Malta Finance Centre In Good Shape
Wednesday, January 18, 2012
Malta's efforts to establish itself as a dynamic, cost-efficient, financial services
domicile is paying dividends, according to promotional agency MaltaFinance, which
has highlighted that each of the island's financial services sectors, insurance,
banking, trusts and funds, recorded solid performance during 2011.
Discussing Malta's success as an international financial centre in a year-end
statement, FinanceMalta’s Chairman, Kenneth Farrugia said that: "The
growth of the [financial services] sector speaks for itself. If you look at
the growth of the funds industry as an example, 15 years ago we could describe
the industry in just one word - ‘two’ - because we had two funds,
two custodians and two asset managers. Today Malta has over 500 funds and in
excess of 100 asset management companies, so the growth has been quite significant,
predominantly in the last two or three years."
Today there are over 6,500 people in direct employment in financial intermediation,
against the background of a total workforce of approximately 160,000.
The latest statistics released by the National Statistics Office show Malta
has had substantial growth primarily in financial intermediation. Financial
services are a significant contributor to GDP, edging towards 15% of the economy.
Currently the funds industry is leading the sector, having added over 100 new
listings in the first half of 2011. "We’ve had compelling growth
in this particular industry," notes Farrugia. "It’s clearly
a sign that the industry has become truly international because we are serving
fund managers based in the US, Canada, Italy, UK, Switzerland, Czech Republic,
Latvia, and beyond."
FinanceMalta said that Malta is seeing substantial demand from a number of
hedge fund managers who are choosing to shift their operations to Malta in response
to both the rising costs of business and the growing regulatory burden in their
domicile. Malta is emerging alongside London, Geneva, Luxembourg and the Swiss
canton of Zug, as another European location for fund managers keen to maintain
flexible operating arrangements and reduce tax bills, the agency said.
Farrugia highlighted the insurance sector as an additional future area of strong
growth for Malta: "A growing body of insurers are finding their way to the
island given the firm but flexible regulatory regime and access to excellent
support services. Prospects for this sector look to be encouraging with Malta
frequently being chosen ahead of competing jurisdictions."
Malta is also an emerging regional hub and key location for wealth managers,
family offices, high-net worth individuals and retirees, MaltaFinance reported.
Bruno L’ecuyer, FinanceMalta’s Head of Business Development, said:
"Given Malta's favourable residency and tax laws, innovative investment
vehicles (including specialist funds regimes and trust companies), excellent
legal and accountancy services, and a warm and sunny climate, all within the
European Union, the country has begun to appeal to a wide audience in this area."
Also, when it comes to the speed of transposing regulations and international
legislation, Malta is industry leading, enhancing the territory's appeal, Head
of Administration, Dr. Bernice Buttigieg said. "Malta has a clear edge
and this contributes significantly to our competitive advantage. In fact, Malta
on the EU scoreboard ranks joint first with Denmark. We are efficient in transposing
directives or European regulations into our national legislation. The reason
behind this is because we’re small but we’re nimble, we can act
very quickly and we don’t have a significant hierarchy."
"We used to say that Malta is waiting to be discovered, but I think Malta
is now being discovered today. The acceleration of foreign companies coming
to the island is a manifestation of that. People are sometimes driven by perceptions,
but you need to come to the island, meet with government, the regulator and
the operators and get a first-hand view of what Malta is really about. I think
when people do that, then Malta is sold to them. We don’t want to keep
Malta a secret any more," Farrugia concluded.