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Malta: the gateway to Europe.

Summary: For African firms, Malta could provide a jumping point into the European market

As a long-standing member of the European Union (EU), Malta offers unique investment opportunities for companies looking to expand into Europe. Situated between North Africa and Europe, the island nation has historic links between both continents.

The country's entry into the EU in 2004 means that Malta offers a way for African companies to access Europe's market of approximately 500 million people. Evidence can be seen to support this, with a number of foreign institutions having already set up shop in Malta, taking advantage of its geographic advantages to open up business in the Mediterranean and North African markets.

"We are blessed with an excellent geographic location. Malta can act as a conduit to the North African market and vice versa to the European market," said Dr. Christian Cardona, Minister for the Economy, Investment and Small Business, Malta.

"Over the past ten years, Malta's financial services industry has developed from one that was primarily led by the domestic market into a truly international financial services centre, attracting many top-rated financial services firms," added Kenneth Farrugia, Chairman, FinanceMalta.

In combination with this, Malta has also engaged in multiple international agreements, boasting some 70 double tax treaties, and has an English- speaking staff. This is further supported by a sound legal framework--the fiscal framework of the country is both approved by the OECD and the EU. English is an official language, alongside Maltese, with corporate law heavily influenced by British models.

This can provide further comfort to companies looking to do business in the island nation as the local laws are published in both English and Maltese, making negotiating the legal landscape a relatively simple affair.

In recent years, Malta has also made significant strides in updating its finance centre to attract worldwide recognition. This is part of the country's efforts to increase the depth and breadth of its financial services industry. One aspect of this is in Malta's growing fund inventory of more than 600 funds licenced by the Malta Financial Services Authority (MFSA), a business in which the country has some history. Banks have had an involvement in a variety of different investment vehicles, ranging from mutual funds to real estate funds and pension funds.

Malta has traditionally had a 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.Throughout the financial crisis, Malta emerged as a relative safe haven despite turmoil in financial markets globally.

An argument could be made for Malta to become the gateway to North Africa and the continent at large, in a similar approach to the way in which Dubai has become a funnel for Asian investment into the Middle East and Africa. Even so, its prime geographic location, EU membership, and cultural roots provide an opportunity for African companies looking to expand their presence into Europe.

FinanceMalta 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 services sector to continue to prosper and grow.

Malta can act as a conduit to the North African market and vice versa to the European market.

-- Dr Christian Cardona, Minister for the Economy, Investment and Small Business, Malta

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Publication:Banker Africa
Date:Jun 30, 2017
Words:630
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