bargains are few and far between, with the low cost to hold property (and arguably healthy cash flows by owners) limiting any sense of urgency to sell by all but those facing particular personal situations. Establishing contact with multiple real estate agents often pays off, as they might be able to share new listings as soon as they enter the market. Having found the right property and negotiated a price with the vendor, the act of buying it is rather straightforward. First, a promise of sale agreement will be drawn up by a notary public. This is a legal and binding document that sets out the price, any conditions related to the sale and the date of the final transfer, usually set for two to six months later. The buyer will need to pay a deposit – generally, but not necessarily, 10 per cent of the final price – to the notary, to be held in escrow. This amount is forfeit in favour of the vendor if the buyer withdraws from the deal for any reason not explicitly noted down in the promise of sale agreement. Along with the deposit, the buyer will
Ta’ Xbiex. Photo: ewg3D - iStock
need to pay part of the stamp duty, set at 1 per cent of the transaction price less any amount agreed for movable furniture. The remaining 4 per cent would need to be paid upon signing the final contract of sale. Once the promise of sale agreement is signed and the deposit paid, the notary will carry out a thorough investigation of the history and legal title of the property by going through previous contracts and relevant documents to verify its ownership and boundaries, and to determine whether there are any legal issues or guarantees related to it. Planning permissions and the building regulation certificates will also be verified. When the notary is satisfied that everything is in order, a meeting is set up to finalise the contract, at which point the balance of the sale price is paid and the ownership of the property is transferred to the buyer. Notary tariffs are established by law and so are all the taxes, stamp duty and other relevant charges due by purchasers and sellers. Legal fees and stamp duty are payable by the purchaser, while agency fees are payable by the seller.
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a.
Ph ot o:
Ini go
Ta ylo
r
MaltaInvest2024
i em Sl
Opportunities for Foreign Investment
W
hile the reliability of Maltese real estate as a store of value leads some individual investors to purchase property in SDAs with a buy-and-hold strategy, most foreign investment in this sector tends to be more focused and opportunistic. There is no blueprint to follow – it is up to each investor to sniff out and capitalise on the opportunities available in Malta’s evolving economy. A look at some of the successful foreign real estate investments seen in the last years may however shine a light on the strategies used to add distinct value to the country’s property landscape. A group of experienced foreign real estate developers and investors, for example, established the VBL Group when they recognised the underutilised potential of Valletta in the years prior to its stint as the European Capital of Culture in 2018, at a time when considerable efforts were being made to regenerate a city that had become rundown from underinvestment. Bringing together local insight and foreign expertise and capital, the company was able to embark on a large-scale, long-term renovation project that was beyond the reach of the local investment community. In so doing, it has become the largest private landowner in Malta’s capital, and has seen the value of its portfolio increase significantly over the years as new life was breathed into the locality. Von der Heyden Group, a German group of companies focused on niche real estate investments, similarly saw a diamond in the rough in the Maċina, a historic 16th-century bastion overlooking the Grand Harbour that it has since lovingly restored and turned into a boutique luxury hotel. The building also hosts what has rapidly become one of Malta’s top wedding venues, along with an exquisite gastronomic offering. Strategically situated alongside the country’s main superyacht marina,
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the Gran Cugó Macina has established itself as one of Malta’s premier hospitality offerings, and showcases the synergies made possible by the islands’ dense and unique urban landscape. Malta’s wealth of historic sites offers a compelling backdrop for foreign investment ventures with a visionary approach. Beyond restoration, there are other real estate opportunities to explore. One such foreign-owned entity is Malta Properties Company (MPC), a Dubai Holding subsidiary born of the divestment by one of Malta’s leading telecommunications companies of its property holdings. Today, MPC is a key player in the commercial real estate segment, with its office blocks and industrial properties hosting several blue-chip enterprises. Foreign investors would do well to examine the country’s present and future needs to identify existing market gaps that local investors are unable, unwilling, or slow to fill. Upmarket residences remain in short supply, being eagerly lapped up as soon as they are brought to market. Also lacking are modern apartments that meet the sophisticated demands of educated professionals who may be willing to pay a premium for highly finished smart homes with serious sustainability credentials – if only they could find them. In this exercise, local partners and property consultants, especially those specialising in assisting foreign buyers, can be of vital help. The collection and analysis of data pertaining to property has also grown more refined in recent years, reflecting the sector’s maturation. Regular updates on the real estate market by the Central Bank of Malta have now been joined by valuable private contributions. Most pertinently, these include reports by KPMG Malta, commissioned by Property Malta, and Grant Thornton Malta in association with Dhalia Real Estate – publications that are certain to make for interesting reading for prospective investors in Maltese real estate.
CHAPTER 4 Real Estate
Local Insight
VBL Group is the largest private owner of real estate in Valletta, with assets used for residential, office, retail and hospitality purposes. Co-Founder and former Chairman Dr Andrei Imbroll currently serves as its CEO. VBL is in the business of developing and managing real estate in Malta’s capital, Valletta. What attracted you to this particular market? When VBL was first set up, back in 2012, Valletta was a place which primarily elicited nostalgia, packed with majestic crumbling palazzos with barely a soul wandering the streets after dusk. On the other hand, the city still stood proudly on the world map as Malta’s capital and welcomed every tourist visiting the island – but just for those couple of hours it took to walk down its main streets and visit the world-famous cathedral. This displacement between capital cities was clearly visible, and so was the opportunity. Valletta lacked private investment, a plan and a vision, and with these three elements VBL Group was founded. We foresaw the reality before us today, with the gap narrowing between Valletta and neighbouring EU capital cities, both in terms of the ‘capital city experience’ as well as in the subsequent appreciation of property values this brings.
Valletta is a UNESCO World Heritage Site, creating headaches as well as opportunities for development. How has VBL navigated through what is surely a complex legal and regulatory environment? And have Malta’s authorities been supportive? Every single law and regulation safeguarding Valletta and the beauty that it holds should be celebrated every single day, as the steadfast development restrictions have allowed Valletta to be developed in a sustainable manner. As a group we are wellversed in all elements of property development; working within the restrictions of a UNESCO World Heritage Site certainly adds challenges, but these challenges have led to Valletta being virtually unspoilt.
With the various business lines we are involved in, we are dealing with numerous authorities on a daily basis. I would say that a business like ours, that is particularly non-intrusive, has the support and trust of the local authorities, with the level of bureaucracy certainly reducing to a level which is manageable.
Photo: Inigo Taylor
Meet Andrei Imbroll
Can you identify any pros and cons, or particular benefits and challenges, that foreign investors in Maltese real estate should look out for? The Maltese real estate market is a very strong and dynamic one. Malta’s population is still growing – one of the few in Europe – offering a good foundation for further growth. As in any other market, though, supply and demand are key. We have chosen to focus on Valletta primarily because of that safety net. Valletta’s supply is defined, both by its geographical nature, being a peninsula, as well as by the protection afforded to its skyline by UNESCO. This ensures that Valletta’s upward trajectory will continue as long as we remain sensitive to its history and culture. The same cannot be said for the rest of Malta. With the advent of high-rise developments, the increase in supply might create volatility on the market. Identifying the right real estate segment or location is the main challenge for a foreign buyer who does not have a deep local knowledge of the real estate sector.
If you had to give foreign investors looking at Malta’s real estate a word of advice, what would it be? On the macro level, I would say to buy where your square metre value cannot be diluted, particularly by oversupply. When it comes to the finer detail, I would advise all foreign buyers to ensure they engage advisors that are exclusive to them. Buying property in a jurisdiction one is not familiar with can be tricky.
Working within the restrictions of a UNESCO World Heritage Site certainly adds challenges, but these challenges have led to Valletta being virtually unspoilt.
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MaltaInvest2024
Local Insight
Meet Michael Bonello With 30 branches and over 350 property sales and letting advisors, Alliance is one of the largest real estate agencies in Malta. Building on his vast experience in the sector, Michael Bonello is Founder and CEO of Alliance Group and leads the Real Estate Agents Section of the Malta Development Association. What are the particular elements that make Malta an attractive place to buy real estate? Apart from the temperate climate, rich cultural heritage and Mediterranean lifestyle offered by many destinations in our region, Malta’s very small size offers more assurance of capital appreciation to international investors. In Malta, everywhere is within close proximity, so there are hardly any depressed areas where property prices remain stagnant for years. Moreover, Malta’s economy is attracting large numbers of foreign workers, boosting demand for accommodation to unprecedented levels and pushing up rental prices, delivering even more attractive returns on rental investments. The fact that we do not have any annual property taxes is another advantage that makes Malta an attractive place to buy real estate for long-term investment. Lastly, we are an English-speaking country and our way of life is as compatible with European values as it is with Arab cultures, helping everyone to feel welcome here. We enjoy a peaceful and productive democracy with excellent education and medical care that makes Malta an excellent place to live and work in.
What benefits and incentives, tax-related or otherwise, are property buyers, specifically foreign ones, eligible for? First-time buyers benefit from a one-time grant of €10,000 spread over 10 years when purchasing properties over €500,000. When purchasing an older-style home built more than 20 years ago which has been vacant for seven years, or a newly constructed property with traditional Maltese architecture, buyers can also apply for an additional €15,000 grant for restoration. For properties in Gozo, this grant goes up to €30,000. On these types of properties, buyers and vendors are exempt from stamp duty and final withholding tax on the first €750,000 of their property. If you are buying your first home in Malta to establish your residence, you may be exempt from paying stamp duty on the first €200,000 and only pay 5 per cent on any amount above that, in a scheme open until the end of 2024. I would suggest asking a qualified estate agent for more details and any relevant updates that may be applicable.
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What advice would you give to a foreign investor looking at Malta’s real estate sector as a possible avenue for investment? Start by looking through real estate websites from where you can easily submit requests for more information on specific listings. Depending on the quality of replies you receive, you can begin to shortlist your preferred property advisor/s to work with. A reliable property advisor can guide you through the process from start to finish, and can suggest alternatives, arrange viewings and even support you to negotiate the best deal.
Are there any particular areas, in terms of geographic location or property types, that seem to have particularly strong upside potential over the coming years? The Northern Harbour region has always seen consistently high demand, but nowadays this is also visible across towns and villages in most other regions. Valletta and the Three Cities, St Paul’s Bay and Gozo are still on the up and up. Meanwhile, terraced houses are becoming so rare that their potential cannot be disregarded, but then again the demand for apartments is much greater, giving these properties a much larger selling potential.
In Malta, everywhere is within close proximity, so there are hardly any depressed areas where property prices remain stagnant for years.
CHAPTER 4 Real Estate
Special Designated Areas
M
alta is dotted with luxury developments representing the apex of residential real estate in the country. These Special Designated Areas (SDAs) are considered Malta’s most prestigious addresses, providing a superior standard of living and the highest levels of security in the most satisfying surroundings.
Going back to Malta, St Angelo Mansions, in Vittoriosa, are the preferred choice of those who want to be steeped in history at every turn. Situated at the heart of the Grand Harbour against the backdrop of the iconic Fort St Angelo, the area is also convenient for boat owners, thanks to the adjacent yacht marina with superyacht amenities.
There is no limit and no prior authorisation required for citizens of any country to purchase any number of properties in SDAs, making them particularly attractive to non-EU nationals (see p. 112). Additionally, owners of SDA properties may rent these properties out without restriction, allowing them to generate cash flow on their investment (subject to 15 per cent tax).
There are many more SDAs besides, each with a particular flavour, all boasting quality that is unparalleled in Malta. Whether used as a primary or seasonal residence, or held as an investment property, SDA real estate should be on every prospective property buyer’s radar.
Fort Cambridge, Sliema. Photo: ewg3D - iStock
As the most cosmopolitan region in Malta, the North Harbour region is home to several SDAs. In St Julian’s, these include Portomaso, with its own yacht marina and casino, Pendergardens, offering a mix of apartments as well as villas, and Mercury Towers, Malta’s tallest building. A short distance away, in Sliema, one can find Tigné Point and Fort Cambridge, an area with high-end residences, offices and retail offerings that has become one of Malta’s top shopping destinations. Those who want to stay away from the hustle and bustle of Malta’s commercial hub might find the SDAs in the North to be more suited for their taste. Tas-Sellum Residence, in Mellieħa, is conveniently located next to Malta’s largest sandy beach, but residents there can beat the summer crowds by using one of the complex’s three large swimming pools. If privacy is a priority, Madliena Village, a gated community nestled between rolling hills with stunning panoramic views, may be just what you are looking for. Meanwhile, Malta’s newest SDA, Verdala Terraces, is centrally located in Rabat, a stone’s throw from the old capital of Mdina. In Gozo, Fort Chambray is a unique development built inside a historic fort where residents can walk along the ramparts while watching the sun set into the Mediterranean Sea, making it a romantic getaway like no other.
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MaltaInvest2024
Commercial Property
R
ising demand for office space that meets contemporary needs has led to a notable increase in developments that aim to raise the standard of Malta’s commercial real estate offering. Businesses looking for offices now have more options than ever, and in more locations, as developments in underserved areas like Valletta come online. For property investors, commercial real estate should be treated with caution while remaining mindful of its potential. Office rental rates fell by 11 per cent from 2019 to the end of 2022, but recovered in 2023. Buildings currently in the works are forecast to provide more room than required, with some degree of oversupply expected to exert downward pressure on prices. That does not mean that there is no space for further development. Indeed, experienced investors confident of developing a new concept that will address market needs will almost certainly find a demand for it, and will likely be able to charge a premium rate. Evidence of this can be seen in the first chart below, which shows that the maximum rent charged in many localities is far higher than the average. These properties tend to stand out by being more than a workspace by providing amenities like gyms, supermarkets and restaurants, making life easier for those working there. The growing cohort of foreign workers has also contributed to this shift, since these are more likely to live close to their workplace and organise their life around it.
The Brewhouse, Central Business District. Photo: Inigo Taylor
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CHAPTER 4 Real Estate
Commercial Rates Minimum, Maximum and Average Office Rental Rates by Locality 580
700
183
600
Rental Price €/sqm
500
320
550
290
400 300
520 380
370
200 100
220
197
261
180
110
Gżira
St Julian’s Minimum
180
170
174
154
141
90
100
Msida
Qormi
140 74
239
220
0
165 190
90
Sliema Average
160
110
San Ġwann
Marsa
140
Ta’ Xbiex
160
Valletta
120
Mrieħel
60
Mosta
Maximum
Data refers to 2022 prices. All figures are indicative, and are not representative of office space in high-end business centres. Source: Grant Thornton, Dhalia 300
€ per sqm per year
250
Average Office Rental Rates by Region and Year
200 150 100 50 0
Central 2017
2018
Grand Harbour 2019
2020
South
North Harbour 2021
2022
2023
Source: KPMG Analytics
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CHAPTER 4 Real Estate
The Verdala Terraces – The Pinnacle of Luxury Living
N
estled in a serene corner of Rabat, just a short distance from the ancient citadel of Mdina, lies the highly coveted Verdala terraces - the pinnacle of luxurious, tranquil, and contemporary living. The lavish collection of residences, duplexes, and penthouses spread across the Royal and Grand Mansions offers an unparalleled level of sophistication, all enveloped by the natural beauty of the Maltese countryside. Step into a realm of refined elegance, where each residence has been meticulously designed to ensure the ultimate in comfort and style. Open-plan layouts, uninterrupted wall space, and extensive use of floor-toceiling windows create seamless and visually stunning living spaces. The attention to detail and quality is evident in every corner. The residences within the Grand Mansions offer privileged front-row seats to some of the most breathtaking scenery in all of Malta’s open countryside. The highquality cladding and smart, staggered design of each terrace create a tranquil escape that is both private and inviting. Whether enjoying a quiet moment with family or entertaining guests, the terraces offer the perfect setting for relaxation and outdoor dining. Benefitting from its Special Designated Area status, both EU and non-EU nationals can acquire properties with the same acquisition rights as Maltese citizens. The Royal Mansions also present an exclusive residential offer, where discerning residents can enjoy the privacy and tranquillity of private verandas with views of the picturesque countryside, beautifully
landscaped gardens and charming public piazzas that encircle the residences. At ground level, new independent retail and cultural spaces bring the streetscape to life, blending into the vibrant fabric of the neighbourhood. Furthermore, at the centre of the Verdala residential complex, is the highly exclusive 5-star ‘The Verdala Wellness Hotel’ where residents can enjoy privileged access to personalised spa experiences and immerse themselves in holistic spa therapies. Residents can also indulge in a variety of high-end amenities that enhance their everyday living experience. These range from the outdoor infinity pool, which provides a stunning spot for relaxation with more breathtaking views, to a state-of-the-art fitness centre and landscaped gardens. Rest easy knowing that 24/7 security, a dedicated concierge, and secure storage options are all in place for your peace of mind, while dedicated lock-up garages, storage areas, retail offerings, and exceptional services at every turn ensure convenience and luxury. Residents have ample opportunity to explore the rich culture and traditions of Rabat and Mdina. From exploring narrow streets lined with centuriesold buildings to discovering historical landmarks and indulging in local cuisine, residents will find themselves surrounded by a vibrant tapestry of culture and heritage. The prime location of the Verdala Terraces also offers quick and easy access to all of Malta’s most notable attractions and landmarks without having to travel far. The best of Malta and Gozo is always within reach.
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A Trusted Name in Turnkey Solutions CEO Carlo A. Vassallo speaks to Dean Muscat about CE Installations’ rise to industry-leader status, fuelled by a commitment to quality, safety and going beyond client expectations.
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ince its humble beginnings back in 2009, CE Installations has steadily built a name for itself as an industry leader. No longer a small firm with a modest team, CE Installations now employs over 300 professionals, providing a wide range of services that span everything from mechanical, electrical and HVAC to interior design, project management and turnkey projects. The seamless end-to-end solutions offered have earned the company a roster of high-profile clients along the way.
reliability and safety. And that’s what we deliver at CE Installations,” explains CEO Carlo A. Vassallo.
“When you’re in the market for a turnkey contractor, whether for a commercial project or a residential renovation, the question isn’t just about who can get the job done, but who can get it done right. You want a company with a track record of success, who can provide a diverse set of services seamlessly, while always ensuring quality,
“At the end of the day, it is our people who make us who we are,” Mr Vassallo asserts. “They’re highly skilled, passionate and committed to doing a great job on behalf of our clients. We pour a lot of time and energy into attracting the best talent at CE Installations. That’s because we want to deliver the best results.”
CE Installations maintains a steadfast commitment to its core values of quality and client satisfaction. Over the years, the team has consistently evolved through ongoing training to deliver work of the highest standards. The quality assurance and technical teams provide crucial support to the execution team, ensuring that they consistently meet clients’ expectations.
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The team’s versatility and professionalism are nowhere more evident than in the company’s portfolio of works. From the revitalised Pjazza Tritoni in Valletta to the recent redevelopment of the AX ODYCY resort in Qawra, not to mention Campus Hub, Fortina Office Block and the Hilltop Gardens retirement village in Naxxar, the work of CE Installations showcases the company’s breadth of skills and dedication to quality. “Our team’s proficiency allows us to approach projects with a holistic perspective, ensuring a successful delivery that aligns with our clients’ needs. Because we have specialised teams for each aspect of a project, we can manage everything smoothly from start to finish, delivering reliable, high-quality work. Regular project tracking, addressing issues promptly and ensuring adherence to deadlines is how we achieve timely completion and excellence. Every step of the way, we stay in constant communication with our clients to ensure we are bringing their vision to life,” Mr Vassallo notes. So how exactly does CE Installations build such successful client relationships? The answer lies in its approach. From the initial contact through to project completion, Mr Vassallo promises that clients can expect a truly personalised experience. “Our client engagement process is built on effective communication and collaboration. It starts with understanding client needs and tailoring solutions accordingly. Once this is established, we conduct thorough assessments and propose detailed plans.
Throughout the project, we maintain open lines of communication, providing regular updates. The process concludes with rigorous quality checks to ensure adherence to project goals.” Safety in the construction industry has been a hot topic in recent years. Commenting on this critical issue, Mr Vassallo emphasises that the well-being of his team and the safety of projects are a fundamental part of the company’s ethos. “Safety is something we take incredibly seriously at CE Installations. That’s why we never rush through jobs or cut corners. We give each project the time and attention it deserves, always watching for any challenges that might arise. We also hire the best people so we can do excellent work without ever putting safety on the line,” he explains. Looking ahead, CE Installations has a slate of exciting projects on the horizon, including the redevelopment of the former Raffles building in Pembroke. Mr Vassallo asserts that the company will remain committed to a roadmap characterised by growth and innovation. “Our vision encompasses the integration of sustainable practices and cutting-edge technologies into our services. We’re constantly adapting to keep pace with industry trends, while remaining true to our core values to deliver unmatched quality, expand our reach and set the highest standards in the industry,” he concludes.
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CHAPTER 5
Financial Services
Malta’s International Investment Guide
Central Bank of Malta. Photo: Inigo Taylor
MaltaInvest2024
Overview
M
alta is home to a thriving and diversified financial services sector that today contributes over one-tenth of its total economic output. Since the liberalisation of the financial economy in the early ‘90s, industry stakeholders have worked closely with legislators to establish the country as a secure jurisdiction with an innovative and cost-effective proposition for money and asset management. Financial players look to Malta for a broad array of services, from the traditional to the cutting-edge, safe in the knowledge that highly skilled operators will be shepherding their investment through the country’s sophisticated legal framework for their maximum benefit. As a European Union member state and a eurozone economy, Malta offers investors stability and peace of mind, as well as full
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access to the world’s third-largest economy. Choosing Malta unlocks an extensive set of tools that corporations and individuals alike can use to protect and grow their wealth. Traditional and innovative legal structures can be made use of to provide the right solution at the right time, while an attractive tax regime makes the country an ideal domicile for assets of all kinds. The range of financial services on offer indicates an industry that continues to look ahead to new horizons despite its maturity. Malta has worked hard to position itself as a jurisdiction offering a distinct suite of products and services that sets it apart from other financial hubs. Funds, wealth management, insurance, banking, FinTech, and blockchain are the headline segments, all contributing to a dense ecosystem that continues to grow despite broader geopolitical and economic turmoil.
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The country’s geographical position bleeds into its business culture, making it conducive to intercultural business dialogue. Anglican, Continental and Arab representatives feel equally at home in Malta, while long-nurtured links to the United States, China, and increasingly India, allow a Maltese setting or domicile to act as a lubricant for the relational gears of investment negotiations. In essence, the country’s stance of ‘active neutrality’, the springboard for its principled participation in international affairs, also serves to facilitate open communication on common ground. Legislative Dynamism Malta’s hard-won reputation as a centre for financial excellence can be credited in no small part to the receptiveness of its legislators to the needs of industry. Time and again, novel frameworks have been constructed and implemented in short order, marking the country as a uniquely dynamic and flexible jurisdiction for a whole range of financial services.
Here’s the skinny: In Malta, as at late-2023, there are currently around 25 banks, some 50 financial institutions, over 40 payment providers, over 500 funds, practically every audit and advisory firm of note, and an army of corporate services, legal and tax professionals with decades of specialised experience – all ready to make foreign players’ experience an enormously satisfying one. Surveys among foreign investors and companies show that Malta’s particularities are its major strengths. The status of English as a second national language allows companies to seamlessly interact with governmental entities and local partners, and gives an edge to those setting up operations on the islands by making it easier to build multinational teams. A beloved tourism destination, Malta provides excellent lifestyle opportunities that further contribute to its attraction for wealth holders and creators, and employees alike.
One can find a number of examples illustrating this legislative dynamism. Take the implementation of incorporated cell structures, unique in Europe, and their extension to fields outside of insurance (see p. 137 and p. 145). Or the rare dual presence of trusts and foundations, each with their own benefits and opportunities (see p. 140). In the fast-paced world of FinTech, operators benefit from a clearly defined and unambiguously enforced rulebook, minimising risk (see p. 147). And in early 2023, the European Union vindicated Malta’s approach to the regulation of crypto, with the Markets in Crypto-Assets (MiCA) Regulation bearing striking similarities to Malta’s Virtual Financial Assets Act, enacted in 2019 – putting Maltese operators in the space in a state of readiness to comply with EU rules (see p. 147). The closeness between economic, bureaucratic and political stakeholders that is a feature (not a bug!) of small island life allows for constant, open and frank dialogue. The ability to find common interest between the needs of economic actors and the national economy contributes to Malta’s trailblazing regulatory outlook, and continues to act as a magnet for forward-thinking innovators and established players alike. Malta remains keen to continue breaking new ground in financial services. In 2023 alone, there has been consultation on a number of issues as the country seeks to cement its place at the forefront of financial innovation. These include the introduction of Notified Professional Investor Funds, revisions to the Insurance Act with
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particular ramifications for the pensions industry, and a consideration of Non-Fungible Tokens (NFTs) in the context of the Virtual Financial Assets Act. These developments, among others, will ensure that Malta is able to meet the needs of both financial entities as well as corporate or individual players looking to refine their financial structures. Regulatory Certainty Innovation and flexibility are prized elements of Malta’s financial services topography, but it is their backing by strict regulatory regimes that has made the country a trusted and reputable jurisdiction for wealth of all kinds. Its compliance requirements go above and beyond those requested by other countries. While some may balk
at the idea of divulging more information, this ultimately serves as a guarantee of stability for those who do opt to hold or manage their wealth in Malta, not to mention for operations based in the country. The Malta Financial Services Authority (MFSA), the regulator for the full spectrum of financial services, keeps a watchful eye on licensed enterprises, and works closely with them as well as with law enforcement and international partners to maintain its credibility. Since an MFSA licence grants companies access to every national market in the EU with minimal operational and bureaucratic costs, its excellent reputation puts its licensees in good standing wherever they may go. Financial operators, even more starkly than other business sectors, know that reputation is everything. The MFSA licence is a signal to investors that the licensee is subject to the highest regulatory standards, with the caveat, of course, that licensees must indeed subject themselves to strict rules and regular enforcement. Operating with the same spirit of partnership as the rest of the Maltese governmental and regulatory apparatus, the MFSA maintains open channels of communication and stands ready to support investors and businesses in their compliance efforts. Another layer of protection for customers of Maltese regulated entities is the Arbiter for Financial Services, which is a separate, autonomous body mediating, investigating and adjudicating complaints against financial services providers. In the blockchain space, on the other hand, the Malta Digital Innovation Authority, the first regulator of its kind in the world, certifies Distributed Ledger Technology platforms and smart contracts while handling the voluntary registration of technology arrangements (see p. 147). Tax Benefits The full imputation tax regime and the tax refund system for corporate shareholders means that Malta-based operations benefit from one of the lowest effective rates in Europe (see p. 62). Corporate tax reform is on the distant horizon, but the changes are promised to retain Malta’s competitive advantage and have a net neutral result on Government income (see p. 43). While a measure of uncertainty is unavoidable, investors can therefore rest assured that the jurisdiction will remain an attractive one in terms of taxation. More information on the particular provisions relevant to financial services (current to late 2023) is provided in the following sections, but to best consider how Malta’s tax regime can be of benefit to you, it is advised to consult a tax professional.
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Parliament of Malta. Photo: Inigo Taylor
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Local Insight
Adriana Camilleri Vassallo set up Francis J. Vassallo & Associates Ltd in 1998 together with her father, Francis J. Vassallo. The firm provides corporate, regulatory and tax services, corporate structures and restructuring, residency, citizenship and relocation, and family business support services, among others. What are the most recent trends you have observed in the financial services space in Malta? Nowadays, clients are looking toward having more than just a service provider. They are seeking assistance which is holistic in nature, a service provider that is equipped with an ability to provide a wide range of solutions to clients in order to optimise various aspects of their business organisation. Moreover, clients have shown us that they prefer having one point of contact in Malta which is able to coordinate a diverse spectrum of requests. Clients are looking for straightforward, non-complex, cost-effective solutions that can be implemented expeditiously and without delay.
FJVA recently celebrated 25 years of operation. What is the difference between Malta’s attractiveness as a financial services hub 25 years ago when compared to today? The financial services industry as a whole has transformed significantly over the past 25 years. The Maltese legal framework has evolved, regulations have been ramped up and the need for more technical human capital continues to become ever more crucial. All these elements require service providers to gear up, enhance the quality of their services, and to ultimately assist clients efficiently in order to ensure that the attractiveness of Malta remains prevalent. Setting up in Malta to merely obtain a fiscal benefit is seen as a pursuit of the past and the financial services industry is filtering out such business organisations. The Malta financial services industry entices businesses seeking to embody a qualitative level of substance and is witnessing a move towards solutions that assist in overcoming the various challenges associated with estate planning and wealth management.
What is one benefit and one challenge prospective investors should be on the lookout for when investing in Malta?
Photo: Bernard Polidano
Meet Adriana Camilleri Vassallo
As a jurisdiction, Malta has opted for a pro-business approach to direct foreign investment. Malta has taken a proactive stance in providing various incentives to businesses, their respective employees and shareholders. A challenge that Malta currently faces is the limitation attributable to opening a local bank account with a Maltese banking institution. Nonetheless, we are well-placed to assist our clients through our network of local or foreign banks.
Can you elaborate about foundations, and why clients might opt for Malta as a jurisdiction for these structures? Maltese private interest foundations may be used as a sophisticated tool in an array of different contexts. Foundations are enabled with separate legal personality, differing from the traditional ‘trust concept’ which, in principle, is a contractual relationship whereby a trustee would own trust assets for the benefit of a category or specific beneficiaries. A Maltese private interest foundation is an autonomous body of persons that would own assets outright, in its own name. Moreover, a Maltese private interest foundation incorporates features that are unique, such as the ability to form separate and distinct cells within the same private interest foundation. It also requires a licensed administrator to ensure transparency and good governance.
As a jurisdiction, Malta has opted for a pro-business approach to direct foreign investment.
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Investment Funds Lower Barrakka Gardens, Valletta. Photo: Inigo Taylor
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here are over 500 funds and schemes registered with the MFSA, attracted by the country’s welcoming environment for fund managers and administrators. In establishing themselves in Malta, these are able to remain fully onshore within a regulated and constantly evolving EU jurisdiction, while benefitting from a wide range of innovative and flexible investment vehicles and services at relatively low cost. In Malta, investment funds find a platform that allows smooth access to European markets and a regulator that is equal parts dynamic, approachable and stringent. Licence applications are processed with a time-sensitive approach, and funds looking to re-domicile from other financial centres will find that the procedure is clear and highly efficient. Unlike many other jurisdictions, Malta does not require that funds registered in the country involve local administrators. However, almost 90 per cent are indeed administered from Malta, and just over half are managed by Malta-based third parties. Funds may also be selfmanaged, with close to a third of Malta-registered investment funds adopting this structure. The comprehensive framework caters to the needs of every type of investor by providing fund promoters with a wide choice of potential set-ups allowing for a broad range of investment strategies.
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As at the end of 2022, Malta-registered funds had almost €20 billion in assets under management. As was the case in the global fund industry, which suffered from a difficult year for financial markets, the net asset value of funds registered in Malta fell during 2022, although it is notable that the drop was less than half the European average, and markedly less than the worldwide average (EU: -12.8 per cent; WW: -10 per cent; MT: -5.6 per cent). In Malta, there was a significant shift observed with a number of funds converting their licence from PIFs to NAIFs (see p. 138), with the latter registering a 37 per cent increase in net asset value. Fund Management The merits and utility of Malta-registered schemes will soon be addressed, but first, a quick word for fund promoters established in other jurisdictions with no intention of setting up shop in Malta. The local industry provides an exhaustive list of services to funds domiciled around the EU and further afield, allowing foreign operators to benefit from the wealth of international expertise Maltese asset management and servicing providers have amassed over the last decades. Whether it is the full outsourcing of fund administration or compliance, regulatory reporting, and back and middle office services, Maltese firms can provide the cost-competitive solutions you require.
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Money Matters Total Net Asset Value of Funds Domiciled in Malta (in € billion) 25
Other
21
7
19.8
16
20 15
Number of Funds by Type of Licence
11.1
AIF
UCITS 104
114
10 5 0
2017
2019
2021
2022 NAIF 104
Source: MFSA
PIF
Management of Malta-domiciled Funds
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Managed from outside Malta 16.3% Source: MFSA. Data corresponds to December 2022 figures.
Self-managed 33.9%
Administration of Malta-domiciled Funds 89.5%
Managed in Malta 49.5%
11.2%
Source: MFSA. Data corresponds to December 2022 figures.
Administered in Malta
Administered from outside Malta
Source: MFSA. Data corresponds to December 2022 figures.
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Legal Structures In Malta, vehicles for a Collective Investment Scheme (CIS) can take the form of investment companies, limited partnerships, unit trusts, contractual funds, and incorporated cell companies. These legal structures allow fund promoters to take advantage of their specific characteristics to craft schemes perfectly suited to different investment strategies. Investment Companies Corporate fund structures come in two forms: investment companies with variable share capital, known as SICAVs (the name is drawn from the tried-and-tested structure popular in Luxembourg); and investment companies with fixed share capital, known as an INVCOs. INVCOs are limited to mainly investing in securities and are subject to restrictions on their holdings, profit distribution and income retention. On the other hand, SICAVs may be used to invest in securities and in other movable and immovable property, and have proven to be highly flexible vehicles allowing for a wide variety of investment strategies. Both can be constituted as umbrella or multi-fund companies where the share capital is divided into different sub-funds. Each sub-fund would have its assets and liabilities ring-fenced as patrimony separate from those of other sub-funds within the company. By employing this structure, shareholders in each of the different sub-funds will benefit from varying returns, depending on the performance of each particular sub-fund, irrespective of the performance of another. Additionally, investment companies with multiple classes of shares with different characteristics but no separate patrimony are also provided for. This allows for the creation of highly flexible structures allowing a single entity to pursue a wide variety of investment objectives and business models. For example, a fund can have one sub-fund following a high-risk strategy with two classes having different fee structures, and another sub-fund following a low-risk strategy with various classes having their net asset values calculated with different frequencies. The flexibility afforded is such that different sub-funds could have different managers following very different strategies. Limited Partnerships Limited partnerships, or partnerships en commandite, are also popular, particularly with private equity and venture capital. Limited partners’ liability is limited to their initial investment, while a limited
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liability company is typically assigned to assume the role of general partner, enhancing the fund’s local substance. Such set-ups can be structured in any number of ways similar to investment companies; they may be set up with variable or fixed share capital, which may or may not be divided into shares, and they may also have different classes of shares, issue fractional shares and can include different sub-funds denominated, if required, into different currencies. Subfunds may also have their assets and liabilities segregated from those of other sub-funds within the limited partnership. Partnerships en commandite are also subject to the same tax rules as companies (see p. 62). Where the capital is not divided into shares, the partnership is deemed to be tax transparent, with income and capital gains arising from the fund taxed according to investors’ tax status and residence. For partners who are not resident and not domiciled in Malta, only the share of income attributable to Maltese sources is subject to tax, with foreign-source partnership income falling outside the scope of Maltese tax rules.
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company to act as a special investment vehicle holding assets on behalf of the fund, shielding assets from creditors’ claims.
M ira be ll
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Incorporated Cell Companies Incorporated Cell Companies (ICCs) are an innovative legal structure with numerous advantages for fund promoters. First implemented in insurance, the set-up proved flexible and robust enough to be extended to the fund sector. ICCs materially expand the range of uses by enhancing the segregation of assets between each cell. For example, a SICAV structured as an ICC may designate each sub-fund as an Incorporated Cell (IC), endowing each one with separate legal and juridical personality, and thus enabling it to transact in its own name.
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While tax transparency may be desirable in some cases, most of the attractions of the Maltese tax code, like the refund system, are limited to companies. Limited partnerships may therefore elect to be considered as companies, allowing shareholders to benefit from Malta’s advantageous tax regime. Unit Trusts Trusts are another common legal vehicle for collective investment schemes. These are subject to fewer restrictions, when compared to companies. They can also be structured to be tax-transparent, which may be particularly attractive in certain cases, such as when underlying assets held by the unit trust are subject to high withholding taxes in the country of issue. Contractual Funds Common contractual funds, or mutual funds, do not have a separate legal personality, and therefore require a custodian in whose name the assets are to be held. Maltese mutual funds typically establish a
Another type of ICC that has proven particularly popular among small managers and startup funds is the Recognised Incorporated Cell Company (RICC). This is a limited liability company providing purely administrative services to incorporated cells within the cluster. The RICC can therefore accommodate a platform model comprising an ICC providing, for example, contractual and startup support to any number of ICs. This relationship does not mean that ICs are subsidiaries of the RICC, and in fact each IC, having separate legal personality, needs to be duly licensed as a collective investment scheme in its own right. Types of Funds The legal structures described above can be used to set up any of the several Collective Investment Schemes (CIS), or funds, catered for in Maltese legislation. The resulting array of options can be designed to serve the needs of any kind of investor. Although regulated to different degrees, all funds are monitored by the Malta Financial Services Authority. Undertakings for Collective Investment in Transferable Securities (UCITS) The European Union’s UCITS Directive allows eligible funds to be freely marketed across Europe under a harmonised regulatory regime. Around a fifth of all Malta-registered funds fall under the UCITS framework, benefitting from the structure’s well-regarded protections for investors. The reputation of UCITS extends beyond Europe’s borders, being the preferred vehicle to tap into the bloc’s capital markets for fund managers from outside of the EU. Malta-based UCITS are exempt from Maltese income tax as long as more than 85 per cent of their underlying assets are situated
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outside the country. They are also exempt from any tax on their net asset value, from withholding tax on dividends paid to non-Maltese residents or capital gains tax on sale of units by the same, and from stamp duty on the issue or transfer of units, making them highly taxefficient structures. Alternative Investment Funds (AIF) Venture capital, hedge funds, private equity funds, real estate funds, and any other investment strategy for all asset classes can be structured as Alternative Investment Funds (AIFs). These have restrictions on leverage limits, fund risk profiles and portfolio liquidity, as laid down in the EU’s Alternative Investment Fund Manager Directive (AIFMD). Like UCITS, AIFs benefit from passporting rights, allowing them to be managed and marketed across the EU, either directly or via a local branch. When targeted towards retail investors (Retail AIFs, or RAIFs), the AIFMD imposes additional investment and borrowing provisions. The Notified AIF (NAIF) is a Maltese innovation designed to speed up the time to market to as little as 10 days. NAIF managers remain regulated by the EU AIFMD, but the MFSA places full responsibility on them to perform all necessary due diligence on the parties involved. By assuming full liability, NAIF managers are exempt from MFSA authorisation or supervision. For this reason, NAIFs can only be marketed to professional or qualifying investors. The structure has proven exceptionally popular with fund managers; the number of NAIFs practically doubled between 2019 and 2022. Professional Investor Funds (PIF) The PIF licence is the fund type most widely adopted in Malta, with some 40 per cent of all funds registered in the country being PIFs. Seen as the best fit for wealth managers specialising in private clients, the PIF has a lighter and more flexible regulatory regime than other funds: no leverage and investment restrictions, and no diversification requirements. It is used extensively for investment in non-traditional instruments as well as complex asset classes, such as private equity, derivatives, real estate, traded endowment plans, and virtual currencies. Since PIFs fall outside the scope of the common EU fund frameworks (UCITS and AIFMD), they do not benefit from the same passporting rights, and are therefore limited to EU member states’ national private placement regimes. Although the PIF has been losing ground to NAIFs in recent years, it still makes up around 40 per cent of all funds registered in Malta. However, the MFSA has reacted resolutely by introducing the Notified PIF (NPIF), launched in 2023.This innovative regime builds on the success of the NAIF, and likewise makes it possible to set up a NPIF in just 10 working days. Since the NPIF, like the PIF, is a non-retail scheme, fund managers need only notify the regulator rather than undergo the full authorisation process.
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Taxation of Funds Malta-based collective investment schemes can benefit from provisions in the tax regime to minimise their tax exposure. A tax professional will be able to provide further guidance on the specificities of any particular set-up, but the headline details are the following. First, Malta does not levy tax on any scheme’s net asset value, nor is there stamp duty or VAT on share and unit issues or transfers by licensed funds or their investors. Fund management and administration services are also exempt from VAT. Non-resident investors are additionally exempt from tax on dividends and capital gains from the transfer of units in any fund. If the structure used is not tax transparent, profits will be taxed at the standard 35 per cent corporate income tax. However, investors can make use of the full imputation system and the tax refund system to bring their tax liability down to 5 per cent, which can be further reduced by applying a Notional Interest Deduction. Taken in combination with the country’s extensive list of double taxation agreements and its unilateral tax relief system, Malta emerges as a uniquely enticing domicile for funds of all kinds.
The Quad Towers, Central Business District. Photo: Inigo Taylor
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Local Insight
Meet Bernice Buttigieg FinanceMalta is a public-private partnership set up in 2007 to promote Malta as an international financial centre. It is a member of the World Alliance of International Financial Centres and the EU Roundtable of Financial Centres. Dr Bernice Buttigieg has been managing the foundation since its inception, and currently serves as its Chief Strategy Officer. FinanceMalta promotes Malta as an international business and financial centre. What are its main selling points?
What kind of assistance from public and private entities can prospective investors in Malta expect to find?
Although our mission is to promote Malta as a financial centre, we would not have much credibility unless what we said was backed up by our members! This is why we are always thrilled to read foreign investors’ positive comments about our country’s nimble and dynamic approach with regards to regulation and legislation, the sector-wide ecosystem that has been carefully nurtured over the past decade, and the nationwide commitment to promote and support innovation.
The island has always taken pride in its size: far from being a limiting factor, we see Malta as a place where the ease of networking is part of our DNA, a real contributor to the ease of doing business. The regulator and other authorities in this industry are accessible and dynamic, and the Government is keen to support private initiatives that have a multiplier impact. This is complemented by our location between Europe and North Africa, straddling the East/ West route across the Mediterranean. This ensures good air and sea connectivity for our multicultural workforce, backed up by topof-the-range IT and data services.
In 2023, a financial services strategy was launched to ensure Malta remains an attractive jurisdiction for financial services. What is the main thrust of this strategy? The key word is in the question: ‘remains an attractive jurisdiction’. Financial services are evolving constantly and, with FinTech in particular, the speed of change is truly impressive. This is why the strategy is so important: Malta must not – and could not – rest on its laurels. It has to constantly evaluate where bottlenecks exist or could develop. The strategy, drawn up by the Malta Financial Services Advisory Council after wide consultation with the Government, authorities and the private sector, has identified no fewer than 175 action points, all of which are aimed at making sure that the island remains an attractive jurisdiction.
However, we need to be careful not to become victims of our own success. The Government is well-aware of the fact that fast growth can lead to unintended consequences, and it is already evaluating the potential impact of such rapid growth on everything from utilities and labour policies to waste management and traffic.
What are the most recent trends or phenomena in the financial services space in Malta? Many of the latest trends are those seen internationally: climate change, ESG and sustainability, all of which have prompted locallybased companies to expand their offering into these new areas of expertise. The Malta Stock Exchange is poised to welcome new products such as green bonds – the first to be launched was fully subscribed within hours – while the regulator is constantly working with the industry to ensure that it is ready to take on the demands of new EU legislation and frameworks. It is an exciting time for the industry and FinanceMalta is proud to help its members achieve their maximum potential.
Malta is a place where the ease of networking is part of our DNA, a real contributor to the ease of doing business.
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Private Wealth
M
alta’s sophisticated financial services industry and its position within the European Union make it popular among high-net-worth individuals and families looking for wealth management that is as effective as it is cost-effective. The plethora of products and services on offer are adaptable and customisable to any needs, and local service providers have proven to be reliable caretakers of generational wealth, building up a reputation for personalised services and tailored solutions that integrate every aspect of a client’s wealth management needs. The country is best known in the space as an ideal jurisdiction for the outsourcing of family office and wealth manager back-office services, enabling them to cut costs while maximising profits, with the results convincing many to transfer more if not all their operations to the islands.
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One of Malta’s key attractions is that it is one of the few jurisdictions where both trusts and foundations can be set up. These can be used to safeguard assets, whether stocks, bonds, art, heirlooms, real estate, or anything else, to manage risk or as a ward against the impacts of political instability, as well as of course for succession and estate planning, and to minimise tax exposure. The structures may also be used for the securitisation of assets, corporate financing, and to shield assets from creditors’ claims, not to mention charity. Trusts and foundations, which can be converted into each other, broadly offer the same features, but typically attract a different clientele; those used to common law jurisdictions usually prefer trusts, while Asian customers tend to be more familiar with foundations.
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reputable operators. The jurisdiction’s popularity has attracted major foreign players which now compete with long-standing local operators, giving clients a greater breadth of products and services to choose from, whether they are high-net-worth, corporate or institutional. The Professional Investor Fund (PIF, see p. 138) is designed to serve as a platform for high-net-worth investors, and some asset management companies have even launched fund platforms open exclusively to family offices and other wealth management providers as an efficient route to enter the market. Malta’s position as a hub of financial services and emerging technologies also gives rise to synergies that can be exploited to the full, with alternative investments such as crypto-tokens being explicitly catered for in legislation (see p. 147) and potential disruptors like the Internet of Things and Virtual Reality (VR) increasingly present in the domestic economy.
Fort St Angelo, Vittoriosa. Photo: Elvira Podolinska
The framework allows for a high degree of pliability. For example, set-ups may involve the creation of a limited liability company to act as the trustee of the trust holding the assets, with the board of directors often constituted by the family members and their trusted advisors. These Private Trust Companies (PTCs) thus allow family members to have a say in the administration of a trust. As with any wealth and estate planning, the starting point is to engage the right professionals to understand what the rules are, and then establish how you can use them to your benefit. Malta tends to be bold where it counts and cautious where it matters: trustees and investment services providers alike need to be licensed with the MFSA, giving clients and their families the assurance that their assets are being managed by
Malta thus offers the affluent a safe, stable jurisdiction and an accessible portal for global investment. When combined with the multitude of structures on offer, Malta continues to be a go-to jurisdiction for those seeking tailor-made arrangements for the management of their wealth. Luxury Assets and Residency Options Another element of Malta’s wealth management offering is its highly competitive framework for the registration of ships, such as superyachts, and aircraft. Its location as a strategic port of call, extensive VAT incentives, and excellent marina and airfield infrastructure make it an attractive holding jurisdiction for such assets. Turn to the relevant chapter (see p. 196) for more information on the country’s dedicated solutions in these areas. High-net-worth individuals also find that there are considerable lifestyle and fiscal benefits to becoming part of Malta’s thriving cosmopolitan community, with several routes available to those wishing to make the country their home away from home. A full rundown of the schemes available and the attractions on offer may be found in the chapter dedicated to residency (see p. 80).
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Banking
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alta’s banks are among the safest and most liquid in Europe, with ample capital to support their future growth. The banking sector today is a different beast to what it was at the turn of the millennium, and today boasts 25 banks of varying sizes catering to the needs of a broad range of clients. The major domestically oriented banks have fuelled the country’s rapid growth, relying on their vast reserves of customer deposits to keep interest rates stable through thick and thin. The importance of this stability to Malta’s economic health cannot be overstated, with businesses and households alike benefitting from the shelter afforded to them during the European Central Bank’s repeated interest hikes in 2022 and 2023. Banks’ strong positions, it has to be said, is also a result of the Maltese mentality towards debt, which results in a relatively low rate of default, even in times of crisis.
FIMBank, St Julian’s
On the consumer side, Malta’s banking system is characterised by a single large player, with four others having a smaller but significant footprint. Foreign investors, on the whole, have yet to attempt to penetrate this market; the investment and private banking spheres afford opportunities aplenty. Many are involved in specialist services supporting their parent banks, such as a concentration of activities in areas like trade or project finance, syndicated loans and investment banking, often holding executive responsibility for specialised areas of their group’s global operations. That said, it is no secret that smaller corporate clients and those involved in sectors deemed to be high-risk are ever on the look-out for new products and services. In some cases, Malta Enterprise and the Malta Development Bank have stepped in to address these market gaps, but these remain short-term solutions that are simply waiting to be filled, with the Government expressing its willingness to support the entry of new players addressing the needs of under-served sectors.
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Local Insight
Meet Nick Captur Nick Captur is the President of the Institute of Financial Services Practitioners and Tax Director at Deloitte Malta. Having previously served in the firm’s financial advisory practice, he now provides support to multinational groups and private clients.
What are the factors contributing to Malta’s position as a hub for financial services? The Maltese financial services sector has built itself up over the years on the back of a good and responsive regulatory framework, skilled English-speaking professionals, an effective legal framework, broad political stability, and consensus in respect of this sector. It had built up a good reputation overseas, which it is in the process of re-establishing through the efforts of both practitioners and the authorities. Initially, the areas that demonstrated the most success included a number of regulated sectors, such as insurance captives and collective investment schemes. These have been supported by Maltese practitioners in the field of corporate services, tax advice, accountancy and legal services. And as the industry in Malta has grown and faced challenges, so have the skill sets practitioners have to offer deepened.
How has the sector changed in recent years? The economic and political environment the world over has changed and evolved over the last decade, and financial services have responded to this. There is more regulation and complexity, but also more digitisation and new challenges and opportunities. This applies to Malta as much as it does to the rest of the world.
The nature of the business in Malta has changed drastically, with a focus on higher standards and greater AML/CFT awareness and processes. We now have a stronger base to work from, but also a higher regulatory burden on practitioners. This has meant more investment in certain internal processes, which can impact profitability and in turn the ability to invest and develop new business. The challenge we face now is to seek a responsible balance between effective and demonstrable regulation that is proportionate to the risks faced, and the needs of the industry. To achieve this, the Malta Financial Services Advisory Council in 2023 published a long-term strategy for financial services in Malta, a strategy which has the backing of both the Government and the Opposition, and includes extensive industry input from over 200 practitioners. Besides identifying potential future niches, such as digitally driven financial services, family offices and aircraft leasing for example, the strategy also places a lot of emphasis on improving the ease of doing business in Malta and in reducing unnecessary bureaucracy.
If you had to tell potential investors one benefit and one challenge to be on the lookout for when investing in Malta, what would these be? The main reason for an investor to come to Malta is the quality of services provided. Malta’s greatest strength is its practitioners, and the skills they provide. There are other factors, of course, including an attractive and fair tax regime within an EU framework.
Malta’s greatest strength is its practitioners, and the skills they provide.
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In terms of challenges, I think they will be surprised at the amount of due diligence and compliance documentation that they require and some of the strict formalities around the certification and format of it. In my experience it is the highest bar that many clients experience anywhere and sometimes it can be quite frustrating, expensive and time consuming. It is hoped that as the EU standardises its expectations across member states, for example once AMLA is set up, this will be more harmonised and perhaps we will have the advantage of being first movers and more experienced and mature in this area, and able to apply appropriate judgement with confidence.
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Insurance
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he traditional third pillar of Malta’s financial services sector, after asset management and banking, is insurance. The jurisdiction’s robust regulatory framework, competitive operating costs and innovative structures, particularly Protected and Incorporated Cell Companies, have drawn a large number of insurance undertakings, reinsurance companies, intermediaries and cells. The Maltese licence allows companies to write business in any other EU country, making insurance a dynamic growth industry within the wider financial services sector, with most companies selling insurance to clients outside of Malta. Insurance companies in Malta provide all types of cover, ranging from personal, health, property, motor and travel to liability and employee protection, and investors can find a number of insurance management companies handling cover for large corporations and providing reinsurance solutions, ranging from well-known international names to boutique establishments offering operational and managerial support to third parties. The industry boasts a workforce of over 1,200 people, backed by specialised practitioners within audit, advisory and legal service providers, and public investment is ongoing to keep Malta at the forefront of the global sector through the development of a vibrant InsurTech cluster where insurers and tech companies can utilise Malta’s cell company framework to test and implement blockchain solutions, smart contracts, artificial intelligence and machine learning. The country’s insurance framework provides for three types of insurance companies. These are the standalone insurance or reinsurance (captive) companies, cells within Protected Cell Companies and cells within Incorporated Cell Companies. Cell Company Legislation Malta is to date the only European Union country providing for the set-up of cell companies. These allow firms, insurance managers and brokers to write risks through cells within a core company and provide businesses with a cost-effective, ring-fencing mechanism as an alternative to setting up a standalone insurance company. First introduced through Protected Cell Company (PCC) legislation, Malta has since brought to market the Incorporated Cell Company (ICC) structure (see p. 145), allowing companies more flexibility to choose the framework that best fits their needs. Cell companies are popular because they are highly cost-effective, quick to set up and extraordinarily flexible. Insurance undertakings utilising
these structures can have one corporate vehicle with numerous cells, with the assets and liabilities of each cell being segregated from the core company and other cells. The core assets may be exposed to the liabilities of the underlying cells, as in PCCs, or shielded from such claims in an ICC structure. In both cases, only one licence is required, allowing the core to take on the responsibility of the management of the overall entity, including compliance, with the attendant cost benefits, thus enabling the transfer of insurance risk to institutional investors and giving corporations the opportunity to develop new risk financing solutions. Resources, such as staff, may be shared between the core and the different cells, leading to significant potential savings. Cell structures can be the right choice of insurance vehicle for a variety of undertakings, including startups lacking the financial requirements to set up their own insurance business, noninsurance corporations seeking an efficient way to tap into the insurance expertise of the dedicated professionals managing the core, or large insurance groups looking to consolidate various operations while maintaining strict segregation between different parts of their portfolio. Although both PCCs and ICCs can be cost-effective alternatives to setting up a standalone captive insurance company, users will find particular advantages in both. PCCs are structured as a single legal entity, whereas each cell in an ICC is a separate registered company with complete autonomy. Thus, while a PCC structure enables the pooling of resources to meet capital and solvency legal requirements, each cell in an ICC needs to meet all such requirements by itself. As financial stakeholders of all kinds become increasingly aware of the advantages offered by cell structures, the sector is poised to continue its rapid expansion – with Malta leading the way. Reinsurance, CAT Bonds and the ILS Market In recognition of the growing importance of insurance-linked securities (ILS) and the convergence of reinsurance and capital markets, Malta has also enacted legislation providing for the formation of Reinsurance Special Purpose Vehicles (RSPVs) and Securitisation Cell Companies (SCCs). RSPVs can be used by an insurance or reinsurance undertaking to cede risk by funding its potential liabilities through the capital markets, while SCCs involve the establishment of a segregated cell for the purpose. Such set-ups are popular for catastrophe bond issues and longevity risk transfer transactions, for example, with the main benefits emerging from their application as cost-effective programme or platform structures if repeat transactions are envisaged.
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Local Insight
Meet Josef Cutajar Josef Cutajar is a seasoned financial analyst with a strong background in banking. Throughout his career spanning 20 years, he established an extensive network with key market players and today is part of the Corporate Broking arm within M.Z. Investment Services Ltd. His work involves assisting companies seeking to raise capital on the Maltese capital market, as well as providing guidance on matters related to market research, investment analysis and valuation, transaction management, corporate governance, and investor relations. How important is the Malta Stock Exchange (MSE) for the country’s economic development? The MSE plays a very important and active role in Malta’s economic development as it is instrumental for an effective process of capital formation and financial intermediation. This view is also supported by the extent to which the MSE has grown over the years. Currently, the market capitalisation of the Regulated Main Market exceeds €15 billion, which is approximately 90 per cent the size of Malta’s GDP. About 54 per cent of this comprises Malta Government Stocks and Treasury Bills, 30 per cent is made up of equities, while the remaining 16 per cent consists of corporate bonds. The number of issuers has also increased significantly, and today over 100 companies from various economic sectors have their shares and/or bonds listed on the Regulated Main Market of the MSE.
How successful has the MSE been in extending its outreach beyond Malta? The MSE has been very active in strengthening its presence internationally, mainly through affiliations with leading organisations. Furthermore, trading on the MSE takes place through ‘Xetra’ which, de facto, facilitates international participation. Nonetheless, although ‘internationalisation’ has been one of the main strategic pillars of the MSE for the past seven years or so, only a handful of companies based outside of Malta have so far tapped the Maltese capital market. The reasons for this could be various, including geographic and demographic considerations, as well as the high level of competition from other stock exchanges in Europe such as those based in Ireland and Luxembourg. Moreover, the
volume of trading on the secondary market is low, particularly when compared to international markets. This is partly due to the general small size of the issues and the absence of any market-making mechanisms, apart from the conventional ‘buy and hold’ investment mentality among retail investors and the lack of sizeable institutional presence. Another plausible reason could be matters related to governance. Although Malta has made important strides forward to implement reforms and improve its profile as a well-regulated hub for financial services, it might be the case that the country still needs to work harder to strengthen its reputation and be on par with other jurisdictions.
With this in mind, do you think that there is still scope for the MSE to continue to seek avenues for increasing its international allure? The short answer is: yes – Malta is a stable economy and it has all the required structures in place to welcome international investors. Moreover, the costs involved for companies utilising the Maltese capital market are comparatively attractive, and this is an advantage that could be more relevant today in an era of high inflation. Having said this, however, the MSE’s objective of enhancing its international profile might require a more targeted and coordinated approach, and should not come at the detriment of reduced focus on the domestic market. Indeed, I believe that the best way for the MSE to reach its ‘internationalisation’ objective is to strengthen the depth, liquidity and efficiency of the domestic market first and foremost, because only a truly vibrant domestic market can draw the attention of international players.
What is your role in facilitating the process for companies that would be seeking listing on the MSE?
Malta is a stable economy and it has all the required structures in place to welcome international investors.
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Despite only being set up in late 2019, M.Z. Corporate Broking has established itself as one of the leading players in the Maltese capital market. Indeed, over the past four years, we managed to raise circa €500 million in capital (approximately €200 million in 2023 alone), predominantly in the form of debt not only for already listed and wellestablished firms but also for relatively new enterprises. The success achieved to date reflects our long-standing experience and extensive knowledge in the field, excellent reputation and track record, strong industry relationships and network, comprehensive and customisable suite of services, as well as an ethos that prioritises longterm and sustainable business relationships built on trust.
The opinions provided are the author’s views and may not reflect those of M.Z. Investment Services Ltd. Moreover, the information contained herein should not be construed as investment, legal, or tax advice. M.Z. Investment Services Ltd is licensed to conduct investment service business under the Investment Services Act (Cap.370) by the Malta Financial Services Authority.
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alta’s wealth of talent and experience in both finance and tech has made the country a natural home for a burgeoning FinTech sector. As the saying goes, one thing leads to another, and the development of homegrown FinTech enterprises launched to service needs observed in other sectors is a perfect illustration of this maxim. For example, iGaming companies operate and receive payments from markets around the world, yet are often listed as high-risk by mainstream banks. This lacuna has been filled by a cohort of digital payment service providers, organically addressing a market need while working closely with the industry to ensure that its specific needs continue to be met amidst a shifting regulatory landscape. Similarly, Malta’s popularity as a backoffice service centre for foreign companies has driven investment in RegTech and automated payroll solutions. The nature of Malta’s economy has positioned it at the forefront of contemporary developments in digital finance, as investors with a keen eye for opportunity respond to emerging needs by developing software that makes life easier for its business users. These efforts are supported by Maltese authorities’ receptiveness to initiatives and technologies that have the potential of defining the next generation of finance. In fact, Malta was the first country to set up a dedicated framework for Distributed Ledger Technology (DLT, better known as blockchain), while 2023 saw the launch of its first national strategy for artificial intelligence (AI). This strategy outlines the efforts Malta is committed to making to stay ahead of the curve in this rapidly developing field, including providing the necessary support to help public and private entities alike make the necessary investments to speed up their adoption of AI. The country’s value proposition for investors in these fields is further enhanced by the MFSA’s regulatory sandbox, providing a controlled environment for the testing of innovative technologically enabled business models, applications, processes or services. These fields are human capital-intensive, dependent on the availability of highly skilled individuals capable of creating innovative solutions that meet the needs of industry. Local stakeholders have shown foresight by heavily investing in training, with educational institutions providing specialisations in fields like machine learning, big data and text processing, among others. Combined with traditionally strong output from courses related to finance, accounts and law, Malta’s human resources are well-prepared to take the FinTech sector to the next stage of its development.
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FinTech and Virtual Finance Adding to Malta’s attractiveness for investors looking at the country as a destination for investment in this area is a digital infrastructure which is second to none, with Malta being recognised as among the bestconnected countries in the world. The country is due to achieve full nation-wide fibre internet coverage by the end of 2024, and all three telecoms providers have embarked on multi-million euro initiatives to future-proof the islands’ digital connectivity, giving investors peace of mind that their projects’ requirements, no matter the load, can be met. Malta Digital Innovation Authority At its launch in 2018, the Malta Digital Innovation Authority (MDIA) was the first regulatory body in the world focused on blockchain technology, Initial Coin Offerings (ICO) and virtual currencies. The MDIA is tasked with certifying DLT platforms and smart contracts while handling the voluntary registration of technology arrangements. It works hand-inhand with the MFSA, which licenses and supervises virtual financial assets exchanges, with the aim of bringing order to a previously unregulated market to ensure consumer protection and market integrity. The MDIA was established when Malta passed the Virtual Financial Assets Act, making it the first jurisdiction to license crypto operators. Since then, the global crypto sector has experienced a whirlwind of events, with the last couple of years being particularly tumultuous as major exchanges collapsed amidst fraud allegations. Throughout all this, the solid Maltese framework ensured that no locally licensed operators were caught up in the scandals rocking the industry. The EU’s own landmark legislative package for the industry, which was approved and entered into force in mid 2023, draws extensive inspiration from Malta’s framework, ensuring that crypto operators based in Malta have little to no additional work needed to comply with the bloc’s new rules. As global developments continued to open new fields to commercial potential, its remit has expanded, with the MDIA now spearheading Malta’s push to establish itself as a centre of excellence in artificial intelligence. With a mission to support innovation, not stifle it, the MDIA supports individuals and organisations in their journey to master and utilise AI. At publication date, the MDIA is working on establishing a European Digital Innovation Hub in Malta. This will bring to the country a range of services, including incubator and accelerator programmes, and a hightech workspace allowing companies to test the viability of their ideas before committing to further investment.
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Mapping Out a Vision for the Future
Longevity in business is rooted in effective succession planning, with company founders and management ensuring their legacy is passed down to the next generations. And, as Dr Ruth Agius Scicluna Buttigieg, the Head of Advisory and Tax Compliance at FJVA, and Dr Andrew James Abdilla, the firm’s Senior Manager in Tax Advisory, tell Rebecca Anastasi, the cornerstone to future-proofing an enterprise is to chart the course today, rather than tomorrow.
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think that if you’re really passionate about your business, then you need to map out the journey, take stock of what you have, and preserve what has been built,” says Ruth Agius Scicluna Buttigieg, Head of Advisory and Tax Compliance at FJVA, a company services provider offering various solution-based services such as corporate, regulatory and tax services, corporate structures and restructuring, residency, citizenship and relocation, and family business support services, among others. FJVA was established in 1998 by Francis J. Vassallo together with his daughter Adriana Camilleri Vassallo. The decision to set up FJVA came after Mr Vassallo’s tenure as Governor of the Central Bank of Malta ended, which was preceded by decades of experience with Chase Manhattan Bank. In 2019, Mr Vassallo passed the baton to Mrs Camilleri Vassallo, giving the firm invaluable experience with all the factors in play when one generation
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makes way for another: “For us, succession planning is not something we learnt from theory,” says Dr Agius Scicluna Buttigieg. “We have seen transition occurring here at FJVA. Having been through the challenge ourselves, we are better positioned to use our experience as a tool to help guide our clients.” The firm employs a commonsense approach to help businesses establish an enduring legacy, with leaders often seeking to solidify the investments they’ve made in their companies – financial, emotional and practical – for the longer-term. Survival is, undoubtedly, the privilege of those firms that think ahead and design an effective succession plan for their company. “There are a multitude of opportunities and benefits to succession planning,” says Andrew James Abdilla, FJVA’s Senior Manager in Tax Advisory. “Just to list a few: we’re looking at protecting the business, growing it and its assets. There is the preservation of harmony,
particularly when the company is family-owned. Moreover, by planning for the future, you can reduce or eliminate certain estate taxes, while also enabling the current leadership to have a hand in shaping the future of the business they’ve worked so hard for,” he explains. Dr Agius Scicluna Buttigieg concurs, adding that “the owner can adjust the plan” once it is in place, and, therefore, “protect their assets, and be agile enough to adjust to circumstances, without letting any adverse events have a huge impact.” Moreover, in terms of timing, “it’s never too early to plan. No one has a crystal ball, so it’s better to look ahead early, to have the necessary time to adjust, rather than leaving it too late – so late, in fact, that you cannot implement the plan you want, or see it come to fruition in the way you would want. So, think ahead, then identify any changes you may need, and adjust accordingly. I would advise business leaders looking to ensure the longevity of their companies to be on the
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which arise in succession, since this varies according to the jurisdictions and the parties involved.” Dr Agius Scicluna Buttigieg expands upon these points: “succession in family businesses typically involves two aspects. Firstly, we need to find ways of allowing the current owners to transmit their ideas and values, while also embracing change and new realities. There has to be a bridge between the old and the new; there has to be an element of passing things on. Then, secondly, we need to find ways of integrating the management team, so they can contribute to the family business, even if they’re not related to the founders. Each family is very particular, and this is where our strength as a firm comes in, since we believe that there is no one-size-fits-all solution. So, we sit down with the family, speak to them, understand the business, and discuss the wishes of the family members – not just the current owner but also those of the next generation – so we can devise what works for that particular family,” the Head of Advisory states.
“No one has a crystal ball, so it’s better to look ahead early, to have the necessary time to adjust, rather than leaving it too late.” Dr Ruth Agius Scicluna Buttigieg lookout for talent who can contribute to the business, and incentivise them to make sure they remain in the long-term,” she insists. This is particularly crucial in Malta, say Dr Agius Scicluna Buttigieg and Dr Abdilla, due to the prevalence of family companies. “We have clients who enquire about the possibility of retaining control while implementing a balanced ownership structure,” Dr Abdilla asserts. “There are indeed ways of retaining control over certain management functions of a specific organisation through vetoes and supervision, for instance. In addition, here in Malta, there are other challenges with regards to crystallising certain taxes, and how to pay for those taxes
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In other words, Dr Abdilla continues, “we have to distinguish between ownership succession and the management of a business organisation.” These are two sides of the same coin, and “need to be looked at cohesively. Succession planning isn’t just accomplished by passing on the ownership – or the wealth – of an enterprise to another entity or individual, but we need to ensure that the plan takes into account the succession of the management of the organisation. This will ensure the overall sustainability of that particular business,” he explains. This process entails determining “the strengths and skills” of the parties involved, Dr Agius Scicluna Buttigieg adds; a task which can be facilitated through FJVA. “You can then identify how to take that forward,” she says. Cataloguing other assets – investments, equipment and premises, for instance – will also “enable the business to diversify, grow the assets it has in hand, and build further.” Such a strategy will also allow the company’s management and leadership to “create a balance between the active business and the long-term preservation of assets,” she says. Innovative structures also support succession planning. “You could, for instance, use a Maltese private interest foundation. This is an effective tool, and is, in some cases, more appropriate than a trust, since it’s an autonomous entity, similar to a company, which manages your assets, but instead of shareholders you have beneficiaries,” Dr Abdilla explains. Dr Agius Scicluna Buttigieg
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“Succession planning isn’t just accomplished by passing on the ownership – or the wealth – of an enterprise to another entity or individual, but we need to ensure that the plan takes into account the succession of the management of the organisation. This will ensure the overall sustainability of that particular business.” Dr Andrew James Abdilla
provides further detail: “there’s also the possibility of having segregated cells within the same foundation, allocating certain assets to certain cells, with the beneficiary of that cell being a family member. So, while the assets are segregated, they are all still held within the one family umbrella, so to speak,” she says. Moreover, returning once again to the question of control but, this time, in the setting up of a foundation, “a regulated administrator, such as FJV Fiduciary Ltd, part of the FJVA Group, can provide peace of mind, since everything will be done in accordance with the statute of the entity and its legal obligations,” Dr Agius Scicluna Buttigieg continues. A business may also decide to open a second foundation/a cell within the same foundation to incentivise management or key people within the structure, “therefore creating a vehicle for them to benefit directly, and one which is not based solely on a system of bonuses. So there’s more commitment shown on behalf of the owners; there’s something more solid and tangible,” she says. Elaborating further on how succession planning aids the development and consolidation of investment opportunities, Dr Abdilla states that “a particular owner or the management might have identified a set of investments, and, if there is a proper vision, and a proper plan to accompany that vision, then we at FJVA are able to understand what the successors could have in mind for the future of the business. This will help us enable the business to establish certain investment horizons, as well as incorporate new ideas, all of which can then be translated within a proper structure.” Businesses in diverse industries will require a specific set of skills and expertise which fit that particular sector, Dr Agius Scicluna Buttigieg continues. “Changes might be happening within a particular industry. This is why the vision needs to be well-planned out according to the context within which the business is working and why there needs to be an understanding of these contexts,” she says.
Indeed, Dr Agius Scicluna Buttigieg states, “our motto is that businesses need to be prepared. The more they’re prepared for the future, the more they’ll be able to adapt to changes and to anything which affects the business.”
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A Business-friendly Approach, on the Doorstep of Europe Cenk Kahraman, CEO of Finance Incorporated Ltd, has been investing in Malta for almost two decades, on both a personal and professional basis, having moved here in 2005. He joined the firm in 2017, and continues to steer it to the present day. Today, as he tells Rebecca Anastasi, he sees the island’s pro-business attitude reaping dividends.
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“I
’ve been living in Malta for 18 years, and I must say, things have changed, with the island becoming more investor-focused. There is less red tape, and stronger decisions being taken at the governmental level,” says Cenk Kahraman, the CEO of Finance Incorporated Ltd (FIL), a financial services firm set up in 2012 operating from the jurisdiction and which today boasts of having 70 employees. In 2018, the firm launched Paymix Pro, a fast, transparent and accessible corporate financial solution that offers accounts, payments and cards. As a result of the favourable conditions, the firm’s leadership is committed to further entrenching the business on the island as well as to further its investment in the country by opening a new office space. The company has “strategic plans to increase our footprint here in Malta, although there are some physical limits, due to the size of the market. However, we’re looking at consolidating ourselves as a global player, rooted here,” the CEO continues. Investing in Malta can take two main forms, he says. “Firstly, there are people or companies who invest in Malta without having a presence here. I’m not talking about opening accounts or establishing holding companies. I’m speaking of making actual financial investments into Maltese businesses; there’s also the possibility of becoming one
of the foreign shareholders, for instance, on the board of a Maltese firm. The second mode of investment is by setting up offices on the island, employing talent here as well as bringing people over to Malta to create organic growth.” Mr Kahraman believes the latter belies a deeper engagement with the potentials that the jurisdiction can offer – an undertaking which FIL has taken on board. “We believe we’re doing a good job in expanding our business here, promoting our services across Europe and the globe. We meet with stakeholders and colleagues in exhibitions, in seminars and in face-to-face meetings, and, so, from that perspective, we believe in Malta’s potential, and in attracting investors to the island,” he says. The ease of doing business locally is part of the attraction, he says. “The policies which have been adopted by the Government are fairly unique. In Malta, I believe the Government is focused on attracting business.” Coupled with this, he continues, “the island is a hospitable and friendly regime within the European Union, so you get the full benefits of investing in the EU market. This means you also get access to the wider continent, as well as legal protection since the regulations in place in the jurisdiction are harmonised with the rest of the bloc. This won’t change. It will remain stable,” the CEO asserts.
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“The policies which have been adopted by the Government are fairly unique. In Malta, I believe the Government is focused on attracting business.” The most profitable sectors are construction – “because it’s a small island, and land is limited; all construction needs to move upwards, and go vertical; this leads to the need to engage specialist and highly-skilled construction firms” – as well as shipping and aviation, with the island’s geographical position being key in this respect. “Malta is in the middle of the Mediterranean, close to all the southern European states, as well as North Africa, so there are also opportunities in this area,” he says.
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Nonetheless, there are some challenges which have recently emerged, as well as others which continue to persist. “The cost of living is rising, and, as a result, the workforce is becoming more expensive. This is also a small local market, so whoever is investing in Malta needs to keep an international perspective.” Local decision makers need to “ensure that investors or companies coming to Malta have access to larger markets, and that their interactions with these markets are appropriate,
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perspective of a stakeholder within the financial services sector – that the Central Bank of Malta and the Malta Financial Services Authority (MFSA) need to continue to take a more proactive role in easing processes,” he insists. Despite these issues, however, Mr Kahraman says that he foresees continued growth within the financial services industry due to “Malta’s stable system; it is one of the strongest economies in Europe.” He refers to the FATF greylisting of the jurisdiction, which ended in mid-2022, and which, “in the shortterm was damaging, but, in the longer-term has provided Malta with the tools needed to ensure better outcomes.” Indeed, the CEO asserts that, as a result of its solid foundations, “Malta will continue to benefit from the over-saturation of markets elsewhere. For instance, a few years ago, Lithuania was the place to go for FinTech, but now they’re overloaded, so new investors, with new ideas, are heading to Malta. We do need to be smart with these opportunities, observing where others have managed, and where they have failed, so we can handle the influx properly and more efficiently,” he says.
and Maltese financial institutions must also be geared up for this,” Mr Kahraman states, referring to the banking sector on the island, which has, of late, been accused of enforcing convoluted and time-consuming processes – an issue, indeed, which FIL’s product, Paymix Pro, seeks to address. The ease of accessing residence permits also needs improving, in his view. “This has actually improved over the past few years and stabilised through a trial and error process. Malta is a small country and does not have access to the necessary human resources, so talent needs to be imported. However, if you had to tell a potential candidate that they need to wait for months on end for a residence or a work permit, you’re going to put them off. These are situations we have to avoid. I also think – from the
Continuing to look ahead, Mr Kahraman asserts that over the next few years he predicts more investment being committed to sustainable technologies. “I believe Malta will play an important role in this arena. Frankly, I don’t see there being the influx of iGaming companies there once was. However, there will be other favourable industries. I think the financial sector will keep playing a dominant role in attracting FDI; companies can be created here, with people employed remotely, and with ideas patented on the island. This will put the country on the map within various niche industries which focus on innovation,” he concludes.
“Malta will continue to benefit from the over-saturation of markets elsewhere.”
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CHAPTER 6
Industry
Malta’s International Investment Guide
Toly Malta Factory. Photo: Toly
MaltaInvest2024
Overview
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iven the inherent limitations imposed by Malta’s small size, casual observers may be forgiven for thinking that the country’s economy depends on tourism and those sectors that require a great deal of regulatory dexterity and jurisdictional sovereignty, like the financial services, iGaming, and ship and aircraft registration segments covered elsewhere in this publication. Many are in fact surprised to find, chugging away in industrial estates and office complexes afar from the main sights, a robust and innovative mix of enterprises engaged in the production of a vast array of goods. Going back to Malta’s size, it is obvious that the country is not especially suited to large-scale, mass production of just any product. Where it does excel, however – and where savvy
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investors have long smelled opportunity – is in high value-added production using the latest technology and requiring a significant degree of training. In fact, among Malta’s largest exports one finds pharmaceuticals, chemicals and microchips, made by companies which prize skilled labour in a setting in close proximity to major European markets. Manufacturing companies based in Malta produce a mix of intermediate and finished goods, the latter for both businesses and consumers. From plastics to drones, sonar devices to medicinal cannabis, as well as a large variety of industrial components, the country’s factories and laboratories form an integral part of the global supply chain for products that require intensive capital inputs in equipment and people alike.
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Top Exported Goods (2022) in € millions Air and spacecraft parts Packaged food Plastics
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Optical and photographic instruments Toys, games, sports equipment Organic chemicals
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Machinery, mechanical appliances
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Fish 274 Printed material 283 Pharmaceuticals 364 Electronics 1007
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Source: National Statistics Office
Meanwhile, the digital products and services ecosystem continues to go from strength to strength, with Malta acting as a development hub for a wide variety of software solutions. Companies based in Malta have found particular success in developing and implementing enterprise application software.
The knowledge-based nature of Malta’s industrial sector, and more generally, the broader economy, means that there are also plenty of opportunities for those providing ancillary services. These include consultants with expertise in any of those sectors currently experiencing rapid growth, as well as providers of digital products and services essential for smooth business operations.
As the country looks to the future, more focus is being placed on industry with a vision aligned to the twin digital and green transitions currently gathering steam. Companies and investors in tune with Malta’s roadmap to a future-proof economy will find plenty of support from local authorities, which are known to strike the right balance between being practical while adhering to the strictest EU and international standards.
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Manufacturing
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Photo: Malta Enterprise
alta’s productive sector saw double-digit growth through 2023, an impressive feat considering that it experienced no slowdown during the height of the pandemic and the ensuing shipping crisis, registering year-on-year growth even during that period of global difficulty. This industrial expansion is reflected in its industrial space, which is increasing rapidly to account for the demand. New factories come online and fresh investment pours in, with the sector set to continue booming as the European Union rolls out new initiatives to stimulate production across the continent.
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Manufacturing is one of the main sources of foreign direct investment in the country, and international manufacturers find in Malta a well-developed infrastructure on the doorstep of Europe, with excellent connectivity to all major regional markets. Among those seeing Malta as a natural home for their production facilities are companies making high value-added products for export to the Single Market and beyond. Welcomed by receptive authorities and a package of incentives, including the allocation of industrial space, manufacturing undertakings also find willing partners in the University of Malta and the Malta College of Arts, Science and Technology (MCAST), which additionally bring to the table considerable expertise in making the most out of state and EU funds.
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Manufacturing companies establishing a base of operations in Malta can rest assured that their facilities will be manned by the right personnel, with the Maltese often praised for their conscientious approach to work, and their creativity in problem-solving. Long touted as a low-cost economy, Malta’s cost of living and doing business have converged close to the European mean, although it remains less expensive than West Europe and most European capitals. The support extended by Government plays an important role, ensuring that Malta remains competitive in those areas which are a priority for national development. Companies that have chosen to set up operations on the islands include industry leaders from the USA, the UK, Germany, France, and Italy, whose high standards are met and exceeded. In the wake of the widespread supply chain disruption seen in 2022 and the geopolitical ramifications of Russia’s invasion of Ukraine, the concepts of near-shoring and friend-shoring have arisen as ways to mitigate an increasingly risky global trade environment. Major economies and large companies alike are realising that security of supply of critical products and components can no longer be taken for granted. As boardrooms increasingly take these factors into account, Malta’s attractiveness as a stable EU member state with a strong economy is expected to continue to grow.
What do Malta’s factories produce? The country’s manufacturing industry today is highly diversified, with much of it dedicated to the production of components for, among others, the electronic, engineering, automobile, and chemical industries. Some of the main products and fields of operation of Malta-based manufacturers include:
Automotive components
Boat components
Circuit boards
Food and beverages
Injection moulding and tooling
Medical devices
Petrochemicals
Pharmaceuticals
Precision engineering
Seals
Security printing
Semiconductors
Switchgears
Toys and games
Custom-engineered and applicationspecific small-batch products
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Photo: David Mallia - Malta Enterprise
MaltaInvest2024
Pharmaceuticals and Life Sciences
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alta exports over €500 million in pharmaceuticals and chemicals each year, making it one of the major players in the European medicines market. Companies in this sector benefit from the short distance to key markets, Government support and open dialogue between industry stakeholders and education providers aimed at developing the potential of the country’s human resources. Producers of generic pharmaceuticals have a particularly strong presence, with the country’s broad interpretation of the ‘Bolar exemption’ providing unparalleled speed-to-market. Malta is one of the few EU countries to fully recognise the research exemption of the Patent Cooperation Treaty and European Patent Convention, thereby allowing the development of generic drugs prior to patent expiry, as long as they are not commercialised. Therefore, a generic drug can be manufactured, tested and approved while the competitor’s patent is still in effect, enabling generic
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pharmaceutical companies to bring their product to market without delay upon the patent’s expiry. The Malta Medicines Authority is the local regulator, and is much respected both within the EU as well as further afield. As a European reference state, Malta, through the Malta Medicines Authority, is also very attractive as a jurisdiction for the registration of nonEU produced pharmaceuticals for batch release, testing and validation, allowing them to be marketed across the EU with a trusted seal of approval. More affordable alternatives exist, but this is one sector where cutting corners is not advised. While some states provide cheaper registration, many of these then charge an export tax on every unit exiting the country, whereas Malta charges no such tax, making it the preferred choice for large companies with a significant amount of exports.
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Local Insight
Meet Sean Wismayer Sean Wismayer is Chief Operating Officer at Pet Nutrition House, Malta’s very own success story in the pet food segment. Launched in 2010, it is present in more than 85 markets in Europe, Africa and Asia, with expansion to the Americas slated for 2024. Pet food is, safe to say, not exactly the first thing one would expect to find being produced to a high level in Malta. Yet Pet Nutrition House does just that. What are the benefits of having a manufacturing hub in Malta? Establishing a pet food manufacturing hub in Malta has allowed us to capitalise on the region’s abundant Mediterranean ingredients, renowned for their health benefits, such as bluefin tuna, vegetables and fruits. Malta’s advantageous geographic location facilitates efficient distribution and market reach, enhancing the company’s competitiveness in European, North African and Middle Eastern markets. Additionally, Malta’s adherence to EU regulations ensures the quality and safety of manufactured pet food, boosting consumer trust and confidence, especially in international markets. .
Pet Nutrition House recently inaugurated a new factory in San Ġwann. Did you find any assistance for this project? Our project has been fortunate to receive valuable governmental assistance. Major contributions have come from Malta Enterprise, Trade Malta and the European Union through the European Regional Development Fund. These crucial supports have played a significant role in advancing and enhancing our project, and overcoming logistical challenges associated with operating from an island state. Moreover, the subsidised prices of fuel and electricity have also played a key role in our competitiveness on the world market.
How useful are Malta’s geographical position and logistics connections in these export-based endeavours? Malta’s strategic geographic location plays a pivotal role in our operations and is a cornerstone of our logistical efficiency and
Malta’s advantageous geographic location facilitates efficient distribution and market reach.
market reach. The highly competitive shipping rates for exports from Malta significantly benefit our operations, especially within the pet food industry where the cost-to-weight ratio of the product is typically low. These favourable rates have a substantial impact on the landed price for our distributors, enhancing our overall competitiveness.
What are your thoughts on the ease of doing business in Malta? It is evident that the Maltese Government has effectively implemented policies aimed at bolstering trade and maintaining competitiveness on the global stage. One noteworthy initiative has been the subsidisation of electricity and fuel, pivotal cost components for industry. In comparison to other countries, local rates for these resources remain highly competitive, offering a valuable advantage. Another key factor contributing to the maintenance of lower production costs has been the strategic importation of labour from other countries. This includes both specialised and unspecialised labour, as a result of which companies have benefitted from lower wage levels compared to domestic labour. The infusion of international talent has not only enriched our skilled workforce but has also played a vital role in managing overall operational expenses. While there are indeed numerous advantages to conducting business in Malta, it’s important to acknowledge the challenges we have encountered. Being the pioneer manufacturing plant in the pet food industry here in Malta has presented unique difficulties. One notable challenge is the limited availability of locally sourced raw materials specifically tailored for this purpose. Moreover, the production of dry pet food, a highly complex product, necessitates the importation of various raw materials from neighbouring Mediterranean countries. This dependence on imports for critical components of our processes adds an extra layer of complexity to our operations and adds supplementary handling costs. Packaging for our products must also be imported from overseas.
What advice would you impart on investors considering Malta for their industrial venture? Achieving success in Malta is about leveraging its unique geographic advantages, aligning with international standards, and utilising governmental support to drive innovation, ensure product quality, and facilitate business growth and market expansion.
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Local Insight
Jean Pierre Attard is Executive Chairman of INDIS, which hosts over 750 tenants in its 15 industrial estates spread across Malta and Gozo. The state-owned agency provides space for companies of all sizes producing a wide variety of finished and semi-finished goods and components. What does INDIS offer foreign investors? The role of INDIS is to provide industrial property to investors following a thorough evaluation process carried out by Malta Enterprise in order to ensure that the business plan presented by the company makes economic sense for the country. During the evaluation stage, INDIS works closely with Malta Enterprise to ensure the availability of property or industrial space that would satisfy the criteria required for the investment. Currently, INDIS offers two options to potential investors (subject to availability): ready-built premises that can be modified to some degree to meet the needs of the investor, and industrial space on which the investor can build the property in alignment with the requirements of the industry they operate in.
How has Malta’s manufacturing sector developed over the last years? Manufacturing has been a mainstay of the Maltese economy, with well-established roots going back more than 60 years, contributing to a spillover effect on other industries that grew along the primary manufacturing industry. Thanks to the islands’ ability to adapt to changing circumstances, and to the support that the various governments have provided, this sector has transitioned over time, shifting from largely low-cost, labour-intensive industries to a vibrant and competitive sector that focuses on innovation in products and processes.
Malta’s size has worked in its favour in attracting foreign investment to the country.
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We have also seen an increase in knowledge-intensive sectors with fewer limitations with regards to the logistical aspect, as well as on the size and the design of the premises they operate from. These sectors have become key revenue drivers these past few years. This industrial development is also of significant importance for Gozo to continue increasing its competitiveness as a separate investment destination. Advancement in technology, such as artificial intelligence, 3D printing and other innovations will surely present new realities for businesses operating within INDIS industrial parks, and this could also give rise to new business models. In light of this fast-changing industrial scenario, INDIS is looking at a reorientation of its strategy to be prepared to meet the needs of emerging industries and to continue providing the necessary support to existing tenants.
Does Malta’s small size have an impact on the industrial activities conducted on the islands? Malta’s size has worked in its favour in attracting foreign investment to the country. We can boast of many manufacturing concerns with world-renowned reputations that have strong roots in Malta, supplying products to some of the most prestigious international brands. Not only have these companies retained their base here for decades, but they have also significantly expanded their operations. The proximity and short travelling time from INDIS industrial parks to the main airport and freeport, the good level of education of the Maltese workforce and our use of English have been key factors in attracting such investors. Together with the ease of doing business and the continuous support the Government has given, these have been the determining factors that have maintained a healthy industrial base that has continued to develop and grow over time. While we shall continue nurturing such industries, rapid technological developments will also be beneficial for Malta, helping it to diversify its economy and remain an ideal base for the establishment of new industries, especially those operating within the knowledge-based field. INDIS is committed to staying at the forefront of this change and being one of the driving forces of the Maltese economy.
Photo: David Mallia
Meet Jean Pierre Attard
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Life Sciences Park Malta’s Life Sciences Park is a state-of-the-art complex designed to facilitate research and development in the sector by allowing companies to commence operations with minimal preparation. Located just outside Mater Dei Hospital, Malta’s main general and teaching hospital, and a short walk away from the University of Malta, its location encourages organic synergies between operators and academia. The establishment includes and offers biology and chemistry lab spaces ranging in size from 100sqm to 300sqm, meeting rooms and a secure facility capable of accommodating specialised activities, such as storage of flammable liquids and gases, as well as general and hazardous waste. Another building is dedicated to digital services, from imaging to software applications to data interpretation. Other facilities and services include gene sequencing and analytical services units, production of human proteins from genetically modified plants, cyclotron radionuclide production for PET screening, and clinical testing and reporting of new chemical entities (NCEs) and generics.
Medicinal Cannabis Malta was among the global frontrunners in the sector when it introduced a framework for the production and distribution of cannabis for medicinal use in 2018. The various regulatory and technical hurdles involved in the export of the controlled drug meant that it took a few years for the industry to really get up and running, with the first medicinal cannabis products made in Malta finally making their way to patients abroad in 2022. A number of companies now use the country as a base for their research and production facilities, fully in line with Good Manufacturing Practice (GMP) standards. Apart from the regulatory certainty provided by legislation, the presence of a mature pharmaceutical sector has also proven helpful to the development of an industry that is yet in its infancy, but which is growing by the month. As the global market for medicinal cannabis is expected to reach €25 billion by 2026, the opportunities for growth are nothing short of staggering.
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Information Communication Technology
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alta has a well-deserved reputation as a hub of software engineering and enterprise application software. It is home to a significant number of small and medium-sized firms creating and managing specialist solutions for a broad range of industries, including financial services, healthcare, aviation, manufacturing, oil and gas, retail, and more. Meanwhile, large firms have also recognised the country’s potential, with many global players active directly or via local partners. Central to this success is not only Malta’s status as the European country with the best internet connectivity, but also a highly skilled local workforce and a thriving IT education industry providing training in all the major technologies essential to the modern digital economy, including Microsoft, Oracle, Adobe, Cisco, Amazon, Dell, VMWare, Google, and HP services. Another benefit is the alignment of local privacy and security legislation with EU standards, reducing bureaucracy and compliance costs. The sector is developing rapidly worldwide, with the major developments in artificial intelligence (AI), Distributed Ledger Technology (DLT, better known as blockchain), and the Internet of Things (IoT) mirrored in Malta. These areas are subject to innovation at breakneck speed, and Malta is well-positioned to capitalise on them thanks to the regulatory frameworks enacted to put investors on a sure footing, and the active support for related investment extended by the authorities. Companies active in these areas locally have created, for example, AIpowered chatbots for the health sector, intelligent energy saving systems for factories, and IoT solutions for the aviation industry. Such success stories highlight the synergies made possible through the presence of potential partners and customers in a wide variety of industries, which make Malta particularly attractive for investment seeking to provide innovative technologies for sector-specific solutions. With the design and implementation of tailor-made, software-based solutions being a crucial part of the 21st century economy, this sector is primed to continue growing.
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Photo: Nikada - iStock
EdTech A niche that is gaining traction is educational technology, or EdTech. The sector is still in its infancy, but is poised to experience rapid growth as investments accrue, helped in no small part by the establishment of a Maltese base by a startup accelerator of global renown. SuperCharger Ventures is the largest EdTech-dedicated accelerator ecosystem with locations in London, Singapore and Malta, with the local set-up offering to cover salaries, reimburse expenses and provide access to funding and soft loans. Partnered with leading Maltese software companies and educational institutes, the programme is an exciting new opportunity that offers a glimpse of what the future holds as digital innovation is unleashed. At publication, the accelerator is accepting applications for the second cohort of participants in its 12-week programme.
MaltaInvest2024
Local Insight
Patrick Hulsen is a serial entrepreneur and investor leading the operations of SuperCharger Ventures in Malta. Started as a FinTech-focused accelerator in 2016, the firm pivoted to education technology (EdTech) during the COVID-19 pandemic when the field’s vast potential became clear. SuperCharger Ventures is present in London, Singapore, and now also Malta. What drew the company to Malta? SuperCharger Ventures has a contract with Malta Enterprise that will see 150 EdTech companies brought to the islands. Before this, we ran online accelerators through London and Singapore, but the scale of the opportunity here in Malta led us to develop our first physical accelerator, a 300sqm space that is welcoming cohorts of startup founders and giving them the chance to see what the country brings to the table. So far, the results are very promising, with just over a third of the late-2023 cohort already starting the incorporation process.
Why is EdTech important? The rapid pace of technological innovation means that the knowledge and skills people have are quickly becoming redundant. It has been estimated that most employees will need to retrain around five times during the course of their working lives. Upskilling an entire population simply cannot be done using traditional methods of education delivery. This is where EdTech comes in, because combining education and technology allows for much broader scope and reach. The speed of progress in the field of AI will likely be the single largest boost to efficiency ever seen, but the flipside is that those who do not adapt will be left behind. What that means is that countries need the massive immediate adoption of EdTech in order to remain competitive on the world stage. Otherwise, they will see relative productivity decline, leading to the loss of jobs.
How has your experience in Malta been so far? Malta is an incredibly welcoming country. During the time we have been here, we have found a lot of open doors. Not only from Malta Enterprise, but also from local partners in tech and finance, and from educational institutes. What I like is that everyone is always focused on finding solutions, rather than dwelling on the problems. So, we have been able to overcome any hurdles, and I believe Malta has a fantastic future ahead of it in building a very strong startup ecosystem. The country is very well-connected, flight-wise, with the rest of Europe, and it’s a very nice country to live in, with an incredible wealth of cultural heritage. It’s also bustling – there is always something going on. We are very happy to be here.
What makes Malta attractive for startups? The reason companies come to Malta depends a bit on whether they are already in the EU or not. For those outside the EU, it’s pretty obvious that by being based in Malta you have a foot in Europe, with all the benefits that brings, from credibility to access to the Single Market. For companies already inside the EU, one of Malta’s main attractions is its size. The country has managed to turn its small market into a strength, since you have the entire ecosystem of a country in such a small area. All the big international companies are here, but you have quick access to all company directors. Many companies also use Malta as a test bed for innovation, allowing them to gain commercial traction and build a solid practical case that makes it much easier to sell their ideas abroad.
During the time we have been here, we have found a lot of open doors.
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Photo: Bernard Polidano
Meet Patrick Hulsen
CHAPTER 6 Industry
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n this publication, we have strived to present an overview of Malta’s main attractions for investors, but it is challenging to summarise Malta’s economy in a few chapters. The economy has diversified considerably over the years, creating opportunities for investors of all kinds. We have discussed some of the main sectors on their own merit, but there are many more besides. Below, you can find, in a necessarily concise format, some of the other industries that make up the Maltese economy. Each sector involves a kaleidoscope of companies, local and foreign alike, drawn to Malta by the islands’ central position, relatively low-cost base and the many targeted incentives designed to stimulate economic activity. The use of English and membership in the European Union, as in other sectors, are crucial, while the existence of a highly educated and skilled workforce ensures that the right labour resources are available to turn projections into reality. These qualities are further maximised through a nimble approach to policy and regulation, a sometimes undervalued benefit which has proven pivotal to the development of many economic pillars. While every effort has been taken to provide a well-rounded account of all the major sectors in which opportunity for investment is ripe, it is impossible to provide a truly exhaustive list. For potential investors engaged in activities not mentioned below, the key takeaway should perhaps be that Malta is a forward-looking economy with a unique set of characteristics, amply covered in this publication, which may be the right fit for your needs. Its small size is a feature, not a bug, and it is leveraged to the full by public and private actors alike. You can rest assured that local partners will do their utmost to make your investment a profitable one, and the policy and regulatory frameworks are underpinned by remarkable political and economic stability.
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Audiovisual Production The stunning landscape and architectural heritage that make Malta so popular with visitors have also proven to be versatile backdrops for a wide variety of audiovisual productions. The country has been attracting iconic productions for decades, with fans of classic movies perhaps remembering Midnight Express (1978) and Popeye (1980). For the Academy Awardwinning Gladiator (2000), an entire replica of Ancient Rome, Colosseum and all, was built in Malta Film Studios, the islands’ main production facility, which has been operating since 1964 and has serviced over 200 productions. Steven Spielberg’s Munich (2005), Angelina Jolie’s By The Sea (2015) and Michael Bay’s 13 Hours (2016) were also largely or entirely shot in Malta. Other popular productions include Game of Thrones (2011), Captain Phillips (2013), World War Z (2013), Jurassic World Dominion (2022), and Napoleon (2023), and many others besides. In Malta, producers and directors find a well-developed infrastructure and several local production houses attuned to Hollywood’s needs. Of particular note is Malta Film Studios’ special effects water facility, including one indoor tank and two of the largest exterior water tanks in the world. These enjoy a natural horizon through their location on the coast, and the studio is equipped with a vast range of water special effects equipment, making it ideal for productions set on the open waters. Apart from the world-class infrastructure and beautiful locations, all within a few minutes’ drive, Malta also offers producers a generous cash rebate of up to 40 per cent of eligible expenditure. Such expenses include accommodation, catering services, props, equipment, vehicles, craft service, per diems, computer equipment, and more. The entity administering these incentives and promoting Malta within the audiovisual industry is the Malta Film Commission. Reach out to the team there to find out whether Malta is the right location for your next production.
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MaltaInvest2024
Aquaculture Aquaculture is another major industry, with the produce from Malta’s fish farms largely sold in Japan’s famous fish markets. Indeed, Japanese and Korean investors were among the first to recognise Malta’s potential as a fish farming nation, illustrating the beneficial impact of far-sighted foreign direct investment. The country is one of the top three Mediterranean producers of the prized bluefin tuna, and the investment in new methods and technologies has also seen Malta emerge as a hub for research and development in the sector, with Malta-based companies now offering their insight through consulting services around the globe. The global fish farming market is expected to expand by around 6 per cent annually throughout this decade, and the sector is witnessing an influx of investment as it strives to feed the world’s growing population while meeting sustainability targets.
field of knowledge through research efforts. Apart from Malta Enterprise, potential investors would do well to get in touch with the Malta Maritime Forum, which brings together all the main stakeholders in the Maltese economy whose operations are tied to the sea, and can help foreign interests by serving as a point of contact with the local sector.
Maritime Services Malta’s maritime sector provides the whole range of services for commercial and leisure vessels alike, including those involved in the oil and gas industry. The jurisdiction’s position as Europe’s top ship registry makes it doubly attractive for those seeking a one-stop shop for all their ship’s needs, whether it is a cruise liner, a superyacht, or an oil rig. Along the main harbours of Valletta and Marsamxett, new opportunities are arising in step with the industry’s evolution to meet 21st century standards, from world-class engineering to discreet concierge services. As the sector goes from strength to strength, there has been an increase in market gaps ripe for investment, primarily in the provision of finance too large to be adequately serviced by local banks. Meanwhile, Malta’s recent emergence as the world’s number one jurisdiction for the registration of superyachts is turning it into a hub for ultra-high-net-worth (UHNW) individuals, fuelling a need for luxury amenities that has yet to be sated.
A new sector in active development is the unmanned aerial vehicles (UAV) industry, more popularly known as drones. In mid-2023, it was a Maltese pilot who flew the world’s first unmanned cargo drone, taking off from Malta’s airport runway. The use of UAVs in the logistics industry is set to skyrocket, seeing investment from global enterprises keen to find solutions to the last-mile conundrum. Similarly, the opportunities for synergy with the maritime and oil and gas industries are tremendous, with drones expected to revolutionise commercial transport during this decade.
Blue Economy Overall, Malta’s seas remain a relatively underutilised resource, and there is growing awareness in the country that the next big economic sector could arise in the blue waters surrounding the islands. This phenomenon is not restricted to Malta; globally, the role of the sea in food production and energy generation is increasingly being considered as a major area of opportunity. In an attempt to stay ahead of the curve in this rapidly growing sector, Malta has launched the Blue Med Focal Point, a point of contact and support for companies that want to develop a sustainable blue economy and create innovative new niches in the broader maritime sector. Through the Blue Med initiative, the Government has also allocated €4 million to attract startups, scale-ups and SMEs with innovative solutions in the fields of blue tech and biotechnology, the mitigation of ocean pollution, blue economy innovation, and blue renewable energy. The opportunities are as vast as the sea itself, and with this being considered a priority area for development by Maltese authorities, there is a raft of incentives investors can make use of, including a number of dedicated programmes aimed at deepening the
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Aviation Aircraft maintenance, servicing and refurbishment works go on day and night in hangars situated all around Malta International Airport. The increasing number of airlines obtaining Air Operator Certificates and registering aircraft in Malta find an ecosystem of companies ready to service all their needs. In fact, two of Europe’s largest airlines, Lufthansa and Ryanair, have dedicated bases in the country, testament to Malta’s ability to punch far above its weight when it comes to business.
Health Education and Tourism Malta’s private health operators are known to provide exceptional treatments at competitive rates, receiving patients from Europe and North Africa who often welcome the use of English, especially when compared to similar health tourism destinations in the region. The industry is as yet limited in size, making it ripe for investment in new treatments and clinical experiences. Relatedly, Malta is slowly growing the field of medical education targeted at international students. The recent opening of a campus of London University’s Queen Mary Barts and the London School of Medicine and Dentistry follows the lead of the University of Malta’s Medical School in providing excellent training to hundreds of students hailing from five continents. Food Production For a country that imports most of the food it consumes, it may seem counter-intuitive that Malta is home to a number of food producers whose products are sold all over the world. The local market being what it is, more and more of these companies are recognising that the best opportunities for growth are to be found abroad. This drive to internationalise is dependent on local partners in the new markets, distributors and retailers alike, making this one area in which foreign investment can benefit the Maltese and their domestic economy alike.
CHAPTER 6 Industry
Local Insight
Meet Svilen Rangelov Svilen Rangelov is the co-Founder and CEO of Dronamics, the world’s first cargo drone airline. Promising to transform the way goods are transported over long distances, it designs, produces and operates the Black Swan aircraft, capable of carrying up to 350kg at a range of 2,500kg, and sells capacity and cargo mobility services. Dronamics started operations in Malta in 2022. What were the factors that contributed to this decision? Malta is a thriving hub for aviation, and as the world’s first cargo drone airline, we wanted to be part of this ecosystem. Sitting on the crossroads of Europe and North Africa, it is an ideal base for long-range cargo drone operations. Living on an archipelago gives the Maltese first-hand experience of the challenges of rapid and reliable goods transportation, creating an appetite for innovative logistics solutions like cargo drone mobility. Meanwhile, the local regulator, the Civil Aviation Directorate, is supportive of innovation, while maintaining the highest standards of safety, and this is very important to us as a pioneer in cargo drone logistics.
The logistics sector is in constant flux, disrupted by shipping limitations, last-mile challenges and rapid technological advances. Where do drones fit in all of this? Very little has changed in the way we move cargo in the last 100 years. We still use ships and heavy-load jumbo jets, serving big hubs, while in the periphery there are hard to reach towns and cities, or islands and peninsulas, where an ‘invisible tax’ on distance exists. Our solution can reach where others can’t or won’t – remote or hard-to-access locations, such as islands, mountainous regions or disaster-stricken areas, where traditional transportation methods may be impractical. Air cargo is unaffordable for most businesses
The local regulator is supportive of innovation, while maintaining the highest standards of safety.
and communities. In fact, only 1 per cent of cargo globally is transported by air, due to cost. We are working towards changing that by offering a solution that is faster, cheaper and greener than what is currently available.
How do you rate the ease of doing business in Malta, and did you find adequate support from authorities? Malta’s business environment is marked by its openness to foreign direct investment (FDI). This is underpinned by supportive authorities, including the Government’s initiatives such as tax benefits and incentives, a strong regulatory framework, a skilled workforce, and widespread English proficiency. In the aviation sector, Transport Malta, the national regulatory authority, enjoys a stellar reputation both nationally and internationally. Its support and robust regulatory framework have played a pivotal role in nurturing pioneering companies such as Dronamics, demonstrating its unwavering commitment to progress. In terms of human resources, as a vibrant aviation hub, it’s no surprise that Malta is full of pilot talent too. Not only did a Maltese pilot conduct our first full-scale flight, we have several Maltese pilots on our team.
What’s next for Dronamics, and where does Malta fit into the picture? Malta holds a central position in our operations, as Dronamics Airlines Europe is incorporated here. Being situated in a nerve centre for aviation like Malta, we are excited to pioneer the integration of cargo drone technology into the broader aviation ecosystem. Recently, we proved our technology with the first successful flight of our full-scale Black Swan cargo drone as we undergo a flight test programme. Dronamics became the first cargo drone airline to obtain IATA (International Air Transport Association) and ICAO (International Civil Aviation Organisation) designator codes, giving us the same recognition as international commercial airlines. We are looking forward to starting our commercial operations very soon, where Greece will be our first market, followed by the rest of the Mediterranean, including Malta.
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CHAPTER 7
Gaming
Malta’s International Investment Guide
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ne industry that Malta can truly claim to have drawn the blueprint for is online gambling. Today, Malta hosts a true iGaming hub, home to over 350 licensed operators – over one in 10 of the worldwide total, including many of the biggest names, the likes of Bet365 and Kindred Group – with an increasingly global outlook, as the sector registers impressive growth year after year. To put things in the right perspective, it is worth noting that the online gaming industry contributes over 10 per cent of the entire value of the Maltese economy, representing an annual turnover of around €1.5 billion. Furthermore, around 50 per cent of the country’s international bandwidth is absorbed by online gambling activities, reflecting the importance of this industry for Malta. Moreover, the
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GiG Beach Office, St Julian’s. Photo: Inigo Taylor
MaltaInvest2024
Overview
industry employs over 10,000 multinationals within Malta’s hub, with the economic spinoff abundantly obvious. The jurisdiction’s unparalleled reputation for efficient and effective regulation stands strong two decades after it introduced the first comprehensive framework for iGaming in the European Union, which remains relevant up to today. The creation of an iGaming hub in Malta has cultivated a thriving ecosystem which acts as the industry’s global nexus where the opportunities for synergy are endless. Meanwhile, the regulator works hand-in-hand with industry players to swiftly react to legal and technological changes, ensuring that Malta retains its position as the undisputed champion of the rapidly growing sector.
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The sector is currently experiencing a period of flux, providing investors and entrepreneurs ample opportunity to create value. A wave of national regulation in Europe has changed the rulebook, with access to consumer markets no longer taken for granted. The increased compliance costs and the fracturing of the European market has put a strain on smaller operators, prompting a wave of consolidation. While Malta retains its primacy in B2B operations, online casino and sportsbook providers are increasingly being forced to obtain different licences for the markets they wish to operate in. Despite the challenges this shift presents, many find that their Malta Gaming Authority (MGA) licence puts them in good stead for their global ambitions, thanks to its reputation and requirements that are typically more stringent than those of other jurisdictions. The same has been noted by Malta-licensed operators that are tapping into the explosive growth of the North American market.
industries the country is actively nurturing. Ever aware of the need to diversify the local economy, Malta has embarked on an ambitious plan to make its mark on other digital sectors. Over the last few years, companies both local and foreign involved in esports, video game development and extended reality have taken root on the islands, with more and more economic players of global renown opening studios and organising competitions in Malta. These sectors are as yet in relatively early stages, but benefit from local authorities’ active support through a range of incentives. To discover what Malta can offer to projects related to these sectors, turn to page 186.
Another benefit of establishing and maintaining a base in Malta is the jurisdiction’s and regulator’s know-how on all aspects of the industry, from the technical, in terms of technology, legislative and business realities, to the social, like responsible gaming and safeguards against addiction. In tandem, Malta’s drive to retain its competitive edge has seen it introduce groundbreaking legislation with respect to Distributed Ledger Technology (DLT), better known as blockchain, allowing operators to accept Bitcoin and other virtual currencies. Similarly, the introduction of a global minimum rate of corporate taxation for companies generating over €750 million in annual revenues, originally slated for 2024, has given Malta’s largest operators cause to think. Although the global nature of the reform is expected to have a neutral effect on Malta’s attractiveness, as pledged by Finance Minister Clyde Caruana, the MGA has made it clear that it is working closely with industry stakeholders to mitigate any potential difficulties and safeguard Malta’s competitiveness as a jurisdiction. In any case, the Maltese Government in late 2023 declared that it would be putting the measure on hold (see p. 43). The skills and experience gained by entrepreneurs, workers and institutions alike over the last two decades in Malta’s iGaming sector have also opened new opportunities in other
Le oV eg as Off i ce , Sli
ema
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MaltaInvest2024
Industry Update
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he iGaming sector has proven remarkably resilient, continuing to grow during the COVID-19 pandemic and the period of high inflation that followed. In 2022, the industry’s gross value added (GVA) grew by 5.8 per cent over the preceding year, bringing the total to €1.5 billion – or just under 10 per cent of Malta’s total GVA. During that year, the MGA issued 31 new licences, an increasing proportion of which relate to B2B activities – whose products and services are sought after by Maltese B2C operators and foreign-regulated operators alike, conscious of the safeguards assured by the Maltese licence. Industry activity in terms of employment also witnessed steady growth in 2022, and 65 per cent of operators said they expected gaming revenue to increase in 2023 – a figure that rises to 74 per cent when looking at 2024. In a sign of continued confidence, most companies also intend to grow their headcount.
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Spinola Bay, St Julian’s. Photo: Ronald Balzan - iStock
New trends that are expected to have an impact going forward include the growing share of player activity on mobile devices like phones and tablets, which in Europe reached 53 per cent in 2022, as well as the development of the metaverse and blockchain in gaming. Regarding the latter, Malta has positioned itself as a thought leader in the regulatory space through a dedicated policy on the use of DLT in the industry. Greater emphasis on personalised gaming experiences is also contributing to the integration of virtual, augmented and mixed reality, an area seeing a surge in investment. The general outlook for the Maltese iGaming industry remains positive, with deep roots in a jurisdiction that is well-placed to pounce on the opportunities afforded by the sector’s global growth.
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Malta: Home Base for the Global iGaming Industry Number of Companies Holding an MGA Licence 400 350
338
332
314
284
Number of Employees Within iGaming
15,774
Total employment in gaming sector
300 250
165
200
141
150
134
10,365
86
Employees working directly with online gaming companies on licensed activities
100 50 0
2021
2020
2019
2022
70% of whom are foreign
No. of companies
representing
5.5% of the total
Additional companies falling under Corporate Group Licence
workforce
Source: MGA. Data corresponds to December 2022 figures.
Source: MGA
Active Player Accounts 36,196,001 40 35 30
22,647,155
35,459,498
36,388,607
26,911,119
(in millions)
25 20 15 10 5 0
2015
2018
2020
2021
2022
Source: MGA
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hat first drew gaming companies to Malta was its trailblazing framework for the industry, and policymakers and the regulator have continued to work assiduously to maintain the jurisdiction’s excellent reputation. The role of clear and effective regulation cannot be underestimated, but it takes more than laws and their enforcement to create a multi-billion-euro industry with a global reach. In Malta, iGaming operators find an EU member state with access to the Single Market, and a communications infrastructure that can support their exacting requirements, bolstered through constant investment. The common use of English and the highly trained workforce also play a role in Malta’s continued attractiveness to market players, as does the streamlined process by which skills not found in the local labour market can be imported. Tying it all together is Malta’s position as a place people love to live, work and play. The easy connections to mainland Europe, the lifestyle opportunities available, and the open and welcoming nature of the locals all contribute to making the 70 per cent of the gaming workforce that is non-Maltese consider Malta as their home.
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bet365 Office, Sliema. Photo: Inigo Taylor
MaltaInvest2024
iGaming in Malta – Where it started, how it’s going, where it’s headed
The sector also benefits from the authorities’ unwavering support. The lasting success of iGaming is in large part a result of the continuous dialogue between private and public players, with Malta championing its development on a local and international level. Local authorities’ willingness to lend an ear to the industry’s needs has led to, among other things, the introduction of preferential tax rates for key employees, specialised education and ongoing investment in the country’s digital infrastructure. Today, Malta boasts a mature ecosystem of operators and support services, including lawyers and accountants specialised in the field, developers, designers, affiliates, customer care outsourcing, search engine optimisation agencies and data centres, required to set up and grow a remote gaming business. As online gaming grows at breakneck speed in North and South America, as well as in Asia, investors and established foreign players alike are sniffing out new opportunities for investment. Conscious of the benefits experienced operators can bring to the table, partners local to these areas are increasingly turning to MGA-licensed iGaming firms to help them on the journey – spurring further merger and acquisition activity.
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Local Insight
Meet Jörgen Nordlund Glitnor Group is an iGaming company focused on lead generation as well as B2C and B2B lines of business. Jörgen Nordlund helped co-found Glitnor Group in 2018, having previously sat on the Board of Directors for West International AB and Jackpotjoy plc. He also helped co-found Vera&John. Since being set up in 2018, Glitnor Group has achieved rapid growth, necessitating a recent move to new offices. Why did you choose Malta?
Do you see the Maltese industry moving towards a concentration on B2B activity, or does B2C still have a place in Malta?
Setting up in Malta was almost instinctive. The country has been the home of iGaming in Europe for the last decade, and it was already home to many of our staff, making it a natural choice for our headquarters.
The iGaming industry is in a constant state of change, which is one of the reasons it is so exciting to be a part of. With more markets becoming regulated, we have seen some operations move away from Malta. However, the country still remains an iGaming hub and will continue to do so.
It is also a hub for iGaming talent and networking. Everywhere you turn on the island, you will encounter someone involved with the industry, and having access to such a wealth of talent makes business much easier. The weather is also consistently fantastic, which definitely helps after a long week in the office.
The opening up of the US market represents one of the biggest opportunities for the iGaming sector over the coming years. Are Maltese companies ready to capitalise on this opportunity? Absolutely. The US market has shaped the industry over the last few years, and it will only continue to grow in importance. Our experience in Malta and throughout Europe will be hugely beneficial as we look stateside. Mergers and acquisitions are going to be key to success in the market, and our recent acquisition of 37.5 per cent of PlayStar is going to be a huge help moving forward. We are proud to invest in this company and can’t wait to see what the future holds with it.
There is so much iGaming talent and so many big companies based here that keeping our headquarters here makes sense from both a B2C and B2B perspective. With Swintt, we already operate in several key markets, including the Netherlands, Sweden, Germany, Latvia, and Lithuania, but Malta will remain our home.
How has the gaming business in Malta evolved from previous years to the present day? Things in Malta have changed significantly in recent years, but we always welcome change and believe the vast majority of recent moves have been hugely positive. For starters, all of the regulations that have been put in place seek to protect customers and ensure long-term business for safe operators. This is excellent for us as we put responsible gambling at the heart of everything we do. Malta as a country has grown a lot economically, and there appear to be more businesses here than ever before. A rising tide lifts all ships, and the continued growth of Malta is going to benefit everyone who is based here. Of course, this increase in business does mean the island is getting busier, and the work-life balance and happiness of our staff is vital. Going forward, Malta will remain our headquarters, with our beautiful office in Tigné Point being the heart of our operations.
A rising tide lifts all ships, and the continued growth of Malta is going to benefit everyone who is based here.
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Local Insight
Meet Ian Gauci Ian Gauci is the Managing Partner of GTG, a technology-focused corporate and commercial law firm which has been at the forefront of major developments in FinTech, cybersecurity, telecommunications, and technology-related legislation. What is your view on Malta’s iGaming sector as it stands today? It is clear that today’s Maltese iGaming industry is strong and mature while being resilient to change and challenges. One can observe that the sector is so resilient that it was one of the few sectors that suffered relatively little impact through the major challenges that the country faced recently, including, particularly, the previous greylisting and COVID-19.
In your experience, at this stage, do market gaps still exist? Market gaps still undoubtedly exist with regards to finance and payments for iGaming companies. At a high level, I would say they are primarily: (i) a lack of serious major banks that are ready to accept iGaming business (particularly B2C); (ii) limited availability of FinTech players who can provide compliant services to gaming entities, especially for the placement of bets in crypto; and (iii) limited payment services and solutions available to iGaming entities that wish to undertake business activity outside of Western markets.
Over the last year, European markets have been enacting legislation that is resulting in the fragmentation of the B2C offering, with many markets now requiring their own national licence. Do you see the Maltese industry moving towards a concentration on B2B activity, or does B2C still have a place in Malta? In my view, some level of increased concentration in local B2B activity is inevitable given the respective regulatory market developments. That being said, I do strongly believe that the Maltese B2C licence still has a place – the local regulatory framework remains the most advanced ecosystem for iGaming activity and the MGA seal remains a most trusted certificate of excellence. Legislative developments, such as the recently introduced Article 56A to the Gaming Act, and the MGA’s upcoming ESG code, all seem to point towards the continued success of B2C in Malta. Indeed, we are increasingly seeing a trend whereby prudent and sensible investors consolidate all relative gaming licences – especially those that are relevant to the EU/UK – within the same entity which holds the MGA licence, thus using Malta as the trusted hub for all relative gaming activity.
What are the main benefits for any iGaming investor looking at establishing a base in Malta? In terms of benefits, I would say that these are, in no particular order: (i) the highly regarded and tried and tested regulatory framework; (ii) the relative tax benefits and incentives; (iii) EU member state
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status, thereby enjoying access to the EU’s market and freedoms; (iv) a defined and mature B2B framework (when in most countries, a B2B framework does not even exist); (v) availability of expert gaming talent, skills, partners, service providers, services, tools, and employees which tend to be a rare find abroad; and (vi) the fact that Malta is a hub for worldwide iGaming activity, helping with relations with customers, providers and competitors while also providing networking and business opportunity.
GTG has been involved in the creation of a number of legal frameworks, like that relating to virtual financial assets. The EU’s own regulation on the topic was enacted in 2023. How similar are the local and European virtual asset frameworks? Do Maltaregistered firms in this sector have a head start, so to speak? Out of all respective legal frameworks enacted to date by EU member states, I think that the Maltese local framework is without any doubt the closest existing national framework to that which will be established by the EU under the MiCA Regulation. Malta also happens to be the only EU country where a virtual financial assets licence is issued by the country’s financial regulator. Firms registered and licensed in Malta will surely have a head start – the rules they are currently abiding by are very similar to the regime that will apply once MiCA is in force, and critically, Maltese firms are expected to be able to transition from their currently local licence to a licence under the MiCA framework in an almost seamless fashion.
Virtual financial assets firms registered and licensed in Malta will surely have a head start once MiCA is in force.
CHAPTER 7 Gaming
The Malta Gaming Authority
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he Maltese licensing regime has contributed towards creating a sustainable industry, and the Malta Gaming Authority’s status as a solid regulator lends its licensees enviable credibility. The standards licensees are obliged to uphold to obtain and retain the MGA’s stamp of approval mark them as honest and reliable companies in the eyes of consumers, partners and authorities alike. The MGA supports a responsive regulatory environment where players are guaranteed responsible gaming services with effective protections, and where industry stakeholders can discuss and propose new concepts, technologies, games, and solutions. Maintaining strong relations with operators is central to its mission, and in fact the MGA is widely regarded as a partner as well as a regulator. Operators in the sector say that the local authority has managed to keep its ear to the ground, and is sensitive to the needs of industry, understanding that the high quality it expects is best achieved when all stakeholders buy into the need for it. An example of the
tireless work undertaken by the authority to continue bridging the gap between itself and the industry is the recent introduction of regulatory workshops to facilitate the exchange of views on topics of mutual interest. The formalised forum for constant dialogue allows the MGA to reduce unnecessary bureaucracy and streamline regulatory processes, increasing the efficiency and effectiveness of its monitoring obligations while meeting the needs of its licensees.
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MaltaInvest2024
Remote Gaming Licensing and Regulation
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he Maltese licensing process is stringent yet efficient, governed by a regulatory regime that is technology neutral and game neutral, with a rigorous consumer focus, making it simple and straightforward to run a successful global business. There are two main licences – one for B2C activities and another for B2B activities – with licensees thereafter only needing to get approval to offer different game types. The framework also provides for corporate group licences which allow multiple companies to be covered by one group licence to reduce bureaucracy. For example, a B2B provider that only supplies its products and services to other entities within a B2C-licensed corporate group has no need to obtain a separate licence. The Maltese gaming licence is held up as a sterling example of good regulatory practice, but this is only possible thanks to the thorough checks each application goes through before it
is accepted. Applicants must pass four validation processes, constituting a due diligence evaluation of all the entities and persons involved, an in-depth financial analysis of the business plan and the viability of the business proposition, and a review of the statutory documents and operational capacities required to ensure that the applicant is equipped to conduct the proposed operations in a compliant manner. The fourth and final step is a system review wherein the applicant is required to implement the operation onto a technical environment in preparation to go live, and appoint an MGA-approved service provider to carry out the review that will audit and verify the live environment against the proposed application. It is only when these four main pillars of the licensing process are completed to the MGA’s satisfaction that a licence is issued. The upshot is that licensees are well-prepared when it comes to real-world operations, enjoy the trust of their players and find an easier road ahead of them if they require operating licences in other markets.
Game Types The four game types are:
Type 1 Games of chance played against the house that have an outcome determined by a random generator. This includes casino-type games, such as roulette, blackjack, baccarat, poker played against the house, lotteries, secondary lotteries, and virtual sports games.
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Type 2 Games of chance played against the house that have an outcome which is not generated randomly, but is determined by the result of a competition, such as a sports event, and whereby the operators manage their own risk by managing the odds offered to the player.
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Local Insight
Meet Brian Zarb Adami CyberSift is a boutique IT solutions company with a focus on cybersecurity, complemented with a wide variety of skills in specialised software, bespoke development and cloud services. It was founded by Brian Zarb Adami, a CISAcertified Information Systems Auditor and a PRINCE2 Project Manager. CyberSift provides solutions for enterprises looking to bolster their cyber defence capabilities, underpinned by artificial intelligence technology and machine learning. As AI develops at breakneck speed, how can businesses deploy it to their advantage? When we decided to employ machine learning and artificial intelligence in the application of cybersecurity, we did so more out of necessity than because we were interested in the field. We were faced with a situation where we couldn’t find the correct talent in the field and realised that companies were being faced with a huge problem in the form of a deluge of security information that one would have to manually process to understand whether their organisation was exposed to any threats or even under attack. We therefore decided to move away from traditional detection and use the automated methods that artificial intelligence offers to help us swiftly identify information security threats, understand them and help customers respond in a timely fashion. Likewise, businesses should aim to use artificial intelligence to automate the mundane heavy lifting, leaving more time for humans to work on value-add workstreams and improve outcomes.
Malta has an established ICT sector, as well as being a hub of iGaming and financial services, both of which require highly specialised technical solutions. How has CyberSift’s development interacted with this ecosystem?
resilience resulted in many seeking a reliable organisation with whom to continue to evolve and enhance their information security. Entrepreneurs looking at Malta must understand that organisations found within the country are relatively small when compared to larger European countries. This is not a bad thing, but it does make it harder to gain real enterprise-level experience when the company aspires to playing at such levels on an international scale. Very early on in our life we came to the realisation that Malta is a good proving ground for the concept, but we would need to move abroad for the international-level client exposure we wanted.
Running a global digital operation requires top-notch digital infrastructure. How well-developed is Malta in this respect? Is it feasible to operate a sensitive worldwide online business from Malta? I think that Malta is well-developed in this area, mainly due to the influx of iGaming companies on the island and the requirement to serve global markets. The infrastructure that we have is sound and resilient, and it is very easy for companies to offer their digital services by hosting locally. Of course, being an island, there is a compelling case for one to also have resilience and disaster recovery outside of the island because at the end of the day we depend on the interconnections that we have. However, such disruptions are few and far between. Malta is definitely a sound platform from which to offer online services worldwide.
I can proudly say that we have the lion’s share of customers in the financial services space. The maturity of the sector and the requirement for such organisations to keep enhancing their cyber
Malta is definitely a sound platform from which to offer online services worldwide.
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MaltaInvest2024
Local Insight
Gaming Malta Foundation Chief Executive Ivan Filletti spearheads the promotion of Malta as a centre of excellence in the remote gaming, video game development, esports and AR/VR sectors, liaising with the relevant local authorities to improve Malta’s attractiveness as a jurisdiction and enhance the ecosystem surrounding the gaming industry. Why should gaming stakeholders consider Malta? For several reasons. For one, investors find a welcoming business environment here. There is a Government that’s embracing this industry, and that helps in no small way. The fact we’re small is good – it makes us nimble, and allows us to provide bespoke assistance. Fiscal initiatives for the digital games industry and Basecamp, which provides subsidised office space for startups and foreign companies looking for a soft launch in Malta, also contribute. Gaming Malta is a regular presence at Gamescom, the world’s largest video game trade fair, and we invite companies based in Malta to join us. In my experience, this kind of support is appreciated just as much as fiscal measures. It finally boils down to the ecosystem that is being nurtured. We want Malta to be the stage for the global ambitions of exciting projects. The domestic market is limited, but as a staging ground, Malta offers something unique. For example, we’re an EU country, but we are also culturally close to the Middle East and people from that region see that we understand their culture too. As for human resources, employers find that talent relocated to the islands loves being here. Meanwhile, the University of Malta’s Institute of Digital Games has consistently ranked among the top 25 graduate programmes in the world, providing a steady stream of locally educated developers. So, it’s the sum of all these parts that makes Malta attractive.
Have there been any major updates in the game development, AR/VR and esports fields in Malta over the last year? The latest development is the launch of a €10 million venture capital fund aimed at emerging technologies, managed by Malta Government Investments. More broadly, we are continuing to see the convergence of technologies on the island, from artificial intelligence to immersive tech. Companies like Draw & Code have set up their R&D operations here – they have an immersive tech lab within our incubator space, and they’re developing some very advanced VR on the island. Keywords, one of the largest technical services providers for the video game industry, has two studios – Sperasoft and Electric Square – based in Malta. Taken together, these developments are bringing a paradigm shift to Malta’s gaming ecosystem.
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We are also seeing the maturation of Malta as a Unity centre of excellence, ensuring that new talent is being trained to the highest standards and is able to meet the needs of the game development industry. In esports, the ESL Pro League season was once again hosted in Malta, bringing the top Counter-Strike teams to the island for two months. This partnership has now been extended for another year.
When considering Malta, what is one thing that any prospective investors involved in these fields should know? That Malta is creating a startup mentality. We have set our strategy and laid the first building blocks in education and investment, providing support to new projects and high potential ventures while encouraging the cross-fertilisation of ideas. And we are building on solid foundations – Malta can boast of being the iGaming Silicon Valley, so we have a track record of systematically nurturing a high tech industry from the ground up. We acknowledge that it is not easy. For iGaming, Malta was a pioneer in Europe. When talking about video game development, other jurisdictions are well ahead of us. But that’s our job at Gaming Malta: engaging with stakeholders and providing business support to ensure that Malta is the most attractive environment for the gaming industry to thrive.
We want Malta to be the stage for the global ambitions of exciting projects.
Photo: Inigo Taylor
Meet Ivan Filletti
CHAPTER 7 Gaming
The authority’s role, of course, goes beyond the issuing of licences. Regular audits are undertaken, accounts are monitored to ascertain that player funds are kept segregated and are sufficient to cover player dues, and commercial communications are overseen to ensure their adherence to socially responsible standards. When it comes to player protections, licensees are obliged to offer players a suite of responsible gaming tools granting them increased control over the amount of time or money spent on gambling. The MGA carries out routine audits of such systems, which are meant to quickly identify and help those at risk of harm. Similarly, the authority is also proactive in its efforts to weed out matchfixing and malicious sports betting, and works closely with the Financial Intelligence Analysis Unit, Malta’s financial crime watchdog, as part of its fight against money laundering.
Fees It costs €5,000 to apply for a licence, whether B2C or B2B, and €1,000 to request approval of a new game type. Annual licence fees vary from €3,000 to €35,000, depending on revenue, with B2C licensees also subject to a compliance contribution worked out as a percentage of their gaming revenue. The exact percentage varies by game type and revenue band; details are available on the Malta Gaming Authority website (mga.org.mt).
Through these commitments arising from the regulatory structures aimed at protecting players as well as wider society, the MGA also safeguards the Maltese gaming licence, to the benefit of operators and the state alike.
Type 3 Games of chance not played against the house where the operator is not exposed to gaming risk, but generates revenue by taking a commission or other charge based on the stakes or the prize. These include player versus player games such as poker, bingo, betting exchange, and other commissionbased games.
Type 4 Controlled skill games, such as fantasy sports competitions.
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MaltaInvest2024
The highly skilled workers and sophisticated service providers developed through Malta’s iGaming experience have proven adept at transferring skills, capital and connections to other digital industries
Esports The explosion in popularity of livestreamed competitive gaming is upending traditional sports models and creating new digital-first audiences, particularly among youths. The esports sector is seeing an uptick in interest from investors, driven in part by its positive performance during the pandemic, at a time when almost all other competitive sport ground to a halt. The influx of fans during that period has continued to grow, with total global viewership estimated to be in the region of 250 million, predominantly consisting of Millennials and Gen Z. The industry was valued at over €1.2 billion in 2022, and is expected to experience annual growth of 20 per cent over the coming years. Leveraging synergies with the well-established event and hospitality industry, Malta has hosted a number of international esports events and has become a home for one of the top esports brands globally, ESL Gaming, which organises regular competitions in the country. Every year, teams of competitive video game players come to Malta, from where their tournament progress is livestreamed to millions of fans worldwide. Investors in this space benefit from Malta’s strategic, central location and its position as a mature tourism location, which make it a highly attractive destination for many players and allow tournament organisers to offer participants the kind of added value that is difficult to find elsewhere.
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Video Game Development Companies working in video game development have also caught on to the particular advantages offered by Malta, with many finding the unique combination of EU membership, attractive climate and techsavvy workforce highly suited to their growth strategies. The companies finding Malta a fitting jurisdiction to establish a branch in include all kinds of studios, developers and publishers, working on console, desktop and mobile games of all genres – platformers, shooters, RPGs, and more. Apart from game development itself, some studios are also taking the cue from the banking, ecommerce and iGaming sectors in setting up customer and player support departments on the islands – another area where the widespread use of English gives Malta a competitive edge. The sector is in active development. State-run and private educational institutes have introduced new courses to address gaps in the locally available skill set, and are always open to further collaboration. Entrepreneurs and investors in the game development industry can also take advantage of the various incentives and support measures offered by the economic development agency Malta Enterprise (see p. 55). These include the facilitation of access to finance, investment aid for expenditure on tangible and intangible assets, wage support, and assistance related to research and development.
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Extended Reality Another economic niche Malta is currently cultivating is the extended reality industry, incorporating virtual, augmented and mixed reality – also known as immersive tech. Extended reality has many uses, ranging from the educational to the commercial, and in fact the technology has long been used on a local basis in the tourism and real estate sectors to great effect, increasing engagement and customer satisfaction. Similarly, the film and manufacturing sectors, for example, utilise extended reality for performance capture and rapid prototyping. The introduction of truly global players like Draw & Code Labs, however, is a recent development, as the country seeks to make its mark on the burgeoning industry, which is poised to grow rapidly over the coming years. As the technology develops, other opportunities have opened up in the web, mobile and gaming sectors – particularly in light of the heavy investment in metaverse projects – making Malta fertile ground for the sector.
Basecamp There are plenty of incentives available for companies seeking to establish a presence in Malta, but what about startups that have yet to see their products and services come to fruition? Basecamp, a recently opened startup incubator, is another key component of the ecosystem currently in development. Located in the south of Malta, it provides a hub for high-potential companies to work from, helping employees grow into a community of developers. An initiative of the Gaming Malta Foundation, the 700sqm facility includes 10 subsidised studios of different sizes outfitted as high-quality office space, and doubles up as a convenient location for events and business matchmaking. As an accelerator focused on emergent industries, Basecamp also provides business knowledge workshops, organises networking events and gives participants access to an ever-expanding network of industry professionals and investors based both locally and overseas.
Gaming Malta Foundation An independent non-profit set up by the Government of Malta and the Malta Gaming Authority, the Gaming Malta Foundation is the first point of contact for many companies operating in the sectors mentioned above. Its job is to promote Malta as a centre of excellence in the digital and remote gaming sector, and act as a liaison between prospective investors, entrepreneurs and local authorities. Gaming Malta has been instrumental in promoting the country and strengthening its position in the broader gaming industry, with its efforts manifesting important results for jurisdiction and industry alike. Companies in the relevant sectors are invited to approach it, and can expect to find an advisor and a friend that can facilitate their Maltese journey.
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MaltaInvest2024
‘Commitment to Evolution is One of Our Key Strengths’
Photo: Piotr Werner
Since its inception, SOFTSWISS maintained an exceptionally strong tech culture and level of engineering expertise. Chief Commercial Officer at SOFTSWISS Max Trafimovich tells Ramona Depares why these attributes placed the company’s solutions at an immediate technical advantage.
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ver the past two decades, Malta’s iGaming industry has witnessed remarkable growth, with KPMG Malta estimating its contribution to the country’s total GDP to exceed 10 per cent. We caught up with Max Trafimovich, Chief Commercial Officer at SOFTSWISS, a leading iGaming software provider headquartered in Malta, for insight about which factors determine the enduring popularity of the sector for investors in Malta. “This achievement is credited to Malta’s early entry into the EU gaming sector and its ongoing commitment to regulatory enhancement. As a result, Malta is now home to more than 300 gaming companies with over 10,000 top-notch professionals on board,” he starts off.
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Malta continues to solidify its position by preserving its jurisdictional advantages, which serve the dual purpose of attracting new gaming ventures and retaining existing operators. The Malta Gaming Authority leads a series of initiatives supported by the industry to uphold the country’s reputation as a prominent iGaming hub. “Moreover, investors in Malta benefit from a well-established supportive framework of service providers, including legal entities, financial agencies, marketing companies, and technology providers focused on iGaming. SOFTSWISS takes pride in being an integral part of this extensive ecosystem,” Mr Trafimovich explains. All of these factors, along with Malta’s excellent flight connectivity, stable fiscal policies and a pro-business political environment,
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collectively make the country an exceptionally attractive destination for the iGaming business. So what are the factors that should be taken into account when selecting a reliable provider for establishing a prosperous iGaming entity? “Based on our extensive expertise,” he asserts, “we believe that the key lies in the product’s functional attributes, which align with its technical characteristics. Essentially, the more versatile these features, the better the product’s performance.” Equally significant is fair pricing. That is why SOFTSWISS ensures transparency by providing potential clients with a detailed breakdown of every cost item. While this may result in somewhat lengthy commercial proposals, it solidifies mutual trust in the clarity and transparency of the company’s offering.
“Investors in Malta benefit from a well-established supportive framework of service providers, including legal entities, financial agencies, marketing companies, and technology providers focused on iGaming.”
The CCO adds that another vital consideration is the provision of excellent after-sales support. This encompasses quick responses, adept problem-solving, the proactive engagement of account managers, and the ability to find workarounds. Surprisingly, many companies tend to underestimate the true value of these aspects, which are, in fact, priceless. “Last but not least, ensuring that the provider’s solutions can flex and grow with your business is crucial. Scalability is a game-changer for handling increased traffic and transaction volumes. If a software platform cannot keep up, this results in constant downtime and lost revenues for operators. Therefore, any ambitious operator should opt for providers whose solutions are built to handle heavy loads and are proven to manage large volumes of data,” Mr Trafimovich says. Of course, elevating a company to a higher level involves several fundamental stages. What is the best strategic approach to enhance a company’s development within the iGaming industry? “At the outset, delving into comprehensive market research and financial analysis is akin to surveying the bedrock, furnishing the essential insights needed for expert decision-making. Following this, creating a well-defined business growth strategy that harmonises with the company’s long-term goals is imperative,” he says, noting that SOFTSWISS sets explicit, measurable objectives extending at least three years into the future, which are revisited and refined annually.
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“As newcomers in the world of iGaming, we recognised the paramount important of focusing on the IT aspect and we have ultimately demonstrated that our solutions hold a strong technical edge.” He believes that attracting top talent is equally vital, as a skilled workforce is the catalyst for innovation and the linchpin for executing strategic ventures successfully. Recognising this, SOFTSWISS places a strong emphasis on fostering its employer brand. “Our commitment was underscored in 2022 when SOFTSWISS was recognised as the Workplace of the Year at the SiGMA Europe Gaming Awards,” Mr Trafimovich shares with understandable pride. Another aspect he considers important for growth is diversification and expanding the product portfolio with a variety of gaming solutions and options to reach a wider audience. He elaborates how the SOFTSWISS team is constantly working to enhance the company offering, creating a complete iGaming ecosystem where different product modules interact with each other seamlessly.
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“Moreover, the adoption of a user-centric philosophy is a vital aspect, essentially prioritising an exceptional end-user experience through seamless navigation, a mobile-first approach, retention automation, and client support improvement. These steps are fundamental for ensuring maximum player satisfaction and gaining a competitive edge,” he says, adding that in a technology-driven industry like iGaming, the technological aspect is also crucial as only innovative companies with a robust technological foundation can expect a prosperous future. SOFTSWISS started life as a Belarusian startup and has today evolved into a prominent global iGaming player. Asked about the key strengths that contributed to this transformation, the executive shares his belief that, as is often the case, this was due to a combination of hard work, unwavering determination and a touch of luck.
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“I believe we were fortunate to assemble such a great initial team of technical specialists. Our tech culture and the exceptional expertise of our engineers have been our hallmarks since day one. As newcomers in the world of iGaming, we recognised the paramount important of focusing on the IT aspect and we have ultimately demonstrated that our solutions hold a strong technical edge.” Moreover, SOFTSWISS had the foresight to explore crypto and blockchain technologies before they became a trend, and long before competitors did. As a result, the solutions the company offered were already crypto-friendly when Bitcoin first hit the $100 mark and became a buzzword. This alone propelled it into the industry spotlight, instantly establishing the brand as a trendsetter in the sector. “The company’s commitment to evolution is one of our key strengths. We consistently enhance our product line with new features and venture into new market segments. Over the years, we have introduced various offerings such as the SOFTSWISS Casino Platform, the Game Aggregator, the Sportsbook, the Jackpot Aggregator, and Affilka. These additions played pivotal roles in elevating our portfolio and building a comprehensive ecosystem for the iGaming business,” Mr Trafimovich enthuses. However, he adds, it’s important not to underestimate the talent of the brand’s founders in strategic business growth planning and financial management, which he considers an absolutely crucial factor at all stages of a company’s existence, but which holds particular significance in the startup phase.
The SOFTSWISS CCO’s reply hints at an exciting upcoming phase, as a dynamic shift in global regulatory frameworks gets underway. The increasing number of countries legalising and regulating online gambling is expected to create a multifaceted regulatory environment, offering both opportunities and challenges for operators. “This transformation is expected to fuel global expansion as emerging markets in new regions embrace iGaming, allowing operators to explore untapped opportunities beyond traditional domains. As the industry continues to mature, a trend toward consolidation will continue, paving the way for large-scale M&A deals in the coming few years,” Mr Trafimovich predicts. As expected, innovation will remain at the core of the industry’s growth, with content diversification and technological advancements driving user experiences and bolstering the overall appeal of the industry. “We expect ongoing integration of cutting-edge technologies like virtual reality, augmented reality and the expansion of artificial intelligence. Furthermore, responsible gaming is set to take the spotlight as operators and suppliers enhance their responsible gaming software to safeguard the well-being of players,” he adds. The bottom line, he concludes, is that the iGaming industry will retain its adaptability and dynamism, underscoring a continuous need for innovation and compliance. Success in this rapidly evolving sector hinges on the ability to combine flexibility and a keen awareness of industry trends.
It is no secret that the iGaming industry is constantly developing. So what significant developments does the company anticipate?
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CHAPTER 8
Shipping & Aviation
Malta’s International Investment Guide
MaltaInvest2024
Overview
Malta International Airport. Photo: Alex Turnbull
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alta’s success in establishing itself as a leading jurisdiction for ship and aircraft registration is impressive by any measure. The numbers speak for themselves: over 9,000 vessels fly the Maltese flag, making Malta’s ship registry the largest in Europe and the sixth largest globally by gross tonnage. More than 1,000 of these are over 24m in length, with Malta since 2020 holding the top spot as the number one jurisdiction in the world for superyachts. Indeed, the distinctive Maltese cross is often spotted flying in the background in photos of celebrities on holiday, in the Med and beyond. As for the 9H Register, it has grown by a remarkable 600 per cent over the last decade, ranking as the world’s fastest-growing civil aircraft registry. Major airlines, charter outfits, jet leasing companies, and individual owners have registered aircraft in Malta, evidence of the country’s ability to generate interest from a wide range of sectors. Malta’s status as a global player in ship and aircraft registration is partly due to the fact that the Maltese flag is perceived to be safe and reliable, and one that offers owners and operators significant tangible benefits. Proactive policymaking and world-class service providers, together with the islands’ strategic location, EU membership, and the fact that English is also an official language are part of this success story, and why both registries have seen such impressive growth,
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with plenty of room for expansion. The frameworks have evolved throughout the years, and today provide for innovative corporate set-ups allowing for exceptional tax mitigation opportunities and a great deal of flexibility, while complying with the highest standards of European and global maritime and aviation authorities. Other attractive features include cost-effective fee structures, responsive and experienced regulators, and the ready availability of ancillary services, making Malta a jurisdiction of choice for those seeking to domicile their most valuable assets with peace of mind. Both registries fall under the remit of Transport Malta and are operated by the Merchant Shipping and Civil Aviation directorates within the regulator. These are often praised for their efficiency and exemplify Malta’s commitment to quality service. Facilitating the process are several reputable law firms and corporate services providers which can guide any prospective registrants as to the best path to maximise the utility of a Maltese registration. The Maltese Government has shown tangible commitment to the growth of its ship and aircraft registries, working closely with private stakeholders to continue attracting interest while keeping abreast of the changing international regulatory landscape and ensuring that sustainability considerations are placed at the heart of the maritime and aviation sectors’ development.
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Malta – A Leading Jurisdiction for the Registration of Mobile Assets Number of Superyachts Registered in Malta Malta becomes the world’s largest register of superyachts 1,030
1,200
100% increase since 2015
1,000 800 600
398
452
600
500
687
751
806
1,107
850
400 200 0
2013
2014
2015
2016
2017
2018
2019
2020
2021
Source: Transport Malta
Total Tonnage of Malta-registered Vessels
Size of Aircraft Registry
90
800
80
700
70
600
49,000,000
No. of Aircraft
(in millions)
839
900
84,100,000
60
July 2023
50 40
500 400 300
30
200
20
92
100
10
0
0
2010 2012
2022
2023
(as of July)
Source: Ministry for Transport
Over
5,500
workers directly employed in the aviation sector
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Miriam Camilleri is the Founder of MCConsult, a boutique maritime advisory firm and service provider. A veteran of the industry, she sits on the Board of the Malta Maritime Forum and chairs the Maltese branch of the Chartered Institute of Logistics and Transport. Malta’s value proposition as a ship registry has evolved over the years. What are the reasons for the country’s success in this field? Malta’s standing as a top ship register and the largest in the EU gained momentum gradually. Several policy issues have been under discussion for a number of years and it is only now that positive developments can be gradually and carefully presented to our international clientele. One important reason for the growth in popularity of the Malta flag is the result of a continuous process of improvement over the years brought about by the ever-increasing collaboration between the public and private sectors. Shipowners have continued to show confidence and trust in our legal regime and administrative system, for which support has always been forthcoming irrespective of the government in power.
How satisfied would you say clients who choose Malta to register their vessel are with their choice? Several factors affect the choice. Flexibility, reliability, reasonable costs, and good service are all important attributes that must be maintained and improved. The flag administration, the service providers and all the staff involved in the registration process give
Our law is very protective of all interests, including those of the shipowners and financiers who have full confidence in our system.
their utmost to assist and provide a timely and efficient service. Malta is honoured to have on board quite a number of owners loyal to the flag and who are extremely proud to fly the Maltese flag on their ships sailing all over the world. Of course, they do so to their advantage.
When it comes to the courts, how well do they serve the specific needs of shipowners, operators and financiers? Our law is very protective of all interests, including those of the owners and financiers who have full confidence in our system. When cases end up in court, these need to be dealt with efficiently and effectively. Legal versatility and competence are essential, and Malta is not lacking. However, the ever-expanding national, European and legal regimes are a growing challenge. The industry has been advocating for a number of years to have its own dedicated maritime court and Government has been listening. Now we need to walk the talk.
How can Malta’s maritime sector further improve its offering to investors? The public–private sector tandem must be further strengthened. It is important that the industry and the respective authorities continue working towards strengthening this cooperation to improve the qualities that are the mainstays of the growth of Maritime Malta. Meanwhile, banking and insurance services can definitely be improved – they are not particularly understanding of the needs of the maritime industry. This needs to be addressed if we are to improve and expand our services in this regard. We cannot offer a one-stop-shop service if we are nitpicking and refuse to move out of our comfort zone. We are very lucky that we are right in the centre of the Mediterranean Sea and can offer a wide range of services to shipowners, ship operators, ship managers, charterers, and other stakeholders. It is important never to lose sight of the fact that Maritime Malta is an integral part of Malta as an international service centre and that the Malta flag is integral to Maritime Malta. In short, we need 360° vision and must never rest on our laurels. Finally, the maritime industry is the survival of Malta, as an island state. The Malta flag, the freeport, ship repair, and the wide range of maritime services are a chain we offer so that the industry can run efficiently and economically. Investing in the sector means contributing to our own survival.
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Photo: Bernard Polidano
Meet Miriam Camilleri
CHAPTER 8 Shipping & Aviation
Ship Registration
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s a small archipelago in the central Mediterranean, Malta’s connection to the sea has driven its historic and contemporary development. The country’s fate for the last 2,500 years offers a succinct guide to the Mediterranean Sea’s dominant powers, from the Phoenicians and the Romans all the way to the British Empire. Its large and well-protected harbours have long been prized for their naval potential, but it takes more than geography to become the EU’s foremost ship registry. After the departure of the last British sailors in 1979, Malta invested heavily in its maritime infrastructure, physical as well as regulatory, contributing to the development of a comprehensive package of benefits and incentives that is lauded for its high standards and efficiency. Choosing the right flag is one of the most important decisions for a ship owner, affecting privacy and taxes, exposure to liability and boarding, and the vessel’s viability as a commercial enterprise. Registration in Malta is flexible, cost-effective and comes with considerable legal, financial and operational benefits, but it is not the right choice for just any old vessel. The regulator has stringent requirements and takes an active role in monitoring registrants’ compliance to them to safeguard its standing as a jurisdiction of excellent reputation. As a result, the Maltese flag enjoys the highest seal of approval from the Paris and Tokyo MOI White Lists. In 2022, Malta further solidified its status when it was recognised as a top-performing flag state by the US Coast Guard’s QUALSHIP21 initiative. The benefits for registrants are significant, from a lower incidence of boarding inspections to insurance savings. In terms of services, Malta offers the full range of necessities for ship owners and operators, including ship repair and maintenance facilities, supply chain provision, crew provision, training, bunkering, technical services, certification, and more, providing support to vessels as well as to the oil and gas industry of the Mediterranean. Whatever their needs, ships in Maltese ports and further afield, registered in Malta or otherwise, can rest assured that they will be met.
Vittoriosa Marina. Photo: Petar Avramoski
Those desiring to make the most of the Maltese flag’s stellar reputation and the country’s formidable array of legal, technical and ancillary service providers will be pleased to know that Malta accepts the registration of all kinds of marine vessels. These encompass everything from private and commercial yachts to cruise liners, super tankers, oil rigs and barges, including ones under construction. There are no restrictions on the nationality of the master, officers, crew, shareholders, and directors, and vessels may be registered personally by EU citizens or through an EU-registered corporate body with owners of any nationality. Inspection requirements vary by the ship’s age, although it is pertinent to note that there are no inspection fees or hidden costs. Ships that have been in service for 25 years or more are typically not accepted, although this restriction may be waived in certain circumstances. Vessels carrying the Maltese flag can navigate and trade anywhere in the world, and are given preferential treatment in many ports. Regarding human resources, incentives for professionals engaged in this sector are available through the Highly Qualified Persons Programme. Malta also provides for bareboat charter registration of foreign ships, meaning that matters regarding title over the ship, mortgages and encumbrances remain the remit of the foreign registry, while the operation of the vessel falls under the jurisdiction of the Maltese registry.
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Registration Fees and Taxation Malta operates an attractive tonnage tax regime carrying a seal of approval from the European Commission. Maltese tonnage tax rules do away with traditional methods of taxation in favour of a highly competitive tax on a vessel’s net tonnage (NT), with newer ships (under 10 years) eligible for discounts. Under the rules, revenue from shipping activities is exempt from Maltese income tax. Profits made from the sale of such ships, or the sale of stock in companies owning them, are also untaxed, as are dividends paid to shareholders from shipping-related profits. The rules are even more attractive when recalling Malta’s wide network of double taxation agreements. Shipping companies may register under tonnage tax rules when at least 60 per cent of their fleet is flying an EU/EEA flag. New registrants are allowed considerable leeway, having this requirement reduced to 25 per cent, although this must gradually increase. Eligibility for non-EEA ships depends on having their commercial and strategic management taking place in an EU/ EEA country. Most ships, like cargo, passenger, research, and cable laying vessels are eligible, but not fishing ships, fixed offshore installations or ships primarily used for sports and recreation. For ships not registered under tonnage tax rules, profits will be taxed at the standard corporate rate of 35 per cent, and shareholders receiving dividends arising from this taxed income are therefore entitled to claim a refund, limiting their tax exposure (see p. 62). Central to the tonnage tax regime’s functioning is the requirement to maintain separate ring-fenced accounts for activities which are tax exempt and those which are not. In cases where there is no income except that derived from shipping-related activities, the organisation can submit a simplified tax declaration instead of a regular income tax return. Ships registered in Malta engaged in commercial activities are generally subject to extensive VAT exemptions. Commercial yachts, for example, are exempt from VAT on supplies and maintenance, and are not obliged to charge VAT on charter revenue. Financing Shipping organisations and financiers of ships registered under the Maltese flag enjoy a secure environment with reliable levels of protection comparable to those found in the English Merchant Shipping Act. Constituting an executive title, mortgages are enforceable upon default, with no need for a prior court judgement, and further mortgages, transfers and deletion of vessels are
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only conditional on the mortgagee’s permission. Financiers can also rest assured that registered mortgages take priority over special privileges or liens which were not previously recorded on the appurtenances or accessories of a vessel, while also being attached to proceeds from insurance and indemnities for mishaps. Since vessels are considered separate and distinct assets within the estate of their owner, any arrest or enforcement by mortgagees can proceed irrespective of any other insolvency proceedings. It is also possible to register a mortgage under a trust for the benefit of anyone to whom an obligation is due. Superyacht Registration Global interest in superyachts is booming, with shipyards reporting full order books and charter operators receiving ever more inquiries. Having made a concerted effort to put itself on the map for the luxury vessels segment, Malta is now reaping the rewards as superyacht owners grow increasingly aware of the potential benefits afforded by the eight-pointed cross. The country has established itself as the world’s undisputed top jurisdiction for superyachts; by the end of August 2023, the number of commercial and private yachts over 24m in length registered under the Malta flag stood at 383 and 724 respectively – more than any other flag. Notwithstanding its proven success, the future looks brighter still as the registry ramps up its presence at boat shows. Long a staple at the Monaco yacht show, Malta made its debut at Cannes in 2023. Elite vessels require quality services, and Malta is poised to continue capitalising on its sterling reputation as a flag of confidence for the planet’s most valuable assets. The country’s heavy investment in state-of-the-art marinas and the presence of onshore service providers of the highest standard are coupled with a legislative framework providing for the distinctive requirements of the superyacht industry. In a sign of its resolve to consolidate Malta’s position at the forefront of the sector, in 2022 the Maltese Government revealed that a national policy on superyachts is in the works, with a vision document presented in late 2023 laying out dozens of action points to continue improving its value proposition. Yachts can be registered for both private and commercial use, and can avail of all the benefits afforded to other ships, including low registration costs and taxes, and free global navigation. On top of these, recent changes to the VAT treatment of pleasure yacht leasing mean that owners can set up attractive operational lease models with cash flow advantages and overall VAT optimisation. These changes lead to varying VAT rates based on where the vessel is used, with no VAT applicable on its enjoyment in non-EU or international waters unless the lessee is using it for commercial purposes.
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Local Insight
Meet Alison Vassallo Dr Alison Vassallo is a Partner at Fenech & Fenech Advocates, where she heads the Yachting Department. Her extensive experience in the sector, including contributions to policymaking, also saw her co-organise the first Superyacht Symposium in 2022. She also chairs the Yachting Services Business Section within The Malta Chamber. What is Malta’s value proposition in the world of superyachts? Over the past years, Malta has made steady inroads in the superyacht sector, attracting some of the world’s most beautiful yachts and influential yacht owners. Today Malta is an undisputed world leader in the registration of superyachts and the largest European flag. This success is underpinned by the legal protections afforded to financiers, effective tax structuring options, a solid legal system, and streamlined importation procedures. These are complemented by the excellent marina, refit, chandlery, and agency services offered to yachts physically calling at our shores.
How has the regulatory and policy framework for the superyacht sector developed over the last years, and how does Malta differ from other jurisdictions popular with superyachts? One of the key strengths of our jurisdiction is that, contrary to some of our European neighbours, who at times have taken the approach of penalising yacht owners, Malta has over the years recognised the value that this industry brings and has taken tangible steps to support it. Furthermore, the private sector and the authorities have consistently worked hand-in-hand to service this niche sector, with our small size undoubtedly rendering individual relations easier to develop and manage. There is consistent consensus between the various players that with competition in this sector being rife on an international level, it is important to build on the heritage, reputation and success Malta has enjoyed for centuries as a shipping jurisdiction by developing tailor-made, professionally delivered solutions. At a time when the industry at large is experiencing historic growth, efforts to strengthen legislative and practical frameworks to effectively service the industry and lay the groundwork for further growth, as
is happening with the development of a first national superyacht policy, could not be more timely.
How does the Yachting Services Business Section within The Malta Chamber contribute to the development of the sector? The mission of the Yachting Services Business Section has always been that of supporting Government with in-depth technical, practical and legal knowledge of the industry. I hold the strong view that the industry depends on the public sector and vice-versa: the service we offer clients we bring to our shores can only excel in this highly competitive sector with the support of the various Government departments.
What advice would you offer superyacht owners considering registration in Malta, to ensure their Maltese experience is as smooth as possible? While yacht purchases are often driven by passion, one solid piece of advice is that it is crucial for potential or existing owners to research and seek proper advice as early on as possible in their journey. This ultimately serves clients to obtain information on all their available options, to plan in good time, and to ensure that the process remains as smooth and pleasant as possible. It also makes a significant difference when owners, especially first-time owners, are guided by reputable advisors with a proven track record of experience and high levels of professionalism. It is crucial for advice to be sought from industry players who have a thorough understanding of how the industry and the processes and legalities which are at times very specific to it work. This can save costly mistakes that are not always easily remedied down the line.
The private sector and the authorities have consistently worked hand-in-hand to service the superyacht sector.
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CHAPTER 8 Shipping & Aviation
Aircraft Registration
Malta International Airport. Photo: GordZam - iStock
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here are many benefits to registering aircraft in Malta, as airlines, charter operators and jet leasing companies have realised in recent years. Aircraft on the 9H Register can circulate freely around Europe, and can be based and operated anywhere in the world. The jurisdiction’s commitment to safety is overseen by the European Aviation Safety Agency, while the country’s ratification of the Cape Town Convention assures creditors that their interests are secure and allows for lower borrowing costs. As is the case with ships, aircraft can be registered as a security for debt, and such mortgages are not affected by the aircraft owner’s insolvency. There are no restrictions on the nationality of shareholders and directors of Maltese aviation companies, which can make use of strategies to mitigate their tax exposure. In fact, Malta’s attractive corporate taxation regime, whereby shareholders may benefit from an effective tax rate of 5 per cent or even less (see p. 62), is even more compelling for aviation stakeholders, with ownership, lease and operational (including charter) income on the international transport of goods and passengers being exempt from Maltese tax, unless such income is remitted to Malta. There is no withholding tax on lease and interest payments to non-residents, while aircraft are not subject to stamp duty and no duty is charged when importing civil aircraft into Malta. Fleet operators will be especially pleased to know that Malta’s extensive network of double taxation treaties (see p. 246) eliminates complex
accounting processes, with income from the international operation of aircraft only taxable in the country where the effective management of the company is situated. Additionally, employees only incur income tax in their respective country of employment – an attractive payrollsimplifying prospect for commercial airlines with a multinational workforce – while companies with private jets do not need to include their use by employees as a taxable fringe benefit. Professionals engaged in the aviation sector may also be eligible for advantageous tax rates under the Highly Qualified Persons Programme. Aircraft registered in Malta can take advantage of a number of specialised incentives, including an accelerated depreciation rate, with airframes, engines and overhaul subject to a six-year minimum, and interiors and furnishing just four. Fractional ownership of aircraft is also possible, allowing co-owners, financed by separate creditors, to specify their individual stake, and aircraft under construction or not in service are also accepted on the register. These features are the fruit of a concerted effort by authorities and stakeholders to develop a novel, secure and flexible framework that serves the varied needs of aircraft owners and operators. Local authorities’ supportive stance towards foreign investment is also reflected in the active support provided by the Civil Aviation within Transport Malta, which stands ready to contribute to a smooth
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Who can register an aircraft in Malta? Private aircraft Citizens of or undertakings established in an OECD country and any other country approved by the Minister (‘International Registrant’), provided that they have the legal capacity to own or operate an aircraft, appoint a local resident agent to represent the owner for matters concerning the registration, and comply with the applicable regulations. Commercial aircraft Maltese, EU, EEA or Swiss citizens with a residence or business in these jurisdictions can register commercial aircraft, which may be co-owned. Photo
: aapsk y - iStock
registration process with its practical understanding of the sector. As regards infrastructure, Malta International Airport is a hub of activity in a phase of active expansion to better cater to the needs of the burgeoning industry, while preparations are underway to build a small airfield in Gozo for private and general aviation activities. Adjacent to the main airport is the Safi Aviation Park, operated by the state industrial parks company INDIS, which offers secure airside facilities in full compliance with applicable standards, and hosts many of the leading entities operating in the Maltese aviation sector. The success of the jurisdiction is exemplified by the substantial investment by Europe’s two largest airlines, Ryanair and Lufthansa, in their Maltese operations. Both are in the process of registering many of their aircraft in Malta, and both also have dedicated servicing operations based in the country. These are joined by several smaller airlines and various business charter and wet lease operators, along with an as yet relatively small number of private aircraft. Supporting the smooth functioning of the industry are various ancillary services, including pilot and crew training schools, repair and maintenance facilities, refitting operations, and insurance, brokerage, surveying, and back-office set-ups. With the number of aircraft registered in Malta continuing to increase, the sector is full of opportunity for serious investors ready to play a role in the development of Malta as an aviation hub.
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Undertakings formed and having their registered office, central administration and principal place of business within Malta, the EU, the EEA, or Switzerland, which are at least 50 per cent owned by the governments of these countries or by persons referred to above, whether directly or indirectly through one or more intermediate undertakings. All operators of aircraft engaged in commercial air transport require an Air Operator Certificate (AOC) and an Operating Licence granted by Malta’s Civil Aviation Directorate. Aircraft can be registered in any one of the following capacities: By an owner operating an aircraft By an owner of an aircraft under construction or currently inoperational By an operator of an aircraft under a temporary title By a buyer of an aircraft under a conditional sale or title reservation By a trustee for the benefit of beneficiaries
CHAPTER 8 Shipping & Aviation
Local Insight
Meet Katrina Abela Dr Katrina Abela heads Vaia Legal, a boutique law firm offering specialised legal services in the maritime, aviation and corporate fields in Malta. She is experienced in yacht and aircraft sale and purchase transactions, as well as ownership structures, customs importations, registration, and assisting companies with acquiring their Air Operator Certificate. What benefits does Malta offer to those registering a vessel in the country? Malta has developed a robust and efficient legal framework which has resulted in the country being a preferred jurisdiction for a number of institutions including financiers. Apart from the advantages of being a sovereign state within the European Union with political, fiscal and social stability, highlights include low company formation, ship registration and tonnage tax costs, along with other fiscal incentives, including tax measures encouraging the commercial operation of yachts and superyachts. There are no restrictions on the nationality of ship owners and shareholders of shipping companies, or the master, officers and crew. The registry also operates a 24-hour, seven days a week service in response to urgent matters. Malta’s registry is dynamic, one of the largest in the world, and very active in EU fora and international organisations such as the IMO.
Malta’s aircraft register is among the fastest-growing in the world. What is Malta’s unique value proposition to aircraft owners? As an EU member state, Malta is a member of the European Aviation Safety Agency (EASA), the body responsible for ensuring safety and environmental protection in air transport in Europe. EASA sets the standard as to what is required for an aircraft to be validly registered in a member state. Furthermore, Malta has also developed a comprehensive and efficient legal framework which has enabled the country to position itself as the registry of choice for many owners, operators, lessors and financiers. The Maltese jurisdiction maintains a rigorous but practical and flexible approach to the industry. The Aircraft Registration Act, which
has been regularly updated to satisfy the needs of the industry, provides for the facility of a full set of securities and ownership options (including fractional ownership) while also facilitating staged registrations. Moreover, Malta offers additional incentives outside the Aircraft Registration Act, developing efficient aircraft importation mechanisms, maintaining the fiscal benefits under the Highly Qualified Persons Rules, the development of cell structures within our Companies Act, and a dynamic Civil Aviation Directorate which understands the needs of the industry.
From your experience dealing with authorities on behalf of clients wishing to register an aircraft in Malta, how efficient and user-friendly is the registration process, typically? The Civil Aviation Directorate has implemented a fully electronic system which has proven to be very efficient over the past years. This system enables the registrant to file all documents in electronic format and the need for wet ink hard copies has been eliminated in most situations.
When it comes to litigation, how efficient are Malta’s courts in delivering judgements in maritime matters? The Maltese courts have maintained a pragmatic and efficient approach towards maritime cases over the years. The Maltese legislative framework also provides for a number of efficient procedures in maritime cases which has greatly contributed to this, such as the facilitation of court-approved private sales and arrest procedures.
The Maltese jurisdiction maintains a rigorous but practical and flexible approach to the industry.
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MaltaInvest2024
Local Insight
Meet Charles Pace Captain Charles Pace is a former pilot, quality assurance and safety aviation professional who has been Director General of Malta’s Civil Aviation Directorate (CAD) since 2016. Your tenure has seen remarkable growth in Malta’s aircraft registry, known as 9H. What has driven this growth? We have seen a constant yearly increase in aircraft registered under 9H. The reasons are various and stem from the fact that in the same period, the amount of Air Operator Certificates (AOCs) has also increased. Many of these have grown from one aircraft to 50 and in some cases over 100 aircraft. We have also seen a substantial increase in aircraft leasing activity where the registry was used as a place to “park” aircraft coming off leases until they return to service. Malta has done a lot of work in improving the Registration Act, and our standing in the Cape Town Compliance list has improved dramatically due to this, as well as thanks to the support of various law firms that have enhanced our position. CAD also has an online system for all applications, including aircraft registration, making the process much more efficient. On the AOC front, we continue to see substantial demand due to our pragmatic and systematic approach. Registration is not easy, but it is transparent. Companies know where they stand and what needs to be corrected. All our laws are written in English, so companies find it easy to understand local requirements, which have no added “Maltese” flavour. Our AOCs also have full access to the EU market, giving operators attractive opportunities.
Given the large increase in new registrations, it must have been challenging for the department to keep abreast of the demand. How has the CAD reacted to this surge? Growth needs to be sustainable and staffing levels need to match the level of demand. The staff headcount has been increased substantially over the years and there is an ongoing review of our requirements. The main issue is dealing with new entrants. One has to be cautious not to create a bottleneck in the system as each new company would increase our downstream annual oversight programme. But we also need to evaluate the work generated against the expertise and the commitment of the actual operators. CAD is not there to run the airline but to audit and inspect based on various risk assessments. Those airlines that employ qualified and committed persons make our life considerably easier as things are in place and understood.
Apart from registration of aircraft, can you identify any niches or services in which the local sector remains underserved, and which might be ripe for investment? Aircraft leasing was a project we embarked on a few years back and still remains a niche we should push for. One might say it is not aviation but financial, but it is nevertheless low hanging fruit for Malta as a lot of work has already been done and we are very much competitive.
What kind of registrants does the 9H Registry typically attract? Our registry is made up of various components. Up until about six years ago we mainly attracted business jets and operators in this area. We have now seen a big shift towards large commercial jets, mainly operated as Aircraft, Crew, Maintenance and Insurance (ACMI) wet leases. We also have quite a few aircraft owned by lessors which are registered here.
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Registration is not easy, but it is transparent. Companies know where they stand and what needs to be corrected.
CHAPTER 8 Shipping & Aviation
Mobile Assets Protected Cell Companies
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novel feature of Malta’s ship and aircraft registries is the possibility to use cell structures to segregate and protect assets. The jurisdiction is the only one in Europe to provide for such set-ups, known as Mobile Assets Protected Cell Companies (MAPCC). Like the cell company structures used in insurance and securitisation (see p. 145), vessels and aircraft held in such cells are effectively protected from claims by creditors of other cells within the same MAPCC. The framework is also popular for its cost-efficiency, since the different cells can use a single operative licence. Cells are also much easier to open and close than entire companies. The cell company retains single legal personhood, although each individual cell needs to be registered with the Registry of Companies with a distinct name. The MAPCC can issue shares and pay out dividends for any of its cells, without taking into consideration the financial position of any other cell within the company or of the company’s core (non-cellular) assets. Directors must maintain a clear, constant and easily distinguishable separation between all the differently designated assets. Additionally, such companies are obliged to inform any third parties they transact with about their cell set-up.
Photo: Rawf8 - iStock
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CHAPTER 9
Tourism
Malta’s International Investment Guide
MaltaInvest2024
Overview
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f one sector could be described as Malta’s cornerstone, there is no doubt that tourism holds that distinction. Efforts to diversify the economy have proven successful, and its prosperity is no longer solely gauged by the influx of tourists. Nevertheless, tourism remains the vital force driving Malta’s economic success, employing nearly 25,000 people and stimulating investment in various sectors, from gastronomy to retail, culture to property. In 2022, tourists spent over €2 billion in Malta, and by the first half of 2023, more than half of that amount had already been spent, signalling a substantial recovery for a sector that faced challenges during the COVID-19 pandemic. The number of arrivals in 2023 is poised to surpass the figures from the blockbuster year of 2019, exceeding expectations of a significant recovery only by 2025. That means that 2023 could very well be the all-time record year, in terms of tourists’ arrivals. The almost three million tourists choosing Malta for their vacation do so for various reasons, as the islands offer a comprehensive array of sights and experiences that have captivated visitors for generations. While Malta’s sun and beaches remain perennial favourites, the country provides much more. Visitors now frequent the islands year-round to immerse themselves in the unique historical heritage, attend cultural events featuring worldrenowned artists, explore spectacular underwater wreckage sites, and indulge in unparalleled comfort provided by top-tier establishments.
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Mdina Gate. Photo: Inigo Taylor
CHAPTER 9 Tourism
The extensive revitalisation of Valletta and the Three Cities over the past decade has reinstated a high level of sophistication, restoring these areas to their former glory during the Knights Hospitaller’s rule. Numerous palazzos have been transformed into boutique hospitality offerings, and a select list of restaurants, recognised by the Michelin Guide, caters to refined palates. For those seeking a touch of elegance, Mdina, the home of several of Malta’s noble families, offers the chance to visit, dine and stay in some of the country’s most elegant ancestral homes. For a more modern experience, the cosmopolitan hubs of Sliema and St Julian’s provide a sense of contemporary luxury, with leading hotel brands welcoming guests to towering structures overlooking the sprawling North Harbour metropolis. Tourists can indulge in retail therapy at numerous fashion outlets and revel in the hedonic pleasures of bars, lidos, nightclubs, and casinos along the coast. Before delving further into Malta’s allure as a tourism destination, it’s essential to note the significance of connectivity. Most arrivals come to Malta by air, making the connections provided by the airlines servicing the islands a key factor in the sector’s success. Malta International Airport serves as the country’s gateway to the world, connecting to around 100 locations thanks to flag carriers and low-cost airlines. Ryanair plays a pivotal role in these connections, significantly contributing to the notable increase in tourist visits. In March 2024, Air Malta, the country’s flag carrier, will cease operations. It will be swiftly replaced by a new airline established by the Maltese Government, provisionally named KM Malta Airlines, which the Government has stated will be supported with the necessary capital to achieve stability. This new carrier will operate routes to major European cities including London (Heathrow and Gatwick), Paris, Lyon, Rome, Milan, Catania, Amsterdam, Berlin, Munich, Dusseldorf, Madrid, Vienna, Zurich, Prague, and Brussels, with plans to introduce a new service to Copenhagen. These routes, in conjunction with those operated by various major airlines, particularly to the core transit hubs of Frankfurt, Istanbul and Dubai, make travel to Malta relatively accessible for tourists worldwide. Today, Malta offers tourists and tourism entrepreneurs a hybrid proposition — a destination rich in history and cultural value on one side and a cosmopolitan city-like experience on the other. Blessed with warm weather, sunshine almost year-round and the near certainty of safe returns, Malta stands as an inviting and versatile destination.
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2,771,888
1.5 1
2,285,450
2,286,597
25%
of arrivals in any given year are returning visitors
969,246
2,598,690
1,965,928
Around
659,513
(in millions)
2
1,582,153
2.5
1,689,809
3
2,273,837
A Fast-growing Destination 1,791,422
MaltaInvest2024
Malta’s Tourism Figures at a Glance
The average tourist spends
7 nights
0.5 0
2013
2014
2015
2017
2016
2018
2019
2020
Average Age of Tourists Coming to Malta 65+
2021
2022
2023
in Malta
(Jan-Sept)
Arrivals by Season
8%
Winter
13%
24%
0-24
Autumn
28%
45-64 28% Spring
25-44 40%
25%
Summer 34%
Data refers to 2022 figures. Source: National Statistics Office
Data refers to 2022 figures. Source: National Statistics Office
40,642
37,886
36,497
36,110
USA
Ireland
Austria
Hungary
50
19,986
41,239
55,821
Belgium
100
Switzerland
58,220
Netherlands
150
76,479
200
Scandinavia
169,445
250
86,801
350 300
143,229
258,372
400
(in thousands)
400,666
450
398,198
427,005
Tourist Arrivals
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Data refers to 2022 figures. Source: National Statistics Office
Other
Australia
Spain
Poland
Germany
France
Italy
United Kingdom
0
CHAPTER 9 Tourism
Local Insight
Meet Alan Arrigo An accountant by profession, Alan Arrigo is co-CEO of destination management company Robert Arrigo & Sons. He currently serves on the Board of Management of The Malta Chamber, having previously chaired its Tourism Operators Business Section. Malta’s tourism sector has recovered rapidly from the pandemic, with 2023 set to see a record number of arrivals. What’s the secret to this success? Malta’s tourism rebound, post-pandemic, credits its success to connectivity. As an island destination, accessibility is paramount. Authorities supported tour operators and airlines, maintaining robust source market connections which have been crucial to the resurgence. This commitment to accessibility underpins the tourism revival.
What opportunities does Malta’s tourism sector present to foreign investors? Malta’s tourism sector presents investors with a distinctive proposition. The island effortlessly combines history, culture, entertainment, culinary delights, and coastal beauty within close proximity. This diversity insulates investors from market fluctuations, ensuring a robust ROI. While hospitality real estate may be saturated, other sectors in the tourism value chain beckon. These encompass conference facilities, family-friendly attractions and initiatives enhancing the visitor experience while nurturing sustainability. Investments harmonising tourism growth with environmental responsibility are encouraged.
In your role as an inbound tourism operator, you are in direct contact with a multitude of visitors to the Maltese Islands. What are tourists’ favourite characteristics of Malta? Tourists visiting the Maltese Islands consistently rave about several characteristics that make their stay memorable. First and foremost, Malta’s rich history and cultural heritage are a major draw. Visitors are enchanted by our well-preserved historical sites, including ancient
The island effortlessly combines history, culture, entertainment, culinary delights, and coastal beauty within close proximity.
temples, fortresses and charming old towns. The opportunity to immerse oneself in centuries of history is a unique and cherished experience. Tourists also adore Malta’s scenic coastline, and the compact nature of the islands allows travellers to explore both historical and natural attractions within a short distance. Our culinary scene, with local delicacies and international fare, also delights visitors, leaving a lasting impression.
As a long-time operator, what is different in Malta’s tourism sector today, compared to a few years ago? Malta’s tourism has undergone a remarkable transformation, marked by the rise of professional operators, especially in gastronomy. Michelinstarred restaurants and a focus on local, high-quality ingredients have elevated the culinary scene. Cultural and entertainment offerings have expanded, while sustainability initiatives align with global trends, positioning Malta as a quality destination that offers a more nuanced and enriching experience for visitors.
What advice would you give to foreign investors who might be enticed to invest in Malta’s tourism industry? Diversify Your Portfolio: While opportunities abound in Malta’s tourism sector, it’s wise to diversify your investments. Avoid over-saturation in areas like accommodation and instead explore complementary ventures such as conference facilities, eco-tourism projects or cultural attractions. Diversification can reduce risk and maximise returns. Embrace Sustainability: Sustainability is no longer a buzzword; it’s a necessity. Incorporate environmentally responsible practices into your investments, as eco-conscious travellers increasingly seek destinations that prioritise conservation and sustainable development. This not only benefits the environment but also enhances your longterm reputation. Collaborate Locally: Forge strong partnerships with local businesses, tour operators and communities. Collaborative efforts foster goodwill and authenticity, ensuring that your investments align with the unique character of the Maltese Islands. Respect the Culture: Malta’s culture and heritage are integral to its appeal. Show respect for local customs, traditions and historical sites in all your ventures. Cultural sensitivity enhances the authenticity of the visitor experience. By following these guidelines, foreign investors can make a meaningful and sustainable contribution to Malta’s thriving tourism industry while reaping the rewards of this dynamic and promising sector.
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Malta’s Tourism Product
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isitors to Malta might find themselves relatively overwhelmed by the abundance of attractions and activities packed into this compact destination. Around a quarter of tourists return for more, realising that a week is barely enough to scratch the surface of the islands’ offerings. As we explore some of the major attractions, it’s crucial to bear in mind that Malta is a place that continues to unveil delights for those who delve deeper into the wealth of experiences it presents. This sentiment is echoed by both locals and foreign residents who discover new reasons to be entranced by the country year after year. Originally branded as a sun and sea haven, visitors will encounter ample opportunities to work on a tan and dip into the water along the numerous sandy and rocky beaches across Malta, Gozo and Comino – many of which boast Blue Flag status. Whether it’s beaches with amenities ranging from water sports to culinary establishments or secluded ones where the silence is only interrupted by the rhythmic waves, sunseekers and avid swimmers can explore a different spot each day without growing tired of the breathtaking scenery. Meanwhile, divers of all skill levels will find a plethora of sites in what has been dubbed ‘a wreck diver’s paradise’. With over 60 accessible sinkings, including World War II destroyers, ferries and oil tankers, many serving as homes to diverse marine life, the underwater world is a captivating realm. In 2023, the world’s first deepwater archaeological site was inaugurated off Gozo, providing advanced and technical divers a unique opportunity to witness the remains of ancient shipwrecks and the treasures they once carried.
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Grand Harbour, Valletta. Photo: Inigo Taylor
For those who prefer their archaeological adventures on dry land, Malta and Gozo boast megalithic structures, some of which are recognised as UNESCO World Heritage Sites. Older than Stonehenge and the Pyramids of Egypt, they stand as the secondoldest freestanding structures created by human hands on the planet. Precisely calibrated to the movement of the skies, they are an architectural marvel that has captivated the imagination of all who gaze upon them. If you’re starting to feel like Malta is an open-air museum, you’re spot on. Enigmatic cart ruts from prehistoric times crisscross the islands, troglodyte cave dwellings coexist with the remains of
CHAPTER 9 Tourism
Bronze Age settlements, and Phoenician tombs lie adjacent to ancient Roman roads. All these, however, take a back seat to the awe-inspiring legacy of the Order of the Knights of St John. Their 268-year rule over the islands left an indelible mark, reshaping the landscape with a network of fortifications that witnessed major historical events, from the Great Siege of Malta by the Ottoman Empire to the blockade of Napoleon’s forces and the planning of the Allied invasion of Sicily. For those inclined towards a living, breathing expression of heritage, the village feasts, running throughout the summer, embody Malta’s social fabric. These feasts offer a captivating mix of sacred and secular elements that delight all spectators. No feast is complete without an
exquisite fireworks display (or several), drawing large crowds as town squares transform into pedestrian havens, filled with food, drink and good times with friends. Malta’s compact size allows tourists to explore all these facets while conveniently situated at a single hotel. Five-, four- and three-star accommodations are complemented by boutique hotels, often nestled in gorgeous historical settings, along with a wide array of Airbnbs. Those seeking high-quality lodgings have a plethora of options, with renowned brands such as Hilton, Westin, InterContinental, Marriott, Hyatt, Kempinski, Meliá, Barceló, Corinthia, and Relais et Châteaux all gracing the islands.
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MaltaInvest2024
Local Insight
Dr James Cassar is Managing Director of 242.group, a group of companies offering event services, with offices in various destinations and headquartered in Malta. He holds a PhD from Bournemouth University, focused on making destinations competitive in attracting international events and conferences, and is a visiting lecturer in event management at the University of Malta. 242.group has both driven and benefitted from the growing events sector, and today can be found at expos around the globe. What’s the secret sauce to a successful event? There are several variables that make an event a success, and the most basic is to have an eye for detail on logistics and loose ends, even on the large-scale events. The details may be taken for granted by guests when executed well, but will stick out immediately when not. On the other hand, what makes an event stand out is what we like to call the ‘wow effect’ – which is something out of the ordinary that would prompt a client or guest to take out their phone. To achieve this, eye for detail is once again important, as well as creativity and event experience to execute anything innovative. The secret to this is having a network and contacts on the ground, with the right equipment and the right knowledge.
As an experienced events organiser, what advice would you give to anyone thinking of hosting an event in Malta? Even though Malta is small, network and knowledge are essential to organise a successful event here. It is important for anyone choosing Malta as a destination for their event to partner up with, or gain insight from, experts with local knowledge. My suggestion is to always bring on board a local team to organise the event, or at least to assist within it. Not only does this guarantee that they will know what to look for and where, but they will also have the right knowledge and network to ensure the best value for money.
The event experience extends beyond the event itself. What can event organisers expect from Malta when it comes to hospitality, transport and ancillary services? The event itself is a small part of the whole event experience. The experience needs to be positive from the moment a guest arrives at our destination, to the moment they depart. The success of this depends on what I call the ‘total event/conference product’ at a destination. This is a bundle of components that the destination needs to offer for a successful event experience, and which include most of the factors listed above. Malta has been perfecting its total event product year on year by gaining insights from all past experiences and improving on them. Malta has managed to achieve an extensive external connectivity network, different certified accommodation options, good internal transport connectivity with ease of use through apps, different event and conference venues with event experience, unique selling points related to history that may also be offered, local event suppliers with good knowledge and equipment supply, and with good networks in case of any larger scale equipment that is required from overseas. The fact that Malta is nowadays a conference, expo and events hub means that it is geared to offer solutions to such events, and that such solutions are a priority to it.
Malta has been perfecting its total event product year on year by gaining insights from all past experiences and improving on them.
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Photo: Albert Camilleri
Meet James Cassar
CHAPTER 9 Tourism
Events
i Gaming NEXT. Photo: Shaun Spiteri
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more classical persuasion the chance to enjoy more subtle pleasures. Events like Valletta’s Notte Bianca and Birgu Fest across the harbour are firm favourites with locals and tourists alike, giving them the opportunity to experience these historic cities in a new (candle)light.
Comparisons to Ibiza must however be taken with a pinch of salt, with Malta also hosting an array of cultural festivals attracting a more refined crowd. The Malta Jazz Festival, for one, has earned its place among Europe’s fine events for the genre, while the Malta Baroque Festival provides those of a
Expos and conferences also play a major role in the country’s tourism sector, bringing thousands of attendees to events dedicated to a broad variety of industries, from iGaming and medicinal cannabis to aviation and maritime. Hosting these events are state-of-the-art conference halls, with organisers and participants assisted by a multitude of innovative suppliers and event planners taking care of any operation, no matter its complexity. Many expos also include an off-site calendar of events showcasing Malta’s range of entertainment options, including club nights, cultural tours and boat parties.
alta’s calendar is packed with a wide variety of festivals, with organisers taking advantage of its central location and excellent air connectivity to organise a broad range of events, some aimed at an entirely foreign audience. Isle of MTV, for example, is Europe’s largest free music festival, with upcoming and established artists alike gracing Floriana’s Granaries with their talent. British and Italian organisers have also cottoned on to Malta’s potential for destination festivals, bringing over star performers (and thousands of attendees) every year.
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Valletta Cruise Port, Valletta. Photo: Inigo Taylor
A Cruise Destination
S
ince the opening of the Valletta Cruise Port in 2002, Malta has established itself as a regular fixture on cruise liner itineraries. Practically all major companies operating in the Mediterranean feature Malta as a port of call in many of their offers. The Government has also been at the forefront in providing shore-to-ship electricity, anticipating European regulations to reduce emissions from docked vessels by equipping local facilities with the infrastructure required for long-term success. An extension to the cruise terminal is currently in the works, with the objective of allowing more cruise liners to be berthed in Malta at the same time. Although lacking dedicated harbour facilities, Gozo is also gaining a positive profile as a destination off the beaten track, with the number of cruise liners berthing off the island registering a marked increase. Like the broader tourism sector, the cruise industry has witnessed a strong post-pandemic recovery, with arrivals up by 67 per cent between January and September of 2023 when compared to 2022.
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Local Insight
The Gozo Tourism Association represents all operators related to the sector in Gozo. Among other activities, it organises the annual Gozo Tourism Awards, represents the destination in a number of international tourism fairs, and publishes a variety of material useful to investors and visitors alike. It has also taken the lead in promoting and enhancing several niche markets, like the island’s offering to the diving community. Joe Muscat, its Chief Executive Officer, represents the voice of Gozitan tourism on national entities like the Malta Tourism Authority and the Malta Council for Economic and Social Development. How is Gozo’s tourism offering distinct from Malta’s? Gozo’s distinctiveness is based on its unique selling propositions, centred around the rustic character and natural beauty of the island, with gentle hills contrasting with breathtaking sheer cliffs. Meanwhile, the bed stock mix on Gozo includes the accommodation product commonly known as the farmhouse, which is so prevalent and typical of Gozo. This conversion of old and often derelict buildings in the quaint and rural areas of Gozo into comfortable tourist accommodation has helped emphasise the island’s differentiation from Malta. Along the years, the destination has managed to intertwine and brand cultural, religious and folkloristic events as a touristic offer that can only be experienced in Gozo. These include lyric opera performances staged annually by the two Victoria theatres, a distinct tourist experience attracting domestic as well as foreign tourists. During the Carnival period, Gozo has established itself as a crowd puller, especially with the Maltese, although it is gradually gaining ground with foreign visitors too. Christmas in Gozo is yet another unique period to experience this festive time of the year in a singular setting. With a month-long string of cultural and religious events, Gozo is now being branded as the place to relish the festive spirit.
Investors would do well to look for opportunities that continue to play along the tune of distinctiveness, such as attractions that showcase Gozo’s genuine identity.
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Gozo is also a favoured destination for diving. Despite its small size, the island is endowed with awesome dive sites popular with foreign diving enthusiasts. In fact, around 20 per cent of the foreign tourists to the island come to visit purposely to practise diving. This adventure sport is practised from April and extends into November, making it a niche market that assists in mitigating the island’s seasonality.
A few months ago, the Maltese Government launched a vision for Gozo entitled ‘Gozo: an island of villages’. What is the main thrust of this vision, as it relates to tourism? This regional development strategy for Gozo identifies tourism as one of the sectors that can re-align economic growth with wellbeing. It highlights Gozo’s distinctive characteristics and marks out the importance of their preservation, enhancement and promotion as key factors for a long-term strategy focusing on sustainable tourism. It also shows a commitment to tackle the seasonality of the island by encouraging and incentivising the private sector to improve the Gozitan product whilst creating new anchor attractions.
What does the Gozo tourism sector offer foreign investors? Gozo is a distinct destination. Therefore, the island has to continue offering a different touristic offer. As such this diverse offer is in itself an enticing opportunity for investors to come up with authentic, creative and innovative initiatives. There is more room for sustainable quality tourism development, both from an accommodation aspect as well as in other tourism-related services that can continue complementing the island’s tagline of a distinct destination. Government also does its part through support schemes covering marketing and employment designed to cater for the island’s specific needs. Investors would do well to look for opportunities that continue to play along the tune of distinctiveness, such as attractions that showcase Gozo’s genuine identity. The island’s gastronomy, its local produce, the Holy Week pageantry, and the traditional hospitality, coupled with the rich cultural and natural setting of Gozo, are all opportunities that can contribute towards an authentic and unique holiday experience.
Photo: Alex Buttigieg
Meet Joe Muscat
CHAPTER 9 Tourism
Investment Opportunities
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alta’s tourism sector is full of opportunities for investors with vision, be they established brands or upstart entrepreneurs. The hospitality industry has seen a wave of investment in recent years, attracting global players to cater to the fast-growing number of arrivals seeking quality experiences. The latest of these are Barceló and Meliá, hot on the heels of a landmark development by Hyatt. One avenue for investment lies in the refitting and rebranding of existing hotels, as is the case in the beloved Dolmen Hotel’s announcement in late 2023 that it would be closing down for refurbishment and reopening as a DoubleTree by Hilton establishment. Other prospective hospitality investors might see potential in abandoned palazzos or grand townhouses in quaint areas, with many of these being given a new life when transformed into boutique offerings with old world charm. While Valletta and the Three Cities remain at the vanguard of this trend, towns and villages on the periphery are now receiving more attention, with guesthouses popping up in the hearts of communities far away from the hustle and bustle of more popular tourist hotspots. These offer an altogether different experience, allowing guests to be part of a way of life that is distinctively Maltese and uncompromisingly authentic. This new hospitality trend builds on the success enjoyed by short-let rentals on platforms like Airbnb, which led the way in attracting tourists to spend the night in areas off the beaten track and continues to be a hugely popular investment. The
Valletta. Photo: Inigo Taylor
mushrooming of such establishments has also given rise to further business opportunities as holiday apartment management firms handling everything from bookings to cleanings have sprung up to service the needs of this new class of hospitality offering. The increase in tourists has also driven a need for more and better retail outlets, an area that remains underserved and is ripe for investment. Local players have identified this market gap and are working to satisfy the desire for more diversified shopping options – late 2023 saw the opening of Mercury Towers’ immersive premium retail offering while The Shoreline, in Smart City, is due to open in 2024. Still lacking, however, is a sophisticated suite of haute couture and luxury fashion outlets. One reason for this is the lack of adequate space in Valletta, the natural home of brands serving the
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truly high-end market segment, though a major redevelopment project currently underway at the capital’s Coliseum complex, opposite the sublime St John’s Co-Cathedral, promises to address this need, opening the door to bold investors ready to bring fresh concepts and new brands to an area with unparalleled prestige.
celebrity restaurant generated lasting hype, as the popular TV chef Gino D’Acampo landed in the country to herald the opening of three outlets at Mercury Towers. The reaction to the news will surely be of great encouragement to anyone looking to make their own mark on Malta’s gastronomic landscape.
Dining out is a central element of any holiday experience, and as Malta continues to upgrade its tourism product to attract higher-spending visitors, the gastronomic scene is upping its game and reaching new heights. The Michelin Guide’s assessors recognise the brilliance of new establishments every year, and there is plenty of room for more. In late 2023, the announcement of what is perhaps Malta’s first international
Understanding Malta’s strategic priorities, and why people come here, is paramount for investors looking to carve out a slice of the country’s lucrative tourism sector. The drive to become a more refined destination – while retaining the quantity of tourists all year round – creates a welcoming environment for high-quality investment, especially for internationally renowned brands with a pull factor of their own. Similarly, initiatives to increase arrivals in the shoulder months of the year will be well-received, in line with efforts to mitigate the inherently seasonal nature of tourism in a seaside destination. Not that the seaside should be disregarded: around 60 to 70 per cent of tourists say they come to Malta for the sea and culture – hardly surprising, since these two elements play a big role in any decision to travel to the islands. Business reasons and special occasions like music events and weddings are the main motivators for 8 per cent of travellers, while scuba diving and wellness account for another 5 per cent each. Finally, just under 4 per cent come to Malta to study English at one of the many schools centred around Sliema, St Julian’s and St Paul’s Bay. Investors, companies and entrepreneurs exploring the opportunities offered by a destination attracting close to 3 million tourists will find the Malta Tourism Authority (MTA) and the Ministry for Tourism to be very supportive, guiding them on the practical realities of the market and the legal obligations that are necessary to ensure that high standards remain the order of the day. The MTA is tasked with promoting Malta as a tourism destination around the world, and is also responsible for the licensing of hotels, short-lets, restaurants, bars, and any other business related to tourism. This makes the authority a natural point of contact – as with other sectors, local insight and perspective can make all the difference, so it is in investors’ interest to establish a relationship early on in their journey.
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Valletta. Photo: Inigo Taylor
CHAPTER 9 Tourism
Local Insight
Meet Simon De Cesare Eden Leisure Group is one of the foremost leisure and hospitality groups in Malta. A partner of international brands like InterContinental and Holiday Inn, it is also active in the cinema, esports and fitness sectors. Simon De Cesare has led the company since 2018, having previously served as Director of Operations. He is also a Council Member of the Malta Hotels and Restaurants Association and Vice-President of the Malta Business Bureau. Malta is no longer a summer-only destination. Can you tell us more about this development? We have been trying for decades to push more business to the shoulder months and the strategy has worked. Conference business brings people all year round now, although not all hotels enjoy this market. Summer is still peak and will always be so. We must continue to push and incentivise more activities in the noncore months to be able to manage the scarce resources we have and provide a good experience to our guests.
As the tourism industry has grown, it has left social and environmental impacts, as well as created challenges in finding adequate human resources. How do you see the industry’s future development in light of these challenges? We are increasingly recognising that the sustainability aspect of investment, especially in tourism, needs to be addressed. New hotels need new workers. We are unable to attract these workers from the local workforce, so we have to import them, increasing the strain on the power grid, sewage systems and garbage collection. These are all areas under strain due to the growing population and the sheer volume of tourists. It is not a matter of tackling the influx of workers – they are needed. Rather, we need to tackle the source and dissuade investment that is human capital-intensive while incentivising investment that does more with less.
Malta continues to attract interest from some of the biggest names in hospitality, with a number of renowned hotel lines launching or expanding investment in Malta. What impact does this have on the local hospitality offering? Hotel operators are always happy to open in new locations. The reality is that very few actually invest their own resources and rely on the owner and developer to invest their capital. Arguably, a recognisable name can add to the business case in achieving better rates, but hopefully the new brands also help in raising the quality standards of our hospitality product.
What should any foreign investors in Malta’s tourism, hospitality and leisure sectors keep in mind if they hope to be successful? Today the market is at capacity. Anyone investing in hotels in Malta must look for the unique selling point, whether in the type of tourism it aims to attract, economies of scale or something else that allows their investment to stand out.
Anyone investing in hotels in Malta must look for the unique selling point, whether in the type of tourism it aims to attract, economies of scale or something else that allows their investment to stand out.
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Boosting the Economic Benefits of Tourism in Malta Arthur Grima, Director of Marketing at the Malta Tourism Authority, talks to Sarah Muscat Azzopardi about the work of the team tasked with promoting Malta as a destination around the world.
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“The marketing set-up reflects the authority’s strategy, which is geographically planned, demographically targeted and segment/motivation-driven.”
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he Malta Tourism Authority’s diverse role as tourism industry regulator and the country’s brand promoter is reflected in the way it is structured, and the various functions and services that each of its different departments performs. From marketing and promotion, product development and quality assurance to training, support of local events and participation in travel fairs across the globe, the MTA is active on multiple fronts in pursuit of its goal to ensure that Malta continues to attract attention from holidaymakers. Arthur Grima, the authority’s Director of Marketing, boasts a career in aviation and tourism that spans over three decades. Starting his journey with Air Malta after completing his Business Management degree in 1991, he worked in Frankfurt, Vienna and Amsterdam before returning to the airline’s head office in 2012. In 2015, he started a new chapter with the MTA, eventually being appointed Director of Marketing at the authority in August 2023. Delving into the Marketing Department’s role, Mr Grima explains that, as the official national tourism authority, the MTA is tasked with the promotion of the Maltese Islands on a global scale, as well as the development of its tourism industry.
“Our primary objective is to boost the economic benefits of tourism in Malta, and we achieve this by collaborating with various stakeholders, both locally and abroad. The major role of the Marketing Department is therefore that of destination marketing. Through our international reach, we aim to enhance visitor spend and improve Malta’s standing as a preferred destination for international travellers,” he maintains. For tourism stakeholders, the MTA’s prodigious efforts continue to bear fruit, with the industry rebounding strongly in 2023 as tourist arrivals eclipsed even the record figures registered in 2019. Achieving this kind of success is no easy task, and Mr Grima affirms that it requires the coordination of several teams, noting that the MTA is present with its own office and a staff complement in the UK, Italy, France, Germany, Austria, Switzerland and Poland; the latter being the most recent addition in recognition of the country’s increasing importance as a major source market for tourism. Furthermore, the authority has representation offices in six other European countries, as well as in North America, Japan, Turkey and the United Arab Emirates. “These are, in turn, supported by a specific team, or Marketing Unit, at our Head Office in Smart City,” the Director of Marketing explains, adding that in total, the
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department comprises eight units, each representing a different geographic region. “We also have a separate Digital Marketing Unit which overseas our online presence and coordinates all our digital campaigns,” he continues, touching on the ever-increasing importance of online promotion in reaching new demographics. The MTA, Mr Grima says, employs a distinctly analytical approach to its work, with the marketing set-up reflecting the authority’s strategy, which is geographically planned, demographically targeted and segment/motivation-driven. Each unit oversees a specific segment, and is made up of several experts who are well-informed on specific interests and are a point of reference to their MTA colleagues and trade partners. “In fact, we have a marketing plan for each country, which is segmentdriven according to the time of the year.” At the time of our interview in September 2023, Mr Grima says that the authority is “geared up to promote the winter months, where we focus more on quality, short breaks and lifestyle.” To that end, the MTA promotes Malta’s heritage,
“The industry rebounded strongly in 2023 as tourist arrivals eclipsed even the record figures registered in 2019.”
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winter events and gastronomy, along with land-based active holidays – exploiting the country’s milder climate while Europe is freezing. Other market segments include family travel during mid-term and Christmas school holidays, along with MICE groups. Moreover, he continues, “we will be hosting a considerable number of foreign media representatives which PR outcome ensures a high return on investment, and we will be present in international fairs with our own stand to meet several trade and media representatives, along with potential visitors.” In the weeks and months ahead, Mr Grima adds, the team has various campaigns planned with major online travel agencies (OTAs), TV campaigns, OOH advertising, and digital/influencer marketing, and will also be organising several activations with brand partners. “We always aim at achieving a 360°-marketing approach to reach out to a wide audience in multiple ways,” he shares, adding, “it is difficult to delve into the details in a such a short time, however we are extremely active, and I can assure you that there is never a dull moment!”
CHAPTER 9 Tourism
Why should one visit the Maltese Islands?
Battery Street, Valletta. Photo: viewingmalta.com
“Malta offers a captivating blend of history, culture, natural beauty, and outdoor activities, all within a welcoming Mediterranean setting,” Mr Grima remarks. “It is a destination that appeals to a wide range of interests and is sure to leave a lasting impression on anyone who visits. “The size of the islands, covering around 316 square kilometres, yet with so many attractions that our 7,000-year-old history offers, ensures the best return on holiday time, and therefore the best value for money. One is never more than an hour away from the next stop. One can visit Valletta in the morning, stop for lunch in Marsaxlokk fishing village, go to the beach in the afternoon, and enjoy a sunset dinner in Mdina… all in just one day!
Marsaxlokk. Photo: viewingmalta.com
“Most importantly, one should simply go local. Mingle, experience the local culture, and enjoy our traditions, our gastronomy, and our warm hospitality!”
Mdina. Photo: viewingmalta.com
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The Maltese Islands: Your Premier Destination for MICE Excellence In the vibrant heart of the Mediterranean, the Maltese Islands emerge as the gem of the eurozone in the international MICE arena. Top-tier corporations and discerning organisations consistently choose Malta for their most significant gatherings, drawn by its unique blend of history, culture and contemporary flair. Palazzo Parisio & Gardens, Naxxar
T
conference facilities and dedicated MICE professionals, ensuring that every event is executed with precision and grace. International brands such as Barceló, Hilton, Hyatt, InterContinental, Corinthia, Westin, Kempinski, Radisson Blu, and Marriott offer familiar comfort with a Maltese touch.
Exceptional Venues and Accommodations Accommodating a spectrum of preferences and budgets, Malta’s diverse venues – ranging from luxurious five-star hotels to charming boutique properties – offer more than 7,000 beds in five-star establishments and over 15,000 in four-star accommodations. These venues boast in-house
Malta’s Unique Charm A history rich with over 7,000 years of human activity, Malta’s cultural landscape is a palimpsest of Phoenician traders, Arab conquerors and European rulers. The legacy left by each civilisation has transformed the islands into a mosaic of historical splendour, with three UNESCO World Heritage Sites, including the capital city of Valletta, the architectural wonders of the Megalithic Temples and the subterranean mystery of the Ħal Saflieni Hypogeum.
he Maltese Islands, a Mediterranean jewel, are a nexus of past and present—a dynamic hub of connectivity where European gateways converge within a mere three-hour flight. The islands’ proximity to major European cities is complemented by a swift catamaran service linking Malta to Sicily in under two hours, providing a seamless transition from the historic Valletta Harbour to the bustling port of Pozzallo.
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Island Sisters: Gozo and Comino Adjacent to Malta, the islands of Gozo and Comino provide an enchanting contrast. Gozo, the serene sister, is a haven of tranquillity, inviting wellness retreats and outdoor pursuits among its rugged hills and cultural landmarks. The island’s Ġgantija Temples stand as a testament to a distant prehistoric era. Comino, nestled between Malta and Gozo, is a slice of paradise for water enthusiasts, offering some of the Mediterranean’s most pristine diving, snorkelling and boating experiences.
State-of-the-Art MICE Infrastructure Malta’s MICE infrastructure is among the finest in the Mediterranean. With five convention centres, including the Hilton Malta Conference Centre, the InterContinental Arena Conference Centre, the Oracle Convention Centre and the Malta Fairs and Conventions Centre, the island is equipped to host events of any scale. The Mediterranean Conference Centre in Valletta stands as the flagship venue, a historical masterpiece converted to host modern-day events.
Engaging Experiences The Maltese Islands present a tapestry of activities designed to inspire and entertain. Corporate teams can engage in outdoor team-building exercises, sail the Mediterranean blues, or partake in kayaking adventures along the picturesque coastlines. The islands’ rich history provides a backdrop for cultural explorations and interactive learning experiences that combine leisure with team enrichment.
Breathtaking Locations From the turquoise embrace of the sea to the architectural elegance of historic courtyards and the modern luxury of upscale poolside venues, Malta offers a venue for every vision. Events held on the islands are guaranteed to leave a lasting impression, combining natural beauty with architectural finesse to create unforgettable experiences.
Culinary Delights Malta’s gastronomy is a celebration of its Mediterranean roots, fused with the influences of its storied past. The local cuisine features fresh, sun-kissed ingredients transformed into delectable dishes that reflect the islands’ soul. From rustic farm-to-fork experiences to sophisticated dining under the stars, Malta’s culinary offerings are diverse and plentiful, with six Michelin-starred restaurants and four Bib Gourmand establishments leading the gastronomic scene.
Connect with Us At the heart of Malta’s MICE industry is the VisitMalta Incentives and Meetings (VMIM) team, based at Smart City, Malta. Together with the global team, VMIM provides comprehensive support, tools and personalised assistance to ensure your event’s success. Reach out to us at info.conventions@visitmalta.com
Cultural Vibrance A calendar brimming with cultural events and festivals ensures that Malta’s streets are always alive with celebration. From summer jazz festivals to winter carnivals, the islands offer a vibrant cultural scene that provides delegates with ample opportunity for enjoyment and networking in a festive atmosphere. Seamless Communication Business flows smoothly in Malta, where English serves as the official language of commerce. The Maltese language, with its Semitic roots and romantic influences, adds charm to the linguistic landscape. Main European languages are also spoken, making communication a delightful experience for visitors from around the globe.
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A New Dawn for a Heritage Icon In a major redevelopment that aims to blend historical charm with modern allure, Pjazza 1902 is set to breathe new life into Pembroke’s social scene. David Muscat Fenech Adami, Head of Marketing and Sales, takes Malta Invest behind the scenes of the project to share the vision of what’s shaping up to be an exciting addition to the area.
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ithin an abandoned Grade I listed building in St Andrew’s, Pembroke, a transformative development is finally coming to fruition. For decades, this two-storey property was left in neglect, falling into a state of disrepair. Today, however, works are in full swing to restore this once much-loved site into Pjazza 1902, a multifaceted venue that delicately blends modernity with its storied past. Speaking about the inspiration behind the project, David Muscat Fenech Adami, Head of Marketing and Sales for Pjazza 1902, explains: “The project started with a deep love for history and a dream to create a destination that feels modern yet nostalgic in the heart of Pembroke. We drew our inspiration from the old building itself, which dates back to 1902, and remains a fascinating thread through Malta’s history.” Fostering a sense of community seems to be very much core to the project. Pjazza 1902 is being designed as an inclusive focal
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point in the Pembroke area, one that caters to a diverse audience. Visitors will be treated to a broad spectrum of amenities and familyfriendly attractions. Chief among these, visitors can anticipate a variety of food offerings with a restaurant and al fresco kiosks set against the backdrop of landscaped gardens. Beyond gastronomy, Pjazza 1902 aspires to be a bustling centre for live entertainment, inviting local musicians and performers to put on performances. Adding another feather to its cap, the development is also slated to include a respected childcare centre, Dawra Durella, joining its current locations in Naxxar and Pembroke, alongside a versatile multi-purpose room with indoor and outdoor space suitable for corporate gatherings, special events and children’s parties. “This building has always been a lively gathering spot for the community. Whether as Raffles Discotheque, which was a hugely popular venue in the ‘80s, or even earlier as the Junior Ranks’ Club for the British Armed Forces, it’s a place that brought people
CHAPTER 9 Tourism
together. We feel that it’s only fitting that this wonderful piece of architecture be opened to the public once again so that they can enjoy its beauty while finding a relaxing space where they can spend quality time with friends and family.” Working with a building of such historical significance comes with its own set of complexities, especially when striving to preserve its original elements. Mr Muscat Fenech Adami elaborates on how they’ve navigated these challenges: “Preserving the architectural integrity of this historic building is paramount to us. We’re working closely with heritage experts and skilled architects to ensure that every design intervention respects the building’s legacy. By contrasting original features with carefully curated contemporary designs, we’re looking to achieve a harmonious equilibrium between the past and the present.” The venue will be hosting several monthly family events, giving the public a new space to visit with family and friends alike. “We are sometimes limited in terms of places to go,” says the Head of Marketing. “This project will establish a new area full of leisure opportunities that will diversify the options available.”
launch, and are there any special events on the horizon to mark the occasion? “We’re meticulously crafting the final touches of Pjazza 1902 in anticipation of its upcoming grand opening,” Mr Muscat Fenech Adami enthuses. “To celebrate this momentous occasion, we’ll be planning a series of events and promotions that truly encapsulate the spirit of our venture in the lead-up to the launch.” For those eager to stay updated on the project’s journey, he encourages them to follow their official website and social media channels. Through these platforms, regular updates, sneak peeks and event announcements will be shared, offering an in-depth look at the project’s ongoing transformation. “We can’t wait to share Pjazza 1902 with the public. We’re confident that we’ve created something special here, a heritage building that balances respect for its history while offering contemporary appeal. We can’t wait to see this site come alive once more as the next go-to gathering spot for the Maltese community.”
After years of lying in disrepair, the development of Pjazza 1902 has made significant strides in recent months, but there’s still a stretch to go before its final unveiling. So, what’s the timeline for its official
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CHAPTER 10
Useful Information
Malta’s International Investment Guide
MaltaInvest2024
Overview
I
nvestment decisions are always difficult to take, demanding meticulous consideration of numerous factors. In this comprehensive guide, we have curated essential insights tailored for prospective investors eyeing opportunities in Malta. Throughout this publication, we emphasise the pivotal role of strategic connections, underscoring that the right information can significantly impact investment outcomes. To aid investors in navigating Malta’s business landscape, we provide an exhaustive list of authorities, agencies, associations and organisations, along with their contact details. Additionally, we highlight the instrumental role played by Malta’s embassies and consulates in fostering crossborder trade and investment, urging interested investors to establish vital connections with their local Maltese representatives. Taxation, a cornerstone of investment planning, is explored in depth within this chapter. We delve into the intricacies of the Maltese personal tax regime, elucidating crucial details about the types of income subject to local taxation and the corresponding tax obligations. Moreover, we present a comprehensive inventory of Malta’s bilateral agreements on double taxation, shedding light on how the country’s tax system harmonises with those of other nations, offering invaluable insights for investors. Recognising that investments are intertwined with the broader ecosystem, we emphasise the significance of robust infrastructure. A thriving economy relies on efficient logistics networks, superior healthcare facilities and seamless internet connectivity. Malta, cognizant of this, has made substantial investments to ensure its infrastructure stands on par with its European counterparts. In this
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Triton Fountain, Valletta. Photo: Inigo Taylor
chapter, we spotlight Malta’s robust infrastructure, a testament to its appeal as an investment destination. We trust that the wealth of information presented in this chapter, complemented by the content in this edition of Malta Invest, will prove invaluable to all those considering our Mediterranean islands for their investments. Whether you are exploring new ventures or seeking to expand existing ones, this guide aims to empower you with the knowledge and insights needed to make informed and successful investment decisions in Malta.
CHAPTER 10 Useful Information
Local Contacts Investors will find Malta to be a bustling hub of activity with assistance and support available to those who ask for it. Whether exploring new opportunities, looking for partners, or information on incentives, establishing a local network is essential for success in Malta. Fortunately, support is just a phone call or an email away.
Communications
Employment
Malta Communications Authority (MCA)
Department for Industrial and Employment Relations (DIER)
Regulator of all communications services including TV, internet, mobile telephony, and radio, as well as eCommerce. +356 2133 6840
customercare@mca.org.mt
mca.org.mt
Government entity tasked with supporting good industrial relations and monitoring the legal application of employment contracts. +356 2122 4245/6
info.dier@gov.mt
dier.gov.mt
Education
JobsPlus The national employment agency issuing work permits.
University of Malta The leading higher education institution in Malta with faculties in a wide variety of subjects. +356 2340 2340
info@um.edu.mt
um.edu.mt
+356 2125 5153
jobsplus@gov.mt
jobsplus.gov.mt
Identità Issuer of visas, identity cards, passports, and other services.
Malta College of Arts, Science and Technology (MCAST)
+356 2590 4000
enquiries@identitymalta.com
identitymalta.com
The top vocational and training college with hundreds of courses leading up to Master’s level. +356 2398 7100
information@mcast.edu.mt
mcast.edu.mt
Malta Financial Services Authority (MFSA)
Malta Further and Higher Education Authority (MFHEA) Accrediting authority of Maltese education institutions providing quality assurance and recognition of local and international qualifications. +356 2598 1489 mfhea.mt
Financial Services
info@mfhea.mt
Regulator of financial services in Malta. +356 2144 1155
communications@gov.mt
mfsa.mt
FinanceMalta A public-private partnership set up to promote Malta as an international financial centre. +356 2122 4525
info@financemalta.org
financemalta.org
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Malta Stock Exchange Provides access to capital finance to large companies and SMEs alike through its Main and Prospects markets. +356 2124 4051
borza@borzamalta.com.mt
borzamalta.com.mt
General Investment Malta Enterprise Malta’s economic development agency providing grants, incentives and other assistance for businesses looking to establish themselves in the country.
Institute of Financial Services Practitioners
+356 2542 0000
Association of professionals working across the entire range of financial services.
maltaenterprise.com
+356 9946 7041 / 9934 3240 / 9934 2991 info@ifsp.org.mt
ifsp.org.mt
Malta Institute of Accountants The voice of the accountancy profession in Malta. +356 2258 1900
info@miamalta.org
Malta Enterprise Gozo Office +356 2156 4700 gozo.office@maltaenterprise.com / info@investingozo.com
Malta Enterprise UK Office +44 20 7292 4800
miamalta.org
Malta Institute of Taxation Organisation of tax practitioners promoting good practice and knowledge through seminars and courses. +356 2131 4653
info@maltaenterprise.com
info@maintax.org
maintax.org
peter.meli@maltaenterprise.com
Business 1st One-stop-shop for business set-up. +356 2542 2020
info@businessfirst.com.mt
businessfirst.com.mt
Start In Malta Initiative to improve Malta’s startup ecosystem.
Gaming
+356 2542 0000
Malta Gaming Authority (MGA) Regulator of all gambling services in Malta. +356 2546 9000
info.mga@mga.org.mt
Gaming Malta Foundation Promoter of Malta as a centre of excellence for the broad gaming industry. info@gamingmalta.org
gamingmalta.org
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Malta Business Registry Register of companies based in Malta. +356 2258 2300
info.mbr@mbr.mt
mbr.mt
Government holding company and development partner.
Association of iGaming companies based in Malta.
igenorg.eu
Start In Malta Gozo Office
Malta Government Investments
iGEN +356 7967 6868
startinmalta.com
+356 2156 4700
mga.org.mt
+356 2247 3000
connect@startinmalta.com
info@igenorg.eu
+356 2149 7970 mgis.com.mt
info.mgis@mgis.com.mt
Investment Partner
Government entity dedicated to creating, assisting and promoting economic development.
Malta Film Commission
+356 2149 7970
info.mimcol@mimcol.com
Government entity facilitating film production in Malta through tax credits, co-production grants and other incentives. +356 2180 9135
mimcol.com.mt
Malta Development Bank
CHAPTER 10 Useful Information
Malta Investment Management Company (MIMCOL)
info@mfc.com.mt
maltafilmcommission.com
Provider of financing facilities to support productive and viable startups, SMEs and infrastructural projects. +356 2226 1700
info@mdb.org.mt
mdb.org.mt
Life Sciences Medicines Authority (MA) Regulator of the pharmaceutical industry in Malta. +356 2343 9000
Gozo
medicinesauthority.gov.mt
Gozo Regional Authority Agency promoting economic development in Gozo. +356 2215 6331/3
info.medicinesauthority@gov.mt
info@grda.mt
Life Sciences Park A life sciences hub providing laboratories and other facilities for research and development activities. +356 2247 7600
grda.mt
Gozo Business Chamber
info@maltalifesciencespark.com
maltalifesciencespark.com
Association of businesses in Gozo. +356 2155 0305
info@gozobusinesschamber.org
gozobusinesschamber.org
Gozo Tourism Association Association of tourism operators working in Gozo. +356 21565171 / 2756 5171 / 2755 1999 info@islandofgozo.org; ceogta@islandofgozo.org
Regulator of planning, zoning and building permits. +356 2290 0000
customercare@pa.org.mt
pa.org.mt
Regulator of Malta’s natural resources and all practices relating to their management. +356 2292 3500
Industry
info.era@era.org.mt
era.org.mt
INDIS State entity managing industrial space in Malta and Gozo.
indismalta.com
Planning Authority (PA)
Environment and Resources Authority (ERA)
islandofgozo.org
+356 2226 4400
Property
info@indismalta.com
Malta Development Association Association of property developers and professionals working in the construction industry. +356 7949 2095
info@mda.com.mt
mda.com.mt
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Residency
Malta Council for Science and Technology
Community Malta Agency Agency managing Maltese citizenship. +356 2122 5232
info@komunita.gov.mt
Advisor, promoter and supporter of Malta’s research and development efforts. +356 2360 2200
info.mcst@gov.mt
mcst.gov.mt
komunita.gov.mt
Residency Malta Agency Agency managing Maltese residency.
Tourism
+356 2203 4000
Malta Tourism Authority (MTA)
customercare.residencymalta@gov.mt
Regulator of hospitality, catering and other tourism-related services.
residencymalta.gov.mt
+356 2291 5000
info@visitmalta.com
mta.com.mt / visitmalta.com
Taxation
Festivals Malta Agency
Commissioner for Revenue
National body entrusted as caretaker of Malta’s calendar of cultural festivities.
Malta’s centralised tax office responsible for income tax, social security and VAT. +356 2568 5120/3/8
servizz@gov.mt
cfr.gov.mt
info.fm@festivals.mt
festivals.mt
Valletta Cultural Agency
Customs House Department responsible for the control of the import and export of goods. +356 2123 6795
+356 2334 7301
malta.customs@gov.mt
customs.gov.mt
Agency set up to enable Valletta’s continuing development as a major cultural destination. +356 2124 2018
info@vca.gov.mt
vca.gov.mt
Foundation for Tourism Zone Development Coordinator of facilities, projects and initiatives in zones dedicated to tourism.
Tech
+356 2137 6082
Malta Digital Innovation Authority (MDIA)
tourism.gov.mt/en/ftzd
Authority promoting and supporting Malta’s emergence as a hub of innovative technologies. +356 2182 8800
info@mdia.gov.mt
mdia.org.mt
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Main point of entry and exit to and from Malta, serving millions of passengers every year.
maltairport.com
Public-private entity tasked with supporting the development of digital services in Malta.
tech.mt
Malta International Airport
+356 2124 9600
Tech.MT
+356 2226 2100
ftzd@gov.mt
techmt.contact@tech.mt
Malta Freeport Terminals
Port of call set against the stunning backdrop of Malta’s unique Grand Harbour.
Malta’s transhipment port serving as a versatile platform for the world’s major shipping lines.
+356 2567 3000
info@vallettacruiseport.com
vallettacruiseport.com
+356 2225 1000
CHAPTER 10 Useful Information
Valletta Cruise Port
marketing@maltafreeport.com.mt
maltafreeport.com.mt
Conventions Malta Promoter of Malta and Gozo as a MICE destination. +356 2291 5000
info@conventionsmalta.com
Malta Chamber of Commerce, Enterprise and Industry
conventionsmalta.com
Malta Hotels and Restaurants Association Association of operators involved in the hospitality sector. +356 2131 8133
mhra@mhra.org.mt
mhra.org.mt
info@maltachamber.org.mt
Association representing small and medium businesses operating in Malta.
Commerce Department
commerce@gov.mt
commerce.gov.mt
+356 2123 2881
admin@smechamber.mt
smechamber.mt
Malta Employers Association Union of employers promoting sustainable economic development. +356 2123 7585 / 2122 2992
TradeMalta Public-private partnership supporting trade links and providing assistance to export-oriented companies based in Malta.
admin@maltaemployers.com maltaemployers.com
info@trademalta.org
trademalta.org
Valletta Gateway Terminal Operator of commercial services in Malta’s Grand Harbour with facilities for RoRo, trailers, containers, conventional cargo, and vehicles. +356 2205 7000
+356 2203 2304
Malta Chamber of Small and Medium Enterprises
Department responsible for the issuing of trade licences for certain regulated sectors and operator of Malta’s intellectual property portal.
+356 2247 2400
The independent voice of the private sector in Malta, representing the biggest companies on the islands.
maltachamber.org.mt
Trade
+356 2122 6688
Trade Association
info@vgt.com.mt
Transport Transport Malta (TM) Government body overseeing all transport in Malta. +356 2122 2203
info.tm@transport.gov.mt
transport.gov.mt
vgt.com.mt
TM Civil Aviation Directorate +356 2555 5412
civil.aviation@transport.gov.mt
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TM Merchant Shipping Directorate +356 2125 0360 mershipmalta.tm@transport.gov.mt
TM Maritime Gozo Office +356 2155 8856/7
Yachting Malta Public-private partnership promoting Malta’s development as a hub for yachting events and services. +356 9982 3780
ceo@yachtingmalta.org
yachtingmalta.org
Malta Maritime Forum Association bringing together all stakeholders in Malta’s maritime industry. +356 2559 4188 mmf.org.mt
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admin@mmf.org.mt
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Diplomatic Missions Malta enjoys good diplomatic relations with many countries, and its ambassadors and consuls play an important role in nurturing trade opportunities. Prospective foreign investors may find their local diplomat to be helpful in getting insightful information and direction to make their Maltese venture a smooth success.
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Country or Entity
City
Representation
Telephone
Algeria
Algiers
Consulate
+213 023092262
maltaconsulate.algiers@gov.mt
Australia
Canberra
High Commission
+61 2 6290 1724
highcommission.canberra@gov.mt
Melbourne
Consulate
+61 3 9670 8427
maltaconsulate.melbourne@gov.mt
Austria
Vienna
Embassy
+43 1 5865010
maltaembassy.vienna@gov.mt
Belgium
Brussels
Embassy
+32 2 238 26 08/343 01 95 maltaembassy.brussels@gov.mt
Brazil
Brasilia
Embassy
maltaembassy.brasilia@gov.mt
Canada
Toronto
Consulate
+1 416 207 0922/89
maltaconsulate.toronto@gov.mt
China
Beijing
Embassy
+86 10 6532 3114
maltaembassy.beijing@gov.mt
Shanghai
Consulate
+86 21 6265 0166
maltaconsulate.shanghai@gov.mt
Council of Europe
Strasbourg
Permanent Representation +33 388247610
malta-coe.strasbourg@gov.mt
Egypt
Cairo
Embassy
maltaembassy.cairo@gov.mt
European Union
Brussels
Permanent Representation +32 2 238 2700
maltarep@gov.mt
France
Paris
Embassy
+33 1 56 59 75 90
maltaembassy.paris@gov.mt
Germany
Berlin
Embassy
+49 30 263 911 0
maltaembassy.berlin@gov.mt
Ghana
Accra
High Commission
+233 547044295
maltahighcommission.accra@gov.mt
Greece
Athens
Embassy
+30 2107 7851 38
maltaembassy.athens@gov.mt
India
New Delhi
High Commission
+91 11 4767 4900
maltahighcommission.newdelhi@ gov.mt
Ireland
Dublin
Embassy
+353 1676 2340
maltaembassy.dublin@gov.mt
Israel
Tel Aviv
Embassy
+972 3629 5914/5/6
maltaembassy.telaviv@gov.mt
Italy
Rome
Embassy
+39 06 6879990
maltaembassy.rome@gov.mt
Japan
Tokyo
Embassy
+81 3 5404 3450/1
maltaembassy.tokyo@gov.mt
Kuwait
Kuwait City
Embassy
+965 253 880 45/6
maltaembassy.kuwaitcity@gov.mt
+202 2461 9961/2
CHAPTER 10 Useful Information
Country or Entity
City
Representation
Telephone
Libya
Tripoli
Embassy
+218 21 3638522
maltaembassy.tripoli@gov.mt
Morocco
Casablanca
Consulate
+212 520275820/4
maltaconsulate.casablanca@gov.mt
Netherlands
The Hague
Embassy
+31 70 356 12 52
maltaembassy.thehague@gov.mt
Palestine
Ramallah
Representative Office
+970 2 2413210/1
info.ramallah@gov.mt
Poland
Warsaw
Embassy
+48 22 646 46 39
maltaembassy.warsaw@gov.mt
Portugal
Lisbon
Embassy
+351 213 405 470
maltaembassy.lisbon@gov.mt
Qatar
Doha
Embassy
+974 4029 1342
maltaembassy.doha@gov.mt
Russia
Moscow
Embassy
+7 499 230 25 24
maltaembassy.moscow@gov.mt
St Petersburg
Consulate
+7 812 449 47 80
maltaconsul.stpetersburg@gov.mt
Nizhny Novgorod
Consulate
+7 908 721 4880
maltaconsul.nizhnynovgorod@gov.mt
Saudi Arabia
Riyadh
Embassy
+ 966 11 463 2345/461 5315 maltaembassy.riyadh@gov.mt
Spain
Madrid
Embassy
+34 91 391 3061
maltaembassy.madrid@gov.mt
Tunisia
Tunis
Embassy
+216 71965811/3652
maltaembassy.tunis@gov.mt
Turkey
Ankara
Embassy
+90 312 447 8051
maltaembassy.ankara@gov.mt
United Arab Emirates
Abu Dhabi
Embassy
+971 2 444 8646
maltaembassy.abudhabi@gov.mt
United Kingdom
London
High Commission
+44 207 292 4800
maltahighcommission.london@gov.mt
United Nations
Geneva
Permanent Representation +41 22 901 05 80
malta-un.geneva@gov.mt
New York
Permanent Mission
+1 212 725 2345
malta-un.newyork@gov.mt
Embassy
+1 202 530 9750/1/2
maltaembassy.washington@gov.mt
United States of America Washington D.C.
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CHAPTER 10 Useful Information
Personal Tax Rates Malta operates a graduated progressive income tax regime with a top personal tax rate of 35 per cent for incomes above €60,000. There are three different scales of taxation based on whether the individual is single, married, or a parent. More on that below, but first, it is important to note what types of income are subject to tax, and for who. Individuals resident and domiciled in Malta are subject to personal tax on their worldwide income, while those who are domiciled but not ordinarily resident in Malta are only subject to tax on income arising in Malta and that remitted from abroad. The latter are therefore exempt from Maltese tax on income earned abroad which is not received in Malta, and on capital gains arising outside the country, whether or not it is remitted to Malta. However, persons married to an individual who is resident and domiciled in Malta are subject to taxation on their worldwide income, as if they themselves were resident in the country.
Tax Rates for 2023 Chargeable Income (€) From
To
Rate
Subtract (€)
Single Rates 0
9,100
0%
0
9,101
14,500
15%
1,365
14,501
19,500
25%
2,815
19,501
60,000
25%
2,725
60,001
and over
35%
8,725
Married Rates 0
12,700
0%
0
12,701
21,200
15%
1,905
21,201
28,700
25%
4,025
28,701
60,000
25%
3,905
60,001
and over
35%
9,905
Parent Rates 0
10,500
0%
0
10,501
15,800
15%
1,575
15,801
21,200
25%
3,155
21,201
60,000
25%
3,050
60,001
and over
35%
9,050
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Double Taxation Agreements Malta has an extensive network of double taxation agreements currently in force. Residents of Malta can benefit from the following minimum rates of tax on dividends, interest and royalties.
Dividends Country
Interest Rates %
Royalties Rates %
5
5
Rate for minor shareholding %
Rate for major shareholding %
15
5
Andorra
0
0
0
0
0
Armenia
10
5
10
5
5
Albania
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Percentage required to qualify for major shareholding % 25
Australia
15
15
N/A
15
10
Austria
15
15
N/A
5
10
Azerbaijan
8
8
N/A
8
8
Bahrain
0
0
N/A
0
0
Barbados
15
5
5
5
5
Belgium
15
15
N/A
10
10
Botswana
6
5
25
8.5
5/7.5
Bulgaria
0
0
N/A
-
10
Canada
15
15
N/A
15
10
China
10
5
25
10
10
Croatia
5
5
N/A
0
0
Cyprus
15
15
N/A
10
10
Czech Rep.
5
5
N/A
0
5
Denmark
15
0
25
0
0
Egypt
10
10
N/A
10
12 10
Estonia
15
5
25
10
Finland
15
5
10
0
0
France
15
0
10
5
10
Georgia
-
-
-
0
0
Germany
15
5
10
0
0
Greece
10
5
25
8
8
Guernsey
0
0
N/A
0
0
Hong Kong
0
0
0
0
3
Hungary
15
5
25
10
10
Iceland
15
5
10
0
5
India
10
10
N/A
10
10
Ireland
15
5
10
0
5
Isle of Man
0
0
0
0
0
Israel
15
0
10
5
0
Italy
15
15
N/A
10
10
Jersey
0
0
0
0
0
Jordan
10
10
N/A
10
10
Korea
15
5
25
10
0
Kosovo
10
0
Percentage required to qualify for major shareholding % 10
Kuwait
0
0
N/A
Country
Rate for minor shareholding %
Rate for major shareholding %
Interest Rates %
Royalties Rates %
5
0
0
10
Libya
15
5
10
5
5
Liechtenstein
-
-
N/A
0
0
Lithuania
15
5
25
10
10
Luxembourg
15
5
25
0
10
Malaysia
-
-
N/A
15
15
Mauritius
0
0
N/A
0
0
Mexico
-
-
N/A
5/10
10
Moldova
5
5
N/A
0
0
Monaco
0
0
0
0
0
Montenegro
10
5
25
10
5/10
Morocco
10
6.5
25
10
10
Netherlands
15
5
25
10
10
Norway
15
0
10
0
0
Pakistan
-
15
20
10
10
Poland
10
0
10
5
5
Portugal
15
10
25
10
10
Qatar
-
-
N/A
0
5
Romania
5
5
N/A
5
5
Russia
15/5
15/5
N/A
15/5
5
San Marino
10
5
25
0
0
Saudi Arabia
5
5
N/A
0
5/7
Serbia
10
5
25
10
5/10
Singapore
0
0
N/A
7/10
10
Slovakia
5
5
N/A
0
5
Slovenia
15
5
25
5
5
South Africa
10
5
10
10
10
Spain
5
0
25
0
0
Sweden
15
0
10
0
0
Switzerland
15
0
10
10
0
Syria
0
0
N/A
10
18
Tunisia
10
10
N/A
12
12
Turkey
15
10
25
10
10
UAE
0
0
0
0
0
UK Ukraine Uruguay USA Vietnam
15 15 15 15
5 5 5 5
N/A 20 25 10 50
10 10 10 10 10
10 10 5/10 10 5/10
CHAPTER 10 Useful Information
Dividends
This schedule is only intended to give a general outline of the maximum rates of tax applicable to dividends, interest and royalty payments under Malta’s tax treaties. It is advisable to consult the relevant tax treaty for more detailed information. Source: Commissioner for Revenue
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Malta International Airport. Photo: Alex Turnbull
Infrastructure
F
rom health and education to ports and digital connectivity, Malta’s infrastructure has been strengthened, in many instances with the EU aid provided upon Malta’s accession in 2004. Those unfamiliar with the country may be surprised to find that its healthcare, for example, is excellent. Below, you can explore in-depth information about some of Malta’s key physical and digital infrastructure, which undergoes continuous upgrades to equip businesses with the tools they need to operate efficiently and effectively. Airport Malta International Airport is the first and last destination for over 95 per cent of all visitors to Malta. Two runways, 3.5km and 2.4km long, connect Malta to around 100 destinations including most regional capitals and major cities, many less than three hours away, through over 30 partner airlines. The 72,000sqm terminal hosts over 15 food and beverage outlets, 10 retail outlets and a pharmacy. Business travellers can make use of two executive lounges, while a separate exclusive VIP terminal is typically used for diplomatic travel. The airport campus also includes 2,700 parking spaces, dedicated taxi and coach areas, and a state-of-the-art business centre, home to distinguished operations such as Microsoft and VistaJet. Over 18,000 tonnes of cargo pass through the airport annually, being the main base of Maltese operations for global companies like DHL and Servisair. It also hosts several maintenance facilities, including those operated by Lufthansa Technik, SR Technics and Ryanair. Malta International Airport won Airports Council International’s Best Airport in Europe title for four years running since 2018.
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Further upgrades are in the pipeline. Construction is currently underway for a second business centre and a tenth apron, including a new taxiway and a staging area for ground handling operations. These projects, slated for completion in 2026, will prepare the airport for increasing traffic and commercial growth while reducing resource use. Harbours The Port of Valletta, also known as the Grand Harbour, is the main entry point for people and goods arriving by sea. It extends for around 3.6km inland and is open 24 hours a day, 365 days a year, and hosts a wide array of services including ship repair and building yards, ship
CHAPTER 10 Useful Information
quays, 771,000sqm for container storage, a total of 15,297 container ground slots, and 1,840 reefer slots. The water depth of 17m can accommodate the latest class of 24,000 TEU vessels. The freeport has received over 2,000 ship calls and handled over 3 million TEU in a single year, with its 20 quayside cranes, 60 gantry cranes and highly skilled, dedicated personnel completing fast turnarounds for some of the largest shipping companies in the world. Malta’s strategic position is fully exploited with over 120 global port connections, and the port continues to invest heavily in digitalisation, infrastructural development, productivity, and ongoing training for its workforce to stay ahead of the curve and surpass demanding clients’ high expectations. In 2023, Malta Freeport embarked on a €90 million extension that will be capable of handling mega containerships currently in development. It was also singled out by Lloyd’s List as one of the top 10 ports in the world in terms of growth. Industrial Space Most industrial space is spread across more than 15 industrial estates managed by a dedicated state agency, INDIS. Each industrial estate has a variety of property solutions which can often be tailored to tenants’ needs, with some estates equipped for particular sectors and industries, such as the Life Sciences Park, home to the most cutting-edge laboratories, and the Safi Aviation Park, although manufacturing of all kinds remains the most common use for such space. INDIS takes a proactive approach to facilitating the setting up of business operations in Malta, working hand-in-hand with investors to find the solution that best works for them. To prepare the country for the technological transition of the coming years, INDIS is undertaking significant investments to expand and improve the industrial space on offer.
Marsamxett Harbour, on the other side of Valletta, towards the cosmopolitan areas of Sliema and Gżira, is largely dedicated to leisure-related activity and boasts several acclaimed yacht marinas.
Health Malta’s main hospital, Mater Dei, is a modern dynamic hospital, serving as an acute, general and teaching hospital, with a specialised oncology division situated nearby. The Life Sciences Park is also in the vicinity, allowing for the easy flow of the latest R&D into clinical practice. Healthcare in Gozo is also excellent, as attested to by Queen Mary University of London’s renowned Barts Medical School’s decision to open a Gozo campus next door to Gozo General Hospital. Private healthcare providers also operate specialised clinics and hospitals.
At the southern end of the main island lies the Malta Freeport, which ranks among the Mediterranean’s largest transhipment ports. Its two terminals offer 2,462m of operational deep-water
The public health service is free at the point of delivery for anyone working and paying social security. Regardless of one’s insurance cover or lack thereof, no one is turned away in case of an emergency,
chandelling, bunkering facilities, and specialised silos. The main terminal can handle container, RoRo and conventional cargo. The port also contains the Valletta Cruise Port and provides ferry links to Sicily and Gozo.
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MaltaInvest2024
although proof of insurance will be requested once the condition is stabilised. As in the rest of the EU, the emergency freephone to call an ambulance is 112. Education Malta has a well-regarded public school system with free education available to locals up to tertiary level. The Catholic Church operates several schools, while a relatively small number of private schools can be found, two of which, Verdala and QSI, are geared towards the expat community, offering the International Baccalaureate. The University of Malta and the Malta College of Arts, Science and Technology are the main state-funded tertiary and postsecondary institutions, offering a wide selection of degrees in practically all key subjects. Over the last two decades, several private institutions have also established themselves, with many partnering with international (mostly British) universities to offer internationally recognised qualifications, making Malta an attractive destination for those looking to get a world-class education under a clear blue sky. Dialogue between higher education and industry is constant, with Government-backed research funds acting as the catalyst for collaborative R&D projects that often make their
Marsa Flyover. Photo: Inigo Taylor
250
way to market and have, at times, caught the eye of global players. Here, again, the authorities’ willingness to listen and intervene as and where needed plays a vital role in encouraging fruitful cooperation. Information Technology Malta’s communications infrastructure compares well with that of most major European cities. In fact, Malta is the only EU member state with full coverage of ultrafast fixed internet, while the three mobile operators in the liberalised market provide coverage extending to every corner of the country. The European Commission’s Digital Economy and Society Index (DESI) ranks Malta fifth out of all the EU member states, with the country performing above the EU average in all five dimensions of the index. The success of Malta’s IT infrastructure in providing a solid foundation for sectors like software and game development, gaming and financial services, among others, has spurred on further investment, with the country now positioning itself to venture into future tech like artificial intelligence (AI) and the Internet of Things (IoT). Malta is connected to the internet by means of several cable links to Sicily, while Gozo, which has its own digital development agenda, is connected to the main island through two fibre optic cables, the second of which was opened in late 2020 in a bid to attract tech investment to the island.