Malta's value proposition.
Home to a population of just over 421,000, the Mediterranean island of Malta has stood out in Europe with an economy outperforming many of its Euro zone brethren. The country was rated as the 16th out of 138 countries for the soundness of its banking sector in the World Economic Forum's The Global Competitiveness Report 2016-2017.
Malta has rapidly diversified its traditionally tourism dominated economy with key movements into the services sector. Indeed services now account for some 75 per cent of Malta's GDP, with industry accounting for 23 per cent and agriculture for two per cent.
Furthermore, throughout the financial crisis, Malta emerged as a relative safe haven despite turmoil in financial markets globally. The financial services sector is well regulated under Euro zone rules, with the banking infrastructure supporting all levels of wealth from ultra- high net worth individuals requiring private banking services, to the mass affluent. Malta hosts banking and finance institutions form countries around the world including Australia, Austria, Bahrain, Belgium, Greece, Portugal, Turkey, Cyprus, Finland, Italy, Kuwait, Switzerland and the UK.
Malta has had a traditionally quite conservative approach to banking which has supported the sector's stability.
This is reflected in the lack of systemic shocks the sector underwent during the financial crisis. Bank funding in the country relies on retail deposits rather than wholesale borrowing and funding, with banks maintaining substantial liquidity and adequate capital ratios based on prudent lending practices.
The island nation has also emerged as a hub for wealth management and family offices from around the world, including a growing Middle Eastern presence. Swiss-style private wealth management are offered by specialist firms such as Mediterranean Bank, whilst foreign banks, such as Akbank T.A.A., Sparkasse and BAWAG provide management solutions. Professional financial advice and products tailored to high net worth clients can a lso be found amongst the retail banks in the country, such as HSBC or Bank of Valletta.
Malta has a history of fund management and investment banking, with a growing fund inventory of more than 600 funds licenced by the Malta Financial Services Authority (MFSA). Banks have had an involvement in a variety of different investment vehicles, ranging from mutual funds to real estate funds and pension funds.
Investors who are looking at physical assets may also find value in Malta. The island has already found itself as a stopping point for superyachts crossing the Mediterranean, and as such, the country has begun offering incentives for high net worth individuals looking at private yacht and aircraft solutions. Extensive VAT incentives are offered for the registration of yachts under the country's flag, coupled with strong existing marina infrastructure provide motivation to use the island as a base for a yacht. Likewise with aircraft, Malta has developed legislation to make the registration of private jets easier.
The island also has a strong reputation in the wealth preservation space through trusts and foundations and those looking to achieve yield through investment funds. Malta is one of the few EU countries in which both trusts and foundations can be set up. This allows for the creation of customised solutions that can fit diverse personal and business needs--from succession planning to estate management. Legislation in this field has recently been updated which has brought about the introduction of the Private Trust Company (PTC) which offers opportunities to high net worth individuals looking for a tailor- made trust solution.
Supporting the growing services sector is the sound legal framework upon which it operates. English is an official language, alongside Maltese, with corporate law heavily influenced by British models. This can provide further comfort to those looking to invest in the island nation as the local laws are published in both English and Maltese, making negotiating the legal landscape a relatively simple affair. The fiscal framework of the country is both approved by the OECD and the EU, with Malta also sporting some 70 double taxation treaties.
Finally, as a destination for investment and business, the lifestyle on the island might be seen as a positive in its own right. Malta is a somewhat more relaxing destination than most other major
European financial centres in its secluded Mediterranean location. The island features abundant beaches with beautiful scenery to match. Take a direct flight via Emirates!
Finance Malta Finance Malta is a non-profit public-private foundation that was set up to promote Malta's Business & Financial Centre, both within, as well as outside Malta. The organisation aims to bring together the resources of both the finance industry and the government to help ensure Malta can maintain an efficient and modern legal, regulatory and fiscal framework for the financial servicessectortocontinuetoprosperandgrow.
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