FinanceMalta Investment Guide and Business Directory 2018

Banking • Capital Markets • Funds & Asset Management • Insurance & Reinsurance • Corporate Structuring & M&A • International Pensions • obal & European Corporate Headquarters • Securitisation • Private Wea anagement • Family & Multi Family Office • Trusts & Foundations • Forei hange Trading • Islamic Finance • Global Citizenship & Residency Plann • Corporate Treasury • Intellectual Property • Arbitration • Maritime & Yachting • Aviation •NPayments Shared &N Outsourcing INVESTME T G U I D E & B UIndustry S I N E SS D I R E•CTO R Y 2 0 1 8Services -2019 EDITIO Banking • Capital Markets • Funds & Asset Management • Insurance & Reinsurance • Corporate Structuring & M&A • International Pensions • obal & European Corporate Headquarters • Securitisation • Private Wea anagement • Family & Multi Family Office • Trusts & Foundations • Forei hange Trading • Islamic Finance • Global Citizenship & Residency Plann • Corporate Treasury • Intellectual Property • Arbitration • Maritime & Yachting • Aviation • Payments Industry • Shared Services & Outsourcing Banking • Capital Markets • Funds & Asset Management • Insurance & Reinsurance • Corporate Structuring & M&A • International Pensions • obal & European Corporate Headquarters • Securitisation • Private Wea anagement • Family & Multi Family Office • Trusts & Foundations • Forei hange Trading • Islamic Finance • Global Citizenship & Residency Plann • Corporate Treasury • Intellectual Property • Arbitration • Maritime & Yachting • Aviation • Payments Industry • Shared Services & Outsourcing Banking • Capital Markets • Funds & Asset Management • Insurance & Reinsurance • Corporate Structuring & M&A • International Pensions • European• Securitisation Finance • Private Wea obal & EuropeanMalta: CorporateAHeadquarters Centre with a Office Global Outlook anagement • Family & Multi Family • Trusts & Foundations • Forei hange Trading • Islamic Finance • Global Citizenship & Residency Plann • Corporate Treasury • Intellectual Property • Arbitration • Maritime & Yachting • Aviation • Payments Industry • Shared Services & Outsourcing Published by

CountryProfiler

Why Malta?

A land of inspiring potential and great business opportunities.

Throughout its rich and cultured history, Malta has distinguished itself across a range of industries. High levels of education and a skilled workforce have helped the island develop into a centre of excellence, positioning itself as a perfect international hub for business.

HSBC offers a one stop solution, providing real local insights and understanding to help you set up or expand your business in Malta.

View the “Why Malta?” video on www.business.hsbc.com.mt to learn more about HSBC’s attributes and why Malta is a great place to live and work.

Call 2380 8000 Click business.hsbc.com.mt

Approved and issued by HSBC Bank Malta p.l.c., 116 Archbishop Street, Valletta VLT 1444 which is regulated by the Malta Financial Services Authority. Licensed to conduct investment services business by the Malta Financial Services Authority. (Ref No. 101988 - 05/18)

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PUBLISHER INFORMATION

Banking • Capital Markets • Funds & Asset Management • Insurance & Reinsurance • Corporate Structuring & M&A • International Pensions •

The Team

Global & European Corporate Headquarters • Securitisation • Private Wealth Management • Family & Multi Family Office • Trusts & Foundations • Foreign Exchange Trading • Islamic Finance • Global Citizenship & Residency Planning • Corporate Treasury • Intellectual Property • Arbitration • Maritime & Yachting • Aviation •NPayments Shared &N Outsourcing INVESTME T G U I D E & B UIndustry S I N E SS D I R E•CTO R Y 2 0 1 8Services -2019 EDITIO Banking • Capital Markets • Funds & Asset Management • Insurance & Reinsurance • Corporate Structuring & M&A • International Pensions • Global & European Corporate Headquarters • Securitisation • Private Wealth Management • Family & Multi Family Office • Trusts & Foundations • Foreign Exchange Trading • Islamic Finance • Global Citizenship & Residency Planning • Corporate Treasury • Intellectual Property • Arbitration • Maritime & Yachting • Aviation • Payments Industry • Shared Services & Outsourcing Banking • Capital Markets • Funds & Asset Management • Insurance & Reinsurance • Corporate Structuring & M&A • International Pensions • Global & European Corporate Headquarters • Securitisation • Private Wealth Management • Family & Multi Family Office • Trusts & Foundations • Foreign Exchange Trading • Islamic Finance • Global Citizenship & Residency Planning • Corporate Treasury • Intellectual Property • Arbitration • Maritime & Yachting • Aviation • Payments Industry • Shared Services & Outsourcing Banking • Capital Markets • Funds & Asset Management • Insurance &

Garvan Keating CEO keating@countryprofiler.com

Reinsurance • Corporate Structuring & M&A • International Pensions • European• Securitisation Finance • Private Wealth Global & EuropeanMalta: CorporateAHeadquarters Centre with a Office Global Outlook Management • Family & Multi Family • Trusts & Foundations • Foreign Exchange Trading • Islamic Finance • Global Citizenship & Residency Planning • Corporate Treasury • Intellectual Property • Arbitration • Maritime & Yachting • Aviation • Payments Industry • Shared Services & Outsourcing Published by

CountryProfiler

Publication Date June 2018 Publisher’s Information CountryProfiler Ltd is a specialist publisher of country information that assists corporations managing operations across national borders with trade, investment and relocation decisions.

CountryProfiler is recognised by senior business executives, government representatives, institutions and global organisations as a leading provider of informative, insightful and actionable country intelligence.

Sonja Lindenberg Editor lindenberg@countryprofiler.com

Morgane Stein Project Manager & Business Development Executive morgane@countryprofiler.com

64, St Anne Court, Flat 2, Bisazza Street, Sliema SLM 1642 - Malta T: (+356) 2034 2034 • E: info@countryprofiler.com W: www.countryprofiler.com Photography Department of Information – Malta / Chris Sant Fournier / viewingmalta.com Art Director Ramon Micallef / ram@box-design.net Printing Gutenberg Press, Malta

Melissa Puglisevich Office Manager puglisevich@countryprofiler.com

The information included in this publication is for information purposes only and is subject to change. With regard to the licensing of a business, income generation or any other legal or accounting matters, the publisher strongly recommends that the reader seeks the advice of an appropriately licensed professional.

All rights reserved. Reproduction in whole or part is strictly prohibited without the written permission of the publisher. Opinions expressed in this publication are not necessarily those of the editor or publisher. All reasonable care is taken to ensure truth and accuracy, but the editor and publishers cannot be held responsible for errors or omissions in articles, advertising, photographs, or illustrations.

Ramon Micallef Art Director ram@box-design.net

Laws change.

VALUES DO NOT

Established in 1891, Fenech & Fenech Advocates is a leading Maltese full service law firm providing value-driven, tailored

The Fenlex Group, the firm’s trust and corporate services provider, is recognised as one of the

legal services across all practice areas.

leaders on the island.

198, Old Bakery Street, Valletta VLT1455, Malta T: +356 2124 1232 | E: info@fenechlaw.com

85, St John Street, Valletta VLT1165, Malta T: +356 2124 1817 | E: info@fenlex.com

fenechlaw.com

fenlex.com

CONTENTS

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Contents Key Facts and Figures International Financial Centre Overview Brexit: The Case for Malta

12 16 26

Country Profile Interview with the Prime Minister

28 36

FinanceMalta 38 About FinanceMalta 39 Interview with the FinanceMalta Chairman 40 Interview with the Minister for Finance Interview with the Parliamentary Secretary for Financial Services, Digital Economy & Innovation Interview with the Non-Executive Chairman of the Malta Financial Services Authority

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48 50

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CONTENTS

Contents Banking 52 Capital Markets 60 Funds & Asset Management 66 Insurance & Reinsurance 74 International Pensions 82 Corporate Structuring & M&A 86 Global & European Corporate Headquarters 90 Fintech 96 Blockchain & DLT 100 Securitisation 106 Wealth Management 110 Family Offices 116 Trusts & Foundations 120 Global Citizenship & Residency Planning 125 Corporate Treasury 132 Foreign Exchange Trading 134 Islamic Finance 138

CONTENTS

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Intellectual Property 144 Arbitration 147 Maritime & Yachting 151 Aviation 156 Payments Industry 164 Shared Services & Outsourcing 168 Finance Industry Associations Q&A

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Legislation & Regulation 181 Corporate Business Structures 185 Taxation 190 Doing Business in Malta 196 Conference & Incentive Travel 202 Travel & Living in Malta 204 Business Directory: Who’s Who

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KEY FACTS & FIGURES

Key facts & figures GOZO

MALTA

Location: Southern Europe Official Name: Republic of Malta Area: 316 km2 Population: 460,000 of which: Maltese: 94% Foreign: 6% Languages: Maltese & English Memberships: European Union, Eurozone, Schengen Area Sunshine: 300 days of sunshine/year Temperature average: Winter 12ºC, Summer 31ºC

Located in the centre of the Mediterranean, between Europe and North Africa, Malta is the European Union’s smallest member state. Famous for its 7,000-year history and 300 days of sunshine, Malta has emerged as one of the most remarkable success stories in the Eurozone.

Recognised for its pro-business attitude, state-of-the-art infrastructure and modest costs of doing business, it has become the go-to country for growth-minded entrepreneurs and multinational companies.

KEY FACTS & FIGURES

Currency: Euro

Time: GMT+1

Voltage: 240

International Dialling Code: +356

Religion: Roman Catholic

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Annual rainfall: 600 mm

Malta’s Economy in 2017

Malta’s Finance Sector

GDP Growth: +6.6 Unemployment rate: 4.0% Inflation: 1.6% Surplus: 3.9% Debt to GDP: 47.1% FDI Stock: €165.5 billion (June 2017)

GDP contribution: 11% Banks: 25

Source: European Economic Forecast, Spring 2018

Insurance companies: 63 including 8 captives and 14 Protected Cell Companies

Net Asset Value of Malta-domiciled Funds: €9.7 billion as at end June 2017

Reinsurance Special Purpose Vehicle: 1 Insurance Managers: 11

Registered Company Services Providers: 172

Retirement Schemes: 50 Retirement Funds: 2 Retirement Scheme Administrators: 16

Notified Securitisation Vehicles: 40 including 15 Securitisation Cell Companies with 26 cells

Fund Administrators: 26 Recognised Incorporated Cell Companies: 6 Incorporated Cells: 21

Source: Malta Financial Services

The Maltese Islands were previously best known as a holiday destination. However, over recent years, the country has sought to diversify its economy beyond tourism by promoting a range of sectors and activities, including financial services, tourism, iGaming, construction & real estate, manufacturing, life sciences, maritime and aviation.

Financial Institutions: 48 including 34 payment providers and 14 e-Money Institutions

Investment Funds (including sub-funds): 663 Of which: AIFs: 93 PIFs: 459 UCITS: 106 Retail non-UCITS: 5

Authority. All figures as of end 2017 unless otherwise indicated.

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KEY FACTS & FIGURES

Why Malta? u A full member state of the European Union and part of the Eurozone, providing Malta-based businesses with instant access to the EU’s internal market of over 500 million people; u Advantageous geographical location, being within three hours direct flight time from other European financial centres; u An accessible, respected and forwardlooking regulator and risk-based supervision; u Comprehensive financial legislation catering inter alia for the regulation of investment funds, insurance companies, securitisation, banking and financial institutions, offering many regulatory structures that are unique in Europe; u A network of double tax treaties with around 70 countries; u Political stability coupled with unanimous political support for the country’s position as an international financial centre; u An educated, dedicated and multilingual workforce and incentives to attract foreign professionals; u A banking sector, composed of a combination of solid and reliable Maltese banks and major international banks, providing the highest standards of service to corporate and private clients; u State-of-the-art telecommunications infrastructure and support services by professionals with a ‘can do’ attitude; u High quality of life in a Mediterranean island environment with English as one of Malta’s official languages.

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INTERNATIONAL FINANCIAL CENTRE OVERVIEW

New Ho International Financial Centre Overview

Malta has aspirations to grow and is repositioning to become a centre for financial functions of multinationals and mid-scale firms. Digital finance and blockchain technologies are seen as key to sustaining the growth the finance centre has enjoyed throughout the years.

A

sset, wealth and insurance management have become the power bases of Malta’s financial services sector, which has not only expanded in recent years but also internationalised like never before. Malta today can stand tall among Europe’s financial hubs and is developing new credentials in a range of sectors such as payments, fintech and Distributed Ledger Technologies (DLTs). Viewed as a particularly business-friendly location, the Mediterranean island is a favoured entry point to the European Union because of its robust, EU-compliant regulatory framework, diverse financial ecosystem and deep talent pool. Yet, despite its past successes, the island is taking a fresh look at its finance sector, which, like its counterparts Ireland, Luxembourg and Switzerland, has felt the spotlight of international attention. Malta is facing the task of maintaining its reputation as a robust jurisdiction that has nothing to hide and wants to send a clear message that Malta is no place for financial secrecy.

Â

INTERNATIONAL FINANCIAL CENTRE OVERVIEW

rizons Fully Onshore

The seeds of Malta’s finance centre were sown in 1988 when the country passed legislation to facilitate the establishment of an offshore financial framework. However, government soon recognised that the future lay in the provision of a well-regulated, transparent financial sector and decided to move its financial services onshore. At this time Malta was also seeking EU membership and began to harmonise its legislation, incorporating best practices from comparable centres. EU membership provided Malta with the spur it needed to catapult it from relative obscurity to one of Europe’s most dynamic and fastest growing finance centres. By introducing a strong supervisory framework as well as a competitive, transparent regime approved by both the EU and the Organisation for Economic Co-operation and Development (OECD), Malta sought to distance itself from secrecy jurisdictions, tax havens and shell company structures.

The island has continuously ensured that its laws, including anti-money laundering rules, are fully aligned with European rules and global best practice. Over the years, Malta has accelerated its efforts to increase the depth and breadth of its finance industry. The finance sector has growth by around 18 to 20% annually and accounts for 11% of the country’s GDP, providing almost 10,000 jobs.

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INTERNATIONAL FINANCIAL CENTRE OVERVIEW

Specialist Services Malta has positioned its financial services sector to serve as a European hub for many specialised services. For an island nation of just 460,000 people, Malta has built up a remarkably diverse financial services portfolio. The country’s banking sector was one of the first to embrace an international approach. Today, some 25 banks have established operations in Malta, although only a handful of these are active in the local market. Most use the island as a platform from which to conduct specialised asset financing, corporate banking and trade finance services. The insurance sector has experienced an upsurge due to the presence of expert insurance management services and EU passporting rights, and Malta is now regarded as one of the leading captive insurance domiciles.

The fund sector began to expand soon after the introduction of a specialist regime for alternative investment funds, known as Professional Investor Funds (PIFs), in addition to EU-certified UCITS funds and more recently Alternative Investment Funds (AIFs). While there are around 600 funds domiciled in Malta, the country has proved particularly attractive to fund platforms, managers and administrators who are servicing funds internationally from Malta. The country has also developed into an important wealth management location. High-net-worth individuals, wealth managers and family offices increasingly avail of the country’s wide range of investment vehicles, including trusts and foundations.

Key Players Traditionally, Malta had been chosen as a base by smaller financial services companies and start-ups, which offer clients more personalised services than those provided by the bigger firms.

However, as Malta’s status as a financial centre has grown, the island has also attracted international credit institutions such as HSBC, BNF Bank and trade finance specialist FIMBank.

Today, Malta hosts some 30 fund administrators and 60 insurance companies, ranging from well-known international names to smaller, niche establishments. Fund administrators such as Apex, TMF and Citco all have a presence in Malta, along with insurance specialists such as Munich Re, Aon and Marsh. In addition, multinationals such as BMW, Peugeot, Citroën and Vodafone have set up captives on the island. Malta also boasts considerable expertise in the field of trusts and foundations, including many legal firms with in-house trust companies, along with international organisations.

For an island nation of just

460,000

people, Malta has built up a remarkably diverse financial services portfolio.

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INTERNATIONAL FINANCIAL CENTRE OVERVIEW

Supervising International Business While financial services legislation is drawn up by the Ministry for Finance, all financial services are overseen by the Malta Financial Services Authority (MFSA). The MFSA is open-minded and approachable and offers face-to-face meetings with international companies seeking to operate from Malta – a level of access that is rare in other finance centres. Over the years, the MFSA has also worked together with the industry in developing the required capabilities, capacity and regulatory frameworks to move into new areas of business. The country has gained a reputation for striking a good commercial balance by providing an appropriate legal framework without over-regulating in a way that might inhibit growth and innovation. However, in light of the growing size of the financial sector, international institutions such as the European Commission and the IMF have called the regulator’s ability to effectively supervise internationally oriented businesses into question.

A Question of Substance Malta’s finance community unanimously refuses to be labelled as a tax haven. However, many acknowledge that the changing international landscape for tax planning will force a positive evolution of Malta’s product and service delivery over the longer term. Malta has always insisted that companies have more than ‘brass-plate’ operations, and the island is also fully committed to the efforts undertaken by the OECD in combatting Base Erosion and Profit Shifting in international tax structures.

Proven Concepts

Malta’s finance community has long been emphasising that regulation and innovation aren’t opposites. Practitioners regularly point to the link between the strong performance of the insurance and investment fund sectors and the country’s carefully crafted, and continuously developed, regulatory frameworks. Insurance premiums have reached a new high in recent years, with €3.8 billion written in gross premiums. It is argued that Malta’s Protected Cell Company (PCC) regime offers a cost-effective way of managing the higher capital and compliance requirements of Solvency II. Malta has also experienced an influx of asset managers and fund service providers following the introduction of the EU’s Alternative Investment Fund Management Directive (AIFMD) that regulates alternative fund managers and the promotion of alternative funds. To cement its position as a top domicile for the industry, Malta launched a new framework for the notification of Alternative Investment Funds (AIFs), known as Notified AIFs, as well as rules for the establishment of loan funds.

INTERNATIONAL FINANCIAL CENTRE OVERVIEW

Renewed focus on the wealth management sector has also paid off. Malta has updated its trust law, bringing it in-line with the latest international developments, while the introduction of citizenship-by-investment and new residency programmes have helped promote Malta as a holistic lifestyle and wealth management location. Other sectors are also gaining importance; Malta has the largest shipping registry in Europe and is building up a diversified aviation cluster. But that’s not all.

Blockchain Island The country is expanding its portfolio into profitable niche areas such as pensions, payments and securitisation, while opening its doors to fintech entrepreneurs. Malta is fast becoming a hotbed for cryptocurrency and blockchain activity. The island has received a lot of positive attention for its decision to regulate Distributed Ledger Technologies (DLTs). A new authority, the Malta Digital Innovation Authority will oversee the sector and provide legal certainty to operators, while dedicated regulation for blockchain, cryptocurrencies and Initial Coin Offerings (ICOs) will help these segments thrive in the months and years ahead. Malta’s decision to position itself as a frontrunner in a sector that was thus far mostly unregulated has already attracted investment from new companies, including the world’s largest crypto exchanges Binance and OKEx.

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INTERNATIONAL FINANCIAL CENTRE OVERVIEW

Financial Talent Pool To guarantee a pipeline of talent for established and new companies moving to Malta, the country is investing heavily in its financial sector workforce. From home-grown talent to experienced international financial sector professionals, Malta today offers a diverse talent pool. A high proportion (60%) of Maltese students continue to third-level education, with law, accountancy and management among the most popular subjects. To make the process of attracting foreign talent to Malta as easy as possible, the country has introduced a flat tax rate of 15% for highly qualified foreign professionals, as well as a fast-track visa approval service for non-EU nationals filling key positions in financial companies.

Support Network Companies setting up in Malta find many helping hands.

FinanceMalta, a non-profit public-private initiative, was established to promote the financial sector. The organisation is the first point of contact for investors and financers who soon find that the island’s professional services firms offer a wealth of knowledge and experience. Most law firms are affiliated with international networks, and many lawyers have post-graduate degrees in finance. In addition, each of the ‘Big Four’ accountancy firms has a presence in Malta and, together with the smaller accountancy and auditing practices, service international clients. Trust and fiduciary providers need to be licensed by the MFSA, and companies offering administrative and management services are also obliged to register with the authorities.

A Global View Much of Malta’s success can be credited to its EU membership, which has provided firms with access to the union’s massive internal market of over 500 million people. Malta’s most important commercial relationship is with the European Union.

Unsurprisingly, the island is now positioning itself as a base for UK finance companies seeking an EU address after Brexit. Malta, besides Ireland, is the only other English-speaking EU country, and coupled with its other advantages as a financial centre, this provides financial firms with an interesting opportunity.

However, the island has also sought to promote itself in overseas and developing markets, with special attention being paid to other financial hubs such as New York and Dubai. In addition, Malta has negotiated favourable tax treaties with powerhouse growth markets such as China, India, Hong Kong and the US, with some 70 tax treaties in total. Its geographic position in the middle of the Mediterranean, and its close proximity to North Africa, also make it a good stepping stone for financial companies wishing to target the Arab world.

The island is now positioning itself as a base for UK finance companies seeking an EU address after

Brexit.

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INTERNATIONAL FINANCIAL CENTRE OVERVIEW

Going forward, service innovation has become the new mantra of Malta’s finance industry. All stakeholders, financial service companies, support service providers and regulators are aware that speed to market is crucial. Traditionally, Malta has enjoyed strong cost advantages. However, additional regulatory and compliance requirements are eroding some of Malta’s cost advantages. Nevertheless, the country’s cost base is still very competitive, with operational costs and salaries being 20 to 30% cheaper than in other competing locations.

Future Outlook

Pragmatic regulation, creative innovation and service diversification are just some of the strings in Malta’s bow which have helped financial services become one of the country’s most important economic generators. These features will certainly help Malta to strengthen and reinforce its position in the years ahead. Malta’s government acknowledges that it needs to re-assess the country’s weaknesses, while striving to achieve a balance between enhanced financial stability and a competitive tax and regulatory framework. The island is betting big on digital finance and blockchain technologies as a long-term growth niche that will make the finance centre’s future ever brighter. n

INTERNATIONAL FINANCIAL CENTRE OVERVIEW

The island is betting big on digital finance and blockchain technologies as a longterm growth niche that will make the finance centre’s future ever brighter.

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BREXIT

Brexit

The Case for Malta Malta wants to partner, not rival, London post-Brexit, offering UK-based companies a complementary base that will enable them to access the EU Single Market to passport their services.

A

s Europe’s financial services hubs are promoting themselves as the continent’s next financial capital, Malta‘s message is that it wants become a home to subsidiaries of London-based financial firms. As an English-speaking country, offering full access to the EU market, and with a comparable legal approach and business environment, Malta is positioning itself as a colocation rather than a relocation destination, from where companies can offer services for the EU market that are currently provided from London.

A Partner for the City London has always been regarded as the EU’s main financial centre, attracting a wide range of global financial institutions and service providers. This was not just to participate in the UK financial market but also to use the UK as a hub to access clients and markets across the EU. While the shifting status of London vis-à-vis the EU will certainly push some companies toward the continent, many in Malta’s finance industry believe London will remain a very important financial hub for Europe and the world.

The general expectation is that companies will not shift their entire operations but will only move what is required to ensure access to the EU market.

BREXIT

From Insurance to Fintech Malta’s pitch appears to be working with insurance and asset management companies in need of establishing a European presence but wanting to avoid major disruption to their business and staff in London. The island’s professionals have clear ideas about what kinds of moves are on the cards, and which are not.

They believe that Malta is simply not large enough to successfully compete for global businesses but is an attractive option for smaller and medium-sized companies looking for post-Brexit opportunities, as well as for international companies that have an office in London to passport into other EU countries.

A number of insurance companies have already applied for licences from the Malta Financial Services Authority (MFSA) due to Brexit and more are expected to follow. Malta also sees itself providing solutions for UK asset management companies to help them sustain their business models, while the island is attracting interest from London’s large fintech community on the back of its move to establish the world’s first holistic framework for Distributed Ledger Technologies.

Comparable & Cost-Effective In positioning itself as a post-Brexit partner, Malta highlights its close ties and similarities with Britain. Malta’s legal system includes many features of the British Common Law, while English is an official language. The south European country has been a key corporate location for many years, offering cost-effective set-up and operational costs as well as an advantageous tax regime. However, the island’s regulator makes it very clear that companies without sufficient corporate substance to support their operations will not be accepted. For critical functions such as management, controlling and compliance, qualified personnel need to be present at all times.

Making a Choice The coming months will be a defining period, with many companies preparing their contingency plans and reassessing their position. While the prospect of losing access to European markets is an unappealing one, Malta is positioning itself as an attractive alternative for businesses seeking an address in the European Union. n

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COUNTRY PROFILE

Country Profile

SMALL COUNTRY WITH

BIG AMBITIONS Located at the crossroads of three continents, with a dynamic and energetic population, the Maltese government’s innovative pro-business policies have positioned Malta as one of Europe’s most progressive and forward-thinking countries.

ITIONS

COUNTRY PROFILE

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COUNTRY PROFILE

M

alta has consistently been ranked one of the fastest-growing economies in Europe in recent years, and unlike some of its counterparts, has been remarkably resilient to global headwinds, registering high GDP growth of 6% plus and record-low unemployment. The secret to Malta’s success has been its welldiversified economy, which has proved alluring to international companies and foreign professionals. Malta has created a viable and powerful marketplace for sectors such as tourism, financial services, maritime and iGaming. Building on its digital industries, Malta is now being coined the blockchain island following the introduction of the world’s first dedicated regulations for the sector. The country has never been as wealthy in its entire history as it is today, but the island has not only transformed itself economically. Once-conservative Malta has also introduced a series of trailblazing liberal laws for the LGBTI community and is now recognised as Europe’s most gay-friendly nation, which has given the country a striking new look. Despite Malta’s remarkable social and economic progress, the country has attracted controversy following a series of corruption allegations and the murder of the country’s most prominent investigative journalist, which cast a dark shadow over the numerous positive achievements of the past few years.

Mediterranean Delight Just over 316 square kilometres in area, the Maltese Islands lie virtually midway between Europe and North Africa, some 90 kilometres south of Sicily and 290 kilometres north of Libya.

The archipelago comprises Malta, Gozo and Comino. The main island, Malta, is 27 kilometres long and measures 14.5 kilometres at its widest point. With an average commuting time of just 45 minutes, Malta has held on to its cherished work-life-balance: eight hours of work, eight hours of play and eight hours of sleep.

The official languages are Maltese and English, with 90% of Maltese being completely bilingual.

A rocky island with dry and often windy weather, Malta enjoys a typical Mediterranean climate, with the average temperature ranging from 12 degrees in winter to 30 degrees in summer. The capital city Valletta is both the administrative and business centre of the country. Other main towns include: the popular seaside towns of Sliema and St. Julian’s on the west coast; the inland towns of Mosta and Birkirkara, situated in the centre of the island; and Paola in the south. There are also numerous small villages that still evoke the traditional Mediterranean rural way of life, although some 90% of Maltese live in urban settings and the overall vibe of Malta is modern.

Prime Minister Joseph Muscat

COUNTRY PROFILE

Colourful History Malta’s strategic location at the commercial crossroads linking Europe, Africa and the Middle East has attracted the interest of the various dominant cultures for millennia. The Phoenicians, the Carthaginians, the Romans, the Arabs, the Spanish, the Knights of St John, the French and the British all ruled the island at one time and have contributed to the mosaic that is modern Malta.

Not surprisingly, Britain’s legacy has lasted the longest as Malta was part of the British Empire for over 150 years: business, law and education retain British characteristics, while English, alongside Maltese, is an official language. Maltese is believed to have developed during the Arab occupation of the islands (870-1090) and is the only Semitic language to be written in Latin script.

International People Descendants of ancient Carthaginians and Phoenicians, with strong elements of Italian and other Mediterranean stock, the Maltese are truly an international people. With a history that has seen a succession of foreign rulers, the islanders have acquired an ability to adapt to new ideas and adopt them to their advantage.

Generally well educated and qualified, 90% of Maltese are bilingual in English and Maltese, and many also speak a third language, usually Italian, German or French. Religion – an estimated 97% of the population are Roman Catholic – is also considered an important part of Maltese culture. But despite being a predominantly Catholic country that only began allowing divorce in 2011, Malta today has some of the most progressive LGBTIrelated laws in the world. Accounting for 6% of the population, Malta is also home to a growing expat population, attracted by strong economic growth and career prospects.

A Second Term The country’s population is also one of the most politically active in Europe, with elections seeing voter turnout regularly exceeding 90%. Malta is a parliamentary representative democratic republic, in which executive powers rest with the Prime Minister while the President fulfils the ceremonial function of Head of State. In the last general election, in June 2017, the Labour Party, led by Prime Minister Joseph Muscat, built on their 2013 electoral victory to win a second term, at the expense of the centreright Nationalist Party. The current president of Malta is MarieLouise Coleiro Preca, Malta’s second female president, who was appointed in April 2014.

President of Malta Marie-Luoise Coleiro Preca

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COUNTRY PROFILE

Fastest-Growing Economy Gaining independence from Britain in 1964, the country’s decision to join the EU in 2004 and the Eurozone in 2008, was integral to the expansion of its horizons and bolstered its status as a key business hub in the Euro-Mediterranean region. There is no doubt that Malta leads the region in many economic indicators.

Its small, open economy has proven to be remarkably resilient.

Malta has posted positive growth figures over recent years and has regularly been among the best-performing economies in the EU. Figures for 2017 showed that Malta’s economy grew by 6.6%, making it the fastest-growing economy in the EU. Malta’s growth rate has been forecast to reach 5.8% in 2018 and 5.1% in 2019.

In 2016, Malta’s government also delivered its first surplus, and the government balance of payments remained positive in 2017.

Driven by Service Exports Tourism is among Malta’s top performing sectors. In 2017, the island welcomed a record of over two million tourists. Tourism today accounts for some 25% of the country’s GDP. Rivalling tourism’s importance has been Malta’s financial services sector, which now accounts for 10% of GDP. Life sciences, aviation and iGaming are joining the traditional economic generators and creating a solid base of diverse operations from which Malta is competing at an international level. The maritime industry is one of the oldest; and today Malta is home to the largest ship register in Europe and is one of the major logistics providers in the Mediterranean. Malta is also on the fast track to become a hub for education, healthcare, energy and blockchain technology – sectors that are poised to become the country’s next success stories.

COUNTRY PROFILE

High-Profile Investment

Figures for 2017 showed that Malta’s economy grew by

6.6%

making it the fastest-growing economy in the EU.

The decision by high-profile companies to invest in and move operations to the island is a strong indicator of the extent to which Malta is being regarded as a profitable business hub. HSBC, BNF Bank, CMA-CGM; Microsoft, Huawei, Vodafone, Lufthansa Technik, Playmobil, De La Rue, Crane Currency, Binance and OKEx are prominent companies that have invested in Malta.

Providing access to the EU’s single market, Malta’s proximity to, and cultural links with, North African and Middle Eastern countries are particularly attractive to companies that use the country as a stepping stone for trading, distribution and marketing of their international operations in Southern Europe and North Africa.

In addition to the historical and strong commercial links with Italy and the UK, Malta also enjoys healthy trade with France, Germany and the Netherlands. Malta’s exposure to international commerce is one of the highest worldwide, and the country’s leaders are constantly working on developing new ties with foreign governments in order to facilitate worldwide market access for all industries.

A Place to Grow a Company Malta offers investors a secure and transparent environment in which to start or expand a business. The country has introduced business-friendly policies underpinned by a legal and regulatory framework that is fully harmonised with EU legislation. Malta has also built up modern telecommunications and international transport links, while a full package of incentives that range from fiscal benefits to the provision of custom-built production facilities are available to investors. Start-ups also play an increasingly important role in Malta’s economy and find support in the form of seed financing schemes and incubators. This trend has not gone unnoticed by investors, venture capital firms, and more recently global investment banks, who are competing to fill the funding needs of promising early-stage businesses.

With great attention being paid to the next generation of its workforce, the country continues to invest heavily in education, and each year Malta sees a steady stream of new students entering higher education. Surveys have found that the flexibility of the local workforce is one of the country’s greatest assets: the Maltese are quick to adapt to changing technological and market needs, sustaining and enhancing Malta’s appeal as a world-class investment and business centre.

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COUNTRY PROFILE

An Impetus on Infrastructure Malta has attracted admirers for its success in transforming itself from a British military outpost into a well-functioning economy.

The country now pushes itself towards a more innovation-driven economy, and there is increasing awareness that raising productivity and increasing efficiency are critical if growth is to be sustained.

Businesses often cite a lack of human resources and the country’s ageing infrastructure as major impediments to growth. Human capital investment is high on the government’s priority list. With 20% of the workforce being foreign expats, Malta not only remains open and welcoming towards foreign professionals, but also actively encourages them to come and work on the island.

However, the influx of companies and people has put pressure on the transport network that has failed to keep pace with the exceptional growth that the economy is enjoying. Keen to address the island’s shortcomings, the Maltese authorities are willing to collaborate with global innovators to create a better connected and more efficient transport system.

Opportunities and Challenges Strong economic growth has transformed Malta into a confident nation, which is now seeking to strengthen its position on the global stage. In view of Brexit, Malta says it could become the UK’s gateway to the European Union. Although Malta is not pitching as aggressively as other nations for UK business, it is quietly positioning itself as an attractive alternative for companies seeking an address in the European Union.

Concurrently though, Malta has to defend its economic model given the increased focus on tax competition in Europe. The island stresses that its tax regime has withstood the tough scrutiny of the European Commission and that the country is supporting all EU and OECD initiatives to combat tax evasion. While Malta’s ability to maintain its tax base will define its economic future to a certain extent, taxes are also widely seen as just one factor driving commercial decisions, and the country is paying attention towards increasing the overall ease of doing business.

Not Malta’s Proudest Moment The country’s resounding economic success has been somewhat overshadowed by allegations of corruption and abuse, while the assassination of investigative journalist Daphne Caruana Galizia in October 2017 shocked Maltese society and tarnished Malta’s reputation and positive image on the international stage. The issues being reported in international media are too big and too important to be ignored. While the Maltese government acknowledges the seriousness of the country’s shortcomings that have been reported, the Prime Minister is keen to emphasise that Malta is taking action with the strengthening of institutions so

The island stresses that its tax regime has withstood the tough scrutiny of the European Commission and that the country is supporting all EU and OECD initiatives to combat tax evasion.

COUNTRY PROFILE

that Malta remains a safe country and maintains the stability and integrity of its economy.

Moving Forward Malta’s economic diversity strategy of recent years has paid off in spades. Analysts and international institutions all agree that the country’s investment appeal has been crucial in unlocking its full potential. Its world-class business environment, cutting-edge technology, competitive labour costs, highly educated workforce and gateway position to European and African markets helped Malta attract companies and capital from Europe, Asia and the US. Investment, across all sectors, will remain a key driver of future growth. When it comes to attracting new businesses, keeping costs in check and maintaining Malta’s competitive tax and regulatory frameworks will be important. Malta’s unique appeal, which at times combines a big city vibe with Mediterranean charm, is also playing a role in making Malta an attractive place to work and live. The Prime Minister has set the country the lofty challenge of turning Malta from the best in Europe into the best in the world. Malta is likely to emulate the success of global business locations such as Singapore and Dubai. Mimicking other places though is not an option. Malta will need to draw on its own strengths to define and create its own 21st century identity. n

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Interview

MORE THAN

Economic Dr Joseph Muscat - Prime Minister of Malta

Prime Minister Joseph Muscat is making Malta a great place to live and work, while maintaining the focus on how the country’s finance centre can become even more relevant in the future than it is now.

Our country is moving forward at a very fast pace, and it is one of the most successful economies in the EU.

“

Our financial services sector is being kept under close watch at the moment. But we will also be proactive and engage with others to show how our systems are transparent and fully compliant with all legislations and regulations.

“

We are experiencing economic growth rates of around 6%, while enjoying the lowest unemployment rate in our country’s history. In 2016, a financial deficit was turned into the first surplus in a generation.

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We want Malta to not only be an economic success story, but also a country that offers one of the best qualities of life to its people. The government is committed to achieving significant change in the social, physical and virtual infrastructure of the country.

“

Malta is a Mediterranean country founded on European values and whose workforce has a can-do attitude that is second to none, that remains agile and able to meets new challenges as they arise.

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I believe the future of Malta, and of any country or region, lies not on focusing on one thing, but on a wide range of ideas.

“

Interview

Growth

We are a country where doing business is relatively simple and efficient when compared to other similar jurisdictions. We have a bottom-up approach to regulation, and the distance between the policymakers and the policy-takers is relatively short. This means decisions can be taken in a much shorter period of time.

“

Malta’s job problem does not stem from unemployment.

Our challenge is that our employers are not finding enough employees. That is an issue we are tackling by formulating policies that ensure that our systems are open enough to receive workers.

I believe the future of Malta, and of any country or region, lies not on focusing on one thing, but on a wide range of ideas.

“

It is because of our workforce that we are able to work towards becoming a leader in the cryptocurrency and blockchain field. The future is digital, and we must be on the frontline in embracing this crucial innovation.

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One of our focuses is to work towards a more inclusive Malta.

Measures such as free childcare for all working or student parents, preand after school services and the commitment to tackle the gender pay gap, have led to more women gaining economic independence.

“

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ABOUT FINANCEMALTA

Promoting & Fostering Malta as aN INTERNATIONAL Finance Centre

FinanceMalta, Garrison Chapel, Castille Place, Valletta VLT1063 - Malta General Mail: info@financemalta.org • Tel: +356 2122 4525 Fax: +356 2144 9212 • Website: financemalta.org

FinanceMalta

@FinanceMalta

FinanceMalta

FinanceMaltaYT

ABOUT FINANCEMALTA

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About FinanceMalta Malta is internationally recognised as a brand denoting excellence in financial services. It offers an attractive cost- and tax-efficient base for financial services operators looking for a European Unioncompliant, yet flexible, domicile.

F

inanceMalta, a non-profit public-private foundation, was set up to promote Malta as a Business & Financial Centre, both within, as well as outside Malta. It brings together, and harnesses, the resources of the industry and government, to ensure Malta maintains a modern and effective legal, regulatory and fiscal framework in which the financial services sector can continue to grow and prosper. FinanceMalta’s Board of Governors, together with the founding associations that include the Malta Funds Industry Association, the College of Stockbroking Firms, the Malta Bankers’ Association, the Malta Insurance Association, the Association of Insurance Brokers, the Institute of Financial Services Practitioners, and the Malta Insurance Management Association, as well as its members and staff, are committed to promoting Malta as a centre of excellence in financial services and international business.

Board of Governors Kenneth Farrugia (Chairman)

Karol Gabaretta

Dr Matthew Bianchi

Dr Wayne Pisani

Dr Annalise Micallef

John Huber

5 40

Interview

questions

Kenneth Farrugia, Chairman of FinanceMalta

A Global Strategy “Financial services have become an important economic contributor, accounting for 10% of GDP and providing work to around 10,000 people.”

1

FinanceMalta was set up in May 2007. How would you describe Malta’s journey as an International Finance Centre so far?

Malta’s finance industry has markedly evolved over the last ten years. We have seen strong cluster formations in certain sectors, particularly in asset management, insurance and private wealth. Financial services have become an important economic contributor, accounting for 11% of GDP and providing work to around 10,000 people. I think we have come a long way, but, despite these impressive achievements, we have to acknowledge the fact that the international financial services industry is a highly competitive one.

This means that we need to ensure that Malta remains a compelling proposition for prospective investors seeking to establish or extend their footprint in Europe. I believe we need to review and refresh our strategic priorities and make sure they’ll match with the current and evolving needs of the international financial services community.

2

What could be done to strengthen the sector further?

We need to continue refining the way we promote Malta and our financial services sector. I believe we need to be more strategic in this respect. We need to develop clear and attractive value propositions for the different markets that we are targeting.

Interview

Equally important, we need to ensure that the operating environment remains efficient and effective at both the ‘setting up phase’ of a new business and particularly from an on-going servicing perspective. We can also do much more on the innovation front. We have been very successful in this regard, for instance with the introduction of the Notified Alternative Investment Fund and the Protected Cell Company for the insurance sector. There is a lot more we can do, but we aren’t doing it at the moment.

3

What sectors and markets offer growth potential for Malta?

There are clear opportunities in the fintech space, and we are seeing huge interest in our blockchain initiative. However, for this to take off, I think it is important that regulatory and legal frameworks are in place that provide certainty to companies. Securitisation is also an area, which we expect to see grow in the near future. In the wake of Brexit, we are also seeing interest from insurance and asset management companies. But, let’s be frank, it is very unlikely that a global company such as J.P.Morgan would move 3,000 people to Malta. We also have to keep in mind that not all companies in the UK are looking for a new base.

The City of London is home to four groups of companies: multinationals that already have a presence in many EU

jurisdictions, financial services companies exclusively focused on the UK market, firms that just service business outside of the EU, and companies that have an office in London and passport into the other EU countries. We are therefore targeting companies in the last group as Malta offers an attractive proposition for companies that want to sell to European customers.

When it comes to markets, Europe remains key for us, in particular the UK, Italy and Switzerland. France and Germany are also important.

But we are also looking beyond Europe’s shores and are slowly but surely extending our reach to other regions including the Gulf, Hong Kong/China and the US.

4

What type of business should Malta be going for these days?

Unlike some other finance centres, our financial sector is very well diversified, and we will continue to attract business across all segments. We have seen a host of start-up and smaller niche operators setting up here, attracted by our responsiveness and ‘can-do’ mindset. However, well-known financial services operators have also established a presence in the country or developed partnerships with local operators. Malta plays an important role from a regional perspective, and, as I have already mentioned, our EU membership makes Malta attractive for larger entities

seeking an EU base. However, larger companies are usually interested in the domestic market too, and Malta’s size is a limiting factor in this regard.

I think our particular speciality is helping start-up operations grow and thrive. We can already boast quite a few success stories of companies that came as start-ups to the island, grew from their base in Malta and today are respected players in their fields.

5

Where do you see the future for Malta in financial services and how do you wish to position the country?

I think we need to take a step back and stop trying to be everything for everyone. We have strong asset management, insurance and private wealth sectors, and there are sub-sectors that we can grow and expand.

But we also need to look at what made us successful so far. We were known for our ability to help companies get their products to market in a very short time and for the development of innovative regulatory frameworks. Those two things were at the heart of our success. In my opinion, the growth that we have experienced in recent years has made us a bit complacent.

We lost our drive, and we now need to reinvigorate it. I am convinced that we could do so much more if we focus better, and this should help us develop our roadmap for the next 10 years and beyond. n

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ABOUT FINANCEMALTA

JOIN Membership FinanceMalta offers two types of membership: Corporate and Affiliate. Corporate Membership is open to entities operating within the financial services industry, while Affiliate Membership is designed for organisations and companies wishing to take advantage of the growth of Malta’s finance industry and the FinanceMalta network, including, but not limited to, firms providing Real Estate Services, Recruitment Services, Business and Professional Services, and Media Organisations.

For further information on membership categories and classification, visit www.financemalta.org.

Selected Benefits of FinanceMalta Membership: → Company profile with logo in the FinanceMalta online membership directory, including a link to own website. → Receive regular updates, newsletters, and publications on relevant issues. → Attend partner seminars, training and workshops on a wide range of specialist subjects at heavily discounted rates (some events are complimentary). → Influence the market, regulators and law makers through FinanceMalta’s lobbying activities. → Benefit from FinanceMalta’s marketing and PR initiatives. → Regular opportunities to showcase your firm on the international scene under the umbrella of FinanceMalta at certain events. → Attend the annual FinanceMalta conference at a discounted rate. → Opportunity to publish white papers and articles on FinanceMalta’s website and to take part in topical webcast series.

Corporate membership fee: €250 - €600 per annum (depending on the applicant entity’s headcount). Fees for new members will be calculated on a pro-rata basis.

Affiliate membership fee: €300 per annum.

Fees for new members will be calculated on a pro-rata basis.

ABOUT FINANCEMALTA

Corporate Members (as at the time of printing)

BOV Fund Services Ltd Calamatta Cuschieri Investment Services Ltd Camilleri Cassar Advocates Camilleri Galea Ltd

Corporate Members

Camilleri Preziosi

A3E Capital SICAV p.l.c.

CCPS Malta

Abacus Corporate Services Limited

Chetcuti Cauchi Advisors Ltd

Abalone Asset Management Ltd

Citadel Insurance plc

ACT Advisory Services Limited

Citco (Malta) Ltd

Actaco Financial

Citco Fund Services (Malta) Limited

Active Fund Placement

Clearstream Banking

Active Services (Malta) Ltd

Corrieri Cilia Legal

Acumum - Legal & Advisory Group

Creditinfo Malta Limited

Advocate Magro Axelsson & Associates

Credorax Bank Ltd

Advocates Primei

CSB Group

Affinity Management Services (Malta) Limited

Curmi and Partners Ltd

AgriBank

Custom House Global Fund Services Ltd

AID Compliance Ltd

DARAG Group Ltd

ALB Forex Trading Limited

David Zahra & Associates Advocates

AlleyBe Ltd

Dconsulta Limited

Alter Domus (Services) Malta Limited

Deloitte

Amicorp Fund Services Malta Ltd

Demetra Corporate Advisors

Amicorp Malta Limited

DF Advocates

Andurand Capital Management Limited

DFK Malta

Antelope Group

Dingli & Dingli Law Firm

AON Insurance Managers (Malta) Ltd

Directors Chambers Ltd

Apex Fund Services (Malta) Ltd

dMTV - de Masi Taddei Vasoli

APS Bank Ltd

DNT Fiduciary Ltd

Aqua Trust Services Malta Limited

Dohle Services (Malta) Limited

Aramis Capital (Europe) Ltd

Dolfin Asset Services Limited

Arendt Services Malta

Dominion Fiduciary Services (Malta) Ltd

Areti Fiduciary Services Ltd

Dr Kresse International Law firm

ARQ Group Ltd

Dynamic Management Solutions Limited

Artex Risk Solutions (Malta) Limited

E & S Consultancy Limited

Athos family & Business Services (Malta) Ltd

ECCM Bank Plc

Atlas Insurance PCC Ltd

Ecovis (Malta) Consultants Ltd

Audentia Capital Group

Elmo Insurance Ltd

AUM Asset Management Limited

e-Management Ltd

Avanzia Taxand Limited

Entropay Ltd

Bank Of Valletta plc

EPG Financial Services Limited

Bastion Wealth Limited

Equiom (Malta) Limited

BDO Malta

Ernst & Young Limited

Be. Legal Advocates

Estera International Fund Services (Malta) Ltd

BEAT Limited

e-Volve Consultancy Limited

Bee Insurance Management Ltd

Exco Services Ltd

Bentley Trust (Malta) Limited

Fairwinds Management Limited

Boston Multi Family Office

Fenech & Fenech Advocates

BOV Asset Management Limited

Fenech Farrugia Fiott Legal

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ABOUT FINANCEMALTA

Fenlex Corporate Services Ltd

KSi Malta

Fexserv Financial Services Ltd

Kylin Prime Group

Fides Corporate Services Ltd

Lawsons Equity Malta

Fidgen Malta Ltd

lecocqassociate ltd

FIMBANK

Lombard Bank Malta plc

Finco Trust Services Ltd

Lombard Odier & Cie (Gibraltar) Limited

Finisterre Malta Ltd

Mainstream Fund Services (Malta) Ltd

FMG (Malta) Ltd

Maitland Malta Limited

Framont & Partners Management Ltd

Malta Stock Exchange plc

Francis J. Vassallo & Associates Limited

Mamo TCV Advocates

Galea Salomone & Associates

Mandaris Group (Malta) Ltd

GANADO Advocates

MAPFRE Middlesea plc

GasanMamo Insurance

Marsh Management Services Malta Ltd

Gatt Tufigno Gauci Advocates

Mazars Malta

GCS Accounting Malta Limited

MeDirect

GM Corporate & Fiduciary Services Limited

Mediterranean Insurance Brokers (Malta) Ltd

Go Beyond Limited

MFC Merchant Bank Ltd

Gonzi & Associates Advocates

MGI Finconsult Limited

Grand Harbour Trustees Limited

Micallef & Associates

Grant Thornton

Michael Grech Financial Investments Services Ltd

Griffiths + Associates

Mifsud & Mifsud Advocates

GVZH Advocates

MJM Europe Limited

Hanover Investors Management (Malta) Ltd

MoneyMatrix Ltd

HBM Malta Ltd

Moore Stephens

HBM Trustees Ltd

MPL Asset Management Ltd

Heptagon Capital

MSV Life p.l.c

HSBC Bank Malta plc

Munich Re of Malta p.l.c.

HSBC Global Asset Management (Malta) Ltd

MZ Investment Services Ltd

IFINA group

NBG Bank Malta Limited

IIG Bank (Malta) Ltd

Newco Corporate Services Ltd

Infocredit Group Ltd

Nexia BT

Integra Private Wealth Ltd

Nicolai Xuereb - NX Legal

Integrated-Capabilities (Malta) Ltd

OpenFunds Investment Services

Integritas Trustees Ltd

Osiris Trust Ltd

International Management Services Ltd

Papilio Services Limited

Intertaxaudit Auditors & Consultants (Malta) Ltd

PayMix Limited

Invest4Growth Asset Management Ltd

PiscoPartners

Island Insurance Brokers Limited

PKF (Malta)

ITC International Pensions Ltd

Plethora Trust & Fiduciaries Ltd

Izola Bank plc

Portman International Ltd

Jesmond Mizzi Financial Advisors Limited

Portmann Capital Management Ltd

JLT Insurance Management Malta Limited

Portsea AIFM Malta Ltd

John Huber and Associates Tax Services

Praxis Fund Services (Malta) Ltd

Justin Cutajar CPA

PraxisIFM Trust Ltd

Kane LPI Solutions (Malta) Ltd

Prestige Capital Management Limited

KNG Securities

Private Value Asset Management Ltd

Konsultadvisory Limited

PwC

KPMG

QGen

ABOUT FINANCEMALTA

Quinton Trust (Malta) Limited

WTP ADVISORS MALTA

Refalo & Zammit Pace Advocates

XNT LTD

Reyl & Cie (Malta) Ltd

Zerafa Advocates

RiskCap International Limited

Zeta

Rizzo, Farrugia & Co (Stockbrokers) Ltd RSM Malta Rutter Giappone & Associates Sanne Fund Services Malta Ltd Sarnia Yachts (Malta) Limited Satabank plc Scotstone Fund Managers Ltd SGGG Fexserv Fund Services (Malta) Ltd Sheltons Malta South Risk Partners Sovereign Pension Services Limited

AFFILIATE Members (as at the time of printing)

Sovereign Trust (Malta)

Ambra Recruitment Malta

Sparkasse Bank Malta plc

Antal International - Malta

Spinoza Capital

Aqubix Ltd

St. Julian’s Advisory

Ascent Software

Stivala & Stivala Corporate Management Ltd

Azure Rock Partners Ltd

STM Malta Trust & Company Management Ltd

Belair Real Estate

Summa Fiduciary Services Ltd

BMIT Ltd

Swissquote Financial Services (Malta) Ltd

Boston Link

Taxea Limited

Business Office Services International (Malta) Ltd

Templar European Investment Services

C & C Express Ltd

The Malta Institute of Accountants

Castille

Timberland Invest Ltd

CDDS Mediterranean Ltd

TMF Management and Administrative

Ceek

Services (Malta) Limited

CountryProfiler Malta Limited

Transworld Plus PLC

Equinox Ventures Ltd

Trident Corporate Services (Malta) Ltd

eWorld Ltd

Trident Fund Services (Malta) Ltd

Facilization Ltd

Tri-Mer Services Ltd

Frank Salt Real Estate Ltd

Trireme Pension Services (Malta) Ltd

Hilton Malta

Tromino Financial Services (Malta) Ltd

IFS Malta

Truevo Payments Ltd

Integrated Talent Ventures Ltd / jobsinmalta.com

Trustmoore Corporate Services (Malta) Limited

Konnekt

Unifin Services Limited

Linedata

USA Risk Group (Malta) Ltd

Melita Business

Valletta Commercial Services Ltd

MISCO

Vassiliades & Co. (Malta) Limited

Nicholls Moisa

Vella Grech Legal

People & Co Ltd

Virtus Advisors Ltd

RE/MAX Malta

Vistra Malta Ltd

Regus Serviced Offices

War Chest Fiduciary Services Limited

Smartcity Malta

WDM International Ltd

Thomson Reuters

Western Union Business Solutions

Tristar Travel

White November Corporate Services (Malta) Ltd

Vodafone Malta Ltd

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Interview

A Balanced Professor Edward Scicluna - Minister for Finance

Professor Edward Scicluna discusses Malta’s economic results, the island’s stance on tax harmonisation and how the country can maintain its international competitiveness.

Malta is becoming a solid top performer in economic terms, and the outlook is bright.

In 2017, our GDP grew by a record 6.6%, one of the highest in Europe. Economic growth is expected to remain well above the EU average, inflation is expected to be moderate. Unemployment is at historically low levels, sitting at 3,5%, while we also recorded the highest employment growth in the EU for the fourth consecutive year. We cut income tax rates to make it more attractive for people to work, while offering incentives for more women to join, and for people reaching retirement age to remain in, the workforce.

“

We are encouraging more innovation and research, especially in the financial services sector by providing an appropriate regulatory framework for cryptocurrencies and blockchain technology.

“

Malta has commenced exchanging information in line with the Common Reporting Standard and has an activated information exchange network.

“

For two consecutive years, we registered a fiscal surplus after years of carefully planned economic management that has turned the country around. A balanced budget will remain one of our priorities. We don’t want to go back to negative territory, and we will closely monitor our expenditure to identify any potential wastage.

“

We are a small country, and we have the advantage that when we have an idea, we can run with it, get it through parliament and get the regulations in a much shorter time.

“

Interview

Approach Our economic performance and strong track record are confirmed by the rating agencies. However, we are aware that all financial centres are at the moment passing through severe stress tests both nationally and internationally. But investors believe in us, and we will continue to be one of the competitive choices in the Mediterranean.

“

Like many other jurisdictions, we will look into further defining substance requirements, which would provide guidance to companies and service providers alike. Malta was and will always be after substance. We want real companies with real employees, and many of the companies operating out of Malta have done so for years.

“

At times companies have difficulties finding the right talent. With labour shortages, comes wage inflation and this can have a negative effect on competitiveness.

However, Malta is open for people coming from other EU countries, and increasingly from non-EU countries. We are also aware of competition.

But we are not resting on our laurels, and are focusing on other important areas, such as improving bureaucracy, to attract companies and capital.

“

The recent OECD International Tax Cooperation Report showed Malta to be among the world’s most tax-compliant countries. The report noted an absence of harmful tax practices in relation to base erosion in general, as well as a strong commitment in relation to tax cooperation.

“

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48

Interview

BUILDING ON Silvio Schembri - Parliamentary Secretary for Financial Services, Digital Economy & Innovation

Strengthening the Malta Financial Services Authority and positioning the country as an international hub for DLT and blockchain operators are just two of Silvio Schembri’s priorities to take financial services to a new level.

The idea is that the MFSA will become more businessfriendly without weakening the authority’s regulatory power. We need to ensure that the MFSA will be able to respond effectively to the challenges of today’s finance landscape.

“

We are envisaging a complete overhaul of our financial services regulator.

The time is ripe for the Malta Financial Services Authority (MFSA) to step up the game through a pragmatic risk-based approach rather than a descriptive one, which reflects today’s realities.

“

My wish is to create an entire new industry based on blockchain technologies and attract innovative startups. We are willing to throw our doors wide open to help companies develop new solutions, and we plan that the sector will account for 10% of GDP by 2027.

“

We are aware that our financial services sector has suffered a bit in recent times as a result of false allegations and media reports that have cast a bad light on the sector.

It is one of my main priorities to get the sector back on track.

“

Immigration will remain key to our future, and we have already smoothened the process for anyone looking at taking up a position in Malta, and we want to make sure that onboarding foreign professionals is as uncomplicated as possible.

“

Interview

BLOCKCHAIN Our new commercial court started operating, hearing and adjucating cases relating to matters governed by the Companies Act, such as bankruptcy, insolvency proceedings, and winding-up proceedings. The intention is to decrease bureaucratic procedures for companies and make Malta a natural choice for investors.

“

We are putting Malta on the international map as a blockchain hub, with the introduction of the world’s first holistic regulatory framework for Distributed Ledger Technologies (DLT). A new supervisory body, the Malta Digital Innovation Authority (MDIA), will certify and regulate blockchainbased businesses, initial coin offerings (ICOs) and distributed ledger technologies.

“

Our regulatory framework for DLTs offers legal certainty to a space that is largely unregulated. It will cement Malta’s reputation as The Blockchain Island.

The feedback so far has been tremendous, keeping in mind the companies that have already announced their decision of relocating and opening offices here.

“

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Interview

Future-pro Professor John Mamo - Chairman of the Malta Financial Services Authority (MFSA)

The new non-executive Chairman of the Malta Financial Services Authority (MFSA), Professor John Mamo, shares his thoughts on the modernisation of the authority and the future of financial services in Malta.

We will create a separate standalone registry of companies, as well as a new regulatory body overseeing the fast-growing blockchain sector, the Malta Digital Innovation Authority (MDIA). There will certainly be points of contact between these new entities and the MFSA, but we will be careful not to duplicate work.

“

Brexit is an opportunity for our financial services sector, and we are seeing encouraging interest from the various sectors, where a number of players are considering setting up in Malta.

“

We are working on the reform and modernisation of the MFSA. We are reviewing our business processes in order to improve efficiency and productivity.

Our competitive advantage for a long time was our ability to give operators fast feedback, and we will address any speed to market issues.

“

Malta has been in the international media spotlight recently, and while I don’t believe that the MFSA is above criticism, the media reports were at least partly wrong.

We need to establish better, more responsive lines of communication.

“

Our financial services sector has grown substantially during the past two decades. This growth has caused certain strains on the resources of the MFSA. We have a staff complement of 350 people, and we plan to take on another 100 people in the near future.

“

Interview

ofing We need to focus more on education. The finance sector – as many other sectors of the economy – is finding it challenging to fill open positions due to the low unemployment rate.

“

the Finance Centre

Financial Services are an important pillar of the economy, and we will strive to achieve more growth in this area. Professor Joe Bannister has been instrumental in delivering Malta’s modern international finance centre and he is highly regarded on the international stage. While he stepped down from the Chairman’s position, we would certainly wish to retain his advice and council to further grow our finance centre.

“

Our regulatory framework has been the foundation upon which we have built our success. Now more than ever we need to remain one step ahead and create sound and innovative regulation that attracts business.

“

While we have already attracted professionals from inside and even outside the EU, we need to produce more qualified individuals that could take on the top jobs in the sector.

“

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BANKING

Banking

Not Big Enough

Malta’s has one of Europe’s healthiest and most profitable banking sectors, yet despite this, the market needs to attract more institutions to support its ever-growing economy and financial services sector.

M

alta’s banking sector is a study of contrasts: the country is home to many international banks offering specialist services supporting operations abroad, while some market segments of the island’s finance centre remain underserved. The island is currently home to 25 banks, which continue to perform solidly.

However, Malta’s expanding economy, coupled with an influx of foreign talent and companies, has led to a growing demand for banks that support the niches that Malta’s finance sector has built up – such as private banking, wealth management and investment services. Malta offers remarkable growth opportunities for banks that are ready to seize a share of this business, but increasing the number of banks is a tough challenge. The global banking sector is in consolidation mode due to heightened capital requirements, rising compliance costs and the impact this has on banks’ profitability. This means the island is now looking to attract established foreign institutions and medium-sized banking groups, rather than start-ups and smaller banking rivals, which may find the current conditions more challenging.

BANKING

International Orientation Malta has a small domestic market, and its banks’ strategies have traditionally been tied to the local economy. The two largest retail banks, Bank of Valletta (BOV) and HSBC Malta, can trace their origins back to the 19th century. Maltese banking history has seen a number of mergers and acquisitions that shifted the competitive landscape, as well as a period during which major institutions were nationalised. The sector entered its most defining period in the late 1980s and 1990s when it was being transformed from a tightly controlled publicly owned sector into one of liberalisation and foreign ownership.

Malta also garnered attention when it joined the EU in 2004 and the Eurozone in 2008, as more banks discovered the country as a platform for business. Today, 25 credit institutions have a presence in Malta, offering a full set of banking services that range from retail and investment banking to trade finance and custody services. There is a clear divide between the local retail banks and the internationally focused, specialised foreign banks that have set up in Malta, which have almost no interaction with the domestic economy. The entire sector employs around 4,500 people.

Three Clusters For more than two decades, the Maltese have looked with pride upon their banking sector, as it has received positive ratings and rankings. The World Economic Forum’s Competitiveness Index 2017-2018 rates it as the 17th soundest banking system in the world, while institutions such as the International Monetary Fund, the European Commission, and credit rating agencies confirmed the sector’s robustness and resilience. BOV and the parent banks of domestic subsidiaries – such as HSBC – have successfully passed the EU-wide stress tests of recent years.

The size of the banking sector stood at 441.6% of GDP in June 2017, which might seem large when compared to its economy. However, in most central euro area countries, such as France, Belgium, Germany and Austria, the ratio of total financial sector assets to GDP ranges between 390% and 600%. Malta’s banking sector is also sharply segmented and essentially divided into three clusters.

The assets of the core banks, which have strong links with Malta’s economy and are thus systemically relevant, amount to 218% of GDP, which is lower than the EU average of 260%. The remaining assets are held by banks with limited links to the domestic market (22.3% of GDP), as well as by international banks with no links to the domestic economy (201.3%). They do not take local deposits, but rather focus on business with non-residents or intragroup transactions supporting their parent banks, or concentrate their activities on areas such as trade and project finance, syndicated loans and investment banking. In fact, many of them hold executive responsibility for specialised areas of their group’s global operations.

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BANKING

Financial Players BOV and HSBC are the largest players in the local retail sector.

APS Bank, Lombard Bank, BNF Bank (previously Banif) and Mediterranean Bank are also considered core domestic banks.

The local banks are retail-deposit funded, and their loan portfolios are diversified in different sectors of the economy. Some of the longest established international banks in Malta are branches of Turkey’s Akbank and Garanti Bank. They use Malta as a booking centre for foreign-exchange loans. Malta has also proved to be fertile ground for specialised banks, niche players or institutions targeting regional markets. Trade-finance specialist FIMBank, which grew from its base in Malta to become an international banking brand, is one of Malta’s greatest success stories. The bank was founded in Malta in 1994 and has set up offices in major cities across the world.

Other leading banking groups with a presence in Malta include IIG Bank, NBG Bank and CommBank. Malta has traditionally sought to attract larger players, however, there was a period in which Malta saw smaller, start-up banks coming to the island.

While many of these banks are operating successfully, there were two particular cases, Nemea Bank and Pilatus Bank, which courted controversy.

Healthy Ratios Malta’s domestic banks have adopted a conservative approach to banking, and this has served the island well. Bank funding depends on retail deposits rather than wholesale borrowing, and over the years, the banks have stuck to this conventional banking approach. The country’s banks maintain substantial liquidity, adequate capital and prudent lending policies. The total capital ratio stood at around 15.5% for core domestic banks, at 16.2% for non-core domestic banks and at 47.9% for international banks in June 2017. These levels were significantly above the minimum regulatory requirements.

Performance of the Core Banks The profitability of the core domestic banks decreased slightly in recent months but they still fared comparatively better than their euro area peers. Pre-tax profits contracted by around 14% to €203.9 million in June 2017, pushing down the return on equity (ROE) and return on assets (ROA) to 8.5% and 0.6%, respectively, in June 2017, and from 10.2% and 0.7% in December 2016. Nonetheless, Malta’s banks continued to outperform its European peers, which reported ROE and ROA of 4.2% and 0.3% respectively at the end of June 2017.

The World Economic Forum’s Competitiveness Index 2017-2018 rates it as the

17th

soundest banking system in the world.

BANK OF VALLETTA

your financial services provider in Malta

With its longstanding banking experience, Bank of Valletta is well positioned to be Malta’s leading pioneer in financial services.

The customer is at the heart of our strategic vision. We aspire to exceed customer expectations, offering a genuine and caring service, built on trust and added value every time we connect.

At Bank of Valletta we have a dedicated infrastructure, coupled with specialist expertise, enabling us to offer both our corporate and personal customers a comprehensive suite of banking and investment services.

Further information available from bov.com or contact (356) 2131 2020 Issued by Bank of Valletta p.l.c., 58, Triq San Ĺťakkarija, Il-Belt Valletta VLT 1130 - Malta Bank of Valletta p.l.c. is a public limited company regulated by the MFSA and is licensed to carry out the business of banking and investment services in terms of the Banking Act (Cap. 371 of the Laws of Malta) and the Investment Services Act (Cap. 370 of the Laws of Malta).

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BANKING

Malta’s core domestic banks continue to rely extensively on customer deposits as their main funding sources. The customer loan-to-deposit ratio increased to 58.7% in June 2017 from 56% in December 2016; however, the ratio remained well below the euro area average of around 100%. During the first six months of 2017, Malta’s domestic banks also cleaned up their loan portfolios, writing off legacy non-performing loans, which resulted in a reduced non-performing loan ratio, down to 4.6% from 7.1% at the end of 2015.

Non-Domestic and International Banks There are currently six non-core domestic banks operating in Malta. They offer only a limited suite of banking services to Maltese residents, usually restricted to deposit taking. In the first six months of 2017, the balance sheet of these banks shrank by 5.3% driven by lower loans granted to the credit institutions and also due to the selling of bank bonds. This group of banks relies heavily on retail funding, financing around two-third of their business activities. Although remaining positive, profitability of these banks narrowed. The ROE and ROA (after tax) stood at 2.6% and 0.2% in June 2017, down from 3.4% and 0.3% in December 2016. Lower non-interest income coupled with higher operating expenses also resulted in a higher cost-to-income ratio, which stood at 74%.

The international banks reported a contraction in their asset base of 5.4%. However, this development was mainly driven by one bank, which reduced its exposures with other credit institutions in Turkey and the UK. International banks continued to rely extensively on wholesale funding, while their regulatory capital position remained healthy and exceeded the regulatory minimum.

The Effects of De-Risking Despite their positive performance, Maltese banks, as banks in other countries, are currently reviewing their business models and de-risking their portfolios by limiting their exposure to certain sectors of the economy, while also building up their capital buffers in accordance with European banking regulation.

This, the industry says, will most likely lead to safer, albeit less profitable, banks in future; however, in the short term it provides a number of challenges as more stringent regulations and compliance requirements have increased transaction costs for both banks and their customers.

Some of Malta’s banks are also finding it increasingly challenging to clear US dollar transactions after global banks started cutting correspondent banking ties with their respondent banks, especially in emerging markets but also in small and medium-sized economies such as Malta. Due to the small size of the market, the island is of limited interest to international institutions, and global banks are weighing their rising compliance costs against potential

Core Domestic Banks APS Bank Limited BNF Bank (Malta) plc Bank of Valletta plc HSBC Bank Malta plc Lombard Bank Malta plc MeDirect Bank plc

NON-Core Domestic Banks FCM Bank Limited FIMBank plc IIG Bank (Malta) Limited MFC Merchant Bank Izola Bank plc Sparkasse Bank Malta plc

INTERNATIONAL BANKS AgriBank plc Akbank T.A.S. CommBank Europe Limited Credorax Bank Limited ECCM plc Ferratum Bank Limited NBG Bank Malta Novum Bank Satabank plc Turkiye Garanti Bankasi A S Yapi Kredi Bank Limited

BANKING

profits from this activity. However, the authorities are hopeful that initiatives driven by the G-20, the IMF and Financial Action Task Force (FATF) will help in addressing the global correspondent banking crisis, while banks in Malta are reporting that alternative arrangement have been found and that they have developed new relationships with global institutions.

Wanted: More Banks However, the most pressing challenge remains the limited number of custody banks in Malta as this affects the growth of the fund industry. Efforts to attract one or two medium-sized custodians to the island have been going on for years, but have remained unsuccessful thus far. As with many other segments of banking activity, the custody industry is experiencing consolidation, and Malta’s financial services regulator reports that this makes it all the more difficult to encourage custodians to move into Malta.

Banks already established in Malta are also reporting that increased regulatory requirements and additional compliance checks are affecting their operations as they are making certain banking services more costly and processes tend to take longer than before.

There is a huge demand for more banks in Malta, with companies reporting that it is becoming increasingly challenging to source corporate banking services from Maltese credit institutions due to the fact that banks have become much more risk-averse and are keen to avoid overexposure to any one sector. There is widespread agreement among Malta’s bankers that more competition is needed to service business coming out of Malta.

Regulatory Challenges Malta’s banking legislation is founded on European Union legislation and is compliant with the Basel Core Principles. Since the introduction of the EU’s Single Supervisory Mechanism (SSM) in 2014, the supervision of the island’s largest banks falls under the remit of the European Central Bank (ECB), while the MFSA is in charge of the supervision of the other institutions. However, although they fall under the auspices of the MFSA, Malta’s smaller banks emphasise that the regulatory burden is hefty due to the complex new regulations. The cost of compliance is enormous, whether in terms of people, technology or infrastructure, while rising capital requirements have become a significant constraint on the capital available for investment.

Opportunity Knocks To future-proof the finance centre and the economy in general, Malta needs to escape the paradoxical situation that global banking giants are reluctant to look at the country due to small market size, while there are not enough banks in the country to

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satisfy the high demand for banking solutions. The sector agrees that the first bank to move into Malta would be able to attract a significant share of business. Malta’s finance centre offers plenty of growth opportunities, for instance, in areas such as ship finance, investment banking and custody services. The island is also a land of opportunity for credit institutions looking for an EU-compliant, yet flexible, domicile that provides access to the EU market and the neighbouring countries of North Africa.

The emerging economies of the region are in need of infrastructure development, offering opportunities in the area of project finance. Malta’s professionals also believe that there is strong potential to attract more eCommerce payment business and fintech companies to the island and promote Malta as a prime location from which to service customers across the globe.

E-Banking as an Opportunity With technology playing a key role in banking these days, Malta has already attracted a significant number of financial institutions focusing on digital services and is home to more than 40 financial institutions. Credit card companies, payment service providers, payment gateways, card issuers and eWallets are licensed as financial institutions in Malta. Analysts agree that financial innovation will rise in importance in the coming years and that it may not be long before fintech companies enter the banking sector in a more decisive way. The industry believes there is scope to attract more online banks and digital solution providers to the island in times when traditional banking models are challenged like never before and the global banking industry seeks to catch up with the digital age.

Reimagining Banking As technology and regulation are reshaping the global banking industry, Malta is emerging as a centre for payment companies.

In addition, Government’s drive to establish Malta as a blockchain and cryptocurrency hub will probably attract smaller, innovative institutions to establish operations in the country. But the challenge to attract banking players of a certain size and stature remains. Key industry figures comment that the pace and extent of regulatory change will continue to prove demanding to the sector for the foreseeable future, as will the continuation of a negative interest rate environment. The trend for banks to consolidate and streamline their operations is likely to prevail for some time to come. At the same time, banks will also increasingly look at alternative ways to generate revenue by offering new digital and added value services to their customer base. Client profiling and data analytics are expected to play a bigger role in helping banks, both in Malta and abroad, to seize new opportunities. n

Client profiling and data analytics are expected to play a bigger role in helping banks, both in Malta and abroad, to seize new opportunities.

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CAPITAL MARKETS

Capital Markets

A Growth Market for SMEs The Malta Stock Exchange eyes international SME listings as the driver of future growth.

CAPITAL MARKETS

W

ith its market cap rising by almost 18.5% to €12.2 billion at the end of 2017 in the short span of just three years, the Malta Stock Exchange is one of the world’s best performing stock indices. Taking advantage of the flexibility offered by its modest size, it offers a combination of highly personalised service, state-of-the-art technology, and cross-border connectivity. Now seeking to position itself as the preferred international market of choice for smaller, expansion-focused companies, it has adopted new, internationally recognised technologies aimed at improving the MSE’s appeal as a listing venue, boosting international market access and helping the MSE compete with other European exchanges, including those of Luxembourg and Ireland. A new SME and start-up-oriented market, as well as a Sharia equity index, have been launched to take the Exchanges operations to the next level. Exchange-traded funds (ETFs), real estate investment funds (REITs) and Islamic finance have been identified as future growth areas. The overarching goal is that by the end of 2018 Malta’s capital markets maximise their potential and visibility – locally and internationally.

Laying the Foundation To date, the MSE’s growth has been largely driven by local companies tapping the market for equity, with investors tending to be domestic institutions or the general public. Many of Malta’s largest corporations are third- or fourth-generation family businesses, and they have come to appreciate the possibilities that a listing opens up for them, such as providing an exit route for dormant family shareholders.

However, significant investments in infrastructure over the past years have paved the way for the MSE to realise its international ambitions. The Exchange now uses Deutsche Börse’s Xetra trading platform, currently connecting over 4,000 traders in 16 different countries. On the settlement and custodial side, linking up with Clearstream, Deutsche Börse’s liquidity provider, has removed barriers between Malta and the world’s trading centres. The Central Securities Depository (CSD) has also continued to expand its range of services that are on offer for listed and unlisted companies across Europe. In 2016, the Exchange proposed a number of initiatives to develop a liquid and efficient securities market and laid out the National Capital Markets Strategic Plan. By the end of 2017, over half of the objectives had already been met, including the introduction of new products, the extension of trading hours and the launch of the Malta Stock Exchange Institute, which offers financial education courses.

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Market Activity & Performance Although the MSE is small by global comparisons, the last 25 years have witnessed a very successful growth phase that has seen the listing of over 40 companies, and the issuance of over €15 billion in equity, corporate and government bonds and treasury bills. Market capitalisation increased from €10.3 billion in 2014 to more than €12.2 billion in 2017. The MSE Equity Total Return Index (MSETRIX), a new index introduced during 2017, closed the year at 8,669.13, with a peak in July 2017 at 9,103.79. The old MSE index was a price index only, whereby the new index takes into consideration both the price fluctuations of the component shares as well as the dividends that companies pay. It is based on the assumption that all dividends are reinvested into the index thus giving a better representation of the potential economic benefit of equity investments and the benefits of compounding.

In 2017, the MSE also saw the IPO of the PG Group, which among others owns two supermarkets and the Zara franchise in Malta. This was the first IPO on the MSE in four years.

A Recognised Exchange The exchange has continued its investment in technology over the past year as part of the move towards integration with Target 2-Securities, the pan-European Security Settlement System developed by the European Central Bank, to which the Exchange migrated in June 2015. Enjoying recognition from other leading international exchanges, the MSE has been included in the FTSE’s Global Equity Index Series (GEIS) since 2010. It has also achieved recognition from the UK tax authorities and has been granted recognised exchange status by the Securities and Exchange Commission in the US.

Recent Milestones of the Malta Stock Exchange

2011

CSD link with Clearstream Banking AG

2012

Migration to Xetra Trading Platform

2013

Launch of Market Making rules

CAPITAL MARKETS

Listing Solution The MSE presents itself as an ideal place to accommodate specialist services and small and medium-cap companies, and is aiming to become one of the top three European stock exchanges catering for SMEs by the end of the decade. The MSE’s Main List consists of equities, corporate bonds, government bonds and treasury bills. Companies with a trading history of three years and over are admitted to the MSE’s Main List, while a secondary Alternative Companies List offers firms with little or no trading history the opportunity to access capital markets. These firms can benefit from EU passporting rights, and besides the MSE’s trading platform, they also have the option to have their instruments traded on another EU market of their choice.

SME Market The MSE has created a new SME-oriented market called Prospects that provides an opportunity for SMEs from Malta and elsewhere to raise capital. Prospects’ rules have been designed to offer a lighter regulatory regime compared to the Exchange’s other markets, while providing robust investor protection and transparency through the requirement to appoint a corporate advisor. The MSE is convinced that this new market has the potential to become a major pillar in the provision of capital financing to SMEs and will help Malta attract international business from countries such as China, Turkey, Italy, Spain, Eastern Europe and the Middle East. The MSE is projecting that by the end of 2018 some 20 companies would have been admitted to Propects.

The ambitions of the MSE go beyond small cap companies, and the Exchange is marketing itself to larger cap companies as a gateway to European investors. These companies can look to Malta as a first step towards an eventual listing on the main European exchanges.

2016

2015

Participation in target 2 securities settlement system

Launch of Prospects, the SME-oriented market Launch of the MSE Sharia Equity Index Launch of the Malta Stock Exchange Institute

2017

Launch of the Total Return Index

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A Market for Debt Securities The MSE’s market for debt securities, the Institutional Financial Securities Market (IFSM), was set up to serve issuers targeting institutional investors, offering increased flexibility and the ability to create securitised instruments tailored to issuers’ own corporate requirements as well as to investor groups’ specifications.

The IFSM, regulated under the Wholesale Securities Market (WSM) Listing Rules, is also recognised by the UK tax authorities. Aimed specifically at institutional investors, the IFSM only admits wholesale financial instruments with a denomination of at least €100,000. These instruments include debt securities, asset-backed securities, insurance-linked notes, convertible debt securities and derivative securities. The MSE had also created a market for debt securities in cooperation with the Irish Stock Exchange, the European Wholesale Securities Market (EWSM), of which the MSE owns 20%. However, following the set-up of the IFSM, the MSE plans to sell its shares in the joint venture.

Turnover in EURO

2016 687,448,393 2017 568,280,672

MSE Equity Total Return Index %change

-17.3% 2016 8798.579

Number of Deals

2016 34,012 2017 30,368

%change

-10.7%

Volume

2016 584,232,960 2017 487,623,226

%change

-16.5%

2017 8,669.132

Market Capitalisation

2016 12,313,373,346 2017 12,210,888,214

%change

-0.8%

%change

-1.5%

CAPITAL MARKETS

Tapping Islamic Finance Another strategic move by the Exchange was the introduction of a Sharia Equity Index in January 2016. This index has been certified Sharia-compliant by Dubai’s Islamic finance consultancy firm Dar Al Sharia. Every quarter, Dar Al Sharia will screen the equities traded on the MSE for possible inclusion with the index, while ensuring that the equities listed continuously comply with Sharia principles. This new MSE Sharia Equity Index is seen as the first step towards establishing Malta as a centre for Islamic finance products, with a view to attracting the Sharia-compliant equities and Sukuk instruments to list and trade on the MSE. The MSE hopes that the index will generate interest from Shariacompliant fund managers in addition to Muslim investor communities all over the world, increase business for the Exchange, as well as raise awareness among Muslim companies interested in accessing the European capital markets through the MSE.

A Professional Environment What sets the Malta Stock Exchange apart is its very high standard of personal service, which provides a lot more support in the preparation for an initial public offering (IPO) than that provided on a larger exchange. In addition, costs and fees remain competitive while those making primary and secondary applications can expect a swift, well-organised process. Both local and foreign companies can also benefit from ancillary services ranging from admission and trading to depository and custodial services.

Furthermore, the MSE highlights that support services provided by accountants, audit firms and lawyers are priced at up to 40% less in Malta than in other EU countries, while offering the same high level of service that market participants expect. In 2017, the MSE also doubled its daily trading, from three to six hours. The Exchange is also exploring how it can leverage blockchain technology, which, it has been estimated, could save the global financial industry over US $100 billion annually in back office costs.

Reaching Out The Exchange has always been at the forefront of initiatives to help develop Malta into an international financial centre. Despite its size, the MSE offers all the benefits of a well-regulated, transparent marketplace, with the added advantage of providing a personalised and swift service. Looking ahead, co-operation will be a major theme for the Exchange, which is looking to develop its relationships with major global stock exchanges outside of Europe. The aim is to provide foreign exchanges with a white label solution, which they could offer to companies within their home markets who want to have a listing in the European Union. n

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Funds & Asset Management

Funds & Asset Management

More to

Come Asset management companies have flocked to Malta in recent years, but the island needs to attract a global custodian if it wants to outgrow its reputation as a start-up domicile.

Funds & Asset Management

M

alta has long been chasing big fund business, but the island is now realising that its strengths lie in being the home of fund managers and administrators, while providing an environment that is attractive to smaller funds and start-up managers.

Growth in the number of funds domiciled in Malta has remained relatively flat in recent years. The reason for this is widely being seen in the limited number of custodians offering services on the island. Nonetheless, the infrastructure caters well for emerging funds and managers. Similar to other fund centres, Malta introduced a manager-led product that offers a faster time to market, while its well-known regime for Professional Investor Funds (PIFs) has been simplified. While big funds are unlikely to come to Malta in the short term, managers are increasingly choosing Malta as their base due to its EU membership and cost-effectiveness, and are launching funds not necessarily in Malta, but in other jurisdictions. There is widespread agreement that Malta has reached a high level of sophistication on the fund administration and fund management side, and has emerged as a veritable start-up location bringing new funds to market. But it needs a boost in its banking and depository infrastructure to break into the big league.

Defining Events Malta is a relatively young investment fund jurisdiction, challenging the more established centres in Ireland and Luxembourg.

It was Malta’s accession to the EU that marked its journey towards becoming a fund domicile. In the years that followed, the sector grew at a much faster rate than many professionals had anticipated. Passporting rights for Undertakings for Collective Investment in Transferable Securities (UCITS) were introduced, and Malta experienced phenomenal growth in the field of alternative funds with its specialised regime for PIFs targeting financially literate, high-net-worth investors.

Ironically, Malta also benefited from the financial crisis as more fund managers were forced to rethink their operating conditions, and so began looking for cheaper alternatives to the traditional European fund domiciles. Over the past 14 years fund registration has more than tripled. While in 2004 there were some 130 funds registered on the island, this number has now grown to some 660, with a combined net asset value of around â‚Ź10 billion.

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Sector in Numbers There is no doubt that, to date, Malta’s growth story has largely been affected by the success of the country in attracting startup fund managers. Most funds launched from Malta are in the US$20 to US$50 million range. However, asset managers report that today many of their clients are at least semi-institutional investors. Following the introduction of the EU’s Alternative Investment Fund Managers Directive (AIFMD), more and more asset management companies have set up in Malta to tap EU markets. Seasoned asset managers, in particular from offshore European jurisdictions, such as Switzerland and the Cayman Islands, have opened offices in Malta.

According to the regulator, the Malta Financial Services Authority (MFSA), the number of asset management companies applying for licences has grown from a handful of firms to 15 per year.

They are keen to join Malta’s community of some 80 fund managers, among them companies such as Liongate Capital Management, Clive Capital, Comac Capital, and BlueGold Capital Management, while 26 fund administrators including Apex Fund Services, Citco, Custom House, Praxis and Valletta Fund Services have set up on the island. The strength of Malta’s fund sector is evident in the fact that a high number of Maltese funds choose to work with local service providers. For example, in the field of fund administration over 86.2% of the funds domiciled in Malta use local administrators.

Product Flexibility Fund managers and promoters regularly comment on the high level of product flexibility that the island offers, although Malta’s fund frameworks have recently seen some form of consolidation. The island operates its PIF regime, alongside the Alternative Investment Funds (AIF) regime that allows managers to launch AIFs targeting professional investors under the Alternative Investment Fund Managers Directive (AIFMD). In 2017, the island made the decision to streamline the PIF framework, which previously comprised three types of funds, to only one option targeting qualified investors. The rationale was that there was little demand for the other two categories due to similarities among the different fund regimes.

Malta has also experienced growth in the UCITS space. Traditionally, Malta was not being perceived as a UCITS jurisdiction, but, at the end of June 2017 the number of UCITS domiciled on the island stood at 106 – an all-time high. One of the most recent additions to Malta’s fund framework are Notified AIFs or NAIFs. This new structure has been designed to speed up time-to-market, similar to Luxembourg’s reserved alternative investment fund, given that Notified AIFs do not need to be authorised by the MFSA. The MFSA has also issued rules for the establishment of loan funds. Many in the industry believe that this could help in attracting real estate and private equity managers.

There is no doubt that, to date, Malta’s growth story has largely been affected by how successful the country has been in attracting start-up fund managers.

A GLOBAL OUTLOOK FOCUSED ON LOCAL NEEDS

Alter Domus Corporate Services Alter Domus is a fully integrated provider of Fund and Corporate Services, dedicated to international private equity & infrastructure houses, real estate firms, private debt managers, multinationals, capital markets issuers and private clients. Our vertically integrated approach offers tailor-made administration solutions across the entire value chain of investment structures, from fund level down to local Special Purpose Vehicles. www.alterDomus.com

YOU INVEST, WE SET UP. YOU DEVELOP, WE ADMINISTER.

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Funds & Asset Management

Investment funds can be formed in a number of possible vehicles, including open-ended and closed-ended corporate entities, trusts, limited partnerships and contractual funds. While the investment company with variable share capital (SICAV) is, to date, the most widely used vehicle in Malta, the island enacted regulations which make it possible for a fund to be constituted as an Incorporated Cell in an Incorporated Cell Company (ICC).

Malta has also extended this cell structure into a platform concept that involves a Recognised Incorporated Cell Company (RICC), providing administrative services to any number of Incorporated Cells licensed as investment funds. In addition, Malta developed platform structures for securitisation transactions, introducing the Securitisation Cell Company (SCC). The SCC offers interesting structuring possibilities because it allows managers to package certain assets, such as real estate and other alternative investments, into book-entry securities that can be held in a fund portfolio.

Emerging Opportunities A number of promising opportunities currently exist within Malta’s fund industry, the two most notable being securitisation and cryptocurencies. The SCC is being seen as crucial in turning the island’s vision of becoming a European securitisation hub into a reality. Managers are already noticing an increase in the use of securitisation vehicles by fund structures. The sector is also seeing the convergence of the capital markets and the fund market. Malta has long been home to the European Wholesale Securities market (EWSM), a joint venture between the Malta Stock Exchange and the Irish Stock Exchange. The EWSM allows for the listing of debt securities or asset-backed securities promoted solely on a wholesale basis. In 2017, the Malta Stock Exchange (MSE) also received regulatory approval to launch the new Institutional Financial Securities Market (IFSM), which since then has become the first fully Maltese Institutional Securities market.

Another significant opportunity revolves around developments being brought about by Malta’s ambition to position itself as a hub for blockchain and virtual currencies. Just a year ago there were hardly any dedicated cryptocurrency funds, now investment in the sector has mushroomed. This has drawn the attention of the MFSA, who is currently developing a rulebook to regulate PIFs which are seeking to invest in virtual currencies, while also considering whether AIFs and NAIFs should be allowed to invest in virtual currencies.

Managed from outside Malta:

Managed in Malta:

30.2%

29.9%

Management of licensed Funds (June 2017)

Self-managed:

39.9%

Funds & Asset Management

Operational Advantages

Administration of Funds (June 2017)

Administered from outside Malta:

13.8%

Administered in Malta:

86.2%

The authorities are making extensive efforts to ensure that Malta’s regulatory framework strikes the right balance between providing effective regulation and straightforward licensing procedures. Speed to market is one of Malta’s specialties, and there is a strong commitment that this will remain the case. The MFSA introduced a new application process and committed to certain turnaround times when reviewing fund applications. Fund promoters are also encouraged to meet with the regulator prior to applying for the authorisation of a fund to discuss the application of regulations. In particular, if fund structures are complex, promoters find the accessibility of the MFSA beneficial and value the opportunity to have face-to-face meetings.

Funds and managers in Malta have long been benefitting from a fiscally efficient tax framework. And while many other international centres have become expensive, Malta offers various other cost advantages: the cost of staff and office space is still below Western European levels, and professional and supervisory fees are also significantly lower. For instance, set-up costs for a fund average between €25,000 and €35,000 and are hence significantly lower than in competing domiciles. If a client wants to plug into an already established investment platform, the fees are in the region of €10,000.

With the ‘Big Four’ accounting firms all established on the island, Malta has the capacity and expertise to help the fund industry continue to expand. They add extra weight to the small and medium-sized accountancy firms, and the large number of legal firms, that service the fund sector in Malta. While in certain cases there is a shortage of qualified staff for senior positions, the island has introduced special tax incentives for high-calibre professionals to relocate to Malta, making it relatively easy for firms to fill positions.

Trillions and Billions Fund custody is one area that needs to see substantial growth, with only a handful of firms offering custody services. The MFSA had negotiated derogation from the EU requirement of AIFs to appoint a local custodian, which elapsed in July 2017. AIFMs in Malta are now required to use a local custodian. At EU level, Malta is lobbying for the lifting of the requirement, arguing that member states should be granted the right to decide whether a custodian can be based abroad or not. The authorities are also hinting that a new custody bank is looking at moving into Malta in the near future; however, they are admitting that this is no easy task due to the size of the market. While Malta has sought to position itself as an alternative to Dublin and Luxembourg, the challenge for Malta is in the trillions. Dublin and Luxembourg are managing assets worth some €2 trillion and €4 trillion respectively, and with Malta having €10 billion, it is clear that the market is not significant enough to match the business model of global custodians.

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Funds & Asset Management

Strategy for Growth Due to this mismatch, Malta had to rethink its approach and is now hosting the managers rather than the funds themselves, and specialising in providing the right environment for start-up managers to successfully grow their funds. Malta has become a top management location due to its cost-effectiveness and other operational advantages. This also had spillover effects on the fund administration side, with fund administrators based in Malta now servicing funds in many other locations. The sector also hopes that the migration of service providers continues in the light of Brexit. Depending on the final trade deal between the EU and the UK, Brexit could make fund distribution and servicing more complex within Europe.

In the meantime, Malta’s fund sector is eyeing the growing wealth in the Arab countries of North Africa, and Shariah-compliant funds can generally be set up in Malta. Based on its vast network of some 70 double taxation treaties and agreements with foreign regulators ensuring a smooth trading environment, Malta provides distribution opportunities to countries in the Americas, the Middle East and Asia where in particular UCITS are welcome.

Future Outlook Effective regulation and a highly personalised approach have helped Malta to establish itself as a fund servicing hub of international repute. The country’s innovative approach to regulation has in many ways secured the survival of the start-up fund, and the latest developments aimed at minimising time-to-market – which has always been an important factor when choosing where to launch a fund – illustrate the potential for investment in the years to come. The global asset management industry is on growth course, with PwC anticipating that global Assets under Management will almost double in size by 2025, from US$84.9 trillion in 2016 to US$111.2 trillion by 2020, and then again to US$145.4 trillion by 2025. The hopes are high that this upswing will also be visible in Malta – provided that Malta successfully addresses the custody challenge. n

Malta has become a top management location due to its costeffectiveness and other operational advantages.

Think Malta, think BOV Fund Services

Are you a fund promoter or a fund manager seeking to set up your funds in a proven EU jurisdiction?

At BOV Fund Services Limited, we can provide you with a “cradle to grave� fund administration services package which encompasses both a turnkey fund formation solution, as well as a full suite of fund administration back office services. Our professional team can assist you in assessing the various regulatory options for your strategy, investor base and intended distribution model, thereby ensuring that you opt for the right structure. BOV Fund Services offers a comprehensive service covering the entire pre-and post-filing of the licence application process, up to the issue of the respective licences by the financial regulator in Malta. Our extensive experience also covers the provision of fund redomiciliation services from offshore jurisdictions to Malta, the handling of cross border mergers of UCITS funds, as well as the passporting of alternative and retail funds from Malta to other EU markets.

BOV FUND SERVICES +356 2122 7148 www.bovfundservices.com infobovfs@bov.com BOV Fund Services Limited is recognised to provide fund administration services and licensed to provide company services by the Malta Financial Services Authority.

BOV

FUND SERVICES

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Insurance & Reinsurance

Insurance & Reinsurance

Brexit, Blockchain give Sector a Chance to Shine Malta’s international insurance sector is finding new opportunities in Brexit and blockchain technology.

Insurance & Reinsurance

M

alta’s international insurance industry has developed fast over the last two decades, often far ahead of the curve in bringing alternate and unique solutions to market. As new technologies and geo political realities cause changes to the insurance landscape’s contours, Malta is determined to keep itself relevant and find new ways to expand growth.

One major example is Brexit. The UK’s decision to exit the EU has prompted intense competition among other European financial centres vying for former UK-based businesses. Hopes in Malta are high that a number of brokers, insurers and captives will choose to open offices on the island, with its lower cost base and established international insurance sector being seen as key factors in its favour.

The island’s unique and tested cell company legislation could also prove a key attraction to insurers and tech companies seeking to utilise Insurtech, blockchain solutions and smart contracts. US and Asian market players, keen to sell insurance to European clients, have already shown increased interest in what the country has to offer and are set to join the list of international companies and ‘blue-chip’ corporations that have already turned to Malta to insure traditional, but also emerging risks such as cyber, environmental and employee benefit risks.

While business is booming when it comes to the provision of international insurance services, Malta’s domestic insurance sector faces a number of challenges. The industry is extremely competitive and defined by price undercutting. Although the market has seen some form of consolidation in the past two years, insurers claim that market rates need to improve for the industry to remain profitable.

Insurance Market Growth Malta’s insurance sector has long been open to foreign investment. Private and commercial insurance was first developed between the two World Wars when a number of underwriting agencies representing British insurance companies set up on the island. Following major consolidation in the UK market during the 1990s, many of the British insurers exited Malta’s small market, creating the opportunity for local agencies to convert into independent insurance companies. But it was Malta’s entry into the EU in 2004 that truly transformed the insurance landscape, with EU regulations enabling foreign companies to insure assets and risks anywhere within the Union. This attracted insurers seeking a more cost-effective jurisdiction, as well as non-EU insurance companies or intermediaries seeking to tap into the EU insurance market. They are allowed to write directly into Europe, thus avoiding the need to engage additional, and often expensive, fronting insurers.

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Regulatory Efficiency & Cost Effectiveness The industry regulator, the Malta Financial Services Authority (MFSA), has played its part in boosting the island’s attractiveness to the international insurance industry. With a stated commitment to prudent regulatory oversight accompanies by innovation, efficiency and cost effectiveness, the MFSA has created an industry environment that allows companies to flourish and meet changing consumer needs. The country has enacted legislation that allows the set-up of captive insurance companies, and has championed the introduction of Protected Cell Companies (PCC) and Incorporated Cell Companies (ICC) in the European Union. Both structures allow firms to write risks through cells within a core company and provide businesses with a cost-effective alternative to setting up a stand-alone insurance company.

Malta has also recognised the growing importance of insurance-linked securities (ILS) and catastrophe bonds, as well as the convergence of reinsurance and capital markets. The island has enacted legislation allowing for the formation of reinsurance special purpose vehicles (RSPVs) and securitisation cell companies (SCCs).

These new regulations will strengthen Malta’s role as an alternative risk transfer domicile as they link the insurance industry with the capital markets. They also allow Malta to attract reinsurance sidecars and hedge funds interested in entering the reinsurance business.

A Diverse Industry Today, Malta’s insurance sector boasts a workforce of more than 1,200 people, and at the end of 2017, 63 insurance companies were based in the finance centre. These were made up of 46 licensed non-life insurance companies, eight life insurance firms, two composite and seven reinsurance enterprises. Most of these companies sell insurance to clients outside of Malta.

The insurance management community, consisting of 11 insurance managers, has greatly helped the sector to grow and develop.

Global corporations such as BMW, Peugeot, Citröen, Nissan, Liberty Global, Volkswagen, Vodafone and RWE have set up insurance companies or captives in Malta, while reinsurance providers Munich Re, Axeria Re and Argo Global, as well as international insurance managers such as AON, Marsh, Willis, JLT, Artex Risk Solutions and USA Risk Group have established operations on the island.

Corporations from across the world are now being serviced from Malta, including businesses from other sectors that are using Malta’s protected cell company legislation to offer insurance to third parties to cover risks in areas such as travel and property. Companies that are primarily active on the local market include Mapfre Middlesea Insurance, Atlas Insurance, GasanMamo Insurance, Citadel Insurance, Elmo Insurance and HSBC Life Assurance. These companies service some 85% of the local personal and commercial market, while the two major life insurance companies, Mapfre MSV Life and HSBC, handle some 90% of the life market.

Today, Malta’s insurance sector boasts a workforce of more than

1,200

people, and at the end of 2017,

63

insurance companies were based in the finance centre.

F 10 9 OUINTSURO ANCE

MOTOR RE HAPPY A S R E M O T S U C VICE. WITH OUR SER

THANK YOU.

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SE INSURE YOUR HAPPY! GASANMAMO

OM | GASANMAMO.C

BY THE MFSA AUTHORISED DATA (2017).

6) & INT ERN AL INSURANCE IS RES EAR CH (201

ATE S MAR KET DNI & ASS OCI SOU RCE: M. FSA

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Insurance & Reinsurance

Surpassing the €3.8 billion mark The combination of a local and an international market has led to record growth in Malta’s insurance market. In 2016, companies wrote €3.82 billion in gross premiums. While this represents a marginal decline of 0.5% compared to 2015 (€3.84 billion), the sector’s recent growth is impressive. Gross premiums rose from €2.83 billion in 2014 and €2.58 billion in 2013. Premiums relating to risks or commitments based outside Malta rocketed from €1.2 billion in 2010 to close to €3.3 billion by the end of 2016.

International insurance business now accounts for some 90% of the total gross written premium. Local premiums also increased throughout the years and reached €0.5 billion in 2016. Malta’s insurance penetration rate stands at 5.2%, below the EU average of 7.6%, with spending significantly lower than the EU average.

Competitive Pressures Expansion remains a major challenge for domestic insurance companies, especially in the non-life segment. Competition is forcing insurers to cut underwriting rates, while claims are reported to be rising, putting insurers’ margins under pressure.

This challenging environment has already resulted in a few overseas insurers withdrawing from the motor market during 2015, while Mapfre Middleasea has acquired the business of Allcare Insurance after the company got into financial difficulties. Insurers claim that rates need to be adjusted upwards for the sector to grow in a profitable and sustainable way. Meanwhile, insurers are looking at two avenues for growth. The first is bringing in new insurance products, such as pet insurance and products for bicycles. Insurers can also grow their businesses by tapping into the expanding economy and offering innovative and creative policies addressing other niche-market demands. There are some sectors, too, which have yet to be fully exploited by insurance firms, including oil and gas. Some companies are also seeking growth outside of Malta, having entered foreign markets by offering specialised products. There is also room for growth in the life insurance segment as coverage in Malta is currently around 38% of the EU average.

Onshore Cell Success Malta’s international insurance sector is expected to continue performing strongly. Solvency II was finally implemented and the uncertainty surrounding its introduction has vanished. In this new reality, Malta’s insurance professionals agree that Malta’s legal framework – and specifically the PCC structure – is the island’s main selling point.

Malta already hosts 14 insurance PCCs with 34 cells, which are owned by companies such as Swarovski, Amplifon, Travelodge, Ocado and TUI. The PCC regime is well placed to provide insur-

The MFSA expects that a number of insurance companies will open offices on the island in the coming months.

Insurance & Reinsurance

Reinsurance: Life:

8

Composite:

2

6

Insurance Company Types

Non-Life:

47

ers with a cost-effective way to manage the higher capital and compliance requirements under Solvency II. The structure offers economies of scale, cost burden sharing and provides the cell with access to knowledge and management expertise pooled within the core of the PCC. It is seen as the ideal structure for start-ups, which otherwise might struggle to comply with the new requirements. Insurance Managers and Brokers can also benefit from this structure. For instance, foreign consultants, brokers or managers could create their own cells in local insurance broker or management PCCs, through which they can service their clients across the EU, with less capital and cost than setting up stand-alone licensed companies.

Future Growth Areas The sector also points to emerging opportunities from blockchain technologies and the island’s ability to play host to disruptive players from different insurance verticals. Insurers offering or developing innovative solutions could use a cell in a PCC to test and deliver new applications, either by setting up their own PCC structure or by working with an established insurance company renting out cells. Future growth is also expected to be driven by securitisation, either through the use of RSPVs or SCCs. An SCC is a single legal entity that can establish one or more segregated cells for the purpose of entering into securitisation transactions, including insurance-linked securities transactions such as catastrophe bond issuances, longevity risk transfer transactions, collateralised reinsurance transactions and cell sidecars. The main benefit of SCCs lies in their application as programme or platform structures, for instance if repeat transactions are envisaged, offering lower costs and quicker set-up time for each transaction. Exchange Re has become the EU’s first securitisation cell company platform for cell-based insurance linkedsecurities (ILS) and collateralised reinsurance transactions after having been granted approval by the MFSA.

A Competitive (Post-Brexit) Domicile Malta’s value proposition is also being viewed as making Malta attractive as a post-Brexit destination. The MFSA expects that a number of insurance companies will open offices on the island in the coming months. Foreign companies often choose Malta because it is an EU member state with dedicated cell legislation; however, they soon realise that there are several other advantages such as highly qualified insurance professionals and a businessfriendly environment. This makes the country an attractive outsourcing destination for foreign insurance companies, managers, brokers and other intermediaries. Functions such as claims administration, analytics, customer care, policy administration, sales and distribution can be outsourced to Malta with a view to reducing costs. With its innovative legislation and operational

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advantages, Malta is possibly top of the list for companies that seek to relocate to another jurisdiction and require vehicles for specific needs, such as third-party business, solutions to reinsurance issues or wanting to tap into capital markets. Malta’s re-domiciliation legislation allows for a seamless transfer of structures in and out of the island, without the need to wind up operations. In addition, insurance companies are exempt from paying duty on documents on the insurance of risks situated outside Malta and from paying contributions to the Protection and Compensation Fund with respect to the same risks.

Support Network Insurance companies in Malta can rely on a wide support network, including three associations: the Malta Insurance Association (MIA), the Malta Insurance Management Association (MIMA), and the Association of Insurance Brokers (AIB), as well as the newly setup Malta Association of Risk Management (MARM).

The sector is also backed by a large number of legal firms, as well as accounting and auditing practitioners that range from local practices to the global ‘Big Four’. Furthermore, over the past years, Malta’s lawyers and accountants also acquired the specialist insurance knowledge needed for more complex services, like the re-domiciliation of captives from another jurisdiction to Malta.

Growth Potential While the low interest environment will continue to pose a challenge to the sector as it affects the way insurance companies reserve and invest their funds, product innovation is seen as one measure to cope with this environment. Sector professionals highlight that Malta’s domestic insurance sector is on the right track when developing new policies and services.

On the international front, Malta has become an important player in the insurance market, and the fact that the island has opened up to the insurance-linked securities market bodes well for the future. By offering EU passporting rights, a fiscally beneficial environment and competitive operating costs, the island is expected to remain a hotspot for EU and non-EU direct insurers seeking a cost-effective location. It will be a magnet, too, for multinationals looking for reinsurance solutions and service providers with an international client base eager to enter the EU insurance market. To exploit its full growth potential, Malta only needs to ensure that it continues to offer innovative solutions, sustains a low cost base and maintains an efficient operating environment. n

The sector is also backed by a large number of legal firms, as well as accounting and auditing practitioners that range from local practices to the global ‘Big Four’.

Insurance & Reinsurance

81

Total Gross Premium Written 2016 3.82bn

2015 3.84 bn

2014 2.82 bn

2013 2.58 bn

2012 2.31 bn

2011 2.20 bn

2004 0.21 bn

0.0 bn

0.5 bn

1.0 bn

1.5 bn

2.0 bn

2.5 bn

3.0 bn

3.5 bn

4.0 bn

Number of insurance companies 60

50

40

30

20

10

0

41

45

50

54

58

60

60

58

60

63

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

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International Pensions

International Pensions

Pension Management Industry Spreads Its Wings Already a leading market for British expats pensions, Malta sets its sights on the wider European pensions market.

International Pensions

M

alta’s international pension management industry has fast developed into a flourishing segment of Malta’s finance centre; however, the sector is facing a somewhat uncertain future. The island offers solutions for high-net-worth individuals looking for an investment vehicle, international workers planning for retirement and global corporations seeking pension schemes for their staff. Malta currently caters mainly to the UK market, and thus far no one really knows what impact Brexit will have on expat pensions based in Malta. Nonetheless, the country’s professionals believe that the industry can expand by building on the finance sector’s wide experience in asset management.

QROPS Destination The creation of international pension plans is a recent development, as the increasing mobility of people and jobs around the world prompted a shift away from the traditional idea of pension provision as a purely domestic service. Malta’s emergence as a financial service centre first created a market for UK-linked pension products. Qualifying Recognised Overseas Pension Schemes (QROPS) were introduced in Britain in 2006 to make the process of transferring pensions to another country for UK pensioners living abroad simpler. In 2009, the Malta Financial Services Authority (MFSA) procured confirmation from the British tax authorities that pension schemes established on the island, and regulated by the MFSA, are eligible for recognition as QROPS. Therefore, pension rights can be transferred into it without a UK tax charge. The interest in Malta as a QROPS jurisdiction has been on the increase ever since this recognition was obtained, and the country has become the main market for UK expats’ pensions. Today, newly set up schemes can self-certify with Her Majesty’s Revenue and Customs (HMRC) in the UK as QROPS. In addition, a retirement scheme licensed in Malta is also eligible as a Qualifying Non-UK Pension Scheme (QNUPS). Money transferred into these schemes is free from UK inheritance tax.

Malta is also making a name for itself in relation to Institutions for Occupational Retirement Provision (IORPs). These schemes can be set up in Malta to be passported to other EU and EEA member states. With IORPs, the EU is seeking to establish a second pillar for a pan-European pension system, and the country’s professionals believe that Malta is the ideal base for operators of such schemes. However, the occupational pension fund sector has not yet risen to the fore, and according to practitioners the main reason is that the majority of service providers are not embracing the added complexity of such offerings, including IORPS, and the lack of a sustainable domestic occupational pension fund tax regime in Malta.

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Expanding Segment Malta licensed its first six pension schemes in 2010. By the end of 2017 the island was home to 50 different pension schemes. The rapid growth that the sector is experiencing is due, in part, to the appeal of Maltese policies around regulation and taxation of international pensions. Growth was also boosted when changes to the QROPS legislation resulted in numerous jurisdictions, such as Hong Kong, Guernsey, Cyprus and New Zealand, no longer complying. They were forced to de-list a large proportion of their schemes, and some of those operators relocated to Malta. Operators on the island were also able to mirror the UK’s rules around pension flexibility which were introduced in 2015, which meant that clients can withdraw a 25% initial commutation lump sum followed by up to 75% of the fund taken as advanced income. Greater flexibilities have also been introduced in case of death, including the potential for a full payment of the value of the pension to the beneficiaries As in other areas of financial services, Malta’s approach to legislation and regulation in this sector aims at providing the necessary safeguards to ensure the smooth operation of pension schemes and pension funds. International pensions are governed by the Retirement Pensions Act which requires the registration and ongoing supervision of pension schemes, as well as service providers and scheme administrators, investment managers and custodians, through the MFSA, making Malta an attractive location for accrued pension funds for expatriates living around the globe.

Under Malta’s regulation, pension schemes are also fully reconciled and audited right up from member level to the overall scheme operation. This is something that does not happen to such a degree in other countries and gives great comfort to pension holders.

For Europe and Beyond Maltese QROPS and QNUPS are ideal for those who have previously built up UK pensions but are no longer a UK resident, such as British expatriates and foreign nationals who have worked in the UK and have accumulated pension funds there.

Malta’s extensive double-taxation agreement network consisting of some 70 treaties, offers further advantage for QROPS schemes held in Malta. The UK’s regulations require QROPS jurisdictions that tax local residents on their pension income to also tax payments to non-residents at the same rate. An exemption to this is where the QROPS jurisdiction has a double tax treaty with the individual’s country of residence. In Malta, QROPS schemes have already been designed for expatriates living in the US, interacting with the country’s double taxation agreement with the US. There is also scope for more Europe-focused business as most of Malta’s tax treaties are with EU countries.

Malta remains an attractive QROPS domicile for expats living in the European Economic Area (EEA) after the introduction of the Overseas Transfer Charge (OTC), a 25% levy on QROPS transfers, in 2017. Expats living within the EEA do not pay the charge, while those living outside need to pay unless they live in the same country as their QROPS is based. However, the fear is the charge could extend to pension transfers with European Union countries once Brexit has taken place. While the full terms of the UK’s exit from the EU will remain unclear for several years, the industry says QROPS appear to be vulnerable to change and this might affect future QROPS growth.

International Pensions

While Malta has seen the breakthrough in the international pension sector due to its attractiveness for QROPS and QNUPS, it does not exclude coming to similar agreements with other countries. Mobile workers across the European Union are said to account for 5% to 10% of the Union’s workforce, and the island sees an opportunity to cater for the pension needs of companies and individuals from EU markets.

International Competitiveness Malta’s competitive cost base offers advantages to both pension providers and policyholders. Companies can benefit from operating costs, which are 20% to 30% lower than in most other EU countries, cost-savings that can be translated into lower contributions and higher gains for scheme participants. The island’s support infrastructure is also becoming stronger by the year. The country boasts a sophisticated telecommunications network and is serviced by a hard-working, Englishspeaking workforce. This goes a long way towards reassuring potential clients that any advice they require is always readily available. Moreover, many of Malta’s law firms offer pension providers assistance in setting up, while accountancy and related services, such as business consultancy, are widely available.

Towards the Future The outlook for Malta’s international pensions industry remains positive. With increased global mobility, the need for expat pensions and pension solutions for international companies is increasing. Although EU regulations have been in place to facilitate the set-up of pan-European pension plans, the marketplace has not really provided for cross-border pensions, despite demand from multinationals and individuals. However, barriers related to pensions for mobile workers are gradually being lifted. While industry professionals believe that different taxation and regulatory systems will impede growth in the field of occupational pensions in the short term, they are convinced there is already great potential for private pension plans. By the time market momentum grows, Malta will have had enough time to perfect its service offerings and build up a track record, making it well placed to serve the pension requirements of the wider market. n

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Corporate Structuring

Corporate Structuring

Staying Ahead of the Curve Helping companies adjust to greater regulatory emphasis on substance, Malta continues to attract serious companies to do business on or from the island.

Corporate Structuring

A

t a time when regulatory changes on EU and OECD levels are reshaping the international business landscape, Malta offers global corporations a package that includes fully EU-compliant legislation, low cost structures and highly developed professional services, all within a respected, well-regulated finance centre. The island has already caught the attention of ‘blue chip’ corporations and corporate planners who use Malta for international transactions and investments into Europe and emerging markets around the world. With a growing supply of quality office space available for companies that wish to establish substance and physical presence, Malta presents itself as a location where this can easily be achieved.

With a regulatory framework that has been assessed numerous times, Malta has developed a reputation as a quality jurisdiction that offers strong regulation, high levels of transparency and good governance.

Strong Regulations Malta has served as a corporate structuring base for several decades, since offshore companies were first introduced in the 1980s. Subsequently, with the country’s decision to move onshore a few years later, these companies were converted into structures compatible with EU law. With Malta’s accession to the EU in 2004, the country’s tax regime – which had been in place since 1948 – was approved by the European Commission. Malta operates a full imputation tax system under which companies are taxed at a rate of 35%. However, shareholders are entitled to refunds for the tax paid by the company. This system meets international tax standards, and Malta is included in the so-called ‘white list’ set out by the OECD. With a regulatory framework that has been assessed numerous times, Malta has developed a reputation as a quality jurisdiction that offers strong regulation, high levels of transparency and good governance.

Popular Vehicles Incorporating a company in Malta only takes a few days. Every company must be registered with the Registrar of Companies at the Malta Financial Services Authority (MFSA), which now lists over 79,000 companies. The most commonly used vehicle for international business is the Limited Liability Company, but businesses can also choose to set up General Partnerships, Co-operatives and Limited Partnerships. Malta has also introduced special legislation, mostly used in the funds and insurance sectors, for the formation of Protected Cell Companies (PCC), Incorporated Cell Companies (ICC) and Securitisation Cell Companies (SCC).

A Malta company is the ideal vehicle for a wide range of business activities, as holding or trading companies, ranging from property ownership to the management of eCommerce activities and licensed financial services provision. Malta companies are also being used for shipping and maritime activities, as well as for aircraft transactions. A Malta holding company can hold shares in other companies, as well as equities, bonds, loan portfolios, real

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estate and other asset classes. In addition, Malta-registered companies can be used for listing on foreign stock exchanges.

Incorporation & Relocation The island has seen a steady increase in incorporation of companies and the structuring of deals through Malta in recent years, with 5,230 companies and 104 partnerships registered in 2017.

In addition to new incorporations, Malta is also seeing more redomiciliations of companies from other European jurisdictions, such as the Netherlands, Cyprus and Portugal, as well as the relocation of management and effective control of companies to Malta.

New regulation such as the OECD Common Reporting Standard has resulted in a greater emphasis being placed on substance, and Malta is seeing companies and their intermediaries establishing a stronger physical presence. Professionals and advisors highlight that tax is not the only reason why companies should look at Malta. There are a number of reasons, including the country’s labour force, economic and political stability, the way of life, the professional attitude of the service providers, and English as an official language.

Mergers & Acquisitions Malta is also being used as a platform for M&A transactions, with foreign companies establishing a Malta company as a European base, which then either acquires another European company or group, or carries out a cross-border merger. Malta is perceived as a flexible and efficient jurisdiction for this kind of work due to its attractive corporate law and regulatory environment, as well as the advantageous fiscal treatment of locally registered companies used as vehicles for cross-border acquisitions. Equally important, the minimal tax leakages mean bidders using a Maltese company to launch an offer for a foreign firm are able to put in a more attractive bid in an auction process. Malta’s network of some 70 double taxation treaties further strengthens the country’s position as a key corporate location. Thus far, the majority of transactions coming through Malta are European, but there is increased interest from outside the EU, including America and Asia.

High Standards Malta’s position as a top international business hub is solidly underpinned by a regulatory framework aimed at attracting reputable players, and fuelled by the relentless commitment of the MFSA, and practitioners alike, to retain a quality service and high standards of business regulation. The Maltese legal structure is a hybrid system of Civil and English law. While it is based on the civil law pattern of continental Europe, most administrative and fiscal legislation is constructed on the English model. This unique legal and regulatory framework also gives it

Corporate Structuring

an advantage in M&A activity, as practitioners have a cultural affinity to both systems and can easily bridge the gap between continental European and UK legal frameworks. Maltese legislation also allows foreign companies to change their domicile to Malta, without the need of winding up their operations in the foreign country and incorporating a new company in Malta. This ensures substantial cost savings for the company and makes it attractive for already established companies to move their seat to Malta, while Maltese law allows for companies to re-domicile out of Malta in an equally straightforward process. As part of the 4th Anti-Money Laundering Directive, Malta has established a register of beneficial owners, and all corporate entities are required to submit up-to-date and full information to the MFSA.

Experienced Service Providers Malta’s service providers are able to provide clients with the full range of services, having acquired the experience and in-depth knowledge of company formations, mergers and acquisitions that comes with frequent exposure to international transactions.

Their reputation is excellent, and most of the country’s legal firms are part of international networks, such as Lex Mundi and Lexis Nexis, and are regularly ranked on Chambers, MartindaleHubbell and Legal 500. The ‘Big Four’ accounting firms have a presence in Malta, while the large number of small and medium-sized firms have made significant strides in establishing the country as a serious financial services centre. Most firms also offer company secretarial, management and directorship services and are authorised by the MFSA to offer trustee and fiduciary services.

The Malta Solution Malta stands out as a costeffective EU jurisdiction with a well-educated workforce that is able to deliver innovative solutions to complex transactions

While taxation and corporate structuring of multinationals and high-net-worth individuals have become matters of public interest, Malta emphasises that it is not a tax haven and is keen to keep up its reputation as a transparent jurisdiction. The country keeps its regulatory framework in sync with the changing demands of the industry and in line with the requirements laid out at EU level. This ensures that Malta retains maximum relevance, effectiveness and attractiveness to the international financial community. As the international trend shifts away from brass-plate practises towards substantial, bricks-and-mortar presences, Malta stands out as a cost-effective EU jurisdiction with a welleducated workforce that is able to deliver innovative solutions to complex transactions. n

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Global & European Corporate Headquarters

Global & European Corporate Headquarters

Reaching New Marke

W

ith companies such as HeidelbergCement, Lufthansa Technik and Konica Minolta already using Malta as their location for regional or key function headquarters, international corporations are fast appreciating the advantages of operating out of Malta. The combination of its central Mediterranean location, highly skilled international workforce and high quality of life not only make Malta an attractive option for European companies, but also a destination of choice for multinationals looking for a location from where they can oversee investment in the developed and emerging countries of the region.

Malta is often regarded as the hub linking the EU’s market of 500 million people and the rapidly evolving markets of Africa. Coupled with a network of double tax treaties, English-speaking staff and strong cultural ties, the country is positioning itself as an international management centre and an ideal launch pad to enter neighbouring markets.

ets

Global & European Corporate Headquarters

Malta is increasingly ranked on decision makers’ shortlists when it comes to choosing the location of their international and regional headquarters

Open Economy Malta’s geographical position in the centre of the Mediterranean has always played a pivotal role in influencing the country’s destiny and prosperity. Situated between North Africa and Europe, Malta has long enjoyed close cultural and business relationships with countries such as Libya, Algeria and Tunisia. The country’s entry into the EU in 2004 was widely welcomed by the international business community, which saw Malta’s EU membership opening up new opportunities for foreign companies to enter the EU marketplace. Malta is also a long established key intermediary for foreign investment. In fact, trade and investment are of vital importance to Malta’s economy and, according to the 2017 Open Market Index published by the International Chamber of Commerce, Malta has the 7th most open economy in its league table of 75 nations.

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Global & European Corporate Headquarters

Leading Companies Increasing numbers of companies have already located their regional headquarters or certain key functions on the island. The international trading arm of the HeildelbergCement Group has its headquarters in Malta, while Lufthansa Technik set up a regional service centre in Malta due to its location in the southern European Mediterranean region, as well as its proximity to Africa and the Arabian Peninsula.

Konica Minolta has set up a sales, services and support centre for Central Asia, the Middle East and Africa in Malta in an effort to break down the barriers of distance, language and culture, while Austrian private jet company VistaJet relocated its headquarters to Malta in 2016. Companies from the finance sector have also found Malta to be a profitable base. Trade finance specialist FIMBank has its global headquarters in Malta, and a number of foreign banks use Malta as a springboard to the Mediterranean and North Africa. The oil and gas industry has also discovered Malta as a safe service centre in the Mediterranean. In addition, in the IT and iGaming sector, some of the biggest names in the business have set up shop on the island.

Generally, Malta is an ideal location to carry out functions such as strategic planning, the management and supervision of subsidiaries, mergers & acquisitions, the management of Intellectual Property, corporate finance, trade finance, risk management, research and development, logistics, as well as ICT and data centre operations.

Facilitating International Business Doing business in and from Malta is easy. The country has a highly-developed business infrastructure, making it an advantageous base for region-wide corporate coordination and central management functions, sales, marketing and customer service. A neutral, pro-business and economically stable country, Malta offers companies a positive climate from which to successfully compete in the region. A fiscally efficient tax structure leads the way and is complemented by a network of some 70 double-taxation treaties, facilitating international business and ensuring a smooth trading environment.

Management & Control in Malta There is optimism in Malta that the country’s importance as a management centre is set to grow. Since the OECD presented their action plan on Base Erosion and Profit Shifting (BEPS), the importance of substance has significantly increased.

Professional services firms report that many clients are currently assessing that their set-ups are in alignment with the changing rules, acknowledging that only company structures that are in line with the substance requirements will stand the test of time. Companies require an appropriate physical presence and registered employees on their books, while decisions need to be taken from Malta.

Malta believes it is particularly attractive as a location for American and Asian firms wishing to enter the EU or the North African markets. In its efforts to persuade growing numbers of foreign companies to use it as a base, the country emphasises that it is also a great place for small and medium-sized enterprises seeking growth opportunities outside their home countries. With operational costs being 20% to 30% lower than in most other Western European countries, Malta offers smaller companies a conducive business environment in which to build up European, African or Middle Eastern networks.

Global & European Corporate Headquarters

Emerging Markets As growth opportunities continue to move away from the traditional markets, most multinationals want Africa to become part of their expanding global footprint. It is a continent ripe with potential, and an increasing number of corporates believe locating key business functions close to the growing number of African consumers is growing in importance. Despite a number of challenges, Africa is undergoing a transformation that is difficult to ignore. The continent is seeking to accelerate its own economic growth and offers investment and trade opportunities across all sectors, including energy, retail, tourism, leisure, utilities, transport, telecoms, health, and education. The business community believes Malta is well suited to be a base for the sale and distribution of a vast range of consumer goods into African markets. The country is drawing on long-established links with its neighbouring countries, and many Maltese professionals have in-depth knowledge of African markets, often acting as key business introducers.

Malta’s low crime rate, Mediterranean climate, competitive personal tax rates, as well as its good educational and healthcare systems also make it an easy sell for American, Asian or European expatriate executives, particularly those with families.

Decision Criteria

Besides geographical proximity to major markets, Malta is connected by air to almost every major city in Europe and to key destinations in North Africa and the Middle East, most being just a few hours’ flight-time away.

Located uniquely on the main shipping routes, Malta has also become a major Mediterranean transhipment hub connected to more than 100 ports worldwide. The advantages of operating in, or from, Malta also include the county’s flexible, highly trained and multilingual workforce, with wages below the Western European average. Immigration from across Europe, bringing increased language skills and technical expertise, has boosted the country’s offering and is helping drive the sector’s steady expansion.

Foreign companies based in Malta comment favourably on their experiences with their local employees in terms of productivity, profitability, dependability and rapid response times. Malta’s low crime rate, Mediterranean climate, competitive personal tax rates, as well as its good educational and healthcare systems also make it an easy sell for American, Asian or European expatriate executives, particularly those with families.

Regional Growth Malta may not be the most obvious location as either the European or global headquarters of a firm, but in the long term the prospects are good that Malta will benefit from growth in the region and become an increasingly popular choice for the location of international and regional headquarters. n

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Fintech

Riding the Next Fintech Wave As all fintech sectors remain hot areas of investment, Malta sees very clearly the advantages it could gain by placing itself on the global fintech map.

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alta is positioning itself as the go-to place for innovative fintech companies, and among them, its many specialists in blockchain technology, insurtech and regtech. The island is racing to develop a framework aimed at bringing oversight to the blockchain sector, while creating the right conditions for tech innovators, start-ups and larger players to grow their business from Malta. The island seeks to attract companies disrupting segments such as payments, insurance, investment as well as compliance in equal measure. In transforming itself as a safe space for fintech, Malta has a lot of things going for it. With its cost base cheaper than Europe’s number one fintech location London, Malta is worth looking at. The island offers financial software entrepreneurs the opportunity to be located in one of Europe’s fastest-growing finance centres, in close proximity to potential employers, contractors and investors. Companies are also using Malta as a springboard to nearby markets, in particular those of Africa, which is increasingly becoming a testing ground for new financial technologies.

Fintech

Digital Economy Malta has already built up an enviable reputation as an ICT hub.

The first industries to take advantage of what Malta has to offer, such as fiscal benefits, a strategic location in the centre of the Mediterranean and cultural proximity to Europe, were iGaming and eCommerce. Malta’s ICT industry has expanded considerably beyond its humble beginnings, now employing around 7,000 people and boasting a vibrant software development industry. It is constantly evolving, with growth being driven by a wide array of segments, such as cloud computing, mobile platforms and applications, social networking and digital gaming.

Malta has now become one of Europe’s favoured destinations for foreign direct investment within the ICT industry. The island has attracted not only global brands but also smaller, more specialised software developers. Today, several hundred ICT companies operate in, or from, Malta. The majority of these are microenterprises, but high-profile names have also been attracted to the country, including Microsoft, Cisco and Oracle. The island’s ICT firms realised early on that growth can be achieved by specialisation and moved away from generalised product and service portfolios. Many of them today offer specific solutions and tailor-made products for a range of sectors, including financial services.

Regtech, Insurtech, Fintech As an industry traditionally comprising banks, insurers and asset managers, Malta’s finance sector has recently seen new operators entering the market. New regulatory challenges in the post-crisis financial market landscape, pressure on banks and other financial services companies to cut costs, as well as changing market dynamics driven by technology-savvy consumers, have created a fertile environment for fintech. There are already fintech companies based in Malta tackling regulatory and compliance issues, as well as platform and API-driven propositions in areas such as payments and risk management. Insurance companies based in Malta are also rethinking the ways insurance is being delivered, and experts agree that it is only a matter of time before insurance business will be conducted in a different fashion. The rapid development in connected devices allows insurers to tailor insurance premiums based on customer behavior, creating cost-effective and profitable products and services. Regtech has also grown from a niche market into one of the most promising areas of the financial sector. Increased regulation of the financial market over the past few years has generated pressure on financial institutions to streamline their efforts to raise transparency levels and cut compliance costs.

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Fintech companies have been drawn to Malta because the island provides a wealth of talent, both in tech and finance. The local labour pool is deep enough to meet the needs of ICT employers across the range of technical and creative skills, while specialist knowledge can easily be sourced from overseas due to an incentive programme for foreign workers. Salaries are lower than in other Western European IT centres, such as the UK or the Scandinavian countries, thus enabling small- and medium-sized companies to develop new products at affordable HR costs. International connectivity is also pivotal to the further development of this sector and is guaranteed by three operators providing international gateway services via fibre-optic cables to mainland Europe. Regtech is different to other key areas of fintech, in that, it not only needs a sound and innovative financial services sector but also an engaged and supportive regulator. Regulatory innovation has been one of the priorities of the Malta Financial Services Authority (MFSA), indicating that support for regtech firms will gain momentum in the coming months.

Blockchain Move Malta is also embracing the blockchain revolution as it looks for new sources of growth, and many in Malta hope that the island will be able to build up an entire blockchain industry.

The Government of Malta has proposed the introduction of a regulatory framework for the sector that would pave the way for the creation of a new regulatory authority, the Malta Digital Innovation Authority (MDIA); the registration and certification of service providers of Digital Ledger Technologies; as well as the regulation of Initial Coin Offerings (ICOs) and related service providers. Malta is aware that it must act quickly if it wants to attract business and reap first-mover advantages. Other jurisdictions are also following the blockchain path, and in some cases, have already launched frameworks for ICOs or are also working on rulebooks to cover any commercial use of distributed ledger technology. Meanwhile, the MFSA also confirmed that it is set to follow other European locations to classify virtual currencies as investable assets for the investment industry, while the Malta Stock Exchange has also created a blockchain committee, which will assist in the formulation of a strategy geared towards addressing this emerging technology.

Regulatory innovation has been one of the priorities of the Malta Financial Services Authority (MFSA), indicating that support for regtech firms will gain momentum in the coming months.

Fintech

Start-up in Malta There is widespread agreement that the level of potential disruption across many industries is vast and virtually unexplored.

The opportunities seem endless and a wealth of solutions could be developed. Malta’s small size makes it the ideal test environment for new technologies and ventures in need of a flying start.

Companies can develop and test new products and services on the diverse, yet concentrated, local market before exporting their services and solutions to Europe and further afield. Global giants support the small island nation in its effort to become a centre for tech innovation. The island has partnered with Microsoft to create an innovation centre, offering lab space and mentoring programmes to early-stage companies or individuals. The centre places Malta at the forefront of new technologies, such as cloud computing, and provides facilities that help tech start-ups to develop their products and overcome initial hurdles in commercialising ideas. Start-ups will also find help and support at TAKEOFF, Malta’s first technology business incubator, which is based at the University of Malta, while the Malta Information Technology Agency (MITA) also runs an innovation hub. Efforts are also underway to attract an international accelerator to Malta.

With 25 banks, 60 insurance companies and over 70 fund managers, in addition to many other financial services companies, Malta’s IFC offers software developers a large potential client base on their doorstep. The island is also home to a number of eFinancial Services companies, including payment gateways, card issuers, eWallets and online foreign exchange traders. Many of them are showing interest in collaborating with tech start-ups on pilot projects, as well as the testing of software, hardware and applications. Malta is also keen to provide a home for fintech companies targeting the African market, where large banks are now investing in digital currency outfits after leaving the market mostly to telcos.

The Race is On Financial services companies in Malta and elsewhere have recognised that disruption is not a one-time event but rather a continuous pressure to innovate. The financial sector hopes that technology could reduce their compliance and regulatory costs by automating their operations and making them more transparent. Established companies, seeking more innovative and economical solutions, are ready to partner and collaborate with new players, while many blockchain start-ups are currently looking for a home but are unsure where to set up their businesses due to the undefined regulatory environment. In this context, many in Malta agree that Malta could win significant business by positioning itself as a secure, innovative fintech hub and a pioneer in blockchain regulation. n

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Blockchain and DLT

The Great As applications for blockchain are on the rise and could shake up financial services, Malta is developing global standards that have the potential to push the technology into the mainstream and disrupt the status-quo of the finance industry in the years ahead.

Blockchain and DLT

Chain

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alta plans to make waves in the cryptocurrency and blockchain sphere with the introduction of the world’s first holistic regulatory framework for Distributed Ledger Technologies (DLTs). The island’s vision is to create a thriving blockchain economy by providing a high level of regulatory certainty to a space that thus far is mostly unregulated. The ambition is that the sector will account for 10% of GDP by 2027. A new regulatory authority is set to be established which will be responsible for the certification of DLT platforms and smart contracts, while handling the voluntary registration of technology service providers.

The proposed framework also includes a regime for the approval of Initial Coin Offerings (ICOs), as well as the regulation of cryptocurrency service providers.

Activity around blockchain technology is already ramping up significantly. Crypto Exchanges Binance and OKEx has opened offices, cryptocurrency entrepreneurs are preparing to launch the first ICOs from the island, and blockchain-related start-ups are putting their applications and products on the market, intent on pushing the boundaries of technology into new markets.

Development Roadmap During the past two years, blockchain technology has rapidly gained popularity with businesses, both big and small, and primarily in industries concerned with cybersecurity and payments. Two of Malta’s main industries are financial services and gaming, and hence, blockchain moved early to the top of Malta’s growth agenda. Initially, the sector’s regulatory authorities – the Malta Gaming Authority (MGA) and the Malta Financial Services Authority (MFSA) – were reluctant to allow the use of cryptocurrencies and blockchain technology. Both had concerns regarding the anonymity and stability of these systems. Yet there was the belief that DLT could be Malta’s golden opportunity, and that there should be a critical analysis of the technology. A working group was set up to make recommendations on how Malta can make the most of the opportunities offered by distributed ledger technology, including cryptocurrencies and ICOs. Meanwhile, the MFSA has given the green light and classified virtual currencies as an investable asset for the investment funds industry, and the gaming regulator recently approved a sandbox launch of a mock virtual currency, which is aimed to test whether cryptocurrencies would affect the island’s economy negatively.

Pioneer of Blockchain Law Prime Minister Joseph Muscat said last year he wants Malta to become a global pioneer in fully embracing blockchain – both across the public sector and from a regulatory aspect.

The uses of this technology are wide ranging; and the network’s decentralised nature is usually regarded as one of the technologies biggest pros given that there is no single point of failure from which records or digital assets can be corrupted. Many predict the technology will radically change supply chains, and proof of blockchain’s popularity is evident: Almost two billion US-Dollar had been invested in blockchain start-ups as of early 2017. Many believe that by 2025, blockchain adoption is considered mainstream and integral to the financial markets ecosystem.

However, it’s early days for this industry, and many believe regulating this industry would help it grow and add credibility to it. While Malta is not the first country in the world working on, or implementing, bills accepting or promoting the use of cryptocurrencies and blockchain technologies, the island is among the first coun-

Blockchain and DLT

tries to introduce legislation for the so-called second generation of blockchain technologies, such as Ethereum which took the concept of recording transactions a step further and introduced decentralised computation, which supports more complex functions such as smart contracts. Ethereum is mostly used by developers building applications on top of it. Those in favour of regulation believe that there are many companies who are interested in having a proper licence under which to operate, and Malta aims to be the first in Europe to provide exactly that.

A New Regulator Malta seeks to introduce a regulatory authority, the Malta Digital Innovation Authority (MDIA), dedicated towards the supervision and certification of DLT platforms and smart contracts. The MDIA would be the first regulator of its kind in the world. However, Malta made the conscious decision that certification with this authority would be voluntary and not mandatory in order to ensure that innovation will not be stifled. Nevertheless, the expectation is that some DLT-based platforms would wish to obtain regulatory approval since regulated products would imply a certain level of security, which the market will likely prefer. The proposed law will initially capture DLT platforms and smart contracts only, but could be extended to include other platforms and technologies, such as Artificial Intelligence and While Malta Internet of Things technologies, at a later stage. is not the When it comes to virtual currencies and first country ICOs, Malta proposes a financial instruments in the world test, which will enable entities to determine whether their virtual currency, token or activworking on, or ity falls within the scope of existing financial implementing, services legislation. The proposed law will also bills accepting set out the licensing requirements, procedures and obligations for ICOs and service providers, or promoting which fall outside the scope of existing legislathe use of tion. The law will satisfy Anti-Money Laundercryptocurrencies ing and Know Your Client regulations, without stifling technological innovation. and blockchain

A New Age of Finance

technologies, the island is among the first countries to legislation for the so-called second generation of blockchain technologies

Many believe blockchain has potential in almost any context where information needs to be agreed and shared, for instance in insurance, trade deals, public health systems, foreign policy, international aid, taxation, loans – the list is seemingly endless. Indeed, every financial process that requires record-keeping and involves multiple parties could potentially benefit from blockchain technology. Proponents argue that, if properly implemented, distributed ledgers can bring improvements in transparency, efficiency and trust due to the centralised nature of the database and the fact that all changes are encrypted in such a way that they cannot be altered or deleted without leaving a record of the data’s earlier state.

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Industry Support As interest in this technology is rising to unprecedented levels, industry experts have come together to form BitMalta, an association advocating blockchain technologies and cryptocurrencies to the general public, as well as the Blockchain Malta Association, which promotes education, research and public debate for the advancement and development of digital economy in Malta. The island’s government has indicated that it is willing to throw its doors wide open to help companies develop new solutions. While there are no imminent plans in the pipeline, the island’s leaders do not rule out the possibility of establishing their own blockchain and their own cryptocurrency.

While there are no imminent plans in the pipeline, the island’s leaders do not rule out the possibility of establishing their own blockchain and their own cryptocurrency.

Blazing the Trail DLT is still at a nascent stage; nonetheless, its proposition is so compelling that a number of other jurisdictions are investing in it now in order to carve out a role for themselves. Malta has taken proactive steps, and it is the country’s ambition to lead the race to embrace the new technology and set the standards for other countries to follow. However, most experts say that it is unrealistic to assume that any regulatory framework currently in the making, including Malta’s, would be able to account for, and foresee, all issues related to blockchain regulation. Growing pains are sure to follow. Yet, there is no other way than taking proactive steps. The blockchain opportunity is too big to be ignored. Malta’s Government is a big backer of this technology and wants to undertake selected projects itself. This will ensure a flow of projects to attract overseas players to Malta, stimulate the local blockchain industry and encourage start-ups. The signal that Malta is open for blockchain business could not be clearer. n

Malta’s proposed regulatory framework for the blockchain sector includes three separate pieces of draft legislation: •

The Malta Digital Innovation Authority Bill will provide for the establishment of the regulator to be known as the MDIA;

•

The Technology Arrangements Service Bill outlines a regime which will be set up for the registration of Technology Service Providers, such as DLT platforms, and the certification of Technology Arrangements such as smart contracts;

•

The Virtual Financial Assets Bill will set out the framework for Initial Coin Offerings (ICOs) and the regulatory regime on the provision of certain services in relation to virtual currencies.

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Securitisation

Securitisation

Alternative Routes to

Capital Malta’s securitisation regime places the country in prime position to make the most of new opportunities as the global securitisation sector recovers.

Securitisation

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ith European demand for securitisation products growing, Malta is deftly positioning itself as a rival to Luxembourg and Ireland as a hub for onshore securitisation structures. The only EU member – besides Luxembourg – with dedicated securitisation legislation, Malta has become one of the fastest growing securitisation centres in the EU, and the number of securitisation vehicles has grown from just 18 in 2015 to 40 by the end of 2017.

These covered a variety of asset classes including lease and other receivables, various categories of loans and financial instruments and even container vessels.

Malta’s Securitisation Act provides a robust creditor-friendly framework, which means greater certainty for many of the legal challenges that investors are typically faced with in any securitisation transaction, while the Securitisation Cell Company offers an innovative vehicle for platform and programme structures. Malta is the first EU member state to legislate for the use of segregated cell companies, already popular in the insurance and funds sectors, for securitisation transactions. In 2017, the island launched the Institutional Financial Securities Market (IFSM), a market for debt securities, asset-backed securities, derivative securities and insurance linked notes specifically designed for the institutional investors, which puts Malta at par and direct competition with the financial services hubs of Luxembourg and Dublin.

Renewed Interest Malta’s Securitisation Act dates back to 2006, although it was not until recently that Maltese securitisation structures began gaining traction in tandem with the recovery of the global securitisation market following its collapse as a result of the 2008 financial crisis. Securitisation is experiencing a comeback, and is now widely viewed as an efficient and effective financing tool.

By transforming illiquid assets into tradable securities, securitisation can help channel cash flow to borrowers and fund significant economic development, while helping issuers and investors diversify risk across asset classes and across the globe. Reviving securitisation is also part of the EU’s Capital Markets Union project, which is being designed to encourage capital markets financing and reduce companies’ reliance on bank funding.

The European securitisation market was hit hard by the financial crisis, with issuance falling from a €450 billion high in 2006/2007 to about €80 to 90 billion, according to the Association for Financial Markets in Europe. In 2017, the European Commission proposed two legislative measures to restore market activity in EU securitisation transactions: the Securitisation Regulation and the Securitisation Prudential Regulation, aiming to introduce a more favourable, simple and transparent framework for the sector. These initiatives, which form part of the EU Capital Markets Union, have sparked renewed enthusiasm for securitisation, and the expectation is that securitisation could reach an annual volume of €350 billion once the new legislation becomes applicable to transactions in 2019.

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Appreciated Advantages In this climate, Malta is set to play a leading role in meeting this growing demand. Its strong legal framework, which provides for statutory bankruptcy remoteness and true sale, among other benefits, and tailored rules on tax neutrality, together with the solid foundations that have already helped the country become a leading European financial centre, are expected to contribute to Malta’s growth in this area.

Maltese securitisation vehicles do not require authorisation unless they issue securities to the public on a continuous basis or undertake the business of reinsurance special purpose vehicles in the context of insurance linked securities transactions and are, instead, merely required to notify the Malta Financial Services Authority (MFSA) of their intention to commence securitisation activities.

The Cell Company Concept The Securitisation Cell Company (SCC) is a single legal entity that can establish one or more segregated cells for the purpose of entering into securitisation transactions, with the assets and liabilities attributable to each cell constituting a separate patrimony of the SCC that are segregated from the assets and liabilities of other cells and from the non-cellular patrimony of the SCC. Assets attributable to a particular securitisation cell are therefore only available to investors and other creditors transacting with that cell. SCCs are the ideal vehicle for programme or platform structures, offering cost efficiency and quicker set-up time for each cell while ensuring robust legal segregation between transactions. The number of SCCs established in Malta has grown from just two in 2015 to 15 SCCs with 26 cells at the end of 2017.

Arising Opportunities Malta is also aiming to become the jurisdiction of choice for the securitisation of transport-related assets. Maltese vehicles have recently been utilised for the securitisation of container vessels and their bareboat charter party receivables. While securitisation is not a financing technique typically employed by ship owners, it could prove to be a useful means of securing alternative funding as traditional sources of financing are becoming increasingly limited or expensive. While capitalising on Malta’s securitisation regime, securitisation transactions involving ships are also able to take advantage of the benefits offered by Malta’s tried and tested shipping regime, such as efficiency and certainty of enforcement of a mortgagee in an event of default, as well as the automatic stay on insolvency proceedings of the vehicle pending the outcome of the enforcement proceedings on the vessel. Malta’s more recently introduced aviation legislation, established in part on the jurisdiction’s well-established shipping framework and in part on

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Securitisation

SCCs are the ideal vehicle for programme or platform structures, offering cost efficiency and quicker set-up time for each cell while ensuring robust legal segregation between transactions.

international benchmarks such as the Cape Town Convention, similarly offers an interesting proposition for the securitisation of aircraft when considered together with the Maltese securitisation regime.

Insurance-Linked Securitisation Among the extensive list of asset-classes that can be securitised, Maltese securitisation vehicles, or cells in an SCC, can be used for the assumption of risk in insurance-linked securities transactions such as catastrophe bond issuances, longevity risk transfer transactions, collateralised reinsurance transactions and cell sidecars, provided they obtain the prior authorisation of the MFSA. As the global reinsurance market evolves, with increasing numbers of reinsurers tapping the capital markets and seeking alternative risk management vehicles, Malta offers a secure solution for European insurers looking for Solvency II compliant reinsurance securitisation structures.

In 2017, the Malta Stock Exchange also received approval to launch the IFSM, the first fully Maltese-regulated wholesale securities market. The IFSM offers increased flexibility and the ability to create securitised instruments tailored to issuers’ own corporate requirements as well as to investor groups’ specifications. It is regulated under the Wholesale Securities Market (WSM) Listing Rules and only admits wholesale financial instruments with a denomination of at least €100,000.

Other Benefits The English language gives the country another advantage over other popular securitisation locations. As one of the country’s official languages, the vast majority of the Maltese workforce speaks English fluently, while legislation and regulations are also published in English. There are also a number of legal, accountancy and audit firms with significant experience in securitisation present in Malta.

A Preferred Jurisdiction While there may still be some remaining reservations or misgivings regarding securitisation, these do not invalidate its economic rationale, and the opportunities for securitisation in Malta are abundant. Malta’s securitisation framework is specifically designed to protect the interests of investors. This is one of the reasons why Malta is becoming a preferred jurisdiction for the structuring of securitisation vehicles at a time of investor-centric international regulatory initiatives, such as the EU’s standardised securitisation framework, which are expected to help improve perceptions of securitisation as an effective means of alternative financing and increase global demand for securitised products. n

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Wealth Management

Gaining

Credibili Malta stands out as a wealth management hub with a difference: a holistic service that offers lifestyle and residency options as well as investment solutions.

Wealth Management

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ow a key component of Malta’s International Finance Centre, wealth management is emerging from the shadow of its big brothers, the investment funds and insurance industries.

The wealth management sector has benefited from an influx of affluent clients interested in Malta’s citizenship and residence by investment programmes. They have come to understand Malta’s wide wealth management offering, and subsequently started to source more services and entrusted their advisors with a larger share of their investment assets. Malta offers affluent individuals a full range of innovative products, experienced professionals, a strong regulatory framework, and personal, cost-effective services. It offers all the favourite investment vehicles of wealthy clients, while also allowing investors to protect their assets through the establishment of trusts and foundations. The wealth management industry is set for booming growth over the next decade.

Predictions are that the greatest transfer of wealth globally is about to happen. Some 200,000 ultra-high-net-worth individuals are expected to pass down some US$30 trillion to their children in the coming years, a figure that highlights the extent of the potential for this growing sector.

Ticking all the Boxes There is fierce competition among financial hubs to be the centre of choice for the world’s wealthy, but there are relatively few that can demonstrate the professionalism, range of expertise and

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quality of regulation required to meet the demands of the investment community. Malta, as an EU member state fully committed to international co-operation, is one of those centres ticking all the right boxes. While the global wealth management industry is at an inflection point, challenged by regulatory reforms, a shift to new technologies and robo-advisory products, Malta believes it can enlarge its market share and attract larger volumes of client assets. And indeed, the country’s stable economic climate, business friendly regulatory practices and experience in running a financial centre, place Malta in an advantageous position. The country’s approach of offering an attractive advisory and product portfolio – as opposed to models focused on secrecy – have helped Malta to successfully compete with offshore jurisdictions.

Maltese Advantages Malta’s strengths as a wealth management centre lie in its holistic offering that caters for a wide spectrum of needs, including succession planning, investment advisory, corporate structuring, investment banking and even lifestyle administration. Bankers and asset managers cater for all levels of wealth from the mass affluent to the ultra-high-net-worth individual. A wide range of investment vehicles are available – from simple structures and arrangements for families, to high value and more complex set-ups involving trusts, companies, investment funds and foundations for affluent clients. The country’s membership of the EU further strengthens its competitive position as it provides asset planners with the security of a reputable jurisdiction, coupled with flexible business entities that can accommodate the most diverse needs. Equally important, Malta has an excellent legal infrastructure, which is supported by experienced professionals who can combine all the separate strands into a unified and comprehensive wealth management offering.

Options Available In recent years, Malta has been experiencing a steady influx of banks specifically established to offer investment banking, private banking and wealth management services to their wealthiest clients. Specialist wealth managers are offering private wealth management, while a large number of banks provide professional financial advice and products to high net-worth, corporate and institutional clients. The country has also attracted a number of family offices, which are finding it to be a compelling alternative to traditional wealth management centres and have transferred all or part of their operations to Malta. With some 130 trustees, more than 80 foundation administrators and 120 investment services firms registered in Malta, the sector is rapidly evolving.

Local corporate service providers are also extending their offerings, and Maltese professionals such as tax advisers, lawyers and accountants are recognised to be among the best in the world.

Malta offers affluent individuals a full range of innovative products, experienced professionals, a strong regulatory framework, and personal, costeffective services

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Legal Certainty High-net-worth individuals appreciate the security that the county’s regulatory system provides and emphasise that the true value of Malta’s wealth management industry lies in the finance centre’s reputation as stable and sound. Malta offers an OECDand EU-approved fiscal framework, combined with around 70 double taxation treaties. In addition, the country’s prudential supervisory system, under which trustees and other investment service providers have to be licensed by the Malta Financial Services Authority (MFSA), gives comfort to clients by ensuring that certain regulatory standards are met. Malta’s banks are well capitalised, and the sector was ranked as the 17th soundest banking sector in the world by the World Economic Forum’s Competitiveness Index 2017-2018.

Investment Tools Malta offers solutions to those clients who are interested in wealth preservation through trusts and foundations and to those who want to achieve yield through investment funds and the like.

The EU member state is one of the few jurisdictions where both trusts and foundations can be set up. Both structures allow the creation of customised solutions that will fit the most diverse personal and business needs, ranging from succession planning to estate management. While Malta has a pedigree in the field of administering trusts since the 1980s, the country has recently updated its legislation to bring it in line with the latest trends and to ensure that Malta maintains its competitive position. The updated law also brought about the introduction of the Private Trust Company (PTC), which offers interesting opportunities to high-net-worth individuals and families who prefer tailor-made trust solutions.

As more high-net-worth investors and family offices are warming up to investing in private equity and hedge funds, Malta’s reputation as an investment fund domicile is rising fast.

With some 660 funds established in Malta, the country’s fund administrators and managers have a solid track record in setting up and managing different investment vehicles for institutional and individual investors. Asset management companies in Malta have launched fund platforms which are exclusively open to family offices and third-party managers to provide them with an efficient and cost-effective solution to enter the market. Investors preferring physical assets are increasingly looking at Malta, too.

Already a strategic port of call for superyachts crossing the Mediterranean, there has been a growing demand from highnet-worth individuals for private yacht and aircraft solutions. The introduction of extensive VAT incentives for the registration of yachts under the country’s flag and the excellent infrastructure of the country’s marinas make Malta a logical choice to base a yacht.

Malta also offers attractive solutions to purchase and manage air-

Malta offers solutions to those clients who are interested in wealth preservation through trusts and foundations and to those who want to achieve yield through investment funds and the like.

Wealth Management

craft and has developed a strong legislative framework that has paved the way for the easy registration of private jets. There are many reasons why an individual may wish to establish corporate entities in Malta, ranging from the simple creation of a company to own, for example, a holiday residence, a yacht or a private aircraft, to the more complex set-ups required in the structuring of Islamic Finance transactions.

A New Type of Client Traditionally, Malta’s wealth management offering has been focused on Europe, with many companies even specialising in certain markets, such as the UK or the German-speaking nations.

However, thanks to a growing number of double taxation treaties with high-growth economies in Asia and Latin America, Malta began catering to a wider audience. The introduction of Malta’s Individual Investor Programme, through which foreign nationals can obtain Maltese citizenship when investing in the country, as well as a similar programme offering residency by investment, has put Malta on the radar of many ultra-high-net-worth and high-net-worth individuals from outside of Europe. Practitioners are reporting that they have built deep working relationships with many clients, who initially were looking at Malta only from an investment migration perspective.

A Focus on Technology

Practitioners are reporting that they have built deep working relationships with many clients, who initially were looking at Malta only from an investment migration perspective.

The wealth management industry is also in the midst of digital disruption. Due to the introduction of new regulations and related cost increases, a greater focus will be placed on cost effectiveness, while technology will become mission critical to drive customer engagement, collect data on clients and potential clients, portfolio handling as well as regulatory and tax reporting. In this climate, Malta seeks to attract fintech companies and technology-driven businesses providing wealth management solutions. Wealth management firms seeking to harness blockchain technology should also look at Malta given that the island is in the process of introducing a regulatory framework for this emerging industry.

Future Outlook The landscape for international wealth management has changed over the past years. After the financial crisis, client expectations grew more sophisticated and competition intensified.

Continuous initiatives to update the country’s regulatory framework, as well as incentives for high-net-worth individuals, are aiding the growth and will likely lead to Malta playing a greater role in investors’ decisions when choosing an international wealth management centre. n

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Family Offices

Family Offices

Increasingly Sophisticated Malta offers family offices and wealth management firms a combination of top-class professional services, effective regulation and the ideal lifestyle location

Family Offices

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alta is becoming a popular family office destination due to its business- and wealth-friendly environment. Although many wealth holders that have moved structures to the island are keeping a low profile due to the private nature of the industry, practitioners are reporting that they are doing more family office work than they did a few years ago. Single and multi-family offices with a presence in Malta highlight the island’s innovative investment vehicles including specialist funds and trust regimes, high quality service at competitive international rates, strong legal and accountancy professions and English-speaking environment as some of the reasons why Malta is being seen as a good platform for family offices.

Family Office Evolution While the Maltese family office sector is still very much in its infancy, its component services have been on offer in the country for several decades. Indeed, Malta was an early mover in this segment with many lawyers and accountants acting as trustees or advisers on a wide range of issues and providing services to single and multi-family offices worldwide. While the first generation of family offices was traditionally located close to the family who created the wealth, given the rising complexity of the global financial market, family offices branched out into other locations that can offer cost-effective but high-quality services. As more and more clients are now beginning to appreciate Malta’s relationship-driven business culture and service-oriented workforce, the country’s family office sector is maturing rapidly. Wealth management firms seek to serve their clients more holistically by moving up the value chain to launch complete family office services.

At the same time, Malta is increasingly being seen as an alternative to the traditional family office locations of the US, UK and Switzerland, and is attracting money-managers from the world’s banking centres to establish fully-fledged offices on the island.

Full Financial Services Wealth creators and their families, heirs who benefit from old fortunes, as well as newly rich tech billionaires and professional athletes, are today looking at Malta as a location to manage their assets. In Malta, they can find service providers who manage everything for them: tax structuring, investment management, estate planning as well as inheritance and wealth transfer services. In addition, larger law and accounting firms are providing an array of family office services. One of the key attractions

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for family office providers is the country’s regulatory framework that surrounds the wealth management industry and the smooth licensing process for trustees, foundation administrators and investment advisors. Typically, setting up a family office is expensive; it often costs more than US$1 million a year to run a fully integrated family office due to the lack of economies of scale. By locating both the administration and asset management functions in Malta, affluent families and their advisors can benefit from low administrative costs, simple licensing arrangements and an effective regulator in the form of the Malta Financial Services Authority (MFSA).

Wealth Structuring Thus far, most family offices in Malta originate from continental Europe, however, several companies are looking to reach new and profitable markets such as the US, Australia and New Zealand. In seeking to attract affluent families and their ‘chief financial officers’ to Malta, they point to Malta’s regulatory frameworks for holding companies, investment funds and fund platforms, as well as for trusts and foundations. The country is also constantly developing new solutions that can be used in a family office setting, including a citizenship-by-investment programme, as well as a number of residency programmes. These programmes are seen as important catalysts for the transformation and growth of Malta’s wealth management sector in general as they bring affluent people to the island. The trust law has also just been updated, and the new version includes the concept of a family trust. For a family trust, a company can be set up which exclusively acts as trustee to this particular family trust, thereby allowing for greater control and confidentiality while also allowing better tailor-made solutions to reflect particular family needs.

Malta Facts Traditionally providing a complete outsourced solution to managing finances and investment, family offices tend to invest heavily in consultants, databases and analytical tools to optimise a portfolio. While the financial sector is becoming increasingly complex, family offices based in Malta say they can successfully navigate the new regulatory landscape because all of Malta’s financial services fall under the regulation of the single regulator, the MFSA. New and foreign companies are able to benefit from streamlined licensing procedures, lower regulatory fees and reduced bureaucracy when compared to other IFCs. Political and financial stability is also critical in attracting business to the island, and Malta’s strengths have been proven in recent years, particularly in the country’s success in weathering the global recession.

Staff recruitment, however, has become a key challenge for firms as the competition for talent in Malta’s rapidly expanding

Family Offices

financial services industry has intensified. More and more companies are now sourcing foreign employees with the required level of expertise in order to deal with the demand for services in the financial sector. Though the sector is restricted by these problems, the intention of most companies is to remain boutique. By doing so, they can continue to provide their clients with the kind of intimate service for which they were chosen while ensuring that the human resources are available to sustain the growth.

Cost Efficiency The intention of most companies is to remain boutique.

By doing so, they can continue to provide their clients with the kind of intimate service for which they were chosen while ensuring that the human resources are available to sustain the growth.

The competitive landscape for wealth management services has increased in recent years, making it more difficult to attract new clients and retain existing ones. In this climate, cost is becoming a decisive factor. Single family offices are usually not designed as profit-making entities themselves and, hence, they need to control the cost of their operations, while consistently low interest rates mean many wealthy individuals are looking for quality service providers with competitive fees. Many family offices are currently analysing their cost structure to restructure their operations, and Malta, with its more competitive fee and salary structure, expects to welcome more family offices in the near future.

The country’s role as a reliable outsourcing partner will also remain important as a strong support infrastructure is establishing itself, with account managers to carry out everyday transactions for clients and portfolio managers to make investment decisions. The country’s law firms are on hand to provide legal advice, and senior client relationship managers generally deal with the backbone of the family office itself. Most multi-family offices are open to clients with at least US$20 million, and a few hundred million is usually considered as the minimum needed to operate a reasonably sophisticated single-family office. However, Malta is also attractive to clients who are not considered part of the superrich: sharing high-end wealth management services, or sourcing a few services from Malta’s experienced service providers, is also a reasonable proposition for the average wealthy family.

Set for Expansion It is estimated that there are between 5,000 and 10,000 family offices worldwide, and the number of ultra-high-net-worth individuals (those with at least US$30 million in net assets) is set to grow. Malta’s strategic position in the Mediterranean, sound legal framework and operational advantages are expected to help family office services to expand. Industry players also say they expect more family offices to be set up by newly wealthy families from emerging economies of the region. Despite challenges and competition from some of the more established locations, the country is gaining prominence as a professional and efficient centre for affluent families, wealth managers and high-net-worth individuals. n

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Trusts & foundations

Trusts & Foundations

Building on

Experience Malta’s trust industry plays a vital role in shaping the country as a wealth management location. As demand for trusts and foundations continues to grow, Malta’s track record keeps it ahead in a competitive market.

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till ranked among the premier league of trust jurisdictions, Malta has also acquired a robust reputation as a domicile for foundations. While the country has been a prominent player in administering private wealth structures for almost 30 years, the latest legislative update of its Trusts and Trustees Act brings the country into line with international trends and rival trust jurisdictions, ensuring that Malta remains one of the ‘go-to’ names for those in search of wealth management solutions. The introduction of private foundations complemented the offering, making the country one of the few places in the EU catering for both trusts and foundations. This ‘marketable advantage’ has attracted some 150 service providers, including large banks, independently owned trust companies and smaller niche providers to the Mediterranean island.

Trusts & foundations

A Long Tradition Trusts were originally developed in England in the 12th century.

After centuries of cultivation, this idea was officially introduced into Maltese legislation in 1989 as a ‘ring-fenced’ vehicle, only allowing non-residents to set up such structures. However, after ratifying The Hague Convention in 1994 and becoming an EU member state in 2004, Malta has made significant investments in the development of its legal and regulatory framework, adapting its legislation and tax regime to make it a truly attractive and effective jurisdiction for establishing and managing trusts. In recent years, the country has created specific legislation to establish clear judicial and tax regimes for the set-up of foundations, which had previously only been recognised through case law and doctrinal writing. The new framework made this instrument more secure and the creation of a private foundation even more attractive for foreign clients.

An Instrument of Choice Whether for estate planning, or protection of assets or both, trusts and foundations are becoming the vehicle of choice for high-networth individuals. The recent banking failures, financial crises and economic recessions have also made asset protection a priority for those of more modest means. Foundations appear to be primarily attractive to continental European, Middle Eastern and Asian clients for whom the concept of a trust is less familiar.

Trusts are usually found in common law countries, however with the passing of the Trusts and Trustees Act in 2005, trusts became fully ingrained in Malta’s civil law framework. Nevertheless, practitioners point out that foundations are also of increasing interest to affluent individuals from common law countries. They like the fact that a foundation offers all the benefits of a trust, with the added advantage that the founders can maintain a greater level of control whilst having separate legal personality.

Tailored Products Malta’s trust practitioners and foundation administrators stress that both structures have their specific uses and operate in parallel in Malta. Malta does not offer ‘off-the-shelf ’ trusts, and each trust is structured carefully to reflect the requirements of the client. Malta’s legislation recognises all other jurisdictions and offers clients the option to have the trust regulated by the jurisdiction of the clients’ choice. It also recognises all forms of trusts one would find in other jurisdictions, such as discretionary trusts, accumulation and maintenance trusts, fixed interest trusts, spendthrift and charitable trusts. In addition, the trust law identifies a number of commercial situations within which the use of trusts would attract more favourable treatment. These include security trusts, unit trusts or collective investment schemes and

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Focus & Experience Since 1978 our experienced independent professional team has forged a hard-earned reputation for providing a highly responsive personal service, backed by uncompromising attention to detail.

Professional advisors, asset managers, financial institutions, family offices and international businesses around the world rely on us for independent corporate, fiduciary and fund administration services.

Contact us to discover how our global reach, experienced professional personnel, tailored services and on-the-ground presence in Malta can make a difference to you and your clients.

Contact: Albert Cilia Managing Director, Malta acilia@tridenttrust.com +356 21 434 525

T R I D E N T T R U S T. C O M

Trusts & foundations

securitisation, among others. The use of trusts is now widening to encompass a host of different uses, from Islamic Finance to aircraft holding. Trusts can also be converted into a foundation and vice versa. Foundations can be used in most cases where a trust or a company could be set up, with the most common structures having a wealth planning and philanthropic background.

Top Trust and Legal Professionals The Malta Financial Services Authority (MFSA) oversees trustees and foundation administrators who appreciate the highly regulated environment, as it provides certainty to clients that they are dealing with professional firms. Some 150 service providers operate in and from Malta. This yields a highly competitive landscape for clients who are spoilt for choice when choosing a service provider. In addition, 35 companies in Malta are authorised to act as foundation administrators.

Rules & Regulations

The intention of most companies is to remain boutique.

By doing so, they can continue to provide their clients with the kind of intimate service for which they were chosen while ensuring that the human resources are available to sustain the growth.

Trusts and foundations have been set up in Malta to safeguard everything from heirlooms to stocks, bonds, art and real estate.

The 2014 changes to the Trusts & Trustees Act enhanced the Malta Trust further, with the period of trusts extended by 25 years up to 125 years. The other key change concerns settlor powers. Typically, a trust may be invalid if the person establishing it retains control over the assets; however, the updated law introduced specific circumstances when a settlor may reserve powers under the terms of a trust without the trust being considered a sham. Another major amendment is the introduction of family trusts and Private Trust Companies (PTCs). A family trust can hold assets to the benefit of one specific family, whereby the trustee must be a company that only provides services to that specific family trust. A minimum share capital requirement of â‚Ź15,000 has also been introduced for trustees in addition to a number of other amendments.

Malta’s fiscally efficient tax framework enhances the attractiveness of the jurisdiction, though naturally the actual impact of taxation on trusts depends on a number of issues, including the type of assets and the status of residence of the beneficiaries. However, where the beneficiaries under a trust are non-residents and the income of the trust does not arise in Malta, there is no tax to be paid in Malta. Foundations may choose to be treated as a trust or as a company in which case they can potentially benefit from the country’s tax refund regime.

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Beneficial Ownership Register As of January 2018, all Maltese trusts are obliged to identify, record and report their beneficial owners to the Malta Financial Services Authority; this was one of the features of the EU’s 4th Anti-Money Laundering Directive. Beneficial owners of trusts include settlers, trustees, protectors, and any beneficiaries who exercise ultimate control through direct or indirect ownership.

Name, date of birth, nationality, country of residence, official identification document, as well as the nature and extent of the beneficial interest held by each beneficial owner have to be reported. In case of charitable trusts, the trustee is only required to provide information relating to the settlor, the protector and any other person exercising control over the trust. The new regulations are expected to help in the effort to increase transparency and combat tax evasion and money laundering.

Key Selling Points The MFSA has gained a reputation as an effective and responsive regulator that works hand-in-hand with the government to cement the island’s position as a wealth management hub. Legal and administrative support ranges from small boutique practices to the global ‘Big Four’ accountancy firms, with Deloitte, PwC, EY and KPMG all having branches in Malta. The MFSA also operates a fast-track authorisation for trust companies licensed in other approved jurisdictions. Many are now choosing Malta over other big names in the industry given the island’s status as EU member state, as well as its fiscal and political stability.

Malta’s other key selling point is the value for money it offers those looking to the EU for wealth management solutions, such as significantly lower set-up and administrative costs than other countries. Legal costs, management fees and auditing rates are all lower than in the majority of European jurisdictions due to the fact that well-educated staff can be sourced at two-thirds of the labour costs found in other Western European nations.

Towards the Future The outlook for the future of Malta’s fiduciary industry is bright.

A Maltese trust or foundation offers security, assurance and flexibility in an EU-regulated environment, while maintaining the principle of confidentiality that clients expect. The sector boasts unique legislation that allows the individual requirements of each client and company to be met. Furthermore, Malta is one of the few southern European countries enjoying a stable political and economic environment, and more and more clients are finding Malta trusts and foundations as their preferred vehicles for managing their wealth. n

Global citizenship & Residency Planning

Global citizenship & Residency Planning

Home for

Gl Citizens bal Malta’s wealth-based immigration programmes offer a host of advantages to affluent foreigners, expats and globetrotting professionals looking for a permanent or temporary home.

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s more and more individuals are seeking opportunities beyond their countries of origin, Malta’s citizenship-byinvestment and residency programmes are attracting increasing attention from high-net-worth investors and entrepreneurs from around the world. For professionals or business people who often conduct business on an international scale, a second residence or citizenship has become an appealing option to diversify not only their assets but also their lifestyle options and geographical ties. While living in Malta has long been popular with European nationals, and especially with people from the UK and Scandinavia, the new wave of expatriates taking advantages of Malta’s programmes includes individuals and families from South Africa, Russia, Asia, the Middle East and the Americas.

Launched in 2014, Malta’s citizenship-by-investment programme has been capped at 1,800 applicants but it is very likely that it will be renewed once the current programme ends.

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Economic Investment With Malta’s warm and sunny weather, historic charms and Mediterranean lifestyle, it is easy to see why the island has become one of Europe’s top expatriate destinations. As a small country, Malta has long considered wealth migration vehicles as an important economic tool to attract foreign investment and high-calibre people to its shores. In fact, the first measures to attract foreigners were put in place after independence from Britain in 1964, offering a special tax rate to foreign residents with an above-average income at their disposal. At that time, most individuals who relocated to Malta were British. Further residency programmes were introduced in 1972 and 1988, which built on this idea, offering foreign nationals a 15% flat tax rate and attracting expats from across the world. While this programme has been updated throughout the years, Malta has also widened its residence and citizenship portfolio for high-net-worth individuals.

Visa-Free Access The global citizenship-by-investment industry has gained prominence in recent years as affluent entrepreneurs and investors are seeking easier travel options and safe residency locations in the

900 individuals received citizenship by 2018

Global citizenship & Residency Planning

context of a deteriorating geopolitical climate. Wealth management firms are today increasingly catering to migrating millionaires considering an alternative passport as a hedge against political risks and market volatilities in their home countries or in pursuit of new business or lifestyle opportunities for their families. Malta’s Individual Investor Programme (IIP), offering foreign nationals the possibility to obtain Maltese citizenship, is the only one of its kind endorsed by the European Commission.

A Maltese passport offers visa-free access to 173 countries, and as a stable country, Malta is being seen as a safe haven for individuals, families, business owners and investors.

The IIP requires an investor to pay €650,000 to the National Economic and Social Development Fund, purchasing property having a minimum value of €350,000 or leasing a property for a minimum annual rent of €16,000, in addition to investing €150,000 in government-approved financial instruments. Malta is aware that citizenship is a very complex and sensitive matter, and therefore has developed a four-tier due diligence system to ensure that applicants are bona fide and worthy of Maltese citizenship. Given that investment migration is exclusively the domain of high-networth individuals and business persons with substantial personal assets, Malta sees its IIP as an opportunity to attract highly talented people to the island, as well as to generate additional income for its

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economy. By 2018, 900 applications had already been approved, and the government announced its intention to extend the programme once its 1,800 application cap will be reached. However, it is considering more stringent criteria and invited stakeholders to put forward their ideas.

Golden Visa For those who are either not interested in, or coming from countries that don’t accept dual citizenship, Malta launched the Malta Residency and Visa Programme (MRVP) in 2016. The MRVP grants international investors residency in Malta and a visa by which they can access the Schengen area. Through this programme, Malta effectively acts as a gateway to Europe, which is an attractive feature for nationals coming from South Africa, Russia and China to name but a few. Applicants cannot be citizens of the EU, the EEA and Switzerland and are required to invest in property on the Maltese Islands. If purchased, the property needs to have a minimum value of €270,000 in Gozo or the South of Malta, or of €320,000 elsewhere in Malta. Renting property is an alternative; the annual lease must be between €10,000 and €12,000. Applicants must also commit to invest €250,000 in Government bonds, and this investment must be held for a minimum period of five years. In addition, the applicant needs to declare either an annual income of not less than €100,000 arising outside Malta, or capital of not less than €500,000.

Other Residency Options While the high financial benchmark and investment of these two programmes might not appeal to those of more modest means, Malta offers a number of other residency options.

Non-EU foreigners can take advantage of the country’s Global Residence Programme, which offers a 15% flat tax rate on income remitted to Malta. The programme is linked to the purchase of property; however, investment can be as low as €220,000 for property in the south of Malta or in Gozo. The value of property bought in the remaining parts of Malta has to be at least €275,000. Alternatively, they can rent property for €9,600 per year in Malta and €8,750 per year in Gozo or the South of Malta. Industry professionals point to the benefits derived from this scheme for foreign entrepreneurs, international consultants, intellectuals, authors, musicians or athletes who can establish a second residence in Malta that suits their lifestyle and tax profile. A similar programme for EU/EEA/ Swiss Nationals, the Residence Programme, is also in place, offering individuals from those countries the same tax status.

Global citizenship & Residency Planning

Retirement Haven Pensioners can benefit from the Malta Retirement Programme, which has been designed to attract nationals of the EU, EEA and Switzerland, offering a 15% tax rate for individuals. Retirees can also make use of Malta’s wide network of double taxation agreements. Under most tax treaties that Malta is party to, pensions are tax-exempt from the country in which they are sourced, as long as the person is residing and receiving the pension in Malta. This means pensioners can remit their pensions to Malta and have them taxed at only 15% if they apply for the Malta Retirement Programme.

Applications for the Global Residence Programme, Residence Programme and the Malta Retirement Programme must be made to the Commissioner of Inland Revenue through an Authorised Registered Mandatory (for example, practitioners which are members of Malta’s finance institutes, such as the Institute of Accountants, the Institute of Taxation, the Institute of Financial Service Practitioners or legal practitioners, in any case, duly authorised to act as such).

Working Professionals

Non-EU foreigners can take advantage of the country’s Global Residence Programme, which offers a 15% flat tax rate on income remitted to Malta.

Malta’s economic growth and investments from international companies have also caught the attention of high-flying foreign professionals. Malta is fast becoming an all-round top expat destination that ranks well as a place for career progression and financial gain, as well as for a lifestyle change, demonstrating that the country delivers across numerous elements of expat life. To fill gaps in its labour market, Malta introduced a scheme that offers highly qualified professionals in a range of executive positions and sectors a flat tax rate of 15%, provided they have an annual income of at least €84,016 (basis year 2018). Any income over €5 million is tax-free. Conveniently located at the centre of the Mediterranean within a few hours flying time from major European cities, the country is also the ideal location for professionals working in Europe, Africa or Asia.

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The Mediterranean Ideal Despite the country’s size, expatriates can always enjoy new experiences in Malta ranging from scuba diving and jet skiing to exploring Malta’s vast and engrossing history first-hand in its preserved medieval cities. Along with a rich legacy of historical buildings and magnificent architecture, Malta offers an abundance of lifestyle properties, ranging from sea-front apartments to exclusive villas with private pools. Many expats also report enjoying a better standard of living and more luxurious life since relocating due to the island’s lower cost of living. In addition, exclusive five-star restaurants combining the finest seasonal produce with innovation and expertise can be found all over the island.

While some of the high fashion brand names, designers and upmarket services present in Monaco or Milan are not as common on the island, this merely serves to accentuate the unpretentious and genuine nature of Malta and its people.

A Network of Support This influx of affluent foreigners to the island is supported by a large and experienced network of professionals, including estate agents, lawyers and other service providers, as well as several relocation specialists. They advise on all administrative matters such as applying for the respective permits, taxation, the sourcing of property and schooling for children to help expats settle in to life on the island.

Additionally, as a testament to Malta’s business-friendly framework and world-class citizenship programme, the Swiss-based world governing body of investor migration – the Investment Migration Council (IMC) has chosen Malta to host its Secretariat.

The IMC helps to improve public understanding of the issues faced by clients and governments in this area and promotes education and high professional standards among its members.

Reasons to Relocate A country full of history, passionate people, excellent weather and crystal clear seas, Malta is a place that expats like to call home.

While the country’s residency and citizenship programmes provide additional income for the country, which in turn can be used for economic development purposes, foreign nationals can benefit from improved quality of life in a Mediterranean island setting. Depending on someone’s current location and nationality, relocating to Malta can also offer the added benefit of international tax planning opportunities, better education for children, visa-free travel and much more. n

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Corporate Treasury

Corporate Treasury

Centralising Treasury Operations Lower costs and minimal bureaucracy are putting Malta in the lead as an emerging international treasury location.

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ollowing in the footsteps of Luxembourg, Switzerland and Singapore, Malta is establishing itself as an international treasury centre. Increased volatility in the global economy and the growing complexity of international markets are driving companies to seek improved control, efficiency and transparency in their cash management, and renowned groups have chosen Malta to set up regional or worldwide treasury operations. With lower costs than the established centres, coupled with sophisticated banking solutions and a strong regulatory framework, Malta is quickly becoming the preferred European location for treasurers and CFOs.

Corporate Treasury

A Central Location Malta has developed strong skills in finance, accounting and banking, as well as in back and middle office activities. The country’s economy, the smallest in the European Union, emerged from the international financial and European debt crises relatively unscathed – a fact that has strengthened Malta’s growing reputation as a stable and reputable international financial centre. In particular, the country won international acclaim for its solid banking system, which is the 17th soundest in the world according to the World Economic Forum’s 2017-2018 Competitiveness Index.

This has allowed Malta to move up the value chain in financial services provision, with a focus on front office activities, complex transactions and high-level risk management. Malta now aims to attract more foreign companies wishing to centralise, or consolidate, their regional or global treasury management operations in Malta.

Globally, the increased compliance costs led to a more cost-conscious organisational culture, and more multinational corporations are currently seeking cost-effective jurisdictions for their corporate finance transactions, making Malta an interesting alternative to other European treasury locations.

Group Treasury Companies In most cases, multinationals want a single platform that can offer them an overview of their position, and many of them have come to appreciate the advantages of a Malta company, which can be established to function as Group Treasury for related companies in Malta and abroad. For smaller corporations preferring to outsource treasury functions, a number of providers, including the ‘Big Four’ accountancy firms, banks and smaller organisations, offer a full range of financial management and transaction services to their clients. Cash pooling, leasing arrangements, asset management, risk management and payment services can all be procured from the same treasury service, whether the client is a single entity or a group of companies.

The success or failure of a treasury service hinges on a number of factors, including the quality of a country’s banking facilities, the ease of access to local stock exchanges and a liberalised capital market. While Malta possesses all these traits, it is also rich in professional expertise, and has a strong telecoms network, providing efficient links to Europe via four submarine cables. Ongoing regulatory changes, many of which affect business processes and systems, further add to the complexity of treasury management. In this climate, treasury departments, now more than ever before, seek to optimise their company’s liquidity. Malta’s very competitive cost-base, which is 20% to 30% lower than those of other Western European locations, has also opened the door for it to become a major player in the treasury sector. Its location between Europe and North Africa makes it attractive for emerging market multinationals and companies expanding into regions such as North Africa and the Middle East that are seeking a sophisticated, safe and stable financial centre to base their treasury operations.

Stable Base Whether on a regional or global basis, a number of companies already use Malta to efficiently centralise their treasury operations. Although many believe that the country still has some way to go to establish itself as a world-class treasury centre location, Malta is boasting a number of additional unique selling points.

It is as stable as many of the current treasury locations, such as Switzerland or Luxembourg, with the bonus of lower operating costs and less bureaucracy. n

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Foreign ExchangeTrading

Foreign ExchangeTrading

Malta’s New Trading Strategy

Malta has put investor protection at the centre of its foreign exchange sector, while attracting some of the largest cryptocurrency exchanges to relocate to the island.

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he mass entry of retail investors has helped Malta to develop into a currency trading centre in the Mediterranean.

Capitalising on its growing financial centre and its telecoms infrastructure, Malta has attracted a number of forex and CFD brokers, most of them being small- and medium-sized firms.

The country’s EU-compliant regulatory framework has been a great draw for forex companies, as today’s traders demand to do business with sound financial institutions that offer transparency across each transaction. Participation in the largest of all financial markets comes with its fair share of challenges, and traders view a licence from the Malta Financial Services Authority(MFSA) as a seal of quality. Tighter checks on systems and risk controls, as well as tougher capital requirements and leverage limits for forex companies, have been introduced, and are seen as important measures to retain investor trust as the forex industry enters the next phase of its evolution. Malta is also building a supportive regulatory and technical infrastructure to support the cryptocurrency and blockchain industries, and two of the largest cryptocurrency exchanges have announced their moves to Malta.

Foreign ExchangeTrading

A Young Industry The forex industry and its followers can still be called pioneers given the age of the industry. FX was traditionally the exclusive preserve of the high-flying financial elite. The proliferation of retail-oriented platforms with easy-to-use technology has opened the market to more users than ever before. Currency trading has developed into one of the world’s largest and most liquid financial markets. Trading in foreign exchange markets averaged US$5.1 trillion per day in April 2016 according to the Bank for International Settlements, up from US$ 3.3 trillion in 2007. One of the drivers of this turnover growth was increased interest in FX as an asset class. Traditionally, FX was used as a hedging mechanism, but the desire for portfolio diversification has strengthened its role as a primary investment tool. The growing interest in forex went hand in hand with a rise in online trading, which now accounts for more than 70% of all trading in FX globally. While London, New York and Hong Kong have long been the international centres of global currency trading and investing in foreign exchange, the rise in eForex has also led to the emergence of alternative trading hubs.

A Trading Nation In challenging the captains of the finance world, Malta is building on its unique value proposition. As a seafaring nation, trading has been part of Malta’s culture for millennia, and in the past two decades the country has established itself as an international centre of financial excellence. Malta’s sophisticated IT and telecoms infrastructure, along with cost effectiveness, has also helped the country to gain a foothold in this global market, attracting firms, most of them small- and medium- sized providers, that offer contracts for differences (CFDs) and spot forex contracts.

The Advantage of Regulation While the increase in the number of forex players has been one of the biggest changes in the global market, Malta has been careful and selective in order to attract only the most reputable operators to retain its tier-1 status. Although stringent regulatory standards might seem to be a barrier to growth, the events in the international financial markets and related regulatory issues have seen an increase in financial companies seeking to be licensed in EUcompliant jurisdictions. The reputation of Malta as a well-regulated jurisdiction gives investors confidence, peace of mind, and the added comfort of knowing they are trading with a company that is licensed and adheres to high regulatory standards. Malta’s status as an EU member state also means that certain foreign exchange products and services can be offered in all countries of the European Economic Area (EEA) without the need to obtain authorisation from the regulator in each country, through a process

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referred to as passporting. This allows operators to reduce operational costs and bureaucracy, while catering to a diverse set of clients who have a growing desire to participate in the retail foreign exchange market. In particular, it makes Malta an attractive base for non-EU companies wishing to expand their operations, using the island as a launch pad into Europe.

Tightened Criteria Malta’s regulator, the MFSA, has built a reputation in international circles as being very accessible and promoting transparency, openness and dialogue. The island has established a set of conditions governing operators’ diverse activities. Forex firms can apply for different types of licences with varying capital requirements, depending on the business model they choose to adopt.

Since the introduction of new criteria for the licensing of forex entities, the MFSA closely examines the shareholding structure and the corporate governance set up of companies operating from Malta and has established higher capital requirements for companies engaging in certain activities, as well as different leverage limits for retail and professional clients. Amongst other measures, forex companies are also required to appoint a locally based risk manager. These elements mean that Malta’s framework places great emphasis on investor protection and the handling of clients’ funds. Forex companies licensed in Malta are also required to participate in the local investor compensation scheme.

While the MFSA rules are not materially different from the regulations in other EU countries, and many within the industry feel they do not provide forex companies operating from Malta with a significant advantage, the regulations help investors to be assured of the safety and security of their trading capital while dealing with the risky forex markets.

DLT and Forex The Maltese authorities have also been active in creating a legal framework for Distributed Ledger Technologies (DLT), including virtual currencies. Binance and OKex, the two largest cryptocurrency exchanges when measures by daily trading volume, are about to set up shop in Malta, cementing Malta’s status as a burgeoning hub for innovative financial companies. But there’s more. Blockchain thinking and DLTs are also being seen as a way to make the operations of many traditional forex companies more efficient and transparent, and Malta will likely play an important role in driving DLTs forward.

Foreign ExchangeTrading

Technical Infrastructure Aside from its regulatory advantage, Malta’s strength as a forex location is based on a strong desire to provide an optimum operating environment for business. Foreign exchange today is as much about technology as it is about financial markets. Thanks to heavy investments in infrastructure to support the growth of its finance centre and other industries, Malta offers forex companies a ‘plug-and-play’ environment. In addition, the country is the largest European hub for iGaming companies. Thus, the technical infrastructure that forex companies require is already established. Malta has developed a growing cluster of data centres with 24/7 support services. Systems are designed for high traffic and have ample redundancy. International connectivity is guaranteed via submarine fibreoptic cables to mainland Europe. With eTrading now being the norm, all three operators also emphasise that their bandwidth capacity is virtually unlimited, which is reassuring for forex firms whose future growth will not be limited by connectivity issues.

Investor Protection The global forex market has recently seen the return of volatility. Exchange rates are experiencing greater fluctuations, which means potentially higher returns for investors but it also increases the risk of runaway losses for small traders. This means that many forex companies consider being regulated in a respected jurisdiction with a stable and proven track record such as Malta, crucial in building up a loyal client base. While additional regulation and compliance costs are driving up expenses and reducing brokers’ margins, they are widely seen as an added advantage in winning the confidence of retail clients in times when the protection of investors’ money is as important as returns. Future growth, says the forex industry, depends on the sector’s ability to create an environment of transparency and efficiency. As a country with an EU-compliant regulatory framework, competitive operating costs and a commitment to innovations such as Distributed Ledger Technologies, Malta is positioned at the heart of this change. n

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Islamic Finance

A Smart Way

Forward With a range of Islamic-compliant products and services already available in Malta, the island’s ambition to become a centre for blockchain technologies could boost its relevance in the Islamic finance sector too.

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relative newcomer to the Islamic finance industry, Malta is increasingly marketing Islamic finance as part of its product offering. There has been growing momentum to adopt and set up Special Purpose Vehicles (SPVs) and Malta trusts for Shariacompliant transactions, as well as Sharia-compliant investment funds and insurance, which could appeal to customers in the EU and North African markets. The Malta Stock Exchange is keen to become a key player in Islamic finance capital markets and launched a Sharia Equity Index, which has been certified Sharia compliant by Dubai’s Islamic finance consultancy firm Dar Al Sharia. The greatest opportunity for the sector emerges from developments in the fintech sphere, especially blockchain technologies, which is appealing due to the possibility of immediate settlement and the elimination of counterparty risk. Practitioners believe that Malta could become the place where new Sharia-compliant financial products using blockchain technology are developed.

Islamic Finance

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A Global Niche Islamic finance is one of the fastest growing segments of the financial industry in many parts of the world. It registered doubledigit growth rates in the past decade despite challenging circumstances globally. Its reach and influence has expanded beyond the traditional Islamic markets, and the sector appears poised to enter Western markets and to complement conventional financing. As an alternative form of finance, which prohibits interest on loans and generates profits in a socially responsible manner, Islamic finance products are becoming increasingly popular outside the Islamic world. Investments are also expected to reflect real trade and business. It is this combination that makes Malta, one of Europe’s key International Finance Centres, an interesting new jurisdiction for institutions looking to set up Islamic financial instruments. Total Islamic finance assets are expected to grow from US$2.2 trillion to US$3.8 trillion by 2022.

A Long-Standing Ambition Malta’s interest in Islamic finance began in 2008, when the thenadministration stated their objective of developing Malta as a Mediterranean Islamic finance hub. The Malta Financial Services Authority (MFSA) then analysed the island’s regulatory framework and issued guidance notes on Sharia-compliant investment funds in 2010, which were updated in 2015, preceding the launch of the Islamic equity index in 2016. In an attempt to take on the more established Islamic finance hubs in Europe, London and Luxembourg, Malta highlights its geographical position, offering access to 230 million Muslims in Europe and North Africa, providing a massive client base for Islamic finance practitioners.

As a member of the European Union and the Eurozone, Malta has strong links with all EU member states, while its extensive network of tax treaties, which includes countries such as Tunisia, Egypt, Morocco, Malaysia, Singapore and the United Arab Emirates, makes the country a springboard into the wider Muslim markets.

Sharia Funds Malta is regarded as a well-established fund domicile, and the sector is developing at a remarkable pace. Funds which comply with Islamic law can be set up either as Undertakings for Collective Investment in Transferable Securities (UCITS), as Alternative Investment Funds (AIFs) or as Professional Investor Funds (PIFs), which are non-retail funds targeting the more experienced investor. Ijarah Funds, Commodity Funds and Murabaha Funds, which generally invest in non-conventional asset classes, may only be licensed in Malta as PIFs, while Shariacompliant equity funds can be set up as Maltese UCITS schemes or as PIFs. Considering the restrictions that apply to UCITS

Islamic Finance

funds, Islamic funds may face particular challenges in operating under the UCITS framework, and industry experts believe that Malta’s framework for PIFs provides a more attractive environment for Sharia funds to work in.

Capital Markets The Malta Stock Exchange (MSE) is also pursuing initiatives to open up Malta as a safe, financial services centre for Islamic finance. With the launch of the Islamic Equity Index, the MSE aims to attract business from Middle Eastern firms. In addition to the equities that have already been certified to be Sharia compliant, the MSE hopes to attract international Halal companies that have not previously listed with the Exchange. The Exchange has entered into an agreement with a Sharia advisor and its scholars to ensure the continued compliance of the companies within the Sharia Index, as well as to ensure compliance of new companies coming to the market. It is hoped that this move will facilitate the launch of other financial products that follow Islamic law, including the issuance of Malta’s own sukuk. This has been on the agenda for quite some time, and the Maltese government has displayed a keen interest in tapping the international sukuk market. Sukuk issuance would send a strong signal that Malta is in favour of these type of instruments and mirror developments in other European finance centres such as London and Luxembourg.

Special Purpose Vehicles & Trusts The Malta Stock Exchange (MSE) is also pursuing initiatives to open up Malta as a safe, financial services centre for Islamic finance. With the launch of the Islamic Equity Index, the MSE aims to attract business from Middle Eastern firms.

Thus far, Malta caters especially for Islamic investors’ wealth management, estate planning and corporate finance needs. At the heart of its offering to the Islamic finance community is the SPV, which has become a key element in Islamic finance transactions.

SPVs can take the form of a limited liability company or a trust in Malta. There are numerous benefits in establishing an SPV in Malta. In fact, Malta’s competitive tax regimes for companies, and for trusts, make the country the ideal location to establish SPVs. Coupled with the country’s wide network of double taxation treaties, the island offers an advantageous EU and Eurozone location for the structuring of various transactions, ranging from purchasing and holding property to other corporate and financing solutions. Where a Malta SPV is used in an Islamic finance transaction, it can be particularly useful when combined with a Malta trust holding the shares in the SPV. The concept of a trust is very similar to the Islamic waqf. Malta trusts are effective and reliable, and can offer customised solutions for wealth management as well as succession planning. In the trust deed settlors can define how assets are distributed to the beneficiaries so that they are in accordance with Islamic rules of succession. SPVs and trusts are regularly used for Islamic finance transactions through Malta.

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Islamic Insurance Malta can also offer solutions for ‘Takaful insurance’, which is structured as a charitable collective pool of funds based on social solidarity and cooperation. Takaful participants contribute equally to a fund to help protect one another against risks, whereas in the conventional insurance model, policyholders pay premiums to protect themselves. Malta possesses the right legislative instruments to set up Takaful instruments, offering legislation that allows for Protected Cell Companies (PCCs) and Incorporated Cell Companies (ICCs). A Takaful fund could be set up as a cell in both structures, which is then managed and administered on behalf of the participants by a Takaful operator who charges an agreed fee to cover costs. People requiring insurance cover, such as health, accident or motor insurance, could contribute to one or more cells to protect themselves against those risks. Building on its attractiveness as a re-insurance and captive domicile, there are also opportunities for the establishment of re-takaful structures in Malta.

Banking & Payments In Malta banks are only allowed to own property up to a certain percentage of their total assets, which has created barriers for Islamic retail banking. This means demand from Malta’s growing Muslim community, who are especially interested in sharia-compliant banking facilities in order to purchase property locally, remains unmet. There are, however, no limitations when it comes to international banking. Sharia-compliant investment banking, project and trade finance could be offered to neighbouring countries from Malta. The payments sector also holds great potential.

Sharia-compliant card products, including debit cards, charge cards and credit cards offering new ways of how credit is structured and marketed to consumers with risks and profits shared among all parties involved, could be distributed from Malta. A strong and innovative regulatory framework, state-of-the-art telecommunications infrastructure capable of hosting and delivering round-the-clock connectivity to mainland Europe, and Malta’s accessibility and lower costs could turn out to be a major draw to payment providers seeking a secure environment to offer Sharia-compliant transaction channels.

Islamic Finance

FinTech & Blockchain Malta is also a country with a very positive attitude towards cryptocurrencies and blockchain technologies, and is currently developing a regulatory framework for the sector. And while for many years the Islamic finance industry has been seen as a laggard in digital innovation compared with its conventional counterpart, many Islamic finance players are now acknowledging that blockchain technology could transform the sector as it could eliminate uncertainty in transactions as well as reduce settlement time and complexity, which Sharia-compliant financial agreements tend to possess. The development of smart contracts promise the automation of the entire contractual process for Islamic institutions, alleviating the additional administrative and legal complexities and redundancies associated with Islamic financial products.

Educational Hub With Islamic finance estimated to grow up to 20% annually, the need for specialised human capital in the industry is higher than ever. There is currently a shortage of staff with extensive experience in Islamic markets, and this issue needs to be addressed due to the industry’s rapid growth. With English as one of its official languages and building on its international reputation as a centre for learning and training, Malta is well placed to host Islamic finance training institutions.

Many Islamic finance players are now acknowledging that blockchain technology could transform the sector as it could eliminate uncertainty in transactions as well as reduce settlement time and complexity, which Shariacompliant financial agreements tend to possess

Gathering Momentum While the UK has become the biggest Islamic finance centre in Europe, practitioners in Malta believe the island can establish its own place in this growing sector. As a politically stable financial centre in the European Union and supported by its multilingual and multicultural workforce, Malta’s financial centre stands out for its extensive experience in serving international clientele, while maintaining a strong focus on ethics, strict investment rules, prudential practices and supervision. Sharia-compliant products structured in Malta could appeal to customers in the nearby EU and North African markets.

Malta can also act as a conduit into other EU countries, such as Italy, which is currently an underdeveloped market for Islamic finance, despite having a Muslim population of over 1.5 million.

Islamic finance can be lucrative for Muslims and equally viable for non-Muslims with its ethical, transparent and non-interestbearing financial functions. With the economies of a number of Islamic countries rising, and the Muslim population of Europe set to double in the next decade, Islamic finance has been getting more attention in the mainstream business media than ever before. However, Malta’s success in this sector will be measured by the island’s ability to attract Islamic finance institutions and scholars to the country. n

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Intellectual Property

Making the Most of

Ideas Malta puts the management of intellectual property at the core of its financial sector.

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s control of markets and materials becomes as critical as the control of rights to new ideas and innovations, Malta is providing corporations and individuals with excellent opportunities to exploit their Intellectual Property (IP). Whether referring to patents, trade secrets, trademarks, copyrights, designs or even domain names, all of the various assets share one common characteristic: they have a value and have become important growth factors for companies. Building on its experience in corporate structuring and tax planning, Malta’s vision for the future is to become a trusted platform for international IP transactions offering support across the entire IP value chain, including protecting, managing and commercialising ideas and innovations.

Intellectual Property

A Growing Sector In presenting itself as an IP hub, Malta is starting from a position of strength. Its legal system protects the full range of IP rights, and the country is a signatory to all major agreements in this field, ensuring the enforceability of IP rights in Malta as well as in other countries. Being a European Union member state also ensures that Maltese law is harmonised with EU standards. IP rights can be filed in, or through, Malta, but due to the market size, the registration of some types of IP rights, such as patents, on the island is relatively low. Despite this, a number of international corporations have discovered the benefits of using Malta to set up dedicated companies that can hold and manage their intellectual property rights worldwide.

IP Holding Company Separating the core business from the holding and management of IP rights has become increasingly popular in order to fully exploit IP assets. In Malta, an IP holding company may be incorporated as a normal limited liability company registered under the Companies Act, which can hold, license and market any type of intellectual asset, including trademarks, software copyright, brand-names, patents, and designs. Other assets, such as trade secrets, know-how and domain names can also be owned by a Malta company in order to enjoy the same benefits.

The company can enter into licence and franchise agreements with other persons wishing to exploit these rights and may also acquire IP rights from third parties – for instance, in the context of a merger or acquisition, whereby the IP rights are acquired separately as part of the acquisition of the business. This method of structuring means that the IP-holding company can benefit from Malta’s competitive tax regime and will have access to the country’s wide network of double taxation treaties.

Signatory to International Conventions Malta is a member of all the major organisations and treaties in the field of intellectual property such as the: • World Intellectual Property Organisation (WIPO); • Paris Convention for the Protection of Industrial Property; • Berne Convention for the Protection of Literary and Artistic Works; • Universal Copyright Convention (UCC); • Universal Copyright Convention and the Agreement on Trade-Related Aspects of Intellectual Property Right (TRIPs agreement); • WIPO Copyright Treaty; • WIPO Performances and Phonograms Treaty; • World Trade Organisation (WTO) agreement; • European Patent Convention (EPC); • Patent Co-Operation Treaty (PCT); • Unitary Patent Agreement.

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Support Services Specialist service providers and Malta’s legal firms offer IP owners assistance in developing IP management strategies, providing guidance through all aspects of IP strategy, protection, exploitation, the grant of transfers, licences and acquisitions, as well as the enforcement of IP rights. They can conclude comprehensive portfolio reviews, which flag issues such as business critical intellectual assets that should be protected, conduct searches in databases and registers, manage the registration of IP rights in Malta, as well as in other countries, and liaise with the relevant authorities for clients seeking to protect their creations and ideas. Malta also provides a strong and conducive business environment for companies to manage and trade their IP. In addition, the island boasts lower operational costs than many of its EU peers, while laws and legislation can easily be accessed due to the fact that English is an official language.

Innovation as a Priority Currently, an effort is underway to introduce amendments to the IP landscape, which do not solely focus on tax-related incentives for companies to bring their IP to Malta. The vision is for Malta to become a place where entrepreneurs and innovators can develop their ideas – in a safe, secure and profitable way. This also includes creating the right environment for them to register the IP, raise capital through IP securitisation and exploit the IP. Moreover, Malta is fostering the growth of sectors such as life sciences, ICT and the creative industries, including the construction of industry and design clusters as well as dedicated infrastructure that facilitates research and innovation. By offering companies a favourable location for the protection and management of their intellectual property, Malta is hoping that once the IP is located on the island, the core business will follow. The aim is to bolster the country’s entire IP economy and support activities across the entire value chain, from the creation to the commercialisation and exploitation of IP. n

Registration of IP Rights in, or through, Malta Applications for patents or designs must be filed with the Office of the Comptroller of Industrial Property. Malta is a signatory to the European Patent Convention (EPC) and the Patent Co- Operation Treaty (PCT). It is also a member of the Agreement for the creation of a Unitary Patent. As a result, applications for patents under these regional and international agreements can also be made to the Office of the Comptroller of Industrial Property in Malta, indicating the countries for which the patent is sought. An application for a trademark must also be filed with the Industrial Property Registrations Directorate. European trademark and design registrations can be obtained from the EU Intellectual Property Office (EUIPO).

Arbitration

Arbitration

Approaching its Potential With both experience and expertise on its side, Malta positions itself as a cost-effective, European dispute resolution venue to internationalise its arbitration industry.

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alta’s success in promoting arbitration as an alternative means of resolving commercial disputes is boosting its credentials as a dispute resolution centre, and the country is now targeting a share of the worldwide multi-billion-dollar arbitration market. Malta is interested in joining forces with the private sector to push arbitration to the next level and establish itself as a preferred hub for international arbitration. The island hopes to attract foreign arbitration courts, from Singapore or London, for example, to use Malta as a venue in which to set up operations to serve cross-border European company issues.

Malta has already made great strides in creating a neutral and welcoming environment for arbitration. A central location with links to Europe, the Middle East and North Africa, the county’s high professional standards in the legal and technological fields, along with the support offered by the Malta Arbitration Centre (MAC), have helped arbitration gain traction. Most cases being handled thus far are of a local nature, but that may be about to change. The formation of a strategic alliance, as considered by the Maltese government, would enable Malta to deal with a greater number of arbitrations involving foreign parties.

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A Neutral Forum Despite being a small island in the Mediterranean Sea, Malta has a history of being the venue of international conflict resolution: the country hosted the famous Bush-Gorbachev summit in 1989 that ended the Cold War. More recently, Malta has enhanced its appeal as the go-to hub for corporations seeking to solve commercial disputes of all kinds within the maritime, aviation, gaming, energy and construction industries to name just a few. In 1996 the island implemented the Arbitration Act, which is based on the Model Law on International Commercial Arbitration set out by the United Nations Commission on International Trade Law (UNCITRAL). This created a legal framework that gives parties all the necessary flexibility for arbitral proceedings, acting as a precursor for the establishment of the MAC, which started its operations in March 2000.

Procedural Flexibility Arbitration is one of the fastest-growing areas of legal practice worldwide. It is favoured by many for it procedural flexibility and cost-effectiveness when compared to litigation. Arbitration is a form of voluntary dispute resolution by a private ‘judge’, an arbitrator, instead of a state court. An arbitrator, who is a neutral third party, renders a final and binding award – a method that is especially useful in international commercial transactions, where parties are often unfamiliar with foreign legal systems. In arbitration, both parties control the process from the outset, leading to significant cost-savings compared to litigation; they themselves mutually choose the arbitrator, who often has special expertise in the subject matter, and decide on issues such as the venue and the language of the proceedings. All arbitrations in Malta have to be carried out under the auspices of the MAC, which has seven panels of Arbitrators with expertise in various areas, including insurance, construction, taxation, maritime, finance and accountancy. In the case of international arbitrations, parties can engage a foreign arbitrator who can also be chosen from the Panel of International Arbitrators maintained by the MAC.

The Current Status The MAC manages over 450 arbitrations a year. However, the majority of disputes being referred to the MAC are between Maltese parties. This is due to the introduction of mandatory arbitrations in 2004, where certain disputes, such as motor traffic claims, amongst other classes of disputes, are by law referred to arbitration. In the field of international arbitration, where at least one party is foreign, Malta is still to some extent playing catchup, with international arbitrations often bypassing the island.

However, in 2017 nine international cases were filed with the MAC, while also providing for some 40 commercial disputes

Arbitration

between local companies in a year. In fact, many firms repeatedly use the Centre’s services and appreciate the confidentiality of the proceedings. While the high percentage of local arbitration has given the country’s arbitrators valuable experience and a thorough understanding of the arbitration process in general, it has absorbed the centre’s capacity to fulfil its intended role as a promoter of Malta as an international centre of arbitration. While strengthening its staff complement is currently on the agenda of the MAC, discussions are also underway for the expansion of the centre’s premises and the introduction of productivity-improving technology

Room to Grow

There is a real chance that Malta will become the go-to-place for the arbitration of disputes in gaming, IT and DLT, similar to London’s status as premier centre for maritime arbitration.

Malta’s robust, internationally oriented economy and concentration of companies engaged in cross-border business means it holds significant potential as an international arbitral venue.

In fact, the MAC has already registered an increase in disputes in the fields of ICT and gaming, two of Malta’s export-oriented service industries. The MAC now intends to introduce specific panels of arbitrators for these sectors. Malta’s emerging blockchain economy and its drive to introduce regulations for Distributed Ledger Technologies (DLTs) could also provide for arbitration business in the years to come. There is a real chance that Malta will become the go-to-place for the arbitration of disputes in gaming, IT and DLT, similar to London’s status as a premier centre for maritime arbitration.

Located strategically between Europe and North Africa and within easy reach of the Middle East, Malta also offers companies from the region the right environment in which to solve commercial disputes. The island positions itself as a European location which offers lower costs than other arbitration centres, such as London, Paris and Munich. The MAC could become the first choice for Asian companies with disputes in Europe, for example, in which case it would be cheaper to fly in experts and witnesses only to Malta as opposed to an arbitration centre in Singapore and Hong Kong. Although the exact cost of arbitration depends on the duration of the proceedings, the number of witnesses and the expert analysis required, registry fees are lower in Malta than in other European arbitration centres, which makes the country an ideal location for arbitration of trans-border contracts whose parties wish to avoid the risk of having to litigate in the other party’s courts.

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International Agreements The entire arbitration process in Malta is underpinned by an efficient infrastructure, which comprises educated English-speaking professionals who have experience in dealing with international businesses. The law in Malta is strongly pro-arbitration. To ensure the enforceability of awards, the Malta Arbitration Act incorporates: the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, which has been signed by some 150 states; the 1923 Geneva Protocol on Arbitration Clauses; the 1927 Geneva Convention on the Execution of Foreign Arbitral Awards; and the Convention on the Settlement of Investment Disputes between States and Nationals of Other States. These international agreements help the successful party in arbitration to enforce the award in the country in which the losing party has assets. Each year a number of foreign international arbitration awards are registered by the MAC on the request of the interested party in order to be enforced in Malta through the Maltese courts.

A Voice in International Arbitration While the MAC has so far been seen primarily as a domestic arbitration centre, progress has been made in recent years to enhance confidence in Malta as an international arbitration hub.

However, ultimately, Malta needs to overcome the challenge of attracting cases between non-Maltese parties to really establish itself as a credible international hub. The Maltese government believes that much more can be done to promote Malta, in particular as a cost-competitive location for arbitration of disputes arising in the markets of North Africa. Efforts are also underway to find a private partner with a proven track record in cross-border disputes for the management of Malta’s international arbitration business. By inviting foreign arbitration centres to open case management offices on the island, Malta’s arbitration sector could gain international relevance. The island is now using its well-established arbitration infrastructure and ties to Europe to market itself to potential partners. While other locations may have a stronger track record in handling international arbitrations, with support from the government and the right partner, tried and tested mechanisms and a strong pool of arbitrators, Malta is ideally placed to provide appropriate, effective resolution services to parties in European cross-border disputes. n

Arbitration Procedures in Malta Once a case is filed with the Malta Arbitration Centre, a consultation between the parties is held in order to deal with all preliminary matters, including the appointment of the arbitral tribunal to hear and decide the case, thus ensuring that the arbitral proceedings commence right away. The parties are free to agree whether one arbitrator or a panel of three arbitrators should be appointed. The MAC will only intervene should the parties fail to agree on an arbitrator. The arbitration hearings themselves are much less formal than court proceedings.

Time, date, deadlines and location are selected at the behest of the parties themselves, and it is their decision as to whether lawyers or other experts are to be involved. Awards delivered are final and binding and, once registered with the MAC, they constitute an executive title and can thus be enforced as court judgements. An award can be appealed in a court of law on a point of law, and following amendments to the Arbitration Act, awards delivered in mandatory arbitrations can be appealed against both on points of law as well as on points of fact. This right of appeal, however, can be excluded by agreement between the parties.

Maritime & Yachting

Maritime & Yachting

Smooth Sailing Malta’s maritime sector is charting its future direction: Already hosting a significant percentage of the world’s shipping, the island is now set to raise its profile in ship finance and maritime litigation.

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alta’s location at the junction of the Mediterranean’s most important shipping routes has given it a significant advantage in its ambitions to become a leading maritime hub.

Indeed, the island now hosts Europe’s largest flag register and is fast gaining a reputation as a top location for the yacht and superyacht industry. Key to this success has been Malta’s wellrun international maritime register where high service and safety standards are attracting clients from as far away as Asia and Latin America. Malta also boasts the third-largest transshipment port and has cultivated world-class support services to provide the best possible facilities and expertise to ship owners, financers and operators who choose to become a part of Malta’s rich maritime industry. The island is now also determined to grow its mark in ship finance and maritime litigation

Centuries-Old Sector The sea has long been Malta’s lifeline and link to the world. The island’s strategic location midway between Europe, the Middle East and North Africa has seen it used as a shipping hub for thousands of years by everyone from the Phoenicians to the Order of Saint John and the British who turned Malta’s Grand Harbour into a major naval base. It is estimated that Malta’s maritime cluster contributes to the employment of more than 20,000 people. Supported by growth in a number of traditional and emerging sectors, it is expected that maritime activities will soon account for some 14% of Malta’s GDP.

Shipping Services Malta’s maritime community caters for practically all maritime requirements, and over the years its service providers have become renowned for their knowledge, commitment and attention. The Malta Freeport, which accounts for most of the container traffic on the island, is one of the largest players. It is operated by CMA CGM, with the Yildirim Group of Turkey being a major shareholder. There are also a number of ship repair facilities and yacht marinas. Malta also boasts a wide network of maritime lawyers, agents, brokers and insurers. In terms of shipping services, the only segment not being fully developed is ship management: Turkish company Palmali and Norwegian shipping company Wilhelmsen are among the few with a presence on the island. On the other hand, almost every shipping line and company today has ships on Malta’s register. The island also hosts the Regional Marine Pollution Emergency Response Centre for the Mediterranean Sea; the IMO International Maritime Law Institute and the International Ocean Institute.

Maritime & Yachting

European Leader Ship registration has become the number one activity of Malta’s maritime centre as global ship owners increasingly turn to the Malta flag. There were some 840 new ship registrations in 2016, and the registered gross tonnage increased to 69.9 million gross tons. This figure increased further in 2017, and Malta now has more than 8,100 ships and a total of 75.2 million gross tons on its books. This means that Malta continues to maintain its position as the leading European ship register, ahead of Greece and Cyprus, and the 6th largest in the world. Malta’s register ranges from LNG carriers to cruise ships, from bulk carriers to RORO ships and from oil tankers to superyachts (yachts of over 24 metres in length).

In particular, the number of high-end vessels on Malta’s register is constantly on the increase. Over the past ten years, the global luxury superyacht market has expanded beyond all expectations, and the development of a new yacht code has made the registration of commercial and pleasure yachts, including superyachts, in Malta very attractive. 2017 was also an exceptional year with regard to superyacht registrations; the number of high-end vessels on Malta’s shipping register grew by 20%. There are now 687 superyachts, vessels over 24 metres in length, flying the Malta flag.

Business-Friendly

Malta shipping register position in Europe and the world: Largest register in Europe and the sixth largest in the world in terms of gross tonnage

Malta has successfully attracted professional companies to its shipping sector because it has struck the balance between serious regulation and an industry-friendly approach. Dedicated legislation and tight registration criteria, all in line with EU Directives and International Maritime Organisation conventions, as well as a high-level 24/7 administrative service are among the driving forces behind the success of Malta’s shipping industry. Transport Malta, the regulator of the industry, goes to great lengths to emphasise that Malta is a flag of confidence and not one of convenience. The island’s status as an EU member state, its state-ofthe-art maritime framework and the excellent safety records of Malta-flagged ships helped the island to be officially classified as a low-risk flag. Ship owners appreciate that Transport Malta is on call 24 hours a day to deal with problems from managers or ships’ staff. The authority has technical staff on hand to guide ship owners through whatever issues might arise. In addition, documentation can be lodged outside normal Central European working hours – a service which is important for ship owners and financiers coming from the Americas or the Far East.

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Main Attractions The most compelling reasons so many vessels choose to fly the Maltese flag are related to the island’s favourable legislation and regulations, offering ship owners substantial cost-savings.

Registration costs and the fees of service providers have remained affordable, while the Maltese flag also offers an advantageous tonnage tax system, which has just been approved for a period of 10 years by the European Commission under EU state aid rules.

Another key reason for the flag’s success is that Maltese law offers a huge degree of protection to the financier, giving operators significant advantages when dealing with banks.

As one of only two open registers in the EU, registration is available to vessels owned by Maltese and non-Maltese persons, and, in practice, any kind of vessel may be registered, including one under construction. However, Transport Malta has put a premium on quality by introducing regulations which require ships aged 15 years and over to pass additional inspections, and ships over 25 years old are not accepted on the register. The island now has one of the youngest fleets in the world. The average age of merchant ships registered under the Merchant Shipping Act during 2017 was of 11 years, thus decreasing the average age of all the registered merchant fleet to 12 years.

Incentives for Yacht Owners Malta’s regulatory framework is also attractive to yacht owners.

For example, yachts registered as commercial vessels can benefit by paying an annual tax on the tonnage, rather than an income tax on earnings. For yachts which are not commercially registered, Malta operates an attractive system for purchasing and leasing, similar to those of Italy, France, Cyprus and Greece. This enables yacht owners to pay VAT on their yachts calculated on the percentage of the time that vessels are deemed to have sailed in EU waters – based on the assumption that the larger the yacht, the less time it stays in those waters and vice-versa. Recently, the island has also adopted a reduced VAT rate on short-term yacht charters commencing in Malta. While such charters will continue to be subject to a rate of 18% on the cost of the charter, this will only be applied proportionally, based on the amount of time the charter is in EU waters. Malta’s proximity to North African and Eastern Mediterranean destinations means that a superyacht charter could be undertaken where a significant portion of the time is spent beyond the realms of the EU and its tax rules.

Number of ships registered under the Merchant Shipping Act:

8,123

Gross tonnage:

75.2 million

Maritime & Yachting

Greater Potential

The average age of all merchant vessels:

12 years Registered super yachts

687

While the international shipping community is still facing some headwinds with reduced trade volumes and freight rates near historically low levels, Malta’s shipping sector is expanding. The development of the international ship register has also encouraged owners and management companies to locate their operations in Malta and tap into the island’s professional services. Malta’s lawyers and corporate service providers are among the most experienced in international circles and can advise on all aspects of registration and operation of vessels. Specialist lawyers from the island today handle a wide selection of maritime disputes in both the so-called wet and dry sectors.

Maritime litigation is also a key growth area for the future.

The Maltese government has announced its intention to set up a maritime court and to overhaul the maritime legal framework with a vice-admiralty court and a revamped International Arbitration Centre. Initiatives such as these are aimed at positioning Malta as a maritime hub providing all-embracing maritime legal and corporate services. With a growing international finance sector, the country is also destined to see future opportunities arising in banking and insurance, while Malta’s maritime community is convinced that it can compete with European ship management jurisdictions by developing and offering a greater level of sophisticated ship management activities.

Developing Maritime Story The next chapter in Malta’s maritime story will be written around cluster dynamics. The island hosts various specialist companies, including IT companies focusing on marine software engineering and electrical engineering companies who develop and install vessel-management systems. A number of maritime security companies have also set up shop in Malta. There are six marinas on the island catering for luxury, private and charter vessels. A maritime services park spanning 172,000 square metres is being constructed which seeks to transform Malta into a major hub for the offshore oil and gas industry. The sheer volume of facilities makes for a competitive and productive environment. Industry analysts keeping track of Malta’s maritime sector are certain that a promising future lies ahead if the island continues on its path of making consistent, steady progress. n

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The only way IS UP Malta’s fast-growing aviation cluster is targeting new opportunities for growth and promises to build on previous achievements.

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alta’s aviation sector represents a textbook definition of a cluster, encompassing maintenance, aircraft registration, leasing, finance as well as crew and flight training. Its legislative framework has turned Malta into a recognised address for the registration of both private and corporate jets, while maintenance, repair and overhaul (MRO) providers have long discovered Malta to be a profitable base. Lufthansa Technik, along with Vistajet, one of Europe’s largest private jet operators, are among the firms that have operations on the island. The country is also a leader in a broad range of other aviation services as it hosts firms catering for everything from crew training to engineering services and communication. Aviation is today one of the fastest growing industries in the country, and the government sees significant potential for further growth by attracting more aircraft leasing, finance and charter companies.

Gaining Traction The history of Malta’s aviation cluster can be traced back to Malta’s strong position in the maintenance, repair and overhaul (MRO) field. Companies such as Medavia and Aeromaritime have been operating in the country for a long time, and upon the arrival of aircraft servicing company Lufthansa Technik in the early 2000s, other companies, including SR Technics, chose to explore the opportunities available on the island. Malta’s growing International Finance Centre provided the impetus to expand the industry and update the country’s aircraft registration and finance laws.

Malta’s first aircraft register was established in the 1960s, but was populated only by aeroplanes operated by the country’s national carrier, Air Malta, and a small number of business jets and light aircraft. The introduction of a new Aircraft Registration Act in 2010 changed all this and helped develop Malta into a thriving Mediterranean aviation hub. Today, aviation contributes 2.5% to Malta’s GDP. The local industry may be small by international standards, but it is growing at a steady rate, and the island’s vision is to build a sustainable, competitive industry base that includes a wide range of aviation services, including management, training and aircraft maintenance and financing.

Attracting Global Companies Malta’s aviation sector today aspires to follow in the successful footsteps of the country’s long-established maritime industry, which still retains the largest shipping register in Europe.

Similarly, the country’s expanding aviation register is generally regarded as a key driver behind the growth of the industry. The Maltese aircraft registry counts in excess of 260 aircraft, with some 40 air operator certificates (AOC) held by aircraft operators having their principal place of business in Malta. While Luxembourg and Ireland have traditionally been Europe’s aviation hubs, key players in the global aviation industry are in-

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creasingly relocating to Malta. Corporate charter airlines such as Comlux, Orion Malta and Air X Charter have all registered aircraft in the country. Aircraft management companies DC Aviation and Hangar 8 also established operations on the island, while in 2016, Austrian private jet company VistaJet relocated its headquarters and registered 50 aircraft, adding to the increasing number of private jet companies choosing Malta as the ideal location for the management of their fleets. The move meant that VistaJet registered business jet aircraft worth $1.8 billion on the Maltese registry, making it the biggest aircraft operator in the country. Dutch-run Aviation Cosmetics moved into a brand new hangar complex in 2016, designated as an aircraft paint shop, spraying all makes and models, including the A380. As the sector grows, Malta’s advantages are being recognised further afield, and the island is now also drawing interest from companies from the US and the Far East who are keen to access Europe and Africa.

Regulatory Advantages This growth is due in no small part to the sector’s helpful legislation. Malta’s Aircraft Registration Act strives to do away with unnecessary red tape and regulatory burdens, while maintaining the added protection of being fully recognised by Maltese and EU law. The legislation allows the registration of an aircraft while it is still under construction, the recognition of fractional ownership and the regulation of trust agreements in relation to aircraft. Transport Malta offers fees that are amongst the lowest in the EU, as well as streamlined regulations that are in full compliance with the international safety standards set out by the European Aviation Safety Association (EASA). The Civil Aviation Directorate of Transport Malta also provides an attentive, personal service to companies setting up in Malta.

The country has long ratified the Cape Town Convention, which is widely recognised as the market standard in aircraft finance.

Finance Focus As well as developing cutting-edge legislation, Malta has recently sought to position itself at the forefront of aircraft finance transactions. The country has long ratified the Cape Town Convention, which is widely recognised as the market standard in aircraft finance. The Convention provides certainty to investors in the event of debtor defaults and details procedures that should be undertaken if this happens, such as taking possession or control of the aircraft, selling or granting a lease on the aircraft, and collecting or receiving any income or profits arising from the management or use of the aircraft. In 2016, the Aircraft Registration Act also underwent some fine-tuning, and areas such as insolvency proceedings and mortgage enforcement have been tweaked, demonstrating the authorities continued support and commitment to growing the sector further.

Malta is also well placed for the structuring of air finance deals through various methods, such as syndicated loans and securitisa-

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tion. A wide variety of asset classes can be securitised under Malta’s Securitisation Act, including lease/charter payments for aircraft.

The regulator has also developed a procedure for aircraft leasing which makes the purchase and subsequent lease of an aircraft more attractive, whereby VAT becomes due only for the time an aircraft operates in the European Union. In addition, Malta offers the aviation industry a competitive tax system and access to over 70 double taxation treaties worldwide

Leasing Business With 40% of the world’s aircraft being leased today, aircraft leasing proves to offer tremendous opportunities for Malta to position itself as a Mediterranean hub alongside established or emerging centres. The main challenge for Malta’s aviation finance and leasing industry in meeting its own growth targets is to develop the required expertise, but the industry is confident that with increased exposure to international transactions it will quickly develop a track record of high-quality work. To take full advantage of the growing aircraft leasing and financing markets, it will be important for Malta to further develop its tax treaty network, in particular with the large and developing economies in Asia that are increasingly on the radar of the industry.

Aviation Ecosystem Emerging business streams in aircraft leasing and finance are strongly supported by investment in physical infrastructure, such as the €17 million, 200,000 square metre Safi Aviation Park, which hosts a number of business aircraft operators and MRO facilities. The government sees this development as instrumental in attracting larger aircraft-leasing and charter companies, thus sustaining the industry’s upward trajectory. In addition, law and accountancy firms provide a growing number of ancillary services and are able to assist aircraft owners, managers, lessors and lessees, financiers and aircraft MRO facilities on a wide range of issues. They advise on sale and purchase deals, aircraft registration, chartering and leasing, and the drafting of aviation-related service agreements pertaining to maintenance and repair.

The growth of the industry has also allowed the establishment of flight academies, as well as permitting the Malta College of Arts, Science and Technology (MCAST) to begin offering aviation-related training. Added to its very supportive environment, Malta has taken strides to attract an even greater share of top-tier talent and world-class firms by extending tax-friendly policies, originally drawn up for the finance industry, to the aviation sector. Foreign aircraft managers coming to Malta can now benefit from a reduced income tax rate. These advantages, combined with EU membership and the fact that English – the global language of aviation – is one of Malta’s official languages, enhances the country’s proposition as a base for aviation operators. On the flipside, companies in

Due to its lower cost-base and competitive fiscal framework, more and more companies are choosing to capitalise on the opportunities available on the island.

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Malta are reporting that the rising cost of housing and office space are increasingly eroding the island’s traditional cost advantages, although rates are still somewhat lower than in most locations in Continental Europe.

Niche Opportunities As part of its aviation sector development strategy, Malta is supporting diverse activities, including, but not limited to, MRO operations, back-office set-ups, R&D and the production of aircraft components. A number of smaller companies have already built up a reputation for quality and craftsmanship in fitting and refurbishing aircraft. The sector offers a range of opportunities in profitable niches such as custom IT design or specialist airline reservation call centres. Major airlines also regard the country as a recruitment location due to the language abilities of the Maltese, and another market being developed is aircrew training.

There is room for expansion in the area of pilot training due to the lack of flight simulators, but it is already possible to enrol in a number of flight academies on the island. In addition, Malta invites companies to take advantage of its licence regime for airborne telecommunications.

Growth Ahead With a rapidly growing aircraft register, effective legislation and a strong support infrastructure, Malta’s aviation industry looks set to continue its extraordinary expansion. Although the global aviation industry is challenged for profitability, growth for the years ahead seems to be assured by an increasing demand for safe and efficient transport in nearly every corner of the world. Due to its lower cost-base and competitive fiscal framework, more and more companies are choosing to capitalise on the opportunities available on the island. This implies that the aviation ecosystem will grow further and create more opportunities for service providers to expand in tandem with the sector. The government has also announced its intention to invest heavily in aviation research and development sector in order to retain its competitiveness on a global scale. Should Malta’s aviation sector maintain, or even improve upon, its recent performance, there is little doubt that it will achieve its goal of emulating the success of Malta’s maritime industry and build up the critical mass to reinforce its position. n

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Payments Industry

A New World of Possibilities As the payments industry is undergoing unprecedented change, Malta is becoming a preferred location for the processing of online and mobile payments for customers from across the globe, offering the right combination of expertise, infrastructure and connectivity.

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018 is a game-changing year for banks and payment services providers. Europe-wide regulation, which enables new entrants to offer innovative services to consumers, is transforming the industry. In a competitive environment, where payment processing is becoming a commodity, Malta is positioning itself deftly to ensure that it captures a slice of this fastgrowing industry. The country is emerging as a cost-effective location for start-ups and companies offering new payment channels. Malta’s advanced digital infrastructure which is capable of hosting and delivering round the clock connectivity to mainland Europe and its strong regulatory framework offering legal security and predictability have helped in attracting international payment providers. The island now looks forward to seeing many more innovative projects coming onboard and is focusing on nurturing a smart financial centre that supports the development of new technologies.

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Welcoming Innovation The global payment landscape has changed considerably during the past two decades. Credit and debit cards, electronic payments, and online banking created a sea change in payments as they swiftly overtook cash and cheques, which were the main options up to the 1960s. The more recent and rapid rise of eCommerce has gone on to fuel the development of new payment channels, including e-wallets, mobile payments, e-invoices and transfers, as well as cryptocurrencies. The first payment service providers, card issuers, payment gateways and e-wallets to set up on the island were attracted by Malta’s role as a hub for ICT firms. They started servicing and supporting the growing number of iGaming companies that flocked to the island. Malta’s growing reputation as an international financial centre, coupled with steady investment in IT infrastructure, then helped to develop payments into an independent industry and one of the key sources of new business flowing into Malta’s finance sector.

A Centre for Payments Malta’s payments industry today reflects almost the entire spectrum of payment solutions that are available. The number of licensed financial institutions has grown to 48 at the end of 2017, of which 35 were authorised to provide payment services and 14 were licensed to issue electronic money. Card issuers and ‘quasi-banks’ have become key players in Malta’s payments sector as prepaid products and online-only accounts entered the mainstream. Driven by consumer demand for fast and convenient payment options, mobile and online payment providers are also developing fast, and a growing number of companies find Malta to be a profitable base. A number of specialist PCI certified payment service providers have also established operations in Malta, offering a full range of payment services. These companies have seen their business expand radically over the past few years, and they now collectively service several hundred merchant customers every month, with between 20% and 30% of their business being generated by the online gaming industry that operates out of Malta.

Security and Data Protection With safety and security being an obvious concern for consumers, and the desire of companies to be based within a reputable EU jurisdiction, Malta offers the opportunity to operate in a wellregulated environment and service customers in all 28 countries of the European Union. Malta’s legislation is modern and sophisticated, ahead of many of its competitors in the areas of eFinancial services regulation and facilitation. Malta’s legislative and regulatory framework places great emphasis on anti-money laundering and anti-fraud measures. Overseen and supervised

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by a single regulator, a licence from the Malta Financial Services Authority (MFSA) can assure consumers of the integrity of a payment solution. Industry participants setting up in Malta can choose between four distinctive licences: the banking licence, the eMoney institution licence, the financial institution licence, and the payment institution licence. While a fully-fledged banking licence offers operators the opportunity to provide online banking services, an eMoney institution licence is more attractive to standalone eMoney institutions such as eWallets because it allows operations to start with a lower minimum capital requirement (€350,000) when compared to a full banking licence (€1 million). The island is also developing a framework covering blockchain technologies and cryptocurrencies, and hopes to attract cryptocurrency wallets and exchanges as well as initial coin offerings (ICOs) in the near future.

A Level Playing Field The entire sector is on expansion course. One of the main catalysts for growth is the European Commission’s Revised Payment Services Directive (PSD2), which came into effect in January 2018, requiring European banks to open their infrastructures to licensed third-party providers. The expectation is that this creates a more level playing field between banks and payment provider, while increasing customer protection.

Malta’s professionals believe that potential exists to attract more payment business given the opening of the market. The presence of a large number of financial services, iGaming and eCommerce companies situated on the island means that they can tap into an established cluster of service providers as well as potential clients. The country’s payments industry offers entrepreneurs significant opportunities to win business internationally. Passporting rights offer access to European markets, making Malta a convenient location for the European headquarters of American and Asian financial institutions wanting to enter the EU market. Malta’s geographical location also means that companies can use the island as a springboard to African markets. In particular, developing countries are driving growth in this sector. Mobile payments have played a big role in financial inclusion in Africa where the population embraces new payment options due to a lack of traditional infrastructure, such as credit cards and banks. A significant portion of the global payments sector is also made up of small technology start-ups. Malta’s lower costs give these companies significantly more runway, while they are also able to test their products, such as payments apps and technologies for contactless in-store payments, on the small but diverse market.

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Payment Ecosystem To serve the industry’s needs, the country has expanded its international connectivity and communications capacity enormously over the last few years, with four submarine fibre-optic cables connecting the island to Italy. Malta also boasts a number of specialist firms offering services to the industry. From legal, accounting and corporate services to technical security audits and PCI compliance testing, the country has established a strong contingent of professional and technical services providers to meet the holistic requirements of payment businesses. A number of industry players have also come together to form the first association representing the industry: the Financial Institutions Malta Association (FIMA), which seeks to be the voice of those financial institutions that already call Malta home.

While industry experts believe that the sector will continue on its path of growth, it has become a crowded market, with telecoms providers, eCommerce players, retailers and instant messaging services also entering the market. For payment providers this does not come without its challenges. Competition in the industry will become increasingly fierce in the coming years. This means reputation and innovation are more important than ever today. In this climate, Malta offers the payments industry highly advantageous conditions. Companies are able to benefit from Malta’s fiscally attractive environment, relatively low cost base and experienced, qualified personnel, as well as its strategic location midway between Europe and Africa. The island’s well-respected banking system, and widely praised legislative and regulatory regime, give payment providers the security of knowing they are operating within a world-class system, offering sophisticated methods for online payments and ensuring that customer satisfaction is high.

A High-Tech Finance Centre Passporting rights offer access to European markets, making Malta a convenient location for the European headquarters of American and Asian financial institutions wanting to enter the EU market.

Innovative offerings in the payment acquisition space are flourishing and are driving strong growth in electronic and mobile payments usage and prepaid cards. In Europe, the share of alternative payments is forecast to reach up to 20% of the total payments market by 2020, while another study says that the global mobile payment technologies market is poised to reach US$2.28 billion by 2025. Cryptocurrencies are also expected to gain importance in the near future, while payments are set to redefine not only retail, but also wholesale and corporate payments. Malta is well placed to play a leading role in this development. Its financial services sector embraces innovation and the application of new technologies, and its authorities are committed to realising their vision of a high-tech financial centre. n

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Shared Services & Outsourcing

A High-Value Approach to

Outsourci Malta’s outsourcing sector is migrating from mass market solutions towards more specialised services and higher value functions.

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alta’s outsourcing sector is finding growth opportunities in niches rather than mass markets. While the island’s small size and higher cost base compared to locations in Eastern Europe limit its capability to take on volume-driven outsourcing projects, Malta has established itself as a powerful outsourcing partner that is increasingly winning high-value deals and offering knowledge-based solutions. Evolving from its traditional role as a call centre location, Malta today provides highly specialised services in financial services, IT and performance marketing.

Gone are the days when Business Process Outsourcing or the acronym BPO was synonymous with cost-cutting or labour arbitrage. Today, it is about quality of services and delivering real value, too. As companies are turning to third-parties for backand increasingly middle-office support such as risk management and compliance, the choice of partner becomes all the more critical. The fact that Malta belongs to the European Union provides a degree of regulatory certainty that companies appreciate. Malta is today considered a prime location for functions involving sensitive customer data and requiring specialised skills.

The Emergence of Nearshoring Malta has benefitted from recent ‘nearshoring’ and ‘rightshoring’ trends of businesses westwards from Asia – with the search for higher quality eroding the traditional global offshore dominance of India, the Philippines and China. One example was Malta’s 2006 success in edging out India in the bid to host HSBC’s global call centre for English-language calls. Call and contact centres remained a prominent theme in Malta’s outsourcing offering given that English is an official language, although the focus today is on email, chat support and social media rather than phone calls.

However, Malta soon recognised that the future lay in the provision of higher value-added services, and over a relatively short period the island’s outsourcing sector evolved. The growth of Malta as an international business and finance centre has encouraged companies to offer their services as independent outsourcers. The island also proves fertile ground for shared services centres that are responsible for the handling of specific functions and supporting a group’s global operations in areas such as marketing, HR, finance and IT.

The Right Location Many Maltese firms now offer so-called Knowledge Process Outsourcing (KPO) functions, in which more skilled professionals can assist in knowledge-based areas of work on behalf of finance, insurance or banking companies. While developing economies have struggled to acquire investments from client nations, Malta has continued to show signs of evolution and maturity. A large number of companies offer customer management, including sales, marketing and customer care, or enterprise ser-

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vices such as HR, finance and accounting. The key markets for Malta’s outsourcing firms are accounts based in the UK, France and Germany; though the next few years are expected to herald a period of interest in what the island has to offer. Research has revealed that the drivers motivating companies to outsource are changing fast; while cutting costs is still important, accessing new digital technologies and improving the end-customer experience are becoming equally important.

From Accounting…

The largest BPO providers in Malta today are the Swedish company Besedo (specialising in content moderation and media management) and Centrecom, an international call- and contact-centre. Boasting large numbers of accounting firms, including boutique practices and the ‘Big Four’, accountancy is the biggest outsourcing sector. Companies are also offering foreign clients back-office services, such as the processing and recording of invoices and sales transactions, accounts management and information reporting. In the area of shared services, Malta is differentiating itself from traditional outsourcing locations by viewing shared services as a high-performance business, and many entities are now expanding to deliver high-value services, including business analysis, risk management and decision support to their parent companies, in areas such as finance and accounting, IT, HR, customer service, procurement, payroll, real estate and marketing.

…to Analytics In recent years, Malta’s outsourcing industry has diversified, now delivering services in a wide range of sectors and industries, including financial, and software services, as well as for investment, insurance and shipping firms. A specialist service offered from Malta is performance marketing, and a number of firms that were traditionally assisting Malta’s iGaming companies with lead generation have expanded into financial services.

In the face of global competition, Maltese companies focus on providing high-end analytical services, as most organisations today are outsourcing not only business processes but also knowledge ones, including market research and financial analysis. In particular, its pool of professionals with degrees in finance, banking or insurance has made the island attractive for the outsourcing of activities that are analytical or skills-intensive. With strong data protection legislation and risk-management frameworks, Malta is recognised as a safer location than other outsourcing destinations for the holding of customer information. Specialist risk management firms already offer their services to asset management companies, while the outsourcing of compliance functions is a high growth area due to the ever-increasing regulatory requirements.

Shared Services & Outsourcing

Competitive Skills & Costs The island’s close cultural affinity with the UK and the rest of Europe, combined with its strong work ethic, gives it a significant advantage across many sectors. While costs may be higher than in Asia, many European companies that outsource work to Malta comment that it offers better all-round value for money: the workforce is highly educated and wages are reasonable, and employee turnover is relatively low, resulting in reduced training costs and better quality of service. The island also boasts an excellent ICT infrastructure. The robustness of the IT and telecoms infrastructure, coupled with the good language skills of the Maltese workforce, as well as an attractive business and living environment, will further drive Malta’s outsourcing and shared services success.

An Attractive Package In particular, the international finance centre is expected to create further growth for the industry, which could undertake routine or administrative tasks, such as filling in online data entry forms and processing insurance claims, or repetitive administrative work involved in fund administration. For international companies looking at setting up shared services centres, Malta not only offers a gateway to the European Union, but is equipped to provide both basic business support and best-of-breed services for knowledge-intensive functions. Malta’s task for the future is to continue to increase efficiency and proficiency in order to compete with other European destinations and to create broader awareness of what Malta has to offer. As the outsourcing market matures, Malta will offer clients an attractive package: industry expertise and insight, analytics and innovation – at a competitive price. n

In the face of global competition, Maltese companies focus on providing high-end analytical services, as most organisations today are outsourcing not only business processes but also knowledge ones, including market research and financial analysis.

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Finance & Industry Associations Malta Bankers Association (MBA)

Malta Funds Industry Association (MFIA)

Malta Insurance Association (MIA)

www.mfia.org.mt

www.maltainsurance.org

Former Secretary General: James Bonello

Chairperson: Kenneth Farrugia

Malta Association of Retirement Scheme Practitioners (MARSP)

Malta Insurance Management Association (MIMA)

Institute of Financial Services Providers (IFSP)

www.marsp.org.mt

www.mima-malta.com

www.ifsp.org.mt

www.maltabankers.org

Chairperson: Bethell Codrington

Association of Insurance Brokers (AIB) Chairperson: Fiona Borg

www.aibmalta.com

Chairperson: Elizabeth Carbonaro

Financial Institutions Malta Association (FIMA)

Chairperson: Steve Grech

President: Catherine Calleja

President: Wayne Pisani

Malta Association of Risk Management (MARM) President: Dominic Fisher

www.marm.org.mt

Interview

Finance Industry Associations

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How would you describe Malta’s journey as an International Finance Centre so far?

We started off a quarter of a century ago, from nothing. Today, we have a diversified financial sector, which is able to directly support an ever-growing number of firms and an increasing proportion of the workforce. Finance has now become an essential pillar of the Maltese economy.

Much of Malta’s success can be attributed to the fact that the country has been agile and nimble in reshaping its regulatory framework in response to industry demands.

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Institute of Financial Services Providers I remember the days not so long ago when the Maltese financial services sector consisted only of a handful of local banks. We now have 25 licensed credit institutions, close to 50 financial institutions plus a number of other regulated sectors all forming part of the Maltese financial services sector. Many of these are foreign owned, which is testament to Malta’s ability to attract international business in this sector.

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Financial Institutions Malta Association

Throughout the last 10 years, most of the world has seen some very turbulent times recovering from a serious financial crisis, which has left some very deep scars in most well developed economies. Although Malta did not escape the crisis unscathed, it certainly fared relatively well compared to others. This is nothing short of a success story, which is not attributable to luck, but to sheer hard work, dedication and focus.

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Malta Insurance Association The journey to today has demonstrated that our industry sector leaders have implemented the right strategies to allow businesses to prosper. However, today’s regulation is different to what it was 10 years ago. We’ve had to adapt and embrace changes in how we operate. However, I am confident that the investment in new operating systems, staff training and modernising our business platforms should stand us in good stead for the future.

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Malta Insurance Management Association

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Finance Industry Associations

Can you comment on the recent performance of your sector and what could be done to strengthen the sector further?

The International Market for QROPS continued to thrive during 2016/2017 with a hiccup coming in March with HMRC’s introduction of new legislation and the Overseas Transfer Charge (OTC). Whilst this has had an effect on the commercial end of the market in the Middle East and Asia, there are still good tax planning opportunities in the EEA and for the wealthier clients. The change in the dynamics will no doubt lead to some consolidation in the industry, especially for those who do not have a diversified business model.

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Malta Association of Retirement Scheme Practitioners I detect an increasing appreciation of the importance of risk management.

There has also been a significant improvement in the breadth and depth of local service provision in the field of risk management. Improved clarity around what is required of a risk management function and the necessary competencies of those working with these functions will help the sector make further progress.

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Malta Association of Risk Management

The banking sector has maintained its buoyant trend, and remains very well capitalised, highly liquid and profitable.

It is gratifying that the World Economic Forum’s Competitiveness Report 2017-2018 ranked Malta 17th out of 137 countries for the soundness of its banking system.

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Malta Bankers’ Association The investment funds industry continued to sustain its growth traction.

Albeit new fund set-ups in Europe have experienced a marked decline, most likely due to the onset of significant regulatory obligations being faced by depositaries and asset managers, Malta still managed to register net positive growth both in terms of the number of funds as well as investment service licenses.

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Malta Funds Industry Association

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Finance Industry Associations

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What regulatory changes / developments within your sector does the industry need to watch out for in the coming years?

MIFID II clearly tops the list but there are other legislative developments such as the General Data Protection Regulation (GDPR.) The heavy regulatory agenda going forward underlines the need for asset management firms to remain alert to intense regulatory and media scrutiny, while current business and operational models need to be challenged and adapted to their financial models.

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Malta Funds Industry Association In 2018, the Insurance Distribution Directive (IDD) will bring along new requirements to the industry, which will apply to all licensed insurance brokers.

Our concern was that there would not be enough time to implement the requirements coming out of the Directive. It is good news that the implementation of the IDD, which was meant to come into force in February and aims to improve consumer protection, has been pushed back to October. This will allow firms to make sure that all the necessary changes are properly considered, designed and tested.

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Association of Insurance Brokers

There might be dditional changes to the QROPS legislation post Brexit.

Currently the EEA is exempt from the Overseas Transfer Chare, but this may change. Hopefully the Malta Government and Finance Ministry will suitably enhance the tax incentives to grow a sustainable domestic occupational pensions business, which will also assist the development of the domestic Investment Management offering.

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Malta Association of Retirement Scheme Practitioners One of the main shakers challenging the status quo this year is the Payment Services Directive 2 (PSD2). I believe that although it creates some challenges to the way financial institutions carry out their business, it also presents new opportunities to those players who are agile and clever enough to realise the potential and are able to identify opportunities brought about by the changes to the regulations. Other challenges will arise from new anti-money laundering laws and data protection regulation.

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Financial Institutions Malta Association

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Finance Industry Associations

Within Malta’s entire financial sector, what areas would you identify as offering the greatest opportunity for growth?

I think that the conditions look good for continued strong growth in the area of international insurance and for Malta to act as a test bed for entrepreneurial innovation such as e-money solutions.

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Malta Association of Risk Management The insurance industry is ripe for growth, especially if one considers that insurance spending in Malta is still relatively low compared to the rest of Europe.

The legislative environment and a sound regulatory framework position Malta as one of the best domiciles for those insurers seeking to establish a European base. Although the recent introduction of fiscal incentives has paved the way for an implementation of voluntary occupational pensions, this market is still in its infancy and an area of huge potential.

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Malta Insurance Association

There are different strands of opportunities for us to develop, including insurance companies and captives owned by multinationals relocating from traditional offshore to onshore domiciles.

Then there are new affinity-type business models setting up their own insurance entity rather than partnering with traditional insurance carriers to maximise control and profits. We also see commercial carriers and intermediaries looking at protecting and expanding their EU footprint, and Malta is a candidate domicile.

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Malta Insurance Management Association Currently, we would not look to any of the traditional divisions of the financial services industry as the main source of growth. Rather, we see growth coming from fintech – that is, the application of information and communications technologies to financial services. This promises better, more efficient ways to operate or to deliver existing services, and even new services.

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Institute of Financial Services Providers

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Finance Industry Associations

QA &

Reputation is hard to earn but easily lost.What could be done to improve Malta’s image and profile in order to attract both talent and businesses?

It is imperative that all operators adopt the highest international standards in the fight against money laundering and the financing of terrorism. Likewise, regulators should beef up their enforcement capability to ensure that these standards are maintained across the board. The much stricter AML regime now being implemented necessitates additional and more in-depth checks on customers and transactions. However, their adoption further builds the investment case for the country as a leading European business destination.

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Malta Bankers’ Association

Malta may be seen as being too quick to embrace all new regulations and industries, without necessarily fully understanding the implications and possible adverse side effects. In a fastmoving world, a regulator needs to actively engage with the relevant industry to pre-empt or quickly cut off any questionable practices or products. We have seen damage done to other jurisdictions that have not clamped down quickly enough. We don’t want Malta to fall into the same trap.

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Malta Association of Retirement Scheme Practitioners

There is ample scope for a political, regulatory and industry outreach communications programme to ensure that ill-informed perception-driven views on Malta do not recur. Despite the recent spate of negative comments carried in the media, Malta remains a very attractive, as well as a politically and economically stable, jurisdiction.

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Malta Funds Industry Association

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Finance Industry Associations

The availability of talent and a strong infrastructure are two very important pillars in the decision-making process of investors.What comments would you like to make about both?

In view of the low unemployment rates that Malta enjoyed during the past four years, the finance sector was faced with a lack of resources. The students graduating from the University of Malta and other educational institutions were not enough to sustain the growth in the sector. In the short term, companies are opting for foreign talent to be employed but we need to produce more local talent.

Continued investment in HR and infrastructure remains paramount both for the local operators and for government. One advantage of Malta is that while we might have a finite pool of local talent, we are lucky enough to be a very attractive domicile for expats, thereby allowing us to attract very good quality professionals to Malta.

Association of Insurance Brokers

Malta boast a very good telecommunications infrastructure, with multiple redundancies on international connections. International air connections for travel to and from the island are good, going a long way to eliminate the disadvantage of being an island on the periphery of Europe. The Maltese make very skilled staff, even if in short supply. However, as a member of the EU any organisation setting up in Malta may seek staff in any other European country.

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We have done a lot to attract labour to Malta. However, I still feel that we haven’t done sufficiently enough to facilitate the import of labour from non-EU jurisdictions. In my opinion, we need to systematically attract foreign workers to fill open positions. When it comes to infrastructure, we are all aware that it needs an upgrade, but we also have to keep in mind that we simply don’t have the space to, for instance, build a financial village.

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Malta Funds Industry Association

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Malta Insurance Management Association

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Institute of Financial Services Providers

Interview

Finance Industry Associations

QA &

What key piece of advice would you give someone joining Malta’s finance industry?

To build, from the start, a close and open relationship with the regulator, whose accessibility and pragmatic approach is highly appreciated by existing operators. Membership of the relevant industry associations is also highly recommended to get a better insight of the sector and to integrate with the local professional community.

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Malta Bankers’ Association

The opportunity exists and is real. However, it is in no way an easy task, and success is not guaranteed. It is crucial that any new operator has a well thought-out business plan, one that has been analysed in terms of product or service uniqueness, competition, customer take-up, time to break-even and a roadmap to future-proof the business model. It is also important to ensure that the project is adequately funded to make it resilient to any unexpected bumps that one will encounter along the way.

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Financial Institutions Malta Association

For people considering a career in financial services, the message is simple. The sector is very diverse with a lot of different career choices available. It can also be very rewarding, both financially and in terms of job satisfaction. What is required is good education, and the ability to work in a multi-cultural environment.

That includes language skills, especially English.

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Institute of Financial Services Providers

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QA &

Finance Industry Associations

How do you believe Malta’s finance sector should be positioning itself for the future?

The context is that Malta is a small island operating at close to full employment. In all sectors ‘cheap and cheerful’ strategies are clearly sub-optimal from the perspective of the economy. I would like to see sharp focus on a small number of niche markets. The emphasis should always be on quality rather than scale.

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Malta Association of Risk Management We are still attracting businesses in the more established sectors, while moving into new areas such as international pensions, arbitration, Islamic finance, blockchain and alternative risk transfer.

We now have to safeguard our talent as well as our tax environment to ensure that we continue to be agile and attractive and in a position to pull innovators this way and keep them here.

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Malta Insurance Association

The key to ensure success in the future will be determined by Malta’s ability to continuously identify the right new opportunities and to embrace new technologies that will lead to the next generation of successful businesses. This has already been done in the past for the iGaming industry, and I see no reason why Malta cannot be successful with the next big thing, which most likely will centre on blockchain technologies.

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Financial Institutions Malta Association We should not spread ourselves thin, but I would strongly advocate that we concentrate on those areas where we have built up expertise over these last 13 years.

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Malta Insurance Management Association

Legislation & Regulation

Legislation & Regulation

Moving

Forward

Recognising the evolving financial landscape, Malta keeps its regulatory framework in sync with changing demands and international standards. The country’s latest regulatory move involves developing a framework for the fast-growing sectors of cryptocurrencies and Distributed Ledger Technologies.

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alta’s regulatory framework has been the foundation upon which the country has developed into a world-class base for financial services firms.

At the heart of Malta as an IFC is an independent risk-based regulator, the Malta Financial Services Authority (MFSA), which grants licences and regulates financial activities. As a pragmatic jurisdiction there have been numerous amendments to the country’s legislation to ensure it remains up to date with changing market requirements.

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Originally set up as an offshore financial centre in 1988, Malta moved onshore in the early 1990s, bringing its regulations in line with the EU ahead of becoming a member in 2004. Having joined the European Union in 2004, Malta adheres strictly to EU anti-money laundering, insider dealing and professional secrecy laws, and its frameworks are aimed at attracting only international businesses of repute. Malta’s adoption of the euro on 1 January 2008 has added further stability and increased the ease of doing business across frontiers. Today, businesses operate confident in the knowledge that Malta has an extensive network of double taxation treaties and applies EU regulations. In fact, Malta is first among member states in the timely transposition of EU directives into national law. Firms operating in Malta also benefit from a number of other advantages, including the EU’s single passport regime and the ability to offer EU-wide accepted products. In addition, although Malta’s framework conforms to EU rules, there are still regulatory structures that are unique to the country.

The Malta Financial Services Authority One important milestone in Malta’s development as a financial centre was the establishment of a single regulator for all financial services, the MFSA (www.mfsa. com.mt), in 2002. The MFSA took over the supervisory functions previously carried out by the Central Bank, the Malta Stock Exchange and the Malta Financial Services Centre. Today, the MFSA licenses, regulates and supervises investment funds, banking and insurance businesses, as well as investment service providers and trustees. In addition, the MFSA manages the Consumer Complaints division and regulates the Malta Stock Exchange. Thus far, the Registry of Companies also forms part of the MFSA, however, there are plans to create a separate, standalone registry entity, leaving the MFSA to focus on its regulatory role.

The MFSA’s approach to regulation and supervision is based on clear principles and is proportionate to the size and nature of the business, without undermining investor protection. The country’s small size allows direct contact with all licensees, which gives the MFSA a good understanding of the soundness of the licence holders.

The Authority encourages finance professionals and companies that seek a licence to meet with the regulator prior to application to discuss the regulations. This process promotes mutual understanding. The MFSA is an independent public body. The Authority is a member of the European Banking Authority (EBA), the European Insurance and Occupational Pensions Authority (EIOPA), and the European Securities and Markets Authority (ESMA). The Authority is also a member of the International Organisation of Securities Commissions (IOSCO) and the International Association of Insurance Supervisors (IAIS) as well as a signatory of the Multilateral Memorandum of Understanding with other members of these Institutions.

The Malta Digital Innovation Authority Malta’s government has committed itself to providing blockchain-related and cryptocurrency companies with a regulatory environment that offers them legal certainty in running and operating their businesses, with the introduction of the world’s first holistic regulatory framework for Distributed Ledger Technologies (DLT). The Malta Digital Innovation Authority (MDIA), a new regulatory body, will certify DLT platforms and related service providers, while the framework also sets out the regulatory regime for Initial Coin Offerings (ICOs) and service provision in relation to virtual currencies under the MFSA.

Legislation & Regulation

Central Bank The Central Bank of Malta (www.centralbankmalta.org) was established in 1968 and has contributed to the country’s financial and economic development, particularly by pursuing policies designed to foster exchange rate and price stability within a sound financial system. Prior to 2002, the Central Bank of Malta was the regulator of banks and financial institutions, a role now undertaken by the MFSA. The primary aim of the Central Bank is to maintain price stability. With Malta’s accession to the European Union in May 2004, the Bank automatically became a member of the European System of Central Banks (ESCB). In 2013, the Central Bank and the MFSA have also established a joint financial stability board to strengthen the resilience of the financial system and to mitigate the build-up of systemic risk.

Transport Malta As the authority responsible for regulating all modes of transport, Transport Malta (www.transport.gov.mt) operates the country’s shipping and aircraft registers and is actively involved in the management and promotion of Malta’s maritime affairs and its expanding aviation sector.

Legal Framework of Key Sectors Malta has developed a comprehensive legislative and regulatory framework to accommodate the financial services sector and to ensure adequate investor protection. All legislation and regulations are published in English and Maltese, though the interpretation of the English text prevails. The country’s legal system is rooted in both the Anglo-Saxon Common Law tradition and the Continental European Napoleonic/Justinian code. Maltese corporate law, however, is very firmly based on British models. It allows for a variety of structures, giving the investor considerable flexibility within a well-regulated framework.

Investment Funds The Investment Services Act (ISA), and its subsidiary legislation, is the principal legislative enactment governing the fund industry in Malta. It provides for the establishment of non-retail funds, including Alternative Investment Funds under the EU’s Alternative Investment Fund Management Directive (AIFMD) and for Professional Investor Funds, as well as for retail UCITS and non-UCITS. It also establishes the legal basis for the licensing and regulation of persons providing investment services or operating collective investment schemes. Additional legislation includes the Investment Services Rules. They further explain the scope and contents of the ISA, set out the application procedure and highlight the standard licence conditions that will be applied to a licensed entity.

Banking Banking institutions in Malta are regulated by the Banking Act, which is founded on European Union legislation and is compliant with the Basel Core Principles.

The non-bank financial institutions (including eMoney institutions) are regulated by the Financial Institutions Act. In May 2010, the provisions of the Payment

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Services Directive regulating payment institutions were transposed into Maltese law. This was followed, in June 2011, by the transposition of the EU Electronic Money Institutions Directive regulating Electronic Money Institutions. In 2014, the MFSA became part of the Single Supervisory Mechanism (SSM), the European system of bank regulation, which falls under the responsibility of the European Central Bank.

Insurance The insurance industry in Malta is regulated by two separate but complementary laws: the Insurance Business Act, which provides for the authorisation and supervision of insurance companies by the MFSA; and the Insurance Intermediaries Act, which governs insurance agents, insurance brokers, insurance managers and tied insurance intermediaries. Different types of insurance companies, including captives, Protected Cell Companies, Incorporated Cell Companies, reinsurers and insurance intermediaries can be set up under Malta’s laws. Due to the passporting regime, insurance companies, as well as brokers and other intermediaries, can offer their services in any other EU or EEA member state.

Trusts & Foundations The Trusts and Trustees Act, which has recently been updated to cater for today’s market demands, regulates the setting up of trusts in Malta. The Act provides for the creation of trusts and authorisation and supervision of trustees by the MFSA. Within its provisions, the Act incorporates the Hague Convention on the Law Applicable to Trusts and on their Recognition, which Malta has ratified. While foundations have been recognised and regulated in Malta for almost 200 years through Maltese case law and doctrinal writings, in 2007 Malta enacted specific legislation to clearly define their legal framework. The law regulating foundations is today found in Act XIII of 2007 which introduced the Second Schedule to the Civil Code (Chapter 16 of the Laws of Malta). The legislation allows for the set-up of two types of foundations: private and purpose foundations.

Malta Companies Companies are regulated by the Companies Act. A Malta company can be used for a multitude of business activities, ranging from holding and trading to eCommerce activities. The Continuation of Companies Regulations provide for the redomiciliation of a foreign company and for the continuation outside Malta of a company incorporated in Malta. Maltese legislation allows re-domiciliation from all EU, EEA and OECD countries, as well as from most offshore centres.

Distributed Ledger Technologies Malta proposed three different bills to regulate cryptocurencies and Distributed Ledger Technologies (DLT). The first bill provides for the establishment of the Malta Digital Innovation Authority, the Technology Arrangements and Services bill sets out the regime for the registration of Technology service providers and the certification of ‘technology arrangements’, and the Virtual Financial Assets bill sets out a framework for initial coin offerings and the regulatory regime on the provision of services relates to virtual currencies. n

CORPORATE BUSINESS STRUCTURES

Corporate Business Structures

Structuring for

Success While there are a number of legal structures available to start a business in Malta, the most used corporate form is the Limited Liability Company.

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alta’s comprehensive and accommodating regulatory framework makes corporate structuring available to prospective investors from all corners of the world. Progressively developing as a quality jurisdiction, companies are being attracted to Malta largely on the basis of a proactive Malta Financial Services Authority (MFSA), which seeks to combine highstandard regulation with an efficient response to industry and consumer needs, reasonable fees and highly trained people. With around 70 double tax treaties under its belt, Malta offers investors an EU-compliant, yet flexible, tax efficient domicile for business entities or corporate structures. Business may be conducted in Malta in a variety of forms: as a sole proprietorship, a partnership, a limited liability company (private or public), a branch of a foreign company, a trust, a cooperative, an investment company with variable capital (SICAV), as well as in a number of cell company structures.

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Sole Proprietorship There are no particular requirements relating to the registration or organisation of a sole proprietor. The provisions of the Commercial Code as regards commercial records and bankruptcy apply to sole traders. As the trader engages in trade in his own name, thus not benefitting from separate legal personality, he is therefore personally responsible for all trading obligations.

Furthermore, tax liability is calculated on the individual tax rates of the proprietor.

Partnership Almost any form of business may be carried out in Malta in a form of partnership. General Partnerships must be formed by at least two partners, who will be liable jointly and severally for the full debts of the partnership. The formation of a Limited Liability Partnership is also possible.

Cooperative A body of persons may also be incorporated as a Cooperative Society under the Co-operative Societies Act. A Cooperative needs to follow a predefined process of registration and set-up, which requires the involvement of at least five members (persons or entities). A cooperative is a legal entity in its own right, and its income is exempt from Malta tax (though a percentage of its surplus must be contributed to a reserve fund and to a Central Cooperative Fund).

Limited Liability Company (private & public) The principal legislation covering companies and partnerships is the Companies Act (1995), modelled on the UK Companies Act and European law. Every company registered in Malta must have a registered office in the country. Companies and other forms of partnerships are required to submit a valid Memorandum and Articles of Association, or deed of association in the latter case, normally subscribed by at least two persons. Under certain conditions, it is also possible to register single member companies.

Companies and partnerships are registered with the Registry of Companies based at the MFSA. Malta also excels in the speed and efficiency with which investors can set up a company: once the Registrar of Companies has all necessary documentation and information in hand, registration may take as little as 24 hours. Licensing by the MFSA is required for financial services firms before commencement of operations.

This process can typically be concluded within a couple of weeks.

A Limited Liability Company is formed by means of subscription to capital divided into shares. The liability of the shareholders is limited to the amount, if any, unpaid on the shares held. The

Corporate Business Structures

minimum share capital required to set up a private company is €1,164.69, with 20% paid up and subscribed to by at least two persons, except in the case of single member companies, with restricted objects. In the case of a public company however, the minimum share capital requirement is €46,587.47, with 25% paid up and subscribed for by at least two persons. Companies in Malta need to fulfil a number of statutory requirements. A private company requires a company secretary and at least one director who can be either a corporate entity or an individual, Maltese resident or not.

In addition, a Maltese company needs to have a registered office in Malta and a minimum of two shareholders. However, exemptions to this rule apply. Due to Malta’s fully-fledged trustee regime, shares may be held by licensed trustees in a fiduciary capacity for and on behalf of the ultimate beneficial owners. In order to apply for Malta’s tax refund system and achieve the intended tax results, a company may be required to have additional substance in Malta.

Branch of an Overseas Company All bodies corporate constituted or incorporated outside Malta may establish a place of business in Malta. Overseas companies establishing a place of business in Malta should, within one month of the establishment of the place of business, deliver to the Registrar a number of documents including an authentic copy of the charter of the company, a list of the officers of the company, and the names and addresses of one or more individuals resident in Malta authorised to represent the overseas company in Malta.

Branches carrying out operations in or from Malta are subject to tax in the same manner as a limited liability company.

Protected Cell Companies Malta’s company framework also allows for the formation of Protected Cell Companies (PCCs). Maltese law introduced regulations which allow the PCC model to be adopted by regular insurance companies, insurance brokers and insurance managers alike. A ‘Cell Company’ is a company constituted or converted into a cell company having within itself one or more ‘cells’ for the purposes of segregating and protecting the cellular assets of the company. A cell company is a single legal person. However, a ‘cell’ is in turn a class of shares within a cell company designated as a cell and created for the purpose of segregating and protecting such cellular assets pertaining to the company. A cell is not bestowed with separate legal personality.

Incorporated Cell Companies Malta introduced Incorporated Cell Companies (ICCs) for the funds and insurance sector in 2011. Similar to a Protected Cell Company, an ICC operates in two parts – the company core and the cells. A cell company can create one or more cells within its

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company structure. However, distinct from the PCC model, each incorporated cell is a limited liability company endowed with its own legal personality. The cells are independent from each other and, from a legislative point of view, are protected from each other.

This is done by the issue of cell shares in respect of each individual cell. For tax purposes each cell is treated as a separate entity.

Recognised Incorporated Cell Companies The Recognised Incorporated Cell Company (RICC) is another structure in Malta’s repertoire of cellular vehicles. The RICC allows the ‘core’ to provide, in exchange for payment of a platform fee, certain administrative services to its Incorporated Cells (ICs). The range of permitted administrative services for RICCs covers the typical platform type services, such as assistance in setting up ICs, assistance in selecting as well as contracting with certain service providers, standardisation of documentation, and many other ancillary services. As the RICC is itself a separate company, its shareholders would be able to benefit from Malta’s tax regime for limited liability companies.

Securitisation Cell Company Malta has recently continued to build on its ‘protected cell’ concept by introducing Securitisation Cell Company (SCC) legislation. An SCC is a single legal entity that can establish one or more segregated cells for the purpose of entering into securitisation transactions. The main benefit of SCCs lies in their application as programme or platform structures, for instance, if repeat transactions are envisaged, SCCs offer lower costs and quicker set-up time for each transaction. Maltese law states that assets and liabilities attributable to each cell established by a securitisation cell company constitute a separate patrimony of the securitisation cell company. Assets attributable to a particular securitisation cell are only available to creditors transacting with that cell.

SICAV Under Maltese law, Collective Investment Schemes may be set up as SICAVs (Société d’Investissement à Capital Variable), which is a type of open-ended investment vehicle. The amount of capital in a SICAV varies according to the number of investors. Each individual shareholder is entitled to voting rights and has the right to attend the annual general meetings. A SICAV is formed under the Companies Act (1995) but as a partnership limited by shares, used by mutual funds. Alternatively, Collective Investment Schemes may take the form of a limited liability company with fixed share capital, an incorporated cell company, a limited liability partnership or an investment trust. Such schemes may also be set up by private contract. Malta-domiciled funds are, as a general rule, exempt from Maltese income and capital gains tax.

Corporate Business Structures

Capital gains made by non-Maltese investors when redeeming or transferring their units in a Collective Investment Scheme are not subject to any withholding tax and are automatically exempt from tax. Schemes are not subject to any duty on the issue of shares. Similarly, share transfers are not subject to any duty.

Trusts The principal Maltese law on trusts is the Trusts and Trustees Act. Malta recognises all forms of trusts that one would find in other jurisdictions, such as Discretionary Trusts, Accumulation and Maintenance Trusts, Fixed Interests Trusts, Spendthrift Trusts and Charitable Trusts. Other solutions are also on offer, such as family trusts, which allow settlors to establish a trustee company in order to manage the family estate under trust for the benefit of family members - as opposed to placing assets under the control of professional trustees. These Family Trusts are also eligible for exemption from authorisation, provided the family and its chosen directors fulfil certain conditions dictated by the MFSA. If all the beneficiaries of a trust are non-resident in Malta, and when all income attributable to a trust does not arise in Malta, there is no tax impact under Maltese tax law. Other laws and regulations may have an impact on the taxation treatment of trusts and trustees. Malta is a signatory to almost 70 double tax treaties that may apply in certain circumstances.

Foundations Maltese legislation allows for the set-up of two types of foundations: private and purpose foundations. A foundation can only be constituted in writing, either by a public deed or by a will.

The deed of foundation must be registered with the Office of the Registrar of Legal Persons. Foundations are prohibited to trade; however, a foundation may be endowed with commercial property or a shareholding in a company or other asset which gives rise to income as long as the foundation is only the passive owner of such assets. A foundation may be treated as a company for tax purposes, which is both resident and domiciled in Malta and benefit from Malta’s full imputation system. Foundations may also opt to be taxed in the same way as a trust. n

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Taxation

Reach and Reliability Malta’s tax regime has been one of the main drivers in creating an attractive environment for foreign businesses, while fully transparent legislation means Malta is no place for financial secrecy.

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alta is becoming the jurisdiction of choice for companies seeking to relocate their business interests, or who may be looking for an ideal market within the EU. An efficient workforce, English as an official language and a strong, transparent tax system have all contributed to this growth. The country’s tax system was vetted by the European Commission upon Malta’s accession to the EU and has since been approved as fully compliant with all EU requirements. Malta also cooperates with intergovernmental organisations, such as the Organisation for Economic Co-operation and Development, to crack down on cross-country tax avoidance and encourage fair taxation.

The tax law finds its origins in the UK tax system and is based on well-established principles, with income tax being levied on income and not on capital. The island operates a full imputation system: a system in which any income tax paid by a company is credited in part, or in full, to the shareholder upon a distribution of profits to avoid any double taxation of corporate profits. This system has been in use in Malta since 1948 and has also been approved by the Organisation for Economic Cooperation and Development (OECD). Malta’s practices are in line with international standards of transparency and exchange of information for tax purposes according to the OECD’s latest review in 2013.

Taxation

CORPORATE TAXATION

Income Tax The Maltese tax system is the only remaining full imputation system in the EU. This means that tax paid by a company will essentially remain a prepaid tax on behalf of the tax liability of shareholders. All companies that are resident in Malta are subject to income tax at a rate of 35%. There is no separate corporation tax.

Under Malta’s tax system, upon a distribution of profits, non-resident shareholders are entitled to claim a refund of tax paid at the corporate level to avoid any double taxation of corporate profits. The refund may be equivalent to either 2/3 (when double taxation relief is claimed), 5/7 (in the case of passive interest and royalties) or 6/7 (in the case of trading income) of the tax paid at the corporate level. Income and gains from a participating holding (where a company holds directly at least 10% of the equity shares of a non-resident company, or meets certain other criteria set out in the law), are exempt from tax. Alternatively, instead of claiming this exemption, a company can choose to pay tax at the normal rate, and then receive a full refund of the tax paid upon a distribution of dividends.

Basis of Taxation Companies incorporated in Malta are considered to be ordinarily resident in Malta and are subject to tax on their worldwide income and capital gains. Companies incorporated outside Malta are considered residents of Malta if their management and control is exercised in Malta, but as they are not domiciled in Malta, they are subject to tax on income arising in Malta and on foreign income (but not capital gains) that they receive in Malta. Companies that are neither incorporated, nor managed or controlled, in Malta are subject to income tax only on income and capital gains arising in Malta. As part of the global fight against tax fraud, the importance of substance and the need for sound commercial drivers when structuring international operations has increased. Although the actual tax impact depends on the specific circumstances, companies are required to show that their Malta operations are genuine and being run from Malta. In broad terms, this means companies must show that the management, control and day-to-day decisions concerning business activity are taken in the country.

Double Taxation Treaties Malta-based entities are also allowed to benefit from the country’s wide network of double-taxation treaties, around 60 of which are currently active and others pending.

Malta has succeeded in brokering treaties with China, India, Singapore, the United Kingdom, Hong Kong, Luxembourg, South Africa and the United States of America, as well as most high tax countries. In addition to this, the Maltese tax system also includes Commonwealth relief, unilateral relief and the flat rate foreign tax credit, thereby ensuring that income arising from overseas is not subject to double taxation, even if there is no double taxation agreement in force.

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OTHER TAXES

Customs & Excise Duties As an EU member state, Maltese customs regulations follow European Union Customs Procedures. In general, goods from other EU member states are subject to VAT, while goods from outside the EU are subject to Customs and Excise rules.

For full information visit the Malta Customs Portal at https://customs.gov.mt/.

VAT Value-added tax (VAT) applies to the supply of goods and services that take place in Malta, intra-community acquisitions and imports. The standard rate is 18%, and a 5% rate applies to the supply of electricity, printed matter, digital and confectionery. The VAT rate on holiday accommodation and sports activities is 7%. Zero rating applies to exports and intra-community supplies, international transport, domestic passenger transport, food, pharmaceuticals, and the supply and repair of ships and aircraft. Exemptions from VAT include the sale and leasing of immovable property, banking and insurance services, health, education and broadcasting. VAT registration is mandatory for any person who carries out an economic activity (which may be a part-time activity), irrespective of the yearly turnover, unless such person’s income is generated from exempt without credit supplies.

Under normal circumstances, a person is required to register for VAT under article 10 of the VAT Act. This means VAT-registrants are required to charge VAT on their taxable supplies made in Malta and have a right of input VAT recovery. On the other hand, persons whose annual turnover does not exceed certain prescribed thresholds, ranging from €14,000 to €35,000, depending on the type of activity undertaken by such persons, need to register under Article 11. Such persons do not charge VAT and cannot recover VAT on their expenses but are still required to have a VAT number (without the MT prefix), issue fiscal receipts and submit a declaration (simplified tax return) at the end of each calendar year which must be submitted by the 15th March of the following year.

Social Security Malta has a comprehensive ‘cradle to grave’ social security system. This system is financed through social security contributions paid by each employee and employer. All employed and self-employed persons are required to pay Social Security Contributions (SSCs). The amount of SSCs payable by employees amounts to 10% of the basic wage, subject to a minimum linked to the national minimum wage and a maximum linked to the maximum pensionable income. An equivalent amount is payable by the employer in respect of each employee. The employer must deduct the employee’s contributions from the wages and must remit the amount due, including the employer’s share, to the Commissioner of Inland Revenue by the end of the month following the month in which the wages or salaries are paid. Self-employed persons pay contributions at 15% of their profits, subject to a minimum and a maximum. Payments by self-employed persons are made to the Commissioner of Inland Revenue every three months in arrears.

Taxation

Maternity Fund Contributions All employers are obliged to pay Maternity Fund Contributions for all their employees. By means of this fund, employers in the private sector are entitled to a reimbursement of the salary of the 14 weeks maternity leave paid to their employees. Contributions are generally computed at 0.3% of the basic salary of each employee – subject to a maximum of €65 per annum per employee. Special rates of contribution apply in particular situations as set out in the Tenth Schedule to the Social Security Act.

Personal Taxation Individuals are charged on their income at progressive tax rates up to a maximum rate of 35%. A person who is ordinarily resident and domiciled in Malta is subject to tax on his worldwide income and capital gains. A person who is resident, but not domiciled, in Malta is taxed on income and capital gains arising in Malta and on foreign income (but not foreign capital gains) received in Malta. Non-resident individuals are subject to tax on income and capital gains arising in Malta. Residence will be based on where a person effectively lives and has a home. The Department of Inland Revenue will consider individuals who have spent in aggregate more than 183 days in a tax year in Malta as residents of Malta. Temporary residents, who are not ordinarily residents in Malta but have earned income from Malta, are subject to tax on this income but are not liable to tax on any income arising outside Malta.

The income of a married couple is treated as the income of a single person and is to be declared in one tax return. However, the tax is calculated either on the total income at the married couple’s rates or, if the married couple so elects, and subject to certain conditions, on the income of each spouse separately at the single persons’ rates. A separate tax band exists for working parents supporting children up to 18 years old who are not gainfully employed (or 21-year-olds if they continue their studies to tertiary education). These rates may be availed of if the parents do not declare their income jointly.

Tax Rates

(Basis Year 2018) Rate

Single Computation (€)

Joint Computation (€)

Parental Computation (€)

0% 0-9,100

0-12,700 0-10,500

15%

9,101-14,500

12,701-21,200 10,501-15,800

25%

14,501-60,000

21,201-60,000 15,801-60,000

35% 60,001+

60,001+ 60,001+

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Expatriate Taxation To attract highly qualified personnel from abroad, Malta has introduced an incentive scheme targeting foreign executives. Professionals in the financial services, gaming and aviation sectors can benefit from a flat personal income tax rate of 15% on income up to â‚Ź5 million. Any income over that figure is tax-free. To qualify for this tax incentive, the employee must earn a minimum of â‚Ź84,016 per year among other criteria. EU nationals can benefit from the reduced tax rate for an unlimited period, EEA and Swiss nationals for a period of ten years and third-country nationals for four consecutive years.

Malta is also an attractive place for high-net-worth individuals and their families to relocate to. While Malta offers a unique lifestyle of unsurpassed quality that combines comfort with luxury, the modern and the traditional, and work with pleasure, the country has introduced a programme which offers foreigners favourable conditions if they purchase or rent property of a certain value in Malta or Gozo. The Global Residence Programme is designed to attract individuals who are not nationals of the EU, the EEA or Switzerland and allows them to benefit from a 15% flat tax rate and a residence permit. A similar programme for EU nationals, the Residence Programme, was introduced in the summer of 2014.

Part-time Income Employees, pensioners and students engaged in part-time work may benefit from a special tax rate. Income derived from part-time employment is taxed at a flat rate of 15%, which is withheld at source by the employer. Employees who carry on a part-time self-employment may also benefit from this reduced tax rate.

Wealth Tax or Net Worth Tax There are no such taxes in Malta.

Capital Gains Tax on capital gains is levied on gains arising from immovable property situated in Malta, rights over securities, business, goodwill, patents, trademarks, trade names and the beneficial interest in a trust. Capital gains are added to all other income earned during the basis year and taxed at normal rates.

Property Transfer Tax Persons who transfer immovable property situated in Malta are liable to pay income tax based upon the sales value. This tax is calculated at the rate of 12% of the market value of the immovable property.

Investment Income Resident individuals may opt to pay a 15% final withholding tax on investment income.

Taxation

Dividend Income Malta operates a full-imputation system and accordingly tax paid by a company is imputed as a credit against the tax due by the shareholders upon a dividend distribution.

Directors’ Fees Fees received, as well as remuneration to persons sitting on boards of directors of a body corporate, are also subject to tax on such income at the normal rates of tax.

Duty on Documents (Stamp Duty) A tax is charged under the Duty on Documents and Transfers Act on the transfer of immovable property and securities. The tax on securities is 2%, but is increased to 5% in the case of shares in property companies. A Duty on Documents and Transfers tax amounting to 5% on the market value of the property is levied on the purchaser when buying real estate in Malta. Residents buying real estate as their first residence will pay duty at the rate of 3.5% on the first €150,000. First-time buyers are exempt from paying this duty. The Act also imposes tax on emphyteutical grants, auction sales, credit cards and insurance policies.

Inheritance and Gift Taxes There is no inheritance or gift tax in Malta. The transmission of property and company shares is, however, subject to tax under the Duty on Documents and Transfers Act. Tax is due by heirs upon inheritance of real estate and shares. Duty will be due at the rate of 5% in the case of real estate and at the rate of 2% in the case of shares. Transfers upon inheritance of residential property, from the deceased to the children, are exempt from duty on documents. Furthermore, first time donations of property from the parents to the children, which will be used by the children as their sole residential property, are exempt from duty on documents on the first €250,000 of the value of the property.

Tax returns The fiscal year aligns with the calendar year. Malta operates a self-assessment system. Taxpayers are required to declare their income and calculate their tax, taking into account payments in advance and any other tax credits. The tax payable must be settled at the time that the self-assessment is filed. For individuals, the deadline is 30th June. For companies, the tax return date is nine months after the financial year end, but not earlier than the 31st March of each year. Tax returns of companies have to be accompanied by an auditor’s certificate. Revenue assessments may be raised when a return is not filed, or where the Commissioner of Inland Revenue disagrees with the self-assessment. n

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Doing Business in Malta

Doing Business in Malta

Business Culture Up until 1964 Malta was a colony of the United Kingdom, and British culture still underpins the Maltese way of doing business. At the same time, meetings are much less formal, and business is conducted in a more leisurely manner than in Northern Europe. However, appointments are necessary and should be made one to two weeks in advance. As in most Mediterranean countries, the concept of time is a little more relaxed than in countries to the north. Nevertheless, punctuality is expected and appreciated. Work contacts are usually greeted with their title, if they have one, followed by the surname. However, once a relationship has been established, only first names are used.

Language Most business correspondence is carried out in English, which is one of the country’s two official languages, with Maltese being the other. Laws and regulations are published in both languages. Many Maltese also have a good command of Italian and a sizeable proportion also speak either German or French.

Business Hours Office hours are generally 8.30 am to 1 pm, and 2 pm to 5.30 pm, Monday to Friday.

Some government departments work half days in summer, but many have adapted to ensure offices are manned throughout normal business hours, and the private sector continues to operate normally throughout the year. Most banks open from 8.30 am to 2 pm Monday to Friday, and on Saturday until 12.30 pm. Most shops open from 9 am to 7 pm Monday to Saturday, while some close for lunch between 1 pm and 4 pm. Most retail and commercial shops are closed on Sunday.

Personal Taxation & Expat Taxation

Malta has a progressive personal taxation system that ranges from 0% to a maximum of 35% for income over €60,000. To attract highly qualiIncome tax fied personnel from abroad, the Government rate for highly has introduced an incentive scheme targeting foreign executives. Finance professionals qualified earning a minimum of €84,016 can benefit professionals from a flat personal income-tax rate of 15% on all income up to €5 million. Any income over that figure is tax-free. Malta’s tax system is beneficial for entrepreneurs, wealthy individuals and investors who are looking for a stable, safe and attractive business environment.

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Airport & Air links Malta is connected by air to almost every major city in Europe and to key destinations in North Africa and the Middle East, most being just a few hours’ flight-time away. Cities such as Frankfurt, London and Paris can be reached in less than three hours, while a flight to Rome takes only one hour. At present, Malta is connected to some 100 airports. Malta is also being served by low-cost airlines, and carriers such as Ryanair and EasyJet are adding new routes. Malta International Airport (MIA), the island’s only airport, is centrally located and can be reached within 20 to 40 minutes from all towns and villages.

FDI Attractions & Incentives An open economy with a long-established history of trade, Malta has always actively sought foreign direct investment (FDI), both in existing companies and in new ventures. With a well-balanced mix of incentives that support and ensure long-term competitiveness and growth of companies setting up in Malta, the island attracts record levels of foreign investment, amid intensifying global competition. Companies need to apply to Malta Enterprise, Malta’s investment promotion agency, to determine eligibility, and to access the assistance. Incentives include most of the internationally available investment incentives.

Doing Business in Malta

Market Access Malta’s internal market is relatively small and the real opportunity lies in using the country as a stepping stone to markets in Europe or North Africa. Strategically located at the centre of the Mediterranean, between Europe and North Africa, Malta has historically been the link between the two continents. As an EU member state, Malta offers instant access to the EU’s massive single market of over 500 million people. Companies can conduct business freely and sell their products in all EU member states and/or establish a business in another EU country. In addition to its close geographical position, Malta also has strong historical and cultural ties with North Africa, making it an attractive base for European, American or Asian companies wishing to enter the relatively untapped markets to the south. In addition, Malta is a signatory to some 70 double taxation treaties.

Start-up Support Fintech start-ups find Malta a particularly attractive place due to the concentration of industry players, talent and suppliers on the island. Malta is also stepping up its efforts in helping to create new businesses and has expanded the scope of support for innovators. Incubators and innovation hubs have been established to support start-ups that have the potential to develop innovative services for the gaming industry. Malta is generally 20% to 30% cheaper than the more established European centres, while a company’s seed capital may last three to five times longer. A number of co-working spaces have opened up, offering entrepreneurs the opportunity to work in a vibrant and dynamic environment that will not only foster their ideas, but also create invaluable business connections while still being affordable.

Telecoms & Data Management

Given its size, the island’s telecoms infrastructure is disproportionately strong.

Hosting and co-location services can be easily sourced. Data centres are provided with international bandwidth through the three main telecoms service providers; GO, Vodafone and Melita. There are also several other independent data centres.

Malta is internationally connected through two satellite stations and five submarine fibre optic links to mainland Europe via Italy. To reduce Malta’s reliance on the existing links, Malta’s government plans to invest in an additional fibre optic cable to France. Bandwidth in Malta is slightly more expensive than elsewhere due to the fact that Malta is an island, but increased competition from multiple market players is expected to drive telecommunications prices further down in the near future.

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Banking & Financial Support Services

17th

Malta boasts a well-developed financial support soundest infrastructure, and the country’s service probanking system viders offer access to a full range of banking, insurance and investment products. The World (World Economic Forum, Global Competitiveness Economic Forum’s Competitiveness Index Report 2017-2018) 2017-2018 rates Malta’s banking sector the 17th soundest banking system in the world. Some 25 foreign or privately owned credit institutions are present in Malta, offering the full set of banking services ranging from retail and investment banking to wealth management. Insurance companies provide all types of cover, ranging from personal, health, property, auto and travel to liability and employee protection. Investors can find a number of insurance management companies handling cover for large corporations and providing reinsurance solutions. The country’s experienced wealth managers and stockbrokers are well connected and provide access to global capital markets.

Professional Services Malta has a solid cluster of firms that specialise in providing professional services.

The international business community in Malta is strongly supported by a large range of accounting and auditing practitioners ranging from small boutique practices to the global Big 4 accountancy firms, as well as most international network brands. Most of the country’s legal firms are part of international networks such as Lex Mundi and Lexis Nexis and are regularly ranked on Chambers, MartindaleHubbell or similar. Malta also boasts an array of corporate service providers offering business advisory and back-office support. Malta is able to offer operators professional services at costs that are generally lower than in other Western European locations.

Technical Support Malta offers a highly experienced and vibrant ICT sector, and the island is also home to a rapidly emerging cybersecurity cluster, providing operators’ advice and assistance on risks, compliance and security threats.

Customer Support The island’s reputation as an outsourcing location has been built upon some of the country’s most fundamental strengths: the fact that English is an official language, availability of talented people and value for money. Malta has a long and proud heritage of hosting global businesses, having imported and exported people, ideas and products for centuries. These companies now attract employees from across the globe offering customer service in English, French, Spanish, Portuguese, Italian, Dutch, German, Polish, Russian, Swedish, Arabic and Turkish to mention just a few of the many language groups available on the island.

Doing Business in Malta

HR & Recruitment The key ingredient to Malta’s finance success Employment Regulation has been the ability to attract the best and Regulation: Employment & the brightest. Most Maltese nationals speak Industrial Relations Act at least three languages, Maltese, English Type of contract: Fixed or and Italian, and some are even conversant indefinite, full-time or part-time in French and German. Some 60% of stuProbation Period: Six months dents (18-24-year-olds) continue their eduStandard working week: 40 Hours cation to the third level, and finance related Annual leave: 25 days subjects are among the most chosen. Malta Maternity Leave (paid): 18 weeks is doing its parts in attracting finance talent Parental Leave (unpaid): 3 months from all over the world by fast-tracking Employment Agency: Jobsplus visa and work permit applications for key Recruitment Agencies & Training employees from non-EU countries, making the onboarding process for companies as smooth as possible.

Malta has a good stock of specialist recruitment agencies, including companies that focus on the finance sector. These companies can assist operators in deciding how and where to recruit the human resources necessary, using their international networks to reach potential candidates from around the world.

Salaries & Staff Cost Malta remains significantly cheaper than other European capitals in terms of staff salaries and other costs. While salaries have increased in recent years, the figures are still lower than the European average. In financial services, financial packages range from €20,000 for administrative support roles to €40,000 to €60,000 for department heads and €75,000 to €160,000 for CEOs.

Work Permits & Approvals Visa obligations for foreign nationals reflect EU regulations and obligations.

Non-EU nationals must apply for and obtain an employment permit. Due to the nature of the industry and the specific knowledge that is required, the granting of employment permits even to non-EU nationals is generally an uncomplicated and smooth process.

Commercial Property Malta offers enviable real estate with sea views and marinas as well as prestigious landmark office complexes within easy commuting distance to residential areas.

Although sales and letting prices have been on an upward trend, they are around two-thirds of those charged for comparable spaces in Continental Europe. Office space comes in many flavours, ranging from purpose-built office blocks, converted houses, apartments and palazzos, to new, large mixed-use developments. A large number of local and international real-estate agents provide sales and letting services and can assist in locating suitable property.

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Conference & Incentive Travel

Conference & Incentive Travel

MICE Destination:

10 Good Reasons for Malta 1

Excellent facilities, year-round good weather and convenient connections to Europe’s major airports make Malta a dream destination for incentive planners and conference organisers.

Some 80,000 delegates visit the island each year. The EU, the Commonwealth, WHO, UNDP, Microsoft, IBM, Bayer, Roche, Cable & Wireless, Cadbury, Sony, Dell Computers, Eriksson, UPS, Opel, Deutsche Telecom and many others have already chosen Malta as their meeting venue.

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The country’s compact size also allows for groups and delegates to enjoy leisure and team building activities, such as biking, rock climbing, diving or sailing, during a visit. With 300 days of sunshine, limitless leisure opportunities and first-class dining, Malta offers an abundance of attractions that can form a pre- or postconference programme.

Event organisers can make the most of Malta’s 7,000-year history with its scores of cultural and architectural venues, any of which would be ideal to turn a usually routine occasion into a truly memorable event.

A particular favourite is the 16th century Mediterranean Conference Centre, which served as a hospital during the era of the Knights of St John and can host 1,500 guests at gala dinners or 4,000 visitors at standing receptions.

The island has adopted an ‘access-all-areas-strategy’, meaning any location can be transformed into a formidable event space. Many of Malta’s magnificent castles, stunning palazzos and impressive forts make it easy to add a luxurious atmosphere and special accent to any function.

For a more contemporary note, available venues include theme parks, marinas, luxury yachts and exclusive sea-front properties.

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Malta caters for anything from an eight-strong board of company directors seeking upscale accommodation and elegant entertainment, to a sales meeting for 1,000 company representatives or an annual general meeting of 2,500 people.

Conference & Incentive Travel

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Malta is emerging as a Mediterranean financial services convention hub attracting a broad cross-section of the global finance community and speakers of international repute.

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Most public spaces can be used for events and launch parties; receptions and dinners have already taken place at beaches, museums and village squares. The Malta Fairs and Conventions Centre (MFCC), located near the ancient walls of Mdina, is by far the country’s largest venue with a capacity of 10,000 people.

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Malta is also excellent value for money. Most smaller venues such as palazzos and hotel ballrooms can be rented for around €2,000 a day, while hotel rates in the off-peak season can be as low as €40 a night.

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Conventions Malta offers a variety of services designed to help event organisers.The portal www.conventionsmalta.com provides specific information on the many certified destination management companies (DMCs), hotels, facilities, service providers and venues, audio visual companies, exhibition stand designers and event organisers.

Many four- and five-star hotels are able to offer the highest level of accommodation, facilities and services to visiting delegates. The country has some 4,000 rooms in five-star hotels alone. Major brands such as Hilton, Westin, Radisson and Intercontinental all have hotels in the beachfront city of St Julian’s, giving organisers a choice of modern amenities, including meeting rooms, conference facilities and up-to-date technology.

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Malta is closer to your home base than you may think - just a three-hour plane ride from London and two to two-and-a-half hours from other major European destinations.

This means conference and meeting delegates will enjoy every moment of their time on the island.

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Travel & Living

Travel & Living

Expat Life Malta More than a great place to invest, Malta is a multi-faceted jewel shining at the centre of the Mediterranean. This small, friendly and welcoming island contains everything you could want to strike that perfect balance between business and pleasure.

Travel & Living

A Short Flight Away As a leading finance centre, Malta is well connected. Malta International Airport, the island’s only airport, is just two or three hours flying time from most European cities. Regular flights are provided by Air Malta, the national airline, as well as other carriers such as Lufthansa, Emirates, Turkish Airlines, British Airways, Alitalia, Ryanair, EasyJet, and WizzAir.

Mediterranean Luxury Determined to uphold its reputation as a five-star destination for high-end travellers and the global business elite, Malta features a number of international and luxury hotels such as the Hilton, Radisson, Marriot, Intercontinental, Westin Dragonara, Kempinski, Corinthia and the Hotel Phoenicia, a Campbell Gray Hotel. Superior accommodation is also offered at the boutique hotel Xara Palace Relais & Chateaux.

Gastronomic Delight When it comes to dining, Malta is an island of staggering options.

The food scene is defined by an eclectic mix of Mediterranean cooking with strong Italian influences, fuelled by rich ingredients fresh from farm and sea. There are also many restaurants offering international specialities, and the choice is wide, from smart city restaurants in Baroque palaces and family-run trattorias to seafront fish restaurants.

The World’s Best Climate With more than 300 days of sun a year, expatriates in Malta often become the envy of friends back home. Hot, dry summers and mild winters have earned Malta the title of world’s best climate by ‘International Living’ magazine. Even in winter Malta enjoys an average of 5 to 6 hours of sunshine and more than 12 hours a day in summer.

Universal Use of English As an official language of Malta, English is spoken by nearly everyone. English is so prevalent in Malta that thousands of foreign students travel from all over the world to learn English on the island. It is the main business language, while laws and regulations are published in both Maltese and English. Maltese is a unique language with Arabic roots and speckled with Italian, French and English words. Many Maltese are multilingual and also fluent in Italian, German or French.

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Travel & Living

A Home in the Sun For those looking for something more permanent, Malta boasts a wide range of properties available to rent or purchase, from furnished apartments to farmhouses, villas with pools, and even palazzos. Finding a good property close to amenities is fairly easy. Most notable properties include five-star apartment complexes built in Tigné, Sliema and Portomaso, St Julians.

Comparatively Cheap Although on the rise, the cost of living in Malta is one of the lowest in Europe and ranks somewhere in the middle in terms of a global league table. On average, the cost is one third of that in the world’s most expensive cities. Everyday groceries are on average more expensive in Malta than in Eastern European countries, however they are cheaper than in most Western countries and in global business centres.

High Standard of Living Malta is one of the easiest places to relocate to in the EU and residents enjoy an exceptional standard of living: 10 months of sunshine, an English-speaking population, and a Mediterranean island setting in which it is easy to find one’s way around. Although Malta is a small country, it offers a variety of lifestyle choices that range from urban, cosmopolitan and luxurious to relaxed and rural. Boasting a diverse range of shopping, cultural and leisure activities, all at affordable rates, Malta provides expatriates with a unique opportunity to live every aspect of life to the full.

Getting Around Given Malta’s small size, distances in Malta are negligible and the entire island can be crossed in an hour. However, in similarity to many other successful business centres, the country suffers from traffic congestion during rush hours, and it’s advisable to avoid peak times. As in the UK, cars drive on the left. The public transport system is safe and cheap. A network of routes and a fleet of modern buses provide an extensive service across Malta and Gozo.

Family Life Malta has a highly family-oriented culture. Almost all restaurants and public places are family friendly, while the government offers working families subsidies to cover the cost of daycares.

Older children can be enrolled in one of many excellent international private or local public schools, nearly all of which teach in English. Tertiary education is offered through the University of Malta and other institutes and private colleges.

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Travel & Living

Work-Life Balance Although working hours do not vary significantly from those in other countries, many expats say that they enjoy a better worklife balance in Malta. Overtime is the exception, rather than the rule, while Malta’s small size means beaches, sports facilities and restaurants are just a short ride away. As in many southern European countries, family plays an important role in Maltese society. This also means that time-off during evenings and weekends is respected.

First Class Healthcare Malta has some of the best healthcare in the world, which is offered free to EU nationals residing in Malta, while foreign residents are advised to take out private medical insurance. As well as local clinics in each town, Malta has a large and modern public hospital, Mater Dei, while also being home to several private clinics and hospitals.

Travel & Living

Work and Live Visa Free As a member of the Schengen Zone, Malta attracts thousands of professional EU nationals every year, who are free to reside and work on the island. Non-EU citizens can find details about visa-exempt countries and visa application procedures on the website of Identity Malta (www.indentitymalta.com). Malta has introduced a fast employment and residence process for highly specialised non-EU nationals who would like to work and live in Malta.

An Island of Opportunity Although the finance sector is important to the island’s economy, Malta is more than just finance: the island’s diversified economy is performing exceptionally well, offering exciting and dynamic employment opportunities in a host of sectors such as education, health, gaming, maritime and aviation, to name but a few. For dual-career couples this means that accompanying spouses and partners usually do not struggle to find work.

Getting Things Done Given Malta’s size, its productivity level compares well with other European countries, while increasing efficiency is high on the government agenda. It might be time-consuming to complete certain administrative procedures, however, there is a refreshing lack of bureaucracy in other areas of public and business life.

Crime is very low when compared to other major cities, and there is a general level of all-round safety

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Welcoming Foreigners Malta’s economic growth and investment from international companies have long caught the attention of high-flying foreign professionals. Today, some 6% of Malta’s population is foreign, with many people coming from the UK, Scandinavia, Italy and Spain, but also from France and Germany. The majority of expats finds it easy to meet new people in Malta; and many count locals, as well as other expats among their friends.

Centuries of Captivating History Heritage forms an important part of island life. With 7,000 years of history and many antique remains visible to this day, Malta can be described as an open-air museum. Megalithic temples, medieval towns and massive bastions have all been declared as UNESCO World Heritage Sites. These formidable structures regularly provide the backdrop for events listed in Malta’s packed cultural calendar such as concerts, plays or art exhibitions as well as its thriving film industry.

Travel & Living

Outdoor Malta Malta’s Mediterranean climate lends itself to a year-round outdoor lifestyle of water sports, golfing, hiking, fishing, horse riding and more. The conditions for scuba diving and snorkeling are excellent, particularly as the sea temperature never drops below 13C (55F). Malta has one golf course, located at the Royal Malta Golf Club, and gyms, football pitches or water polo clubs can be found all over the island.

An Island Playground While the warm climate and endless seas surrounding Malta make hanging out at the beach an obvious choice, there’s so much more to do for families with children. All localities have at least one playground, while there are also a number of outdoor and indoor fun parks with trampolines and climbing ladders. But that’s not all: a petting farm, the Playmobil fun park, Popeye Village, the Splash and Fun Water Park, the Malta National Aquarium, as well as an interactive science centre will also keep kids entertained.

Active in Malta The sea, cafés, restaurants, clubs, cinemas, theatres, sports clubs or gyms are almost always within walking distance of office complexes or residential areas. Malta also hosts many great festivals of culture and art. Each town or village even has its own annual feast and parade for their patron saint. For those in need of some retail therapy, Malta is home to shopping malls for big brand names and markets for local goods. n

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Uniquely international

Uniquely local Malta’s international set of legal, trust, corporate iduciary firms, employing advocates, tax advisors & accountants.

We provide the full range of legal & advisory services in a multi-disciplinary practice.

Representing private individuals, corporations, family offices, governments & other organisations, with an international focus.

Centrally managed in the EU tax efficient jurisdiction of Malta, Acumum provides superb client service & practical advice at competitive, transparent pricing.

Aviation Banking Competition Corporate Services Cross border Transactions & Disputes EU Law

Financial Services

Managing Partner Geraldine Noel UK Barrister – Registered in Malta M.A. (Hons) (Oxford), Pg Dip, LLM (Fordham) Malta Office: +356 2778 1700 E: info@acumum.com Skype ID: acumum

260 St Albert’s Street, Gzira, GZR 1150, Malta (EU)

Gaming Insurance Intellectual Property LPO Mergers & Acquisitions Private Client Public & Private law Taxation Telecoms, Media & Technology

Trusts & Estate Planning Wealth Management Yacht & Maritime

Licensed by the Malta Financial Services Authority to provide Trustee, Foundations & Corporate Services Individual Barristers & Advocates Regulated by the Bar Standards Board (England) / Ministry of Justice (Malta)

BUSINESS DIRECTORY

Who’s Who Business Directory

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Business Directory

Accounting & Auditing

Baker Tilly Malta.................................................................................... 218 Busuttil Professional Services............................................................. 220 Capstone Group..................................................................................... 221 Ernst & Young Limited.......................................................................... 223 Grant Thornton...................................................................................... 227 Griffiths & Associates Ltd..................................................................... 227 Mazars Malta......................................................................................... 231 Nexia BT................................................................................................. 233 PKF Malta............................................................................................... 234

Banking Services

AgriBank p.l.c........................................................................................ 216 APS Bank Ltd......................................................................................... 217 Bank of Valletta p.l.c.............................................................................. 219 HSBC Bank Malta p.l.c.- Comercial Banking...................................... 228 IIG Bank (Malta) Ltd............................................................................... 228 NBG Bank Malta Ltd............................................................................. 232 Reyl & Cie (Malta) Ltd............................................................................ 234 Zarattini International Ltd..................................................................... 239

Capital Markets

Malta Stock Exchange p.l.c................................................................... 230

Conference & Events

SiGMA..................................................................................................... 236

Corporate Services

ARQ Group.............................................................................................. 217 Avanzia Taxand....................................................................................... 218 BDO Malta.............................................................................................. 219 CSB Group.............................................................................................. 222 Dรถhle Malta............................................................................................ 223 Fenlex Group.......................................................................................... 225 Finanz-Audit Limited............................................................................. 225 Integritas Group..................................................................................... 229 Maitland.................................................................................................. 230 NEWCO Corporate Services Ltd........................................................... 233 RiskCap International Ltd..................................................................... 235 STM Malta Trust & Company Management Ltd ................................. 236 Trident Trust........................................................................................... 237 Tri-Mer Services Ltd.............................................................................. 237 Unifin Services Limited......................................................................... 238 Zeta......................................................................................................... 239

Courier Services

DHL......................................................................................................... 223

Fund Administration

Alter Domus (Services) Malta Limited................................................. 217 BOV Fund Services Limited.................................................................. 220 CC Fund Services Limited..................................................................... 222 Finanz-Fund Services Ltd..................................................................... 226 SANNE ................................................................................................... 235 SGGG Fexserv Fund Services (Malta) Ltd............................................ 236 Trident Trust........................................................................................... 237

Business Directory

HR & Recruitment

Castille.................................................................................................... 221 MISCO..................................................................................................... 232 VacancyCentre....................................................................................... 238

Insurance Services

Atlas Insurance PCC Ltd....................................................................... 218 GasanMamo Insurance Ltd.................................................................. 226 Marsh Management Services Malta Ltd............................................. 231

Investment Services

Altarius Asset Management Ltd........................................................... 216 Integra Private Wealth Ltd.................................................................... 228 Mediterrania Capital Partners.............................................................. 232

Legal Services

Acumum - Legal & Advisory................................................................. 216 Camilleri Preziosi Advocates................................................................ 221 David Griscti & Associates.................................................................... 222 Fenech & Fenech Advocates................................................................ 224 Fenech Farrugia Fiott Legal................................................................. 224 GANADO Advocates............................................................................... 226 Mamo TCV Advocates............................................................................ 231 Saliba Stafrace Legal............................................................................ 235 WDM International................................................................................ 239

Office & Business Park

Business Office Services International (Malta)................................... 220 Regus Serviced Offices......................................................................... 234

Office Equipment Services

Eworld Limited....................................................................................... 224

Payments Services

Paymix Ltd....................................................................................233 Truevo Payments Ltd....................................................................238

Professional Association

Investment Migration Council......................................................229

Promotional Agency

FinanceMalta................................................................................225

Real Estate

Malta Sotheby’s International Realty...........................................230

Residency & Citizenship

Henley & Partners Malta..............................................................227

Travel & Leisure

La Valette Club..............................................................................229

Trust Services

Bentley Trust (Malta) Limited.......................................................219

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Business Directory

LEGAL SERVICES

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ACUMUM – LEGAL & ADVISORY Acumum’s senior management of lawyers, accountants and tax advisers provides expert, trusted, cost efficient and bespoke services to an international clientele: individuals, family offices, corporations, Governments & other service providers.

Believing in long-term relationships, we provide holistic, sustainable and practical solutions to clients, whilst being committed to a superb level of client service. Centrally managed in the fiscally efficient European jurisdiction of Malta, Acumum’s operations are overseen by Geraldine Noel, a UK barrister registered in Malta, with over 25 years international legal experience. Specialisms: Aviation, Banking & Financial Services, Fiduciary – Trusts & Foundations, Gaming, Intellectual Property, Insurance, Maritime, Personal & Corporate Tax Structuring, Wealth & Estate Planning.

GERALDINE NOEL PARTNER

BANKING SERVICES

260, St Albert’s Street, Gzira GZR 1150 - Malta T: + (356) 2778 1700 • E: info@acumum.com • W: www.acumum.com Contact: Geraldine Noel - Partner

AGRIBANK PLC AgriBank PLC has been established in 2012 and operates as a progressive commercial bank, targeting predominantly Maltese-registered corporate clients. AgriBank offers all types of corporate services tailored to suit our clients’ every need, ensuring swift and simple solutions on lending facilities, deposit opportunities, payment services, foreign exchange transfers, flexible online banking facilities and a smooth and efficient process for the onboarding of corporates. Dealing with AgriBank ensures your business is in the safest of hands and geared for growth. Our offices are located at SkyParks Business Centre at the Malta International Airport. Please contact us if you are interested in our custom solutions, which are sensitive to the needs of our clients.

RODERICK PSAILA CHIEF EXECUTIVE OFFICER

INVESTMENT SERVICES

Level 1, SkyParks Business Centre, Malta International Airport, Luqa LQA 4000 - Malta T: (+356) 2092 6000 • E: info@agribankplc.com • W: www.agribankplc.com Contact: Roderick Psaila - Chief Executive Officer

ALTARIUS ASSET MANAGEMENT LTD Altarius Asset Management Ltd is part of Altarius Group. As a ManCo, Altarius specialise in the on-boarding of Investment & Wealth Managers, Financial Advisors & Family Offices seeking to have their own Regulated European Structure. Altarius provide access to the main EU jurisdictions including Malta, Luxembourg and Ireland.

Dealing with traditional asset classes, as well as the crypto space, Altarius can provide a boutique service ranging from structuring & regulatory to investment management & distribution with an aim to build a solid and long-term European-based business.

BJORN GRECH MANAGING DIRECTOR

Cornerstone Complex, Suite A, Level 1, 16th September Square, Mosta - Malta T: (356) 2123 2540 • E: bjorn.grech@altariusam.com • W: www.altariusam.com Contact: Bjorn Grech – Managing Director

FUND ADMINISTRATION

Business Directory

ALTER DOMUS (SERVICES) MALTA LIMITED Alter Domus is a fully integrated provider of Fund and Corporate Services, dedicated to international private equity & infrastructure houses, real estate firms, private debt managers, multinationals, capital market issuers and private clients. Each of our two service lines - Corporate Services and Fund Services - are staffed by multi-disciplinary, industry focused teams who specialise in handling our clients’ local administrative and compliance issues. Alter Domus today counts 39 offices and desks across five continents through which clients are able to benefit from the global expertise of more than 1,800 experienced professionals active in fund administration, corporate secretarial, accounting, consolidation, tax and legal compliance, depositary services and debt administration services.

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CHRIS CASAPINTA COUNTRY EXECUTIVE MALTA AND ITALY DESK LEADER

BANKING SERVICES

Vision Exchange Building, Territorials Street, Mriehel BKR3000 - Malta T: (+356) 2205 1000 • E: Chris.Casapinta@alterdomus.com • W: www.alterdomus.com Contact: Chris Casapinta - Country Executive Malta and Italy Desk Leader

APS BANK LTD One of the oldest banks in the Maltese Islands, APS Bank is a leading provider of financial services solutions ranging from personal to business to investments. Its distribution channels consist of a network of branches and ATMs complemented by a versatile electronic banking platform which reach out to a retail and commercial customer base.

Being a pillar of community banking for over a century, APS Bank is committed as ever to the economic and social development of its marketplace. APS Bank is one of the most exciting and enterprising banks with an agenda of modernisation and growth, helped in no small way by its young, qualified and highly talented workforce.

MARCEL CASSAR CHIEF EXECUTIVE OFFICER

CORPORATE SERVICES

APS Centre, Tower Street, Birkirkara BKR 4012 - Malta T: (+356) 2122 6644 • E: ceo@apsbank.com.mt • W: www.apsbank.com.mt Contact: Marcel Cassar - Chief Executive Officer

ARQ GROUP ARQ Group is a multi-disciplinary organisation providing a wide range of corporate services to the local and international business sector. As a joint venture between Capstone Group, a mid-tier audit and accounting firm, and FFF Legal, an established Maltese law firm, ARQ is uniquely positioned to offer seamlessly integrated legal and financial services customised to meet the client’s specific business needs across a range of sectors. ARQ also provides a complete service to any client seeking to relocate to, or invest in, Malta.

ARQ’s core focus areas are taxation; company incorporation and administration; trust and fiduciary services; accounting and assurance services; investment migration; residency and citizenship programmes; business advisory services; economic and business intelligence; and risk management and AML compliance.

DAVID BORG PARTNER

Ewropa Business Centre, Level 3 – 701, Dun Karm Street, Birkirkara, BKR9034 - Malta T: (+356) 2549 6000 • E: info@arqgroup.com • W: www.arqgroup.com Contact: David Borg - Partner

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INSURANCE SERVICES

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ATLAS INSURANCE PCC LTD Atlas Insurance has been one of Malta’s leading insurance organisations since the 1920s. Atlas converted to an independent PCC in 2006, a first for Malta and the EU, whilst continuing to write local insurance in its active non-cellular core. Through its Protected Cell Company (PCC) structure, expertise and resources, Atlas enables selfinsurance, InsurTechs and other third party writers into the captive and insurance market promoting innovation. Atlas PCC gives promoters the opportunity to own their own EU insurance vehicle with less capital and cost, also avoiding fronting requirements.

With a highly educated staff complement of over 170 people, the group also includes Atlas Healthcare Insurance Agency Ltd and Jesmond Mizzi Financial Advisors Ltd. MICHAEL GATT MANAGING DIRECTOR

CORPORATE SERVICES

48-50, Ta’ Xbiex Seafront Ta’ Xbiex, XBX 1021 Malta T: (+356) 2343 5221 • E: michael.gatt@atlas.com.mt • www.atlas.com.mt Contact: Michael Gatt – Managing Director

AVANZIA TAXAND Avanzia Taxand is exclusively Taxand Malta. Taxand is the world’s largest independent tax organisation offering practical, expert-led advice. Avanzia Taxand can help turn your tax challenges into strategic solutions that will work for you and your business.

International surveys have consistently ranked the firm very highly. Avanzia Taxand is the leading tax firm in Malta and was named ‘Malta Tax Firm of the Year’ by the International Tax Review in 2019, 2013 and 2016. In 2011, 2014, 2015, 2016 and 2018 it was named Malta Tax Firm of the Year by Corporate International.

WALTER CUTAJAR MANAGING DIRECTOR

ACCOUNTING & AUDITING

Blue Harbour Business Centre, Level 1, Ta’ Xbiex Yacht Marina, Ta’ Xbiex XBX 1027 - Malta T: (+356) 2730 0045 • E: walter.cutajar@avanzia.com.mt • W: www.avanzia.com.mt Contact: Walter Cutajar - Managing Director

BAKER TILLY MALTA Baker Tilly Malta is a firm of accountants, auditors, taxation and business advisors providing services for businesses operating in all spheres of the economy, both locally and overseas. Baker Tilly Malta is an independent member of Baker Tilly International, a worldwide association of leading accountancy practices operating in 141 countries around the world, ensuring that our clients are able to draw on professional advice on any aspect of their international affairs. The philosophy of the firm is based on the concept of providing creative forward thinking and planning, and being able to offer an independent and innovative service in support of clients’ business goals.

DONALD SANT MANAGING PARTNER & HEAD OF AUDIT

Level 5 Rosa Marina Building 216 Marina Seafront Pieta PTA 9041 - Malta T: (+356) 2010 9500 • E: contact@bakertillymalta.com • www.bakertillymalta.com Contact: Donald Sant - Managing Partner & Head of Audit

BANKING SERVICES

Business Directory

BANK OF VALLETTA PLC With its longstanding banking experience, Bank of Valletta is Malta’s leading pioneer in financial services. Bank of Valletta has a dedicated infrastructure, which incorporates the largest branch network across Malta and Gozo, as well as an International Corporate Centre, specialised Business Centres, dedicated Investment Centres and a fully-fledged Wealth Management arm. The bank offers sophisticated digital channels and has a network of international representative offices in Brussels, London and Milan. BOV issues bank cards under the Visa and Mastercard brands and distributes American Express cards. Our customers may avail themselves from a comprehensive suite of banking and investment services, coupled with professional specialists, committed to delivering the most personalised service possible.

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MARIO MALLIA CHIEF EXECUTIVE OFFICER

ACCOUNTING & AUDITING

BOV Centre, Triq il-Kanun, Santa Venera SVR 9030 T: (+356) 2131 2020 • E: romeo.cutajar@bov.com • W: www.bov.com Contact: Romeo Cutajar - Chief Officer Investment Services

BDO MALTA BDO Malta is a fully fledged corporate services firm assisting international and Maltese clients in all their corporate requirements. Our team evolved through the engagement of specialists who have excelled in their various fields, including Audit and Assurance, Tax and VAT Compliance and Advisory, Outsourcing Services, Legal and Advisory Services, Fintech Advisory, Fiduciary Services, Banking, Incorporation/Formation of Companies, Correspondence and Administrative Services, Directorship and Company Secretarial, Yachting and Shipping Services, Aircraft Registration and Tax Advice, Formation of Trusts and Foundations, Gaming Licensing, Securitisation Vehicle and Funds Setup. We are also licensed agents for the Individual Investor Programme. Our exceptional service delivery is built on five key components: clear understanding of client needs, effective communication, the best available professionals and strong ethical values.

MARK ATTARD CHIEF EXECUTIVE OFFICER

TRUST SERVICES

Tower Gate Place, Tal-Qroqq Street, Msida, MSD 1703 - Malta T: (+356) 9942 1750 • E: mark.attard@bdo.com.mt • W: www.bdo.com.mt Contact: Mark Attard - Chief Executive Officer

BENTLEY TRUST (MALTA) LIMITED Bentley Trust (Malta) Limited provides Trust and Company formation and administration on an international, multi-jurisdictional basis. We specialise in meeting the varied requirements of wealthy individuals and their families, entrepreneurs, corporate executive and charities. We can tailor solutions to address a broad range of client objectives. From our base in Malta and together with your chosen professional advisers, Bentley Trust (Malta) Limited offers a highly personal, discrete service providing flexible, efficient administration of all client assets on a global basis. Bentley Trust (Malta) Limited is regulated by the Malta Financial Services Authority. The Bentley Reid Group has offices in Hong Kong, Malta and London, UK. MALCOLM BECKER CHIEF EXECUTIVE OFFICER

Level 7, Portomaso Business Tower, St Julians STJ 4011 - Malta T: (+356) 2137 8828 • E: malta@bentleyreid.com.mt • W: www.bentleygroup.com Contact: Malcolm Becker - Chief Executive Officer

Business Directory

FUND ADMINISTRATION

220

BOV FUND SERVICES LIMITED BOV Fund Services was incorporated in 2006 as a fully owned subsidiary of Bank of Valletta plc, Malta’s largest banking group, to provide the fund management industry with a comprehensive and integrated range of high-quality fund administration solutions. Through the dedication of its highly qualified and professional human resources as well as the significant investment in state-of-the-art technology, BOV Fund Services has positioned itself as Malta’s leading fund administrator. As at January 2018, BOV Fund Services was servicing over 120 investment funds representing €3.7 billion worth of assets, approximately 25% of the local market. BOV Fund Services is recognised to provide fund administration services by the Malta Financial Services Authority.

JOSEPH M CAMILLERI CHIEF OFFICER

OFFICE & BUSINESS PARK

TG Complex, Suite 2, Level 3, Triq il-Birrerija, l-Imriehel Birkirkara BKR 3000 - Malta T: (+356) 2122 7148 • E: jmc@bov.com • W: www.bovfundservices.com Contact: Joseph M. Camilleri - Chief Officer

BUSINESS OFFICE SERVICES INTERNATIONAL (MALTA) Business Office Services offers fully furnished, high-quality, plug-and-play serviced offices within a Business Centre in Mrieħel. Besides office space, clients are offered a full suite of associated business services tailored to their individual requirements.

Organisations ranging from startups, requiring a minimal amount of space, to larger companies requiring a larger footprint, now have the opportunity to relocate to a centrally located business office. Business Office Services allows clients to focus on their business, whilst the day-to-day operations are taken care of by a team of highly trained professionals. On-site private parking facilities are also available.

AMANDA BALZAN OFFICE MANAGER, MALTA

ACCOUNTING & AUDITING

Vision Exchange Building, Territorials Street, Mrieħel, Birkirkara BKR 3000 - Malta T: (+356 ) 2014 5300 • E : Amanda.balzan@boservices.com.mt • W: www.bos-international.com Contact: Amanda Balzan - Office Manager, Malta

BUSUTTIL PROFESSIONAL SERVICES Busuttil Professional Services is an audit, accounting and fiduciary firm based on the island of Malta with more than 36 years of experience. We offer complete solutions for associations, branches, companies, foundations, individuals, organisations, partnerships, sole traders and trusts. Our portfolio includes accountancy, advisory, assurance, banking, employment, fiduciary, immigration, licensing, liquidation, patenting, secretarial, subsidy, taxation, transportation and welfare services.

SILVIO BUSUTTIL MANAGING PARTNER

4, A. De Saavedra Street, Naxxar NXR 2232 - Malta T: (+356) 2141 7088 • E: ps.enquiries@busuttil.mt • W: ps.busuttil.mt Contact: Silvio Busuttil - Managing Partner

LEGAL SERVICES

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221

CAMILLERI PREZIOSI ADVOCATES Camilleri Preziosi commands an outstanding reputation amongst clients and peers as a leading Maltese corporate law firm. We are regularly ranked as a top-tier firm

by Chambers, IFLR1000 and Legal 500. We retain a strong commitment to deliver a quality service in the practice of law. We do this by combining technical excellence with a solution-driven approach. The close relationships we develop and the keen interest we take in our clients’ businesses enable us to give practical, effective advice and innovative solutions under the most challenging situations.

LOUIS DE GABRIELE PARTNER

ACCOUNTING & AUDITING

Level 3, Valletta Buildings, South Street, Valletta VLT 1103 - Malta T: (+356) 2123 8989 • E: info@camilleripreziosi.com • W: www.camilleripreziosi.com Contact: Louis de Gabriele - Partner

CAPSTONE GROUP Capstone Group is an established accounting and assurance firm with a strong reputation built on expertise in the key areas of the financial services industry. The Group’s advisory arm, Capstone Advisory Co. Ltd, delivers effective strategic solutions to businesses and has acquired a solid expertise in this area, particularly in the remote gaming sector. Audit and assurance assignments are managed by Capstone Assurance Ltd., which is authorised by the Malta Financial Services Authority (MFSA) to carry out Class 1 audits, as well as by the Malta Gaming Authority (MGA) to provide system audits. Capstone Group’s core focus areas are audit and assurance; tax planning; business advisory services; trust and fiduciary services; information systems audit and assurance; residency schemes; and investment migration.

KRIS BARON AUDIT PARTNER

HR & RECRUITMENT

Ewropa Business Centre, Level 3 - 703, Dun Karm Street, Birkirkara, BKR9034 - Malta T: (+356) 2549 6500 • E: info@capstonegroup.com.mt • W: www.capstonegroup.com.mt Contact: Kris Baron - Audit Partner

CASTILLE Castille is the professional network in Tech and Financial talent. We are the leading brand in Tech and Finance offering specialist recruitment, scalable staffing solutions, technical training and Digital employer branding. We leverage our expert industry and market knowledge to help businesses and professionals achieve higher performance and outstanding results. Operating in 3 countries, we combine deep geographic presence, world-class talent solutions and a tailored, consultative approach to attract, develop and retain the best and brightest people in Tech and Finance. Being a peoplecentric talent network, Castille takes pride in accompanying candidates throughout their professional development giving them lifetime career opportunities in strategic sectors and technical areas of skill.

MATTHEW CAMILLERI CHIEF EXECUTIVE OFFICER

2, Casa Leone, Magazines street, Floriana FRN 1200 - Malta T: (+356) 2093 3000 • E: support@castilleresources.com • W: www.castilleresources.com Contact: Matthew Camilleri - Chief Executive Officer

Business Directory

FUND ADMINISTRATION

222

CC FUND SERVICES LIMITED Calamatta Cuschieri Fund Services Limited is a leading fund administration company based in Malta. Forming part of the CC Group and boasting investment management experience dating back to 1972, we provide an all-inclusive service from the setting up and launching of a fund, to accounting and investor services as well as ongoing corporate support for funds domiciled both in Malta as well as overseas. We are committed to providing a highly efficient and personalised service and are able to combine our technology and industry expertise to deliver a customised package of services to our clients which allows them to focus on taking their businesses forward.

STEPHEN GAUCI BALUCI HEAD OF FUND SERVICES

CORPORATE SERVICES

Ewropa Business Centre, Triq Dun Karm, B’Kara BKR 9034 - Malta T: (+356) 2568 8688 • E: stephengaucibaluci@cc.com.mt • W: www.ccfundservices.com Contact: Stephen Gauci Baluci - Head of Fund Services

CSB GROUP CSB Group (est. 1987) provides its clients with a spectrum of specialised business and commercial services, offering a complete turnkey solution to clients wishing to setup or relocate their business to Malta. CSB’s areas of specialisation today include: Corporate; Trust; Tax; Accounting; Immigration; Recruitment; Credit Risk; Relocation & Real Estate services. Furthermore, CSB offers the following services: Incorporation and domiciliation of companies; Trust, Fiduciary & Escrow services; Payroll & Tax Administration; Compliance & Regulatory Consultancy; Licensing of iGaming; Licensing of Financial Services, Hedge Fund Registration; Ship, Yacht & Aircraft Registration, HR Consultancy; Residence Permits; Work Permits & Serviced Office Space.

MICHAEL J. ZAMMIT GROUP CHIEF EXECUTIVE OFFICER

LEGAL SERVICES

The Penthouse, Tower Business Centre, Tower Street, Swatar BKR4013 - Malta T: (+356) 2557 2557 • E: info@csbgroup.com • W: www.csbgroup.com Contact: Josef Cardona – Director – Tax & Corporate Services

DAVID GRISCTI & ASSOCIATES David Griscti & Associates is a law firm highly focused on the financial services industry, with a marked emphasis in Funds, Investment Management, Securities, Credit Institutions and other financial institutions. The firm assists and advises banks, asset managers, financial advisors and other financial intermediaries to structure, establish and license AIFs, PIFs and UCITS, AIFMs and UCITS managers, fund administration outfits, credit institutions, other financial institutions and other investment services firms. Post licensing, the firm offers full legal, corporate and tax advisory services, compliance and anti-money laundering services, company secretarial and executive board services, as well as other supplementary back-office administrative services.

DR DAVID GRISCTI SENIOR PARTNER

168, St Christopher Street, Valletta VLT 1467 - Malta T: (+356) 2569 3000 • E: dgriscti@dglawfirm.com • W: dglawfirm.com.mt Contact: Dr David Griscti - Senior Partner

COURIER SERVICES

Business Directory

DHL DHL is the global market leader in the industry and “The Logistics Company for the World”. Our popular International Express door-to-door delivery service is available when you’re sending document or non-document shipments anywhere around the world. The company has been operating in Malta since 1983, and DHL Express remains a pioneer, constantly providing new solutions for its customers, solutions that make it the market leader. While maintaining the largest market share, DHL sets very high levels of service and always seeks to serve the customer in the best possible way.

Having a constant presence in the Maltese market since 1983, DHL has acquired a deep knowledge of critical shipments as well as unparalleled experience in the specialised handling of express deliveries for each industry sector.

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CHARLES SCHIAVONE COUNTRY MANAGER

CORPORATE SERVICES

MIA Cargo Village, Luqa, LQA 3290 - Malta T: (+356) 2180 0148 • E: Charles.schiavone@dhl.com • W: www.dhl.com.mt Contact: Charles Schiavone - Country Manager

DÖHLE MALTA Döhle Malta forms part of the Peter Döhle Group of Companies, a Hamburg-based shipping group which boasts more than five decades of global experience. We are a leading independent corporate and fiduciary services provider specialising in managing corporate structures on behalf of high-net-worth individuals. We have a client type weighted toward a maritime and luxury asset proposition, but as the business has grown and matured, has also helped clients with a diverse set of needs. We combine a world-class infrastructure, keen technical knowledge and an intimate understanding of our clients’ needs and aspirations to provide a personal service inspired by a tradition of precision and trust.

KEITH FENECH MANAGING DIRECTOR

ACCOUNTING & AUDITING

SmartCity Malta, SCM 02, Unit 301, Ricasoli, Kalkara SCM 1001 - Malta T: (+356) 2744 0305 • E: keith@dcts-malta.com • W: www.doehle-malta.com Contact: Keith Fenech – Managing Director

ERNST & YOUNG LIMITED EY is a leading firm in assurance, tax and advisory services. EY Malta forms part of the EMEIA Area, enabling our experienced professionals to use and implement our globallyproven methodologies and extensive resources so as to offer high quality and seamless services to both our domestic clients as well as to clients who operate cross-border. EY is committed to doing its part in building a better working world. The insights and quality services we deliver help build trust and confidence in the capital markets. Our values define who we are. They guide and influence our professionals to create positive change in our people, our clients and our communities.

RONALD ATTARD COUNTRY MANAGING PARTNER

Regional Business Centre, Achille Ferris Street, Msida MSD 1751 - Malta T: (+356) 2134 2134 • E: ey.malta@mt.ey.com • W: www.ey.com/mt Contact: Ronald Attard - Country Managing Partner

Business Directory

OFFICE EQUIPMENT SERVICES

224

EWORLD LIMITED Eworld is an IT infrastructure and cloud systems integrator. It is a Microsoft Tier 1 Cloud Service Provider offering Azure and Office365 solutions, Hewlett Packard Enterprise Gold Partner, offering server, storage, network and back-up IT infrastructure solutions, as well as security solutions from F5, Palo Alto and Sophos. Eworld has implemented solutions and supports customers in a wide range of sectors, with a particular focus on the finance and banking, insurance and e-gaming sectors, besides the public sector, and manufacturing and pharmaceutical sectors. We host a full-spec IT laboratory in order to host any proof-of-concept requirements and welcome all enquiries.

ING RAPHAEL MICALLEF TRIGONA MANAGING DIRECTOR

LEGAL SERVICES

Centenary House, 172, Canon Road, St.Venera, SVR 9034. Malta T: (+356) 7942 0696 • E: info@eworld.com.mt • W: www.eworld.com.mt Contact: Ing Raphael Micallef Trigona - Managing Director

FENECH & FENECH ADVOCATES Established in 1891, Fenech & Fenech Advocates is a leading law firm in Malta, with a strong commercial, corporate, tax, maritime, ship registration, M&A and financial services practice, and is a recognised pioneer in maritime, eGaming and TMT law. The firm’s largely international clientele is serviced by a team of over 100 people. The firm has advised blue-chip clients in various landmark transactions in Malta and overseas and remains at the forefront of legal developments. Our team’s legal insight and business instinct provide clients with value-driven solutions. The varied tax and aviation practices are also a mainstay of the firm’s international work.

DR ANN FENECH MANAGING PARTNER

LEGAL SERVICES

198, Old Bakery Street, Valletta VLT 1455 - Malta Tel: (+356) 2124 1232 • E: info@fenechlaw.com • W: www.fenechlaw.com Contact: Dr Ann Fenech - Managing Partner

FENECH FARRUGIA FIOTT LEGAL Fenech Farrugia Fiott Legal is a full-service legal firm offering a comprehensive range of specialised services with a particular emphasis on cross-border commercial and corporate law. Backed by a highly experienced team of leading experts in their field, FFF Legal provides a seamlessly integrated portfolio of legal services tailored to meet the most complex requirements in a versatile and dynamic manner. The firm acts on behalf of a number of local and international clients, including credit and financial institutions, investment companies, i-gaming companies and other trading and holding entities. The firm’s core focus areas are corporate and commercial law, financial services law and practice, maritime and aviation law, trusts and foundations, estate planning and private clients work.

DR TONIO FENECH MANAGING PARTNER

Ewropa Business Centre, Level 3 – Suite 702, Dun Karm Street, Birkirkara BKR 9034 - Malta T: (+356) 2549 6400 • E: jfenech@fff-legal.com • W: www.fff-legal.com Contact: Joseph Fenech - Law Firm Executive

CORPORATE SERVICES

Business Directory

225

FENLEX GROUP As a leading management and corporate services provider, the Fenlex group caters to a large international client base. Fenlex provides a wide range of services including company incorporation and maintenance, tax and VAT compliance, accountancy, payroll, bank account administration, directorship services, trusts & foundations, recruitment as well as operational assistance. The group has been active in servicing the international business sector since the 1980s and its clients are serviced by a multi-disciplinary team organised into the Corporate Services, Accounts, Tax Compliance, Banking and Operations departments. Fenlex is closely associated with Fenech & Fenech Advocates, a leading law firm.

KARL DIACONO CHIEF EXECUTIVE OFFICER

PROMOTIONAL AGENCY

85, St. John Street, Valletta VLT 1165 - Malta Tel: (+356) 2124 1817 • E: info@fenlex.com • W: www.fenlex.com Contact: Karl Diacono - Chief Executive Officer

FINANCEMALTA FinanceMalta, a non-profit public-private initiative, was set up to promote Malta as an international Business & Financial Centre, both within, as well as outside Malta.

It brings together, and harnesses, the resources of the industry and government, to ensure Malta maintains a modern and effective legal, regulatory and fiscal framework in which the financial services sector can continue to grow and prosper. The Board of Governors, together with the founding associations, its corporate and affiliate members and staff are committed to promoting Malta as a centre of excellence in financial services and international business.

IVAN GRECH HEAD OF BUSINESS DEVELOPMENT

CORPORATE SERVICES

Garrison Chapel, Castille Place, Valletta VLT1063 - Malta T: (+356) 2122 4525 • E: ivan.grech@financemalta.org • W: www.financemalta.org Contact: Ivan Grech - Head of Business Development

FINANZ-AUDIT LIMITED Finanz-Audit Limited provides audit, tax and advisory services to a broad range of businesses from the sole entrepreneur to the large multinational corporation spanning multiple industries. Finanz-Audit Limited is committed to providing quality client services with professional objectivity while preserving the trust of clients by offering personalised attention to each client. The foundation of our success lies in the expertise of our ‘high-calibre’ staff. Their skills, knowledge, professionalism and energy enable us to provide prompt, efficient and high-quality services.

COSMAS COSMA DIRECTOR

Level 1, Somnium, Tower Road, Swatar BKR4012 - Malta T: (+356) 2010 8080 • E:info@finanz-audit.com • W: www.finanz-audit.com Contact: Cosmas Cosma - Director

Business Directory

FUND ADMINISTRATION

226

FINANZ-FUND SERVICES LTD Finanz-Fund Services was incorporated in 2015 following a collaboration between CSB Group (Malta) and Treppides Fund Services (Cyprus) Ltd. Finanz offers a wide range of fund services to our client base ranging from Hedge Funds, Retail Funds, Fund of Funds, Private Equity Funds, Venture Capital and Real Estate Funds. Through our expertise, associates and network, we can manage and accommodate the life-cycle of a Fund including Advice, Application & Incorporation, NAV & Investors Services, Accounting, Audit, Directorship, Secretarial Services, Compliance, MLRO and required Regulatory Reporting. Finanz-Fund Services is authorised to act as a Fund Administrator by the Malta Financial Services Authority.

GEORGE P. NICOLAOU HEAD OF OPERATIONS

LEGAL SERVICES

Somnium, Level 2, Tower Road, Swatar BKR 4012 - Malta T: (+356) 2010 8060 • E: info@finanz-fundservices.com • W: www.finanz-fundservices.com Contact: George P. Nicolaou - Head of Operations

GANADO ADVOCATES GANADO Advocates is a leading commercial law firm with a particular focus on the corporate, financial services and maritime sectors, predominantly servicing international clients doing business in or out of Malta. The firm traces its roots back to the early 1900s, and is today one of Malta’s foremost law practices, consistently ranking as a leading firm in all its core sectors. GANADO Advocates has over the past decades contributed directly towards creating and enhancing Malta’s hard-won reputation as a reliable and effective international centre for financial and maritime services. Today, the firm continues to provide high standards of legal advisory services to support and enhance Malta’s offering.

DR LOUIS CASSAR PULLICINO MANAGING PARTNER

INSURANCE SERVICES

171, Old Bakery Street, Valletta VLT 1455 - Malta T: (+356) 2123 5406 • E: lcpullicino@ganadoadvocates.com • W: www.ganadoadvocates.com Contact: Analise Buttigieg – Marketing Manager

GASANMAMO INSURANCE LTD GasanMamo is one of Malta’s leading insurers, providing excellent value insurance products for both personal and commercial clients. We believe in lasting relationships built on value and trust. Our customers are at the very heart of all that we do. Our proven track record dating back to 1947 positions us confidently going forward. Professional, friendly and helpful is how we like to be seen.

JULIAN J MAMO MANAGING DIRECTOR

Head Office, Msida Road, Gżira GZR 1405 - Malta T: (+356) 2349 0501 • E: jmamo@gasanmamo.com • W: www.gasanmamo.com Contact: Julian J Mamo - Managing Director

AUDITING & ACCOUNTING

Business Directory

GRANT THORNTON As a member firm of Grant Thornton International we offer clients a flexible, responsive service with the breadth and depth of skills to appeal to a variety of markets and with the experience, knowledge and expertise to undertake specialised, sector-specific work.

Our clients can access the knowledge and experience of more than 42,000 people in over 130 countries and consistently receive a distinctive, high quality and boutique service wherever they choose to do business. With over 40 years of industry experience, we focus on providing a full range of services including assurance, tax, advisory, specialist fintech and financial services, wealth management services, corporate, back-office services to clients ranging from public companies, multi-nationals and government agencies to entrepreneurial businesses across a broad spectrum of industries.

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MARK BUGEJA MANAGING PARTNER

ACCOUNTING & AUDITING

Fort Business Centre, Mriehel Bypass, Birkirkara BKR3000 - Malta T; (+356) 2093 1000 • E: grantthornton@mt.gt.com.mt • W: www.grantthornton.com.mt Contact: Wayne Pisani - Partner, Tax and Advisory

GRIFFITHS + ASSOCIATES LTD Established in 1982 and located in Naxxar, our firm of Certified Public Accountants offers a one-stop shop assisting businesses in carrying out activities in, from or through Malta. The firm’s activities include company incorporations, back-office services and international corporate structuring, especially within the context of Malta’s extensive tax treaty network and advantageous tax regime. Being members of PrimeGlobal, an international association of accountants and advisers, adds value to the servicing of clients’ needs within an international perspective.

PETER GRIFFITHS MANAGING & TAX DIRECTOR

RESIDENCY & CITIZENSHIP

Level 1, Casal Naxaro, Labour Avenue, Naxxar NXR 9021 - Malta T: (+356) 2738 3631 • E: peter@griffithsassoc.com • W: www.griffithsassoc.com Contact: Peter Griffiths – Managing & Tax Director

HENLEY & PARTNERS MALTA Henley & Partners is the global leader in residence and citizenship planning. Each year, hundreds of wealthy individuals, families and their advisors rely on our expertise and experience. Our highly qualified professionals work together as one team in over 30 offices worldwide. The concept of residence and citizenship planning was created by Henley & Partners in the 1990s. As globalization has expanded, residence and citizenship have become topics of significant interest among the increasing number of internationally mobile entrepreneurs and investors whom we proudly serve every day. The firm also runs a leading government advisory practice which has raised more than USD 7 billion in foreign direct investment. We have been involved in strategic consulting and the design, set-up and operation of the world’s most successful residence and citizenship programs.

STUART MACFEETERS MANAGING PARTNER

Aragon House, Dragonara Road, St. Julians - Malta T: (+356) 2138 4000 • E: stuart.macfeeters@henleyglobal.com • W: www.henleyglobal.com Contact: Stuart Macfeeters - Managing partner

Business Directory

BANKING SERVICES

228

HSBC BANK MALTA P.L.C. - COMMERCIAL BANKING HSBC Commercial Banking is a leading provider of business financial services. A purpose-built Business Banking Centre in Qormi brings together under one roof a strong team of specialised Relationship Managers and business specialists, all trained to service businesses, thus making it a service centre of excellence. A wide range of specifically designed solutions are available to meet the diverse needs of the business community, including Loans & Overdrafts, Trade and Receivables Finance, Global Liquidity and Cash Management, Foreign Exchange as well as Internet Banking to meet the needs of business customers. We are an international bank with local expertise supporting all business segments in Malta.

MICHEL CORDINA HEAD OF COMMERCIAL BANKING

BANKING SERVICES

Business Banking Centre, Mill Street, Qormi QRM3101 - Malta T: (+356) 2380 4832 • E: michelcordina@hsbc.com • W: www.hsbc.com.mt Contact: Michel Cordina - Head of Commercial Banking

IIG BANK (MALTA) LTD IIG Bank (Malta) Ltd is a specialist trade finance bank focused on international commodity trade and does this through a comprehensive range of services that are tailored to meet the needs of its international trading customers spread over Latin America, Europe, the Middle East, Africa and Asia. IIG Bank (Malta) Ltd is dynamic and innovative in providing structured solutions for trading companies, distributors, manufacturers and exporters, especially those trading in emerging markets. The Bank’s approach to business is characterised by its desire to build long-lasting relationships and by being close to the customer to promote a better understanding of the complexities inherent in international trade flows.

RAYMOND BUSUTTIL MANAGING DIRECTOR & CHIEF EXECUTIVE OFFICER

INVESTMENT SERVICES

Level 20, Portomaso Business Tower, St. Julians STJ 4011 - Malta T: (+356) 2248 4510 • E: raymond.busuttil@iigbank-malta.com • W: www.iigbank-malta.com Contact: Raymond Busuttil - Managing Director & Chief Executive Officer

INTEGRA PRIVATE WEALTH LTD Integra Private Wealth is a privately owned financial service company set up in 2009 and authorised by the MFSA as a Financial Institution, an Investment Service Firm (Category 2 licence), a Corporate Service Provider and a Listing Agent to the Wholesale Securities Market. Through its robust structure the firm can provide unparalleled private wealth management service to its restricted client base of high-net-worth individuals, family offices and institutions. Complete investment solutions can be provided to our clients as a result of Integra’s mature and extensive network of professionals, banks and financial counterparties as well as the in-depth knowledge of the financial markets and how they relate to each client’s needs.

ALISTAIR MUSCAT CHIEF EXECUTIVE OFFICER

228, Tower Road, Sliema SLM 1601 - Malta T: (+356) 2133 8831 • E: info@integra-pw.com • W: www.integra-pw.com Contact: Alistair Muscat – Chief Executive Officer

CORPORATE SERVICES

Business Directory

INTEGRITAS GROUP The Integritas Group is a multidisciplinary firm providing corporate services such as company formation, company maintenance, corporate structures, mergers and acquisitions, redomiciliation, residence, citizenship, shipping and trust services to its clients. Integritas Corporate-Services Ltd is authorised to submit citizenship and residence applications on behalf of applicants to the Maltese authorities, through its Approved Agents, Mr Frederic Villa and Dr Alexia Muscat. Integritas Trustees Ltd is authorised by the Malta Financial Services Authority to provide trustee and fiduciary services. The Integritas Group was founded and is headed by Mr Frederic Villa, a Swiss and Italian national. Mr Frederic Villa speaks Italian, French, English, German and understands Spanish.

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FRÉDÉRIC VILLA MANAGING DIRECTOR

PROFESSIONAL ASSOCIATION

114/3, The Strand, Gzira GZR 1027 - Malta T: (+356) 2385 0611 • E: info@integritas-trustees.com • W: www.integritas-trustees.com Contact: Frédéric Villa - Managing Director

INVESTMENT MIGRATION COUNCIL The Investment Migration Council (IMC) is the worldwide association for investor immigration and citizenship by investment, bringing together the leading stakeholders in the field and giving the industry a voice. The IMC sets the standards on a global level and interacts with other professional associations, governments and international organisations in relation to investment migration. The IMC helps to improve public understanding of the issues faced by clients and governments in this area and promotes education and high professional standards among its members.

BRUNO L’ECUYER CHIEF EXECUTIVE

TRAVEL & LESIURE

16 Rue Maunoir 1211 Geneva - Switzerland T: (+41) 22 533 1333 • E: info@investmentmigration.org • W: investmentmigration.org Contact: Bruno L’ecuyer – Chief Executive

LA VALETTE CLUB La Valette Club at Malta International Airport has been perfecting its VIP services for over two decades, with the aim of adding exceptional value to its guests’ airport experience. La Valette Club offers a variety of membership options, giving members access to the airport lounges and privileges such as complimentary parking and chauffeur and porterage services. Whether a frequent flyer or a business traveller, La Valette Club services are tailored to help guests save precious time and unwind before proceeding with their journey. In 2017, La Valette Club unveiled a completely revamped departures lounge boasting some very unique features, and received a prestigious highly commended rating from Priority Pass.

GEORGE MALLIA HEAD RETAIL AND PROPERTY

c/o Malta International Airport, Luqa LQA 4000 - Malta T: (+356) 2369 6516 • E: george.mallia@maltairport.com • W: www.lavaletteclub.com Contact: George Mallia - Head Retail and Property

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CORPORATE SERVICES

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MAITLAND Maitland is a global advisory, administration and family office firm providing seamless legal, fiduciary, investment and fund administration services to private, corporate and institutional clients across multiple jurisdictions. We are privately owned and fully independent with 17 offices in 12 jurisdictions, over 1,100 employees and over $250 billion in assets under administration. The Malta office was established in 2008 and offers both fiduciary and corporate administration services, including the provision of directors, trustees, and an entire suite of company secretarial services. Our clients include local and international families, trusts, and corporate structures.

STEVE GEORGALA CHIEF EXECUTIVE OFFICER

REAL ESTATE

4th Floor, Avantech Building, St Julian’s Road, San Gwann SGN 2805 - Malta T: (+356) 2144 6377 • E: mel.roberts@maitlandgroup.com • W: www.maitlandgroup.com Contact: Mel Roberts - Director

MALTA SOTHEBY’S INTERNATIONAL REALTY Malta Sotheby’s International Realty was launched in 2013. Our distinct offering extends itself to both local and international clients seeking real estate investment opportunities, those seeking to relocate to Malta, and property owners looking to list and promote their property to qualified buyers. With more than 22.000 sales associates located in 69 countries worldwide, our global network is a commanding presence in the representation of the world’s most remarkable properties. Our team of specialised property experts offer a professional and personalised service – artfully uniting extraordinary properties with extraordinary lives. Services include: Residential Sales & Letting, Commercial Sales & Letting, Property Management and Relocation & Residency.

MICHAEL J. ZAMMIT DIRECTOR AND JOINT OWNER

CAPITAL MARKETS

Sliema Office 200, Tower Road Sliema SLM 1602 - Malta T: (+356) 2010 8070 • E: info@sir.com.mt • W: www.maltasir.com Contact: Michael J. Zammit - Director and Joint Owner

MALTA STOCK EXCHANGE PLC The Malta Stock Exchange provides a structure for admission of financial instruments to its recognised lists which may subsequently be traded on a regulated, transparent and orderly secondary market place. It also offers a comprehensive range of back–office services including maintenance of share and bond registers, clearing and settlement and custody services through its in-house Central Securities Depository. Access to the market may be achieved through admission to listing on the Regulated Main Market, or the Institutional Financial Securities Market (IFSM), both of which are regulated by the MFSA and enjoy full passportability within the EU, or through admission to the SMEoriented Prospects MTF, that is regulated by the Malta Stock Exchange.

JOSEPH PORTELLI CHAIRMAN

Garrison Chapel, Castille Place, Valletta VLT 1063 - Malta T: (+356) 2124 4051 • E: borza@borzamalta.com.mt • W: www.borzamalta.com.mt Contact: Stephanie Galea – Head Business Development and Marketing

LEGAL SERVICES

Business Directory

231

MAMO TCV ADVOCATES Mamo TCV Advocates is one of Malta’s leading law firms, with significant expertise across a broad range of practice areas, including corporate, financial services, aviation, shipping, IP, ICT and immigration law. Over the years we have built strong relationships with our clients and we remain committed to supporting them at all times as they face new opportunities and seek to adapt to changing markets and regulatory landscapes.

The quality of our people and the reputation we have garnered over the years has led to our involvement in numerous complex and ground-breaking transactions and to making us the Maltese firm of choice for a significant number international law firms, multinationals, listed companies, SMEs and individuals alike.

DR MICHAEL PSAILA MANAGING PARTNER

INSURANCE SERVICES

Palazzo Pietro Stiges, 103, Strait Street, Valletta VLT 1436 - Malta T: (+356) 2540 3000 • E: michael.psaila@mamotcv.com • W: www.mamotcv.com Contact: Dr Michael Psaila – Managing Partner

MARSH MANAGEMENT SERVICES MALTA LIMITED The company is active in the business of incorporating, managing, advising and servicing of captives, protected and cell facilities, special purpose vehicles and specialist insurance and reinsurance companies. As the world’s largest captive manager, organisations come to Marsh for a one-stop-shop approach to innovative captive solutions, including advice, implementation, management, and actuarial services. With specialised expertise from global resources, Marsh creates comprehensive, tailored solutions for your business. It is licensed by the MFSA.

STEPHEN PORTELLI HEAD OF OFFICE

ACCOUNTING & AUDITING

The Hedge Business Centre, Level 3, Triq ir-Rampa ta’ San Giljan, Balluta Bay, St Julians, STJ1062 - Malta T: (+356) 2342 3000 • E: stephen.portelli@marsh.com • W: www.mmc.com Contact: Stephen Portelli – Head of Office

MAZARS MALTA Mazars is one of Malta’s leading multi-disciplinary audit and advisory firms. We are committed to giving our clients an efficient and value for money service, underlined by a high level of commitment and quality. Owing to our size, we can offer a wide range of specialised services whilst retaining a personalised approach in terms of delivery. Our service portfolio includes company formation, accounting, auditing, payroll, VAT advisory and compliance, as well as corporate and personal tax planning.

As an integrated member firm of Mazars Group, we are in a position to draw upon the experience and resources of Mazars worldwide.

ANTHONY ATTARD MANAGING PARTNER

32, Sovereign Building, Zaghfran Road, Attard ATD 9012 - Malta T: (+356) 2134 5760 • E: anthony.attard@mazars.com.mt • W: www.mazars.com.mt Contact: Anthony Attard - Managing Partner

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INVESTMENT SERVICES

232

MEDITERRANIA CAPITAL PARTNERS Mediterrania Capital Partners is a dedicated private equity firm which focuses on growth investments of SMEs and mid-cap companies in North Africa and Sub-Saharan countries. Operating through offices in Abidjan, Algiers, Barcelona, Cairo, Casablanca and Malta, Mediterrania Capital Partners manages three investment funds and has a strong approach to Value Creation. The company’s mission is to make portfolio companies successful and strong in the long-run while giving superior returns to its investors and having a social and economic impact in the Africa region. Mediterrania Capital Partners is a regulated financial investment manager licensed by the Malta Financial Services Authority (MFSA).

ALBERT ALSINA CEO AND MANAGING PARTNER

HR & RECRUITMENT

B2, Industry Street, Qormi QRM 3000 - Malta T: (+356) 9914 7237 • E: communications@mcapitalp.com • W: www.mcapitalp.com Contact: Montserrat Petit - Communications Manager

MISCO MISCO is a knowledge-based independent consulting firm, working closely with its clients across all sectors of the economy, with the aim of creating and transforming business strategy into reality. MISCO achieves this by assisting you to maximise your engagement with clients and employees. We support you in developing your business, organise your resources and motivate and develop your employees through a range of services that include business advisory, recruitment and selection, training, marketing and opinion research, business tools, outsourcing and consultancy.

JOANNE BONDIN DIRECTOR

BANKING SERVICES

Fino Buildings, 1st Floor, Notabile Road, Mrieħel BKR 3000 - Malta T: (+356) 2122 0303 • E: jbondin@miscomalta.com • W: www.miscomalta.com Contact: Joanne Bondin - Director

NBG BANK MALTA LIMITED NBG Bank Malta Limited (formerly Finansbank Malta Ltd) was established in 2005 and is a wholly-owned subsidiary of NBG Group. The Group is the oldest and largest bank in Greece and is present in a number of jurisdictions namely Greece, Cyprus, Bulgaria, Albania, FYROM, UK, Serbia, Egypt, Malta and Romania. NBG Malta is designed to be a one stop shop for banking services for high-net-worth individuals and corporations worldwide. Furthermore, the bank also specializes in the provision of risk management and treasury products/solutions for its clients (Ex. Foreign Exchange and Derivative products).

GERASIMOS MAVROKEFALOS CHIEF EXECUTIVE OFFICER

302/304, Townsquare, Qui-Si-Sana Place, Sliema SLM 3112 - Malta T: (+356) 2131 8969 • E: info@nbg.com.mt • W: www.nbg.com.mt Contact: Gerasimos Mavrokefalos - Chief Executive Officer

CORPORATE SERVICES

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233

NEWCO CORPORATE SERVICES LTD NEWCO is an independent corporate services provider that, together with it’s clients’ specialists, has been supporting the structuring of international operations through competitive tax jurisdictions for over 25 years. With wide experience and know how, which allowed it to successfully support major multinational companies as well as smaller companies and start-ups, mainly from EU and Latin-American countries, NEWCO’s team of experts provide legal, tax advice and all the professional services involved in the setting up and management of companies and assistance to high-net worth individuals in Malta.

FREDERICO GOUVEIA E SILVA MANAGING PARTNER

ACCOUNTING & AUDITING

89, St. John Street, Valletta VLT 1165 - Malta T: (+356) 2122 3120 • E: info@newco.pro • W: www.newco.pro Contact: Frederico Gouveia e Silva - Managing Partner

NEXIA BT Nexia BT is a leading full-service audit, tax and advisory firm providing a comprehensive range of corporate and private-client advisory services to an international client base.

Nexia BT’s main services include: Trading and holding structures; Investment Funds and Trusts; Aviation and Yacht leasing structures; Bank account opening; Business Advisory services; Maltese Residence and Citizenship Programmes. Nexia BT is renowned for its vast experience in the development and provision of services consistently securing top mandates from businesses seeking to establish in Malta. It is the firm of choice by High-Net-Worth Individuals seeking a closer link to the country. Nexia BT is the official Government Concessionaire for the Malta Residence and Visa Programme within the Middle East.

KARL CINI PARTNER – TAX AND INTERNATIONAL CLIENT SERVICES

PAYMENT SERVICES

The Penthouse, Suite 2, Capital Business Centre, Entrance C, Triq taz-Zwejt, San Gwann SGN3000 - Malta T: (+356) 2163 7778 • E: info@nexiabt.com • W: www.nexiabt.com Contact: Karl Cini – Partner - Tax and International Client Services

PAYMIX LTD. Paymix Ltd is a licensed and regulated Financial Institution, authorized by the Malta Financial Services Authority as a payment service provider and as an electronic money institution. Paymix Ltd. is also a principal member of Mastercard. Our company provides e-Wallet account services to its clients through own proprietary e-Wallet application whereby customers can receive/send funds. With main focus on the corporate accounts, Paymix Ltd., a FinTec company, is offering simple and efficient financial solutions to all businesses.

CENK KAHRAMAN CEO & EXECUTIVE DIRECTOR

The Penthouse, JPR Buildings, Triq Taz-Zwejt, San Gwann SGN 3000 - Malta T: (+356) 2247 0000 • E: projects@paymix.eu • W: www.paymix.eu Contact: Mina Mitkova, Co-Branding Department Manager

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PKF MALTA PKF Malta is a fast growing, progressive firm that will meet the technical standards that your organisation expects. As a member of PKF International, a network of independent firms of accountant and business advisors with more than 440 offices in over 150 countries. PKF Malta offers a wide range of services to their local and international clients, including: Registered Accountants & Auditors, Tax Advisors; Advisory Economic Analysis, Feasibility, CBA; Licensed Trustee & Fiduciary Services; Licensed Accredited Agents for all, Malta Immigration Solutions; Licensed Corporate Service Providers & legal assistance for: Remote Gaming, Insurance, Intermediaries, Captives, Management, Aviation & Shipping.

PIERRE MANGION PARTNER

OFFICE & BUSINESS PARK

35, Mannarino Road, Birkirkara BKR 9080 - Malta T: (+356) 2148 4373 • E: info@pkfmalta.com • W: www.pkfmalta.com Contact: Pierre Mangion – Partner

REGUS SERVICED OFFICES Regus is the leading global workspace provider. We have built an unparalleled network of office, co-working and meeting spaces for companies to use in every city in the world. It’s a global infrastructure built for businesses to support every opportunity.

Our network of workspaces enables businesses to operate anywhere, without the need for set-up costs or capital investment. It provides our customers with immediate cost benefits and the opportunity to fully outsource their office portfolio. Designed to enhance productivity and connect 2.5 million like-minded professionals, it’s an instant global community and a place to belong. Regus has been operating in Malta since 2008 and in December 2016 it opened its second business centre in Paceville, St Julian’s.

ANDREW GRECH AREA MANAGER - MALTA

BANKING SERVICES

Dragonara Business Centre, 5th Floor, Dragonara Road, Paceville, St Julian’s, STJ 3142 - Malta T: (+356) 2260 5000 • E: andrew.grech@regus.com • W: www.regus.com.mt Contact: Andrew Grech - Area Manager - Malta

REYL & CIE (MALTA) LTD REYL & Cie (Malta) Ltd is a category 4A MFSA licensed entity dedicated to Fund Depositary/Custodian. It is a 100%-owned subsidiary of REYL & Cie Ltd, an independent banking group with offices worldwide. Developing an innovative approach to banking, the Group serves international entrepreneurs and institutional investors through its Wealth Management, Corporate & Family Governance, Corporate Advisory & Structuring, Asset Services and Asset Management business lines. Founded in 1973, REYL & Cie Ltd is licensed as a bank in Switzerland and performs its activities under the direct control of the FINMA and the SNB. The Group manages assets of over CHF 15 billion and employs 210 people.

NATACHA EBENER CHIEF OPERATIONS OFFICER

Swiss Urban Factory, Office no.5, 5 St Frederick Street, Valletta, VLT 1470 - Malta T: (+356) 2248 2951 • E: ne@reyl.com • W: www.reyl.com Contact: Natacha Ebener - Chief Operations Officer

CORPORATE SERVICES

Business Directory

235

RISKCAP INTERNATIONAL LTD RiskCap International Ltd was established in 2013 to provide customised and outsourced risk management, regulatory compliance and governance solutions to the financial services industry. We are in Malta and London and have built up a business with a team with backgrounds in compliance, finance, accounting, mathematics and risk management. Our clients are of all sizes and come from all segments of the financial services industry and are supervised by regulators around the world.

DR PAUL MAGRO FOUNDER & MANAGING DIRECTOR

LEGAL SERVICES

Airways House, 6th Floor, Gaiety Lane, Sliema, SLM1549 - Malta T: (+356) 2733 3179 • E: mt.enquiries@riskcap.com • W: www.riskcap.com Contact: Dr Paul Magro - Founder & Managing Director

SALIBA STAFRACE LEGAL Saliba Stafrace Legal is a law firm operating from Valletta. The firm was founded in 2013 under the name ‘Ian Stafrace Legal’ by Ian Stafrace. In a strategic move to grow its service portfolio and continue to offer its clients effective solutions, Ian Stafrace has in 2015 partnered with Joseph Saliba. Saliba Stafrace Legal has recorded a steady growth during its relatively short existence and is committed to providing a service of excellence in all its main practice areas, including corporate law, securities law and capital markets, banking and finance, investment funds, investment services, environmental law, development and planning law, general commercial law and litigation. The firm has consistently advised corporate clients, individual clients and government institutions.

DR JOSEPH SALIBA PARTNER

FUND ADMINISTRATION

9/4 Brittania House Old Bakery Street Valletta VLT 1450 Malta T: (+356) 2123 9556 • E: info@salibastafrace.com • W: www.salibastafrace.com Contact: Dr Joseph Saliba - Partner

SANNE SANNE is a leading global provider of alternative asset and corporate services.

Established for over 25 years and listed as a FTSE 250 company on the Main Market of the London Stock Exchange, SANNE employs more than 1,200 people worldwide and administers structures and funds that have in excess of £200 billion of assets.

As leaders in our field, we deliver tailored administration, reporting and fiduciary services to a highly valued international client base through a global network of regulated businesses within 15 leading financial jurisdictions spread globally across the Americas, Europe, Africa and Asia-Pacific. Our Malta business provides a full suite of fund administration services through one coordinated platform.

SEAN MURRAY MANAGING DIRECTOR, ALTERNATIVE ASSETS - EMEA

54, Psaila Street, Birkirkara, BKR 9073 - Malta T: (+356) 2258 9500 • E: info@sannegroup.com.mt • W: www.sannegroup.com Contact: Luke Vella Clark - Senior Operations Manager Malta & MLRO

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236

SGGG FEXSERV FUND SERVICES (MALTA) LIMITED SGGG Fexserv Fund Services (Malta) is your administrative partner for all your fund management requirements, bringing together the international expertise of SGGG Fund Services Inc, together with Fexserv Financial Services, one of the leading and most established companies in the local financial services industry.

ANABEL MIFSUD MANAGING DIRECTOR

CONFERENCE & EVENTS

Alpine House, Naxxar Road, San Gwann SGN 9032 Malta T: (+356) 2576 2121 • E: anabel@sgggfexserv.com • W: www.sgggfexserv.com Contact: Anabel Mifsud - Managing Director

SIGMA SiGMA is all about iGaming in Malta. The new, redesigned portal serves as a jobs board all year round to showcase the hundreds of vacancies and connect talent with great companies. SiGMA also organises a number of lavish dinners, branded iGatherings, to promote Maltese culture, cuisine and history in a friendly business environment.

Finally, the next Summit of iGaming in Malta is taking place in November 2018, moving it farther away from ICE, and anticipating another record breaking year with 400 sponsors and exhibitors and 12,000 delegates.

EMAN PULIS FOUNDER AND CHIEF EXECUTIVE OFFICER

CORPORATE SERVICES

Gaming Hub, Judge Paolo Debono Str., Msida Skatepark - Malta T: (+356) 9926 3626 • E: info@sigma.com.mt • W: www.sigma.com.mt Contact: Eman Pulis - Founder and Chief Executive Officer

STM MALTA TRUST & COMPANY MANAGEMENT LTD STM Malta Trust & Company Management Ltd (STM Malta) is part of STM Group Plc, a company listed on the London stock exchange with offices in the United Kingdom, Gibraltar, Malta, Spain, Jersey, and Australia. STM Malta is authorised by the Malta Financial Services Authority (MFSA) to act as Trustees and registered to act as Administrators of Trusts, Foundations and Retirement Schemes, providing these services to a growing international client base. STM Malta is one of the largest providers offering retirement schemes recognised as QROPS, EURBS and QNUPS. Complementing these services, STM Malta has a wealth of knowledge, experience and the expertise to set up and manage companies both in Malta and abroad.

DEBORAH SCHEMBRI MANAGING DIRECTOR

San Gwakkin Building, Level 1, Triq is-Salib tal-Imriehel BKR3000 Mriehel - Malta T: (+356) 2133 3210 • E: info@stmmalta.com • W: http://info.stmgroupplc.com/malta/ Contact: Deborah Schembri - Managing Director

CORPORATE SERVICES

Business Directory

TRIDENT TRUST Founded in 1978, Trident Trust is a leading independent corporate, fiduciary and fund administrator, employing nearly 800 staff across a global footprint that spans Africa, the Americas, Asia, the Caribbean, Europe and the Middle East. Financial institutions, professional advisors, asset managers, family offices and international businesses turn to us for the provision of independent corporate, trust and fund administration services, relying on our worldwide presence, local knowledge and our commitment to responsiveness, reliability, attention to detail and personal service. Our professional personnel are widely recognised for their ability to work cooperatively with advisors and their clients and to support them through their practical knowledge and extensive experience.

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ALBERT CILIA MANAGING DIRECTOR

FUND ADMINISTRATION

Orange Point Building, Second Floor, Dun Karm Street, Birkirkara By-Pass, Birkirkara, BKR 9037 - Malta T: (+356) 2143 4525 • E: malta@tridenttrust.com • W: www.tridenttrust.com Contact: Albert Cilia - Managing Director

TRIDENT TRUST Founded in 1978, Trident Trust is a leading independent corporate, fiduciary and fund administrator, employing nearly 800 staff across a global footprint that spans Africa, the Americas, Asia, the Caribbean, Europe and the Middle East. We provide a comprehensive range of services to almost 500 hedge funds, private equity funds and real estate funds, with AUM in excess of $35bn. Our clients range from multi-billion dollar funds to mid-market and next generation managers. Our truly global reach, with a physical presence in the world’s major financial centres and a range of major fund domiciles, enables us to consistently meet the needs of our clients and their investors, wherever they may be.

ALBERT CILIA MANAGING DIRECTOR

CORPORATE SERVICES

Orange Point Building, Second Floor, Dun Karm Street, Birkirkara By-Pass, Birkirkara, BKR 9037 - Malta T: (+356) 2143 4525 • E: malta@tridenttrust.com • W: www.tridenttrust.com Contact: Albert Cilia - Managing Director

TRI-MER SERVICES LTD Tri-Mer Services Ltd. offers the full spectrum of corporate services tailored exclusively to clients’ needs. Our clients range from individuals or companies who seek to set-up or relocate their personal affairs or businesses to Malta, or who would like to give their business a different dimension. Our focus is to deliver professional and personalised corporate services which embrace tax efficient solutions. The from, established since 2005 and licensed by the MFSA under the Trust & Trustees Act, promises to uphold the values of honesty, efficiency and to treat all our customers in a unique and personal manner, always maintaining professional and ethical standards. Tri-Mer Services is a member of BKR International which enhances the international reach of the firm.

MARCO MERCIECA DIRECTOR

International House, Mdina Road, Mriehel BKR 3000 - Malta T: (+356) 2347 9900 • E: info@trimerservices.com • W: www.trimerservices.com Contact: Marco Mercieca - Director

Business Directory

PAYMENTS SERVICES

238

TRUEVO PAYMENTS LTD Founded in 2013, Truevo is an EU-licensed card Acquirer and Payment Solutions Provider and is a Principal Member of Visa and MasterCard. Truevo enables its customers to accept payments by debit and credit cards through simple, intuitive and user-friendly payment solutions that facilitate payments across multiple channels, including e-Commerce, Mobile Point-of-Sale (mPOS) and Virtual Point-of-Sale (vPOS). Truevo customers can also process OCTs (Original Credit Transactions). Merchant accounts and card processing services can be provided to businesses located within EU and EEA member states. All technical solutions comply with the Payment Card Industry’s highest security standards including PCI-DSS. We also welcome business Partners such as Independent Sales Organisations (ISOs), PSPs, Payment Facilitators and Gateway providers.

STEVE GRECH CHIEF EXECUTIVE OFFICER

CORPORATE SERVICES

MWH Building, 1st Floor, Oratory Street, Naxxar NXR2504 - Malta T: (+356) 2247 4000 • E: info@truevo.com • W: www.truevo.com Contact: Steve Grech - Chief Executive Officer

UNIFIN SERVICES LIMITED Established in 1995, Unifin Services Limited has a wealth of experience as a fiduciary accounting practice in Malta, offering a broad range of corporate, accounting, tax and administration services to international clients. We provide specialist advice in the use of Maltese companies and in international tax planning for companies as well as individuals. Unifin Services Limited is licensed by the MFSA to provide nominee and trust services, and is registered with the authorities as an Authorised Registered Mandatory to submit applications for residence in Malta.

ALBERT MUSCAT MANAGING DIRECTOR

HR & RECRUITMENT

37 Apt R Dolphin Court, Embassy Way, Ta’Xbiex XBX 1073 – Malta T: (+356) 2133 3554 • E: admin@unifin.com.mt • W: www.unifin.com.mt Contact: Albert Muscat - Managing Director

VACANCYCENTRE VacancyCentre (operated by CSB Group) is a specialist recruitment agency that is committed to working very closely with candidates, providing them with exceptionally relevant opportunities through a careful process of evaluation, taking time to match their career aspirations to some of the best opportunities in Malta. VacancyCentre has an extensive network of talented candidates whose background is within the Banking and Finance, Legal and Compliance, iGaming, IT, Administration, and Sales and Marketing sectors, and has a very successful track record of delivering good talent to clients within these sectors.

JOHN DIMECH GENERAL MANAGER

Suite 2, Ground Floor, Tower Business Centre, Tower Street, Swatar BKR4013 - Malta T: (+356) 2123 2224 • E: jobs@vacancycentre.com • W: www.vacancycentre.com Contact: John Dimech - General Manager

LEGAL SERVICES

Business Directory

WDM INTERNATIONAL WDM International is a full-service firm, presenting a multidisciplinary offering to its clients, ranging from legal and tax consultancy to audit and business advisory. WDM Lex Advisory, the firm’s legal services arm, is at the forefront in the following lines of expertise: international taxation; residence, citizenship planning and private client services; setting up of funds, fund managers, forex companies, credit and financial institutions and operations involved in blockchain and cryptocurrency; setting up of fintech and iGaming operations and aircraft and yacht registration. The firm is an Approved Agent for Malta’s Citizenship by Investment Programme and is also licensed to act as a trustee or co-trustee and as an administrator in the context of private foundations.

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DR JONATHAN DE GIOVANNI PARTNER

BANKING SERVICES

35, The Penthouse, Salvu Psaila Street, Birkirkara BKR 9072 - Malta T: (+356) 2123 2096 • E: jdegiovanni@wdm.com.mt • W: www.wdm.com.mt Contact: Dr Jonathan De Giovanni – Partner

ZARATTINI INTERNATIONAL LTD Zarattini International brings together innovation, alliance and proficiency to offer high value added custody services in Malta. We remain at the forefront of innovation while keeping in touch with our roots. We dare to push boundaries but never lose sight of our responsibilities. We combine the highest standards with the deepest dedication to our clients’ needs. Integrity, transparency and resourcefulness are the pillars of our organisation. Part of a Swiss financial group with activities in Switzerland, Luxembourg and Malta, we have built our strong reputation upon reliability, excellent professional competence and transparency. We have a long history of providing reliable local and global custody services to a variety of clients, including asset managers and private and institutional investors.

FRANCESCO SCOTTO CHIEF EXECUTIVE OFFICER

CORPORATE SERVICES

Europa Centre, 56 Saint Anne Street, Floriana FRN 9011 - Malta T: (+356) 2779 1100 • E: malta@zarattini.com.mt • W: www.zarattini.com.mt Contact: Francesco Scotto – Chief Executive Officer

ZETA Zeta is a privately held independent group of companies offering targeted services which include, but are not limited to; Multi-Family Office; Advisory and Structuring; Fiduciary; Company Formation and Management; Corporate; Financial; Fund Formation and Management. Zeta is committed to exceeding client expectations and building a satisfying long-term relationship while retaining its primary focus; your business and family success.

DAVID ZAMMIT MANAGING DIRECTOR

56, Ground Floor, Europa Centre, St. Anne street, Floriana FRN 9011 - Malta T: (+356) 2011 9700 • E: info@zeta-financial.com • W: zeta-financial.com Contact: Michealle Oakes - Director

Malta

The culture of getting things done

Securely Regulated Market Driven Competitively Skilled

Retail Price

â‚Ź20