Investment Handbook & Business Directory

2015/2016 Edition Finance Investment Handbook & Business Directory Malta

banking • insurance • pensions • funds • capital markets • corporate STRUCTURING • maritime • aviation • taxation

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Ernst & Young Limited Regional Business Centre Achille Ferris Street Msida MSD 1751, Malta Tel No: +356 2134 2134 Email: [email protected] In today’s world, where you are should In today’s world, never need to be. We have the right people, Find out how our global approach can help you at ey.com

he Palmali Group of Companies, an international shipping organisation with its head office based in Istanbul, includes under its umbrella the expansive network of Tseventeen international offices, located all around Europe and Eurasia, Established in 1998, Palmali has grown rapidly from the initial service company offering agency services to vessels passing through the Bosphorus and Dardanelles Straits on their way to Turkish ports, into one of the largest oil and dry cargo carriers across the Black, Caspian, Mediterranean and Baltic Seas, as well as the waters of the world’s oceans. Palmali Ship Management Ltd established operations in Malta in 2006 to provide financial, technical, administrative and strategic services to our parent company fleet of ships. Malta’s location at the centre of the Mediterranean and the good reputation of its Maritime Authority has attracted the registration of most of the company’s fleet since 2001. Palmali Shipmanagement has been established to be a leading provider of ship management and related services to the shipping industry. Our primary objective as a service company is to add value to our clients by delivering quality services in a transparent, cost effective and consistent way.

Supported by a team of highly experienced professionals Palmali Shipmanagement services cover all aspects of ship management including:

◆ Company Formation ◆ Commercial ◆ Accountancy ◆ Legal services Management Administration ◆ Vessel registration ◆ Repair and maintenance, ◆ Taxation & financial ◆ Vessel operation ◆ Dry-docking consultancy ◆ Full Technical new building supervision ◆ Banking administration Shipmanagement ◆ Vessel purchasing ◆ Insurance ◆ Ship inspection and Sale ◆ Crew management

At Palmali Shipmanagement we provide the full spectrum of third-party ship management services. We pride ourselves on offering a flexible and customized approach to our ship management almali hiPmanagement td clients seeking global solutions for all vessel segments. P S l

Nigar Aliyeva Keating Director - Palmali Shipmanagement Ltd. Palmali Shipmanagement Ltd - Villa Aurora, 14-16, Princess Elizabeth Street, Ta' Xbiex XBX 1102 - Malta T: (+356) 2138 8344/5/6 • F (+356) 2138 8347 • E: [email protected] • W: palmali.com.tr Publisher Information Contents 4 5

2015/2016 Edition Finance Investment Handbook & Business Directory Contents Malta

BANKING • INSURANCE • PENSIONS • FUNDS • CAPITAL MARKETS • CORPORATE STRUCTURING • MARITIME • AVIATION • TAXATION CountryProfiler CountryProfiler

Publication Date April 2015 8 Key Facts & Figures ISBN Nº 978-99957-0-672-2 The Team

Publisher’s Information 10 International Finance Centre Overview CountryProfiler Ltd is a specialist publisher of country information that assists corporations managing operations across national borders 19 Country Profile with trade, investment and relocation decisions. CountryProfiler is recognised by senior business executives, government representatives, institutions and global organisations as a leading provider of 26 Banking informative, insightful and actionable country intelligence. 32 Capital Markets Europe Garvan Keating 64, St Anne Court, Flat 4, Bisazza Street, Sliema SLM 1642 - Malta Regional Director T: (+356) 2034 2034 [email protected] 39 Investment Funds

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Photography 51 Corporate Structuring / M&A Alan Carville / Fritz Grimm / Michael Jurick / Armand Sciberras / André Micallef / ViewingMalta Sonja Lindenberg 56 Corporate Headquarters Art Director Ramon Micallef / [email protected] Editor Printing Gutenberg Press, Malta [email protected] 61 Trusts & Foundations

The information included in this publication is for information purposes only and is 66 Wealth Management 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. 71 Family Offices

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 75 Philanthropy necessarily those of the editor or publisher. All reasonable care is taken to ensure Melissa Puglisevich truth and accuracy, but the editor and publishers cannot be held responsible for Office Manager 77 Citizenship & Residency errors or omissions in articles, advertising, photographs, or illustrations. [email protected] 82 Foreign Exchange Trading FF Fenlex A5 ctp 2 1/27/12 9:10 AM Page 1

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Contents 7 Contents

85 Corporate Treasury 87 Islamic Finance 90 Intellectual Property 93 Maritime & Yachting 98 Aviation 103 Payments Industry 107 Shared Services & Outsourcing 110 Financial Software Development 114 Arbitration 116 Legislation & Regulation 120 Corporate Business Structures 125 Taxation 135 A Guide for Doing Business in Malta 140 Travel & Living in Malta 144 Did you know? 146 Business Directory: Who’s Who

Composite Key Facts & Figures Key Facts & Figures 8 9

IFC at a Glance 0.8% 6.0% Sovereign Ratings Inflation rate Unemployment rate (January 2015) EU: -0.5% (January 2015) EU: 9.8% A (Fitch, 2015) Key Facts & Figures 68 3.3% All figures as of 2014 Number of Double Tax Treaties GDP Growth (2014) A3 unless otherwise indicated. (Moody’s, 2014) €136.8bn IFRS BBB+/A-2 FDI (June 2014) Accounting Standards (Standard & Poor’s, 2015)

European Economic Forecast Winter 2015 Finance Centre GOZO Forecasts for Malta 2014 2015 2016 GDP growth (%, yoy) 3.3 3.3 2.9 13%

COMINO Inflation (%, yoy) 0.8 1.0 1.9 Contribution to GDP Unemployment (%) 6.0 5.9 5.9 Structural budget balance (% of GDP) -2.7 -2.4 -2.2 1O,OOO Gross public debt (% of GDP) 68.6 68.0 66.8 People employed Current account balance (% of GDP) 3.3 3.5 3.6 Banks: 27

• Valletta Investment Funds: 581 Net Asset Value of Funds MALTA Total (EUR): 9.7 billion Recognised Fund Administrators: 27 Fund Managers: 70+ Country Trust and Fiduciary Official Name: Republic of Malta Companies: 142 Capital: Valletta Foundation Administrators: 32 Location: Southern Europe Insurance Vehicles: 60 European Union: Member Since 2004 Insurance Managers: 15 Total Gross Premiums Area: 316 square km Written by Insurance Sector Languages: Maltese (official) English (official) (EUR): 2.58 billion (2013) Religion: 98% Roman Catholic Retirement Schemes: 35 International Dialling Code: +356 Retirement Scheme Legal System: Common and Civil Law Administrators: 14

Registered Companies: 65,000+ Corporate Tax: 35%. Double Taxation Treaties: 70+ Regulator: Malta Financial Population: Currency: Time: Services Authority (MFSA) 421,000 (2013) Euro GMT+1 www.mfsa.com.mt International Finance Centre Overview International Finance Centre Overview 10 11

espite being only one-fifth of the size of London, Malta has solidified its place among Europe’s finance centres, and its global appeal continues to grow. International Finance Centre Overview DViewed by industry players, investors and regulators as a particularly business-friendly location, the Mediterranean island has been a favoured entry point to the European Union The Rising Star because of its robust, EU-compliant regulatory framework, diverse financial ecosystem and deep talent pool. Over the years, financial services have become one of the country’s of Global Finance world-class export industries, registering impressive year- on-year growth. Malta’s International Finance Centre (IFC) Malta has developed into a vibrant, popular and now supports financial firms from around the world, includ- respected international finance centre, challenging ing banks, investment funds, insurance companies, pension and competing with the top domiciles in the world. funds and family offices. In no small part, Malta’s rise into the ranks of Europe’s leading finance centres has been driven by the island’s reputation for stability and security which has made it an excep- tion to the financial crisis that hit global economies. Strong international ratings helped too and have attracted first-class financial firms. The increasing presence of global institutions now sets the scene for the future: the government has developed a strong vision to establish Malta as a financial centre that serves markets the world over. The island is constantly looking for new engines of growth and is seeking to develop competencies in other potentially lucrative markets, such as currency trading, intellectual property and international pensions.

Onshore Restructuring Malta’s development as an international financial centre has its foundations in sound economic principles, a pro-business environment and forward-looking and responsive regulations. In 1988, Malta passed legislation to facilitate the establishment of an offshore financial framework. However, the 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 membership of the EU and began to harmonise its legislation, incorporating best practices from comparable centres. EU membership provided the island 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 and tax havens. International Finance Centre Overview International Finance Centre Overview 12 13

Rising up the Ranks Big & Boutique Over the years, Malta has accelerated its efforts to increase the The island has gained a reputation as a jurisdiction for depth and breath of its finance industry. The sector has ex- smaller financial services companies and start-ups, which panded by around 25 per cent annually in recent years. It now 10th offer clients more personalised services than those provided soundest banking system accounts for some 13 per cent of the island’s GDP and provides World Economic Forum by the bigger firms. But as Malta’s status as a financial centre close to 10,000 jobs. The government has provided critical 2013-2014 has grown, the country has also attracted international credit support and a range of opportunities for financial institutions (out of 148 countries) institutions such as Deutsche Bank, HSBC, Banif Bank and to expand and grow their business in Malta. FIMBank. The island hosts nearly 30 fund administrators The scale of this transformation has been enough to help Malta is not a tax and close to 60 insurance companies that range from well- Malta being seen as an alternative to established finance haven or a fiscal known international names to smaller, niche establishments. hubs such as Dublin, London and Luxembourg. Malta’s IFC paradise, and both the EU Fund administrators such as Apex, Citco and Custom House has climbed 15 places in the most recent Global Financial and the OECD have approved all have a presence in Malta, along with insurance managers Services Index and is now ranked ahead of Madrid, Dublin our tax regime. We ditched such as Munich Re, Aon and Marsh. In addition, a number and Brussels. Malta’s finance sector has also been given a concepts such as banking of Fortune 100 companies have set up operations here, in- clean bill of health by rating agencies, the EU Commission secrecy a long time ago and cluding multinationals such as BMW, Peugeot, Citroën and and the International Monetary Fund (IMF). The govern- fully adhere to EU rules and Vodafone. Malta also boasts considerable expertise in the ment believes there is still scope for growth and has made regulations, which gives us a field of trusts and foundations, including many legal firms strengthening the financial sector one of its key priorities high level of tax transparency.” that operate in-house trust companies and international or- while equally supporting the island’s other industries to avoid ganisations. reliance on any one sector. Dr Joseph Muscat Prime Minister of Malta Insurance & Pensions A Diverse Ecosystem The past two years were positive ones for Malta’s financial Malta provides a broad and integrated suite of financial ser- sector, with the insurance industry being one of the top per- vices. The country’s banking sector was one of the first to formers. The insurance industry continued to expand, and embrace an international approach. More than 25 banks have gross written premiums almost reached the €2.6 billion mark established operations in Malta, although only a handful of in 2013, despite uncertainty surrounding the EU’s Solvency these are active in the local market. Most use the island as II legislation which led many potential clients to adopt a a platform from which to conduct specialised asset financ- ‘wait-and-see’ approach. Insurance managers point to Malta’s ing, corporate banking and trade finance services. The insur- Protected Cell Company (PCC) regime and argue that this ance sector has also experienced an upsurge of interest due to offers a cost-effective way of managing the higher capital and the presence of expert insurance management services and The financial and EU Malta has established compliance requirements of Solvency II. Growth has also been EU passporting rights. Today, Malta is among the leading banking crises have robust banking, recorded in the retirement pensions sector which, at the end of European captive insurance domiciles. not affected our banking insurance, investment funds and 2014, listed 35 international retirement schemes, thus position- The fund sector began to expand soon after the introduc- industry directly. None of wealth management sectors. ing the island as a competitive jurisdiction for the management tion of a specialist regime for alternative investment funds, our banks were affected or In addition, we are seeing new of cross-border pension vehicles. known as Professional Investor Funds (PIFs), in addition to in need of a bail-out. My growth areas that are expected EU-certified UCITS funds. Malta now hosts over 580 funds priority for the sector is to to play a greater role in the Investment Funds which had a combined net asset value of €9.7 billion at the ensure financial stability and future of Malta’s international Malta’s development as an international financial services end of June 2014. Corporate formation has long been one of to continue to support the finance centre, including domicile has also been spearheaded by strong growth in the the most important areas of business, and today the island’s regulator in the development foreign exchange trading, investment fund sector. Following the introduction of the EU’s register lists around 65,000 companies. More recently, Malta of legislation. In this way the payments, intellectual property Alternative Investment Fund Management Directive (AIFMD) has developed into an important wealth management loca- sector can continue to flourish and international pensions.” that regulates alternative fund managers and the promotion of tion. The country’s wide range of investment vehicles, which at the international level.” alternative funds within the EU in 2013, Malta’s fund indus- include trusts and foundations, are increasingly utilised by Dr Christian Cardona try has entered a new phase in its development. It is hoped high-net-worth individuals, wealth managers and family Prof. Edward Scicluna Minister for the Economy, that the Directive will act as a catalyst for further expansion offices. Minister for Finance Investment and Small Business in the coming years, attracting non-EU managers to set up International Finance Centre Overview 15

shop in Malta. In addition to the newly introduced Alternative Investment Fund (AIF) regime that allows managers to launch funds under the AIFMD, the island’s successful Professional Investor Fund regime has been retained and refined and will continue to be available to EU and non-EU alternative fund managers.

Banking & More Malta is among Maltese banking has remained resilient. The country’s banks the top financial did not require government assistance during the financial centres in Europe. One main crisis, and their strong capital reserves and liquidity ratios reason for Malta’s success continue to serve them well. In the wealth management sector in this sector is the shared trusts have become a popular instrument for many transaction vision of both political planners, and the country has recently updated its trust law in parties. Over past years, we order to cater for the demands of modern investors. It is hoped worked hand-in-hand to that a more streamlined and simplified trust regime will attract create the right legislative foreign, as well as domestic, clients to utilise the 140 companies and regulatory framework already operating on the island. for financial services firms The country’s corporate framework, which includes a fully to grow and prosper.” EU-compliant regime, as well as a respected and well-regulated legal system, makes Malta a particularly desirable company José Herrera domicile. The island’s practices also comply with the OECD’s Parliamentary Secretary international standards for transparency and information ex- for Competitiveness and change. A Maltese company is equally suited as a vehicle for Rising to the challenge is what we do best. Economic Growth international business, investment or financial services, and can be used as a holding or trading company. As companies grow and become more global in scope, cross-border issues become more complex. With a significant presence in Malta, Deloitte can deliver tailored Driven by Regulation solutions to ensure that you make the most of Malta’s regulatory environment, Since the financial crisis, a higher premium has been placed competitive tax system and attractive cost base. on well-regulated financial centres like Malta. Its legislation is in line with EU law and has facilitated a commercially secure business environment from which international investors For more information, kindly contact: can operate. Financial services legislation is drawn up by the Malcolm Booker, Chief Executive Officer: [email protected] Ministry for Finance, and Malta pays close attention to the design of financial regulation to ensure that they are risk- Stephen Paris, Financial Services Leader: [email protected] based and meet regulatory objectives, without over-regulating Marc Alden, Tax Service Line Leader: [email protected] in a way that might inhibit growth and innovation. The Malta Financial Services Authority (MFSA) oversees all financial Tel: +356 2343 2000 services. As a result, companies benefit from streamlined pro- Deloitte Place, Mriehel Bypass, BKR3000, Malta cedures, reduced bureaucracy and lower regulatory fees. The www.deloitte.com/mt MFSA is open and approachable and offers face-to-face meetings with international companies seeking to operate from © 2014. For information, contact Deloitte Malta Malta. Such access is rare in other finance centres and a bless- Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate ing in a bureaucratic world. and independent entity. Please see www.deloitte.com/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu Limited and its member firms.

dt_mt_ad_finance_malta_a5_140214.indd 1 14/02/2014 11:46:27 International Finance Centre Overview International Finance Centre Overview 16 17

Talent Pool finance centre does not solely focus on its traditional links Over the years, Malta has also invested heavily in building and has sought to promote itself in overseas and developing up the competencies of its financial sector workforce. From markets. The island’s geographic position in the middle of the home-grown talent to experienced international financial Mediterranean and its close proximity to North Africa also sector professionals, Malta today offers a diverse talent pool. A make it a good stepping stone for financial companies wishing high proportion (60 per cent) of Maltese students continue to to target regional markets. third-level education, with law, accountancy and management among the most popular subjects. Companies may occasion- Support Network ally struggle with a shortage of qualified employees, but this is Malta is developing The financial services Bankers, fund administrators and insurance managers also tackled with training initiatives and the hiring of foreign staff. quietly as a quality sector continues to talk enthusiastically about the environment. There are few The country has also introduced tax incentives for highly qual- jurisdiction, with the underlying be an important contributor finance centres in the world that match Malta’s sunny climate, ified foreign professionals, who can benefit from a flat income theme being availability of to Malta’s service exports. low crime rate, excellent schools and packed cultural calendar. tax rate of just 15 per cent. trained staff rather than number Malta has maintained a New companies setting up on the island also find many helping of companies. Companies are strong reputation for its hands. FinanceMalta, a non-profit public-private foundation A Central Hub being attracted to Malta largely modern legal and regulatory set up to promote Malta’s financial centre, is the first point of Much of Malta’s success can be credited to the island’s central on the basis of a pro-active framework, access to the contact for investors and financiers who soon find that the is- location. EU membership has provided Malta with access to a MFSA which seeks to combine EU through passporting land’s professional services firms offer a wealth of knowledge massive internal market of over 500 million people. The island high-standard regulation with rights, and an effective and experience. Most law firms are affiliated with international is just two to three hours direct flight time from Europe’s major efficient response to industry tax system and double networks, and many lawyers have post-graduate degrees in cities, and not surprisingly Malta’s most important commer- and consumer needs.” tax treaty network. Going finance. In addition, each of the global ‘Big Four’ accountancy cial relationship is with the European Union. However, the forward, the greatest growth firms has a presence in Malta and, together with the smaller ac- Prof. Joe Bannister opportunities are likely to countancy and auditing practices, service international clients. Chairman Malta Financial arise in asset and pension Clients can rest assured that they are dealing with professional Services Authority management. Insurance firms. Trust and fiduciary providers need to be licensed by the and reinsurance will also MFSA and under new legislation, companies offering admin- continue to be key in driving istrative and management services are also obliged to register the financial services sector with the authorities. Malta also offers significant cost advan- in Malta in the next years.” tages. Legal and accounting fees are lower than in most other European jurisdictions, and other operational costs and sala- Ronald Attard ries are 20 to 30 per cent less than in more established centres. Country Managing Partner, EY Emerging Business To bolster its appeal as finance centre, Malta has closely been While there is still studying international trends in finance and identified a room for growth in EU- number of business opportunities. As financial services are driven business flows, Malta is technology-intensive, Malta seeks to leverage its position as in my view equally attractive key hub for IT companies by attracting more eFinancial servic- for non-EU based financial es. It is hoped that more online banks, credit card issuers and services operators, particularly financial technology firms will base themselves in the country. those in the Middle East, The island is also establishing a presence in the global forex US, Latin America and Hong trading market, and several forex businesses have already set Kong/ China to do business up in Malta. Further growth is anticipated as Malta positions in Europe through Malta.” itself to become a major jurisdiction for the establishment of Intellectual Property (IP) holding companies. As a politically Kenneth Farrugia stable and neutral country, Malta also has potential to become Chairman, FinanceMalta a centre for international arbitration, while its long-standing International Finance Centre Overview Country Profile 18 19

connections to North Africa and the Middle East make it a suitable jurisdiction from which to establish Shariah-compliant structures. Malta’s capital markets are also poised for growth, in particular offering opportunities for small- and medium-cap companies from Europe and beyond.

Safeguarding a Position Yet for all its strengths, Malta’s finance sector faces some challenges. In the funds market a limited number of custodians Diversified inhibit growth, while industry experts warn that the country International risks becoming a victim of its own success, with a shortage Finance Centre of experienced professionals unable to deal efficiently with the rapidly increasing levels of business. The island also has u Insurance to deal with tougher regulation and increased scrutiny. The recent financial crisis, the European debt crisis and subsequent u Banking banking failures have undoubtedly damaged the reputation of the financial services marketplace in general. While Malta u Investment Funds has withstood past troubles, the challenge for the island will be to safeguard its reputation as a strong jurisdiction. Malta’s u Asset Management government emphasises that it will strive to achieve a balance between enhanced financial stability and a competitive tax and u Holding & Trading regulatory framework to make the island’s future even brighter Companies than its past. u International Pensions A Partner for the City The close collaboration between industry and regulatory au- u Capital Markets thorities is a key strength of and augurs well for the future of Malta’s IFC as a competent and trusted financial partner. The u Wealth Management government remains focused on expanding the sector and developing its reputation as a stable financial centre that is u Trusts & Foundations Country Profile international in outlook and reach. The island believes that Malta is an ideal place for London’s firms and investors to do u Maritime & Aviation business with, in and through. The country’s many strengths, from the quality of its workforce to its lower operational costs u Islamic Finance Leading and high quality of life and Mediterranean location, offer complementary business and lifestyle opportunities that are u Expat Residency hard to match. ¢ the Way in the u Financial Institutions

u Family Offices Mediterranean Malta has flourished in the past few years, thanks in no small part u Foreign Exchange to its diversified economy and the ‘can-do’ attitude of its people. Country Profile Country Profile 20 21

he Mediterranean island of Malta brings to mind glori- trative and business centre of the country. Other main towns ous weather, crystal-clear seas and 7,000 years of history. POLITICS include the popular sea-side towns of Sliema and St. Julian’s These attributes have contributed to Malta’s identity on the west coast, the inland towns of Mosta and Birkirkara, Tand helped it becoming one of Europe’s favourite tourist des- Since gaining independence and Paola in the south. While some 90 per cent of Maltese live tinations. Yet there are other measures of success — albeit less from the UK in 1964, Maltese in urban settings, there are numerous small villages that still visible to a first-time visitor. Malta’s international outlook and politics has been dominated evoke the traditional Mediterranean, rural way of life. skilful economic management are paying big dividends as the by two parties, both focused island shines as a perfect example of how a small island state on attracting foreign Colourful History can fulfil its potential. Today, the island prides itself on boast- investment and establishing One of the most beautiful islands in the Mediterranean, Malta’s ing one of the best-performing eurozone economies, register- a stable and competitive strategic location at the commercial crossroads linking Europe, ing low unemployment and economic growth. Its sophisticated business environment. Africa and the Middle East has attracted the interest of the and sun-kissed lifestyle, coupled with an exceptional business various dominant cultures for millennia. The Phoenicians, infrastructure, makes it a fascinating destination for investors Form of state: Republic the Romans, the Carthaginians, the Arabs, the Ottomans, and travellers alike. the Knights of St John, the French and the British all ruled Home to a population of just over 421,000 people and Two parties: Labour Party (PL) the island at one time and contributed to the mosaic that is being natural resource-poor, Malta’s development has largely and Nationalist Party (PN) modern Malta. Not surprisingly, Britain’s legacy has lasted the been attributed to its focus on knowledge and value-added longest as Malta was part of the British Empire for over 150 industries. With tourism as a key foundation for its growth, 93% of voter participation years: business, law and education retain British characteris- Malta has created a viable and powerful marketplace, sup- (2013 general election) tics, while English, alongside Maltese, is an official language. ported by sectors such as ICT, financial services, advanced Maltese is believed to have developed during the Arab occupa- manufacturing, maritime and life sciences. Gaining inde- President: tion of the islands (870-1090) and is the only Semitic language pendence from Britain in 1964, the country’s decision to join Marie-Louise to be written in Latin script. the EU in 2004, and later the eurozone in 2008, was integral to Coleiro Preca the expansion of its horizons and bolstered its status as a key Head of State Outward Looking business hub in the Euro-Mediterranean region. Malta also Descendants of ancient Carthaginians and Phoenicians, with has much to look forward to: the country has been chosen Prime Minister: strong elements of Italian and other Mediterranean stock, the to host the Commonwealth Heads of Government Meeting Dr Joseph Muscat Maltese are truly an international people. With a history that has (CHOGM) in 2015, to hold the EU Presidency in 2017, and Head of seen a succession of foreign rulers, the islanders have acquired an its capital, Valletta, has been named European Capital of Government ability to adapt to new ideas and adopt them to their advantage. Culture for 2018. Generally well-educated and qualified, 90 per cent of Maltese are Opposition bilingual in English and Maltese, and many also speak a third Mediterranean Island Leader: language, usually Italian, German or French. Malta’s population Located at the southern tip of Italy and just over 316 square Malta has attracted Dr Simon Busuttil is also one of the most politically active in Europe, with elections kilometres in area, the Maltese Islands lie virtually midway admirers for its success in seeing voter turnout regularly exceeding 90 per cent. between Europe and North Africa. The archipelago comprises transforming itself from Today, Malta is a parliamentary representative demo- Malta, Gozo and Comino. The main island, Malta, is 27 kilo- a British military outpost cratic republic, in which executive powers rest with the Prime metres long and measures 14.5 kilometres at its widest point. into a well-functioning Minister while the President fulfils the function of Head of It takes just 45 minutes to cross Malta, reducing commuting economy. The island now State. Elections are contested, for the most part, by the two times and increasing leisure time. Malta’s sister island, Gozo, is pushes itself towards a main parties: the Labour Party led by current Prime Minister smaller still at 67 square kilometres, and Comino covers only more innovation-driven Joseph Muscat, and the Nationalist Party headed by Simon 3.5 square kilometres. economy, as there is Busuttil. The last general election, in March 2013, resulted in A rocky Mediterranean island with dry and often windy increasing awareness a landslide victory for Labour, at the expense of the centre- weather, Malta enjoys a typical Mediterranean climate, with the that raising productivity right Nationalist Party which had been in power for 15 years. average temperature ranging from 12 degrees Celsius in winter and increasing efficiency In April 2014, the island also elected a new president, Marie- to 30 degrees Celsius in summer. It enjoys around 300 days of are critical if growth Louise Coleiro Preca. sunshine a year. The capital city Valletta is both the adminis- is to be sustained Country Profile 22

Playmobil

Strong Economy Malta has posted healthy economic growth for the last four years. In 2014, the economy and the labour market continued to perform well, and the outlook for 2015 and 2016 is favourable, which means that Malta will continue to outperform the Hutchinson Lufthansa eurozone average. Strong labour market fundamentals, recov- Technik ering investment and an accommodative fiscal stance are pro- jected to have resulted in real GDP growth of 3.3 per cent in 2014. This has also allowed Malta to maintain one of the lowest By the end of this unemployment rates in Europe, hovering around 6 per cent decade Malta will be a significant international hub in ST against the EU average of 10 per cent. Baxter a number of excellence-driven Microelectronics Diverse Marketplace high value-added sectors. We Actavis Until it gained independence in 1964, after 150 years of British will make this happen in two rule, Malta was described as having a ‘fortress economy’. The ways. Firstly by ensuring the right majority of the Maltese workforce was either employed directly conditions in terms of physical by the British forces or in ancillary industries. After the de- and institutional infrastructure on parture of the British, the newly independent nation was con- the one hand, and a qualitative Microsoft SR Technics fronted with the challenge of building up an economy practi- leap forward in education and cally from scratch. During the past decades, Malta has pursued training on the other. Secondly by pursuing our foreign direct powerful sector-specific development plans as the island rec- Carlo ognised that its economy needs ‘repackaging’ in order to widen investment targets precisely and Gavazzi intelligently. We are already its economic scope and activities. Cardinal Long popular as a safe and sunny tourist destination for focusing on key innovative players Health sun-starved northern Europeans, Malta attracts 1.6 million in, for example, the life sciences.” Trelleborg visitors each year, and the tourism sector contributes some 25 per cent to the island’s GDP. Another high-growth sector Prof. Mario Vella Chairman, Malta Enterprise is financial services, now accounting for 13 per cent of GDP. De La Rue Life sciences and digital media are joining the traditional economic generators and creating a solid base of diverse operations from which Malta is competing on 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. The country Find out what now aims to replicate this success in the aviation sector and has introduced new legislation to help achieve this. Malta’s biggest these companies weakness is its dependence on imported energy sources. However, the country has recently attracted foreign investment have in common. into its energy sector, while oil and gas finds elsewhere in the Contact Malta Enterprise on +356 2542 0000 or email: [email protected] Mediterranean are attracting renewed interest in exploration Gwardamangia Hill, Pieta’ MEC 0001 - Malta in Maltese waters. T: +356 2542 0000 • F: +356 2542 3401 W: www.maltaenterprise.com 3.3% GDP Growth in 2014 Country Profile Country Profile 24 25

Gateway to Growth Active Promotion With its successful economic track record, Malta has con- Malta offers investors a secure and transparent environment stantly attracted steady inflows of foreign direct investment in which to build, or expand, a business. The country has in- (FDI) across all economic sectors, but with the finance sector troduced business-friendly policies underpinned by a legal accounting for over 90 per cent of the total. Malta’s FDI stock and regulatory framework that is fully harmonised with EU position reached €136.8 billion at the end of June 2014. legislation. Malta has also invested heavily in modern telecom- Providing access to the EU’s single market, Malta’s proxim- munications and transport infrastructure, with a full package ity to, and cultural links with, North African and Middle East of incentives that range from fiscal benefits to the provision of countries are particularly attractive to companies that use the Our strength is our custom-built production facilities. Malta’s unique selling point island as a stepping stone for trading, distribution and market- mature workforce, is its highly skilled and highly qualified workforce, available ing of their international operations in Southern Europe and which has studied and at competitive rates, for all areas of the expanding economy. North Africa. Some prominent companies that have invested received training in other With great attention being paid to the next generation of its in Malta are HSBC, Microsoft, Playmobil, Uniblue, Betfair, EU jurisdictions and which workforce, the country continues to invest heavily in educa- Cardinal Health and Lufthansa Technik. possesses a strong work ethic tion, each year seeing a steady stream of new students entering In addition to the historical and strong commercial and client-centric mentality. higher education. links with Italy and the UK, Malta also enjoys healthy trade The excellent workforce is with France, Germany and Greece. Malta’s exposure to inter- also evident in the single Looking Ahead national commerce is one of the highest worldwide, and the regulator, who understands Malta has attracted admirers for its success in transforming country’s leaders are constantly working on developing new the business and adopts a itself from a British military outpost into a well-functioning ties with foreign governments in order to facilitate worldwide robust but flexible approach. economy. The island now pushes itself towards a more inno- market access for all industries. Trade with Asia (mainly China EU membership also provides vation-driven economy, as there is increasing awareness that and Singapore), Russia and the US is increasing. the foundation for Malta’s raising productivity and increasing efficiency are critical if strong regulatory framework.” growth is to be sustained. Based on the positive experience of recent years, the island’s leaders are optimistic that the ambi- Tonio Zarb tion and flexibility of its people will guarantee Malta’s status as Senior Partner, KPMG Malta a centre for international business in the future. ¢

1964 mid-80s 1994 2004 IFC Malta gained independence To diversify the island’s A substantial legislative package Malta joined the European from the UK. Tourism and economy, Malta began was pushed through parliament Union. The introduction low-cost manufacturing providing “offshore” financial as the next step in the process of passporting rights has Zebbug HistoryMarsalforn 2002 Gharb were chosen as economic services to international clients. of evolving Malta into an Set up of the Malta Financial accelerated growth in every Xaghra Nadur

San Lawrenz VICTORIA Qala (RABAT) Ghajnsielem foundations of this International Financial Centre. Services Authority (MFSA), an sector of the finance centre. Xewkija Munxar Comino Xlendi Sannat newly formed state. autonomous body and the

Marfa Point single regulator for all financial (Cirkewwa) 1992 The decision to wind down the services. The MFSA took over St Paul's Bay Mellieha 2008 Xemxija Bugibba “offshore business” was taken supervisory functions that Malta adopted the euro – a St Julian's Burmarrad Sliema and the process to update the were previously carried out by step that inspired Ghajn Tuffieha Naxxar VALLETTA Birkirkara Mosta VITTORIOSA Mgarr Msida Senglea legislative framework began. the Central Bank of Malta, the further Zabbar Hamrun Cospicua

Fgura Qormi Marsascala Malta Stock Exchange and the confidence

Tarxien Zejtun RABAT Zebbug Luqa Malta Financial Services Centre. in the IFC. Ghaxaq Marsaxlokk

Siggiewi Mqabba Dingli Kirkop Marsaxlokk Bay Birzebbuga

Qrendi Kalafrana Zurrieq Banking Banking 26 27

Banking hile the decline of eurozone banks has dominated the international headlines in recent years, Malta has moved to the fore. The island has emerged as A Blueprint for Wa leading international banking centre and has charmed international and regional players who have established operations in the country. Maltese banks are ranked among the safest and best-run credit institutions in the EU, and the sector suffered no systemic shocks or banking failures. There is a clear divide Malta’s banks have between the local retail banks and the more investment-fo- consistently been cused, specialised foreign banks that have set up in Malta and noted for their resilience and which have almost no interaction with the domestic economy. soundness. Our banks scored An increasing number of financial institutions are realising Banking high in terms of stress-test that Malta is a great home, and the island is receiving a boom Malta’s profile as a banking centre has risen since the island indicators and in the Global in interest as it seeks to attract non-banking finance companies emerged from the financial crisis unscathed, a fact that Competitiveness Report.” with a dedicated regulatory framework for this type of financial has reinforced an already robust banking sector. services. Prof. Josef Bonnici Governor, Central Bank of Malta Financial Backbone Malta has a small domestic market, and its banks’ strategies have traditionally been tied to the local economy. The two largest retail banks on the island, 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. However, the desire to establish Malta as a centre for financial services in the late 1980s and 1990s brought extra dynamism, ambition and pace to the sector’s development. The banking sector changed significantly, having been transformed from a tightly controlled publicly owned sector into one of liberali- sation and foreign ownership. Malta also garnered attention when it joined the EU in 2004, and the eurozone in 2008, as more banks discovered the island as a platform for business. Today, over 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.

A Stable Base Employing some 4,000 people, or two per cent of the workforce, the banking sector is today the star economic perform- er, leaving Europe’s powerhouses such as Germany, the UK and France – and even banking centres like Switzerland or Luxembourg – behind in international rankings. The World Economic Forum’s Competitiveness Index 2014-2015 rates it as the 10th soundest banking system in the world. In 2013 and 2014, institutions such as the International Monetary Fund, Banking 29

the European Commission, Bloomberg and the credit rating agency Standard & Poor’s 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.

A Variety of Banks Holding over €50 billion in assets, almost eight times the coun- Maltese banks are try’s GDP, the financial system seems large when compared to very well capitalised, the economy’s output. However, the key defining factor of the liquid and have sound, banking sector is that it is sharply segmented and essentially well-diversified portfolios. divided into three clusters. The assets of the island’s five core Sourcing the funding mainly banks, which have strong links with Malta’s economy, amount from customer deposits and to 210 per cent of GDP, which is below the EU average of the adoption of prudent around 350 per cent of GDP. Banks with limited links to the and conservative business domestic market have assets totalling 73 per cent of GDP. The models are amongst the rest of Malta’s banking sector is made up of international banks strengths that enabled with no links to the domestic economy, with assets totalling Maltese banks to emerge 414 per cent of GDP. They do not take local deposits, but rather largely unscathed from the focus on business with non-residents or intragroup transactions your financial services turmoil of the banking crisis.” supporting their parent banks, or concentrate their activities on areas such as trade and project finance, syndicated loans and in- Charles Borg vestment banking. In fact, many of them hold executive respon- provider in Malta CEO, Bank of Valletta sibility for specialised areas of their group’s global operations.

Leading the Charge Bank of Valletta has contributed to the economic development of Malta for the past two centuries. Today we actively endorse the nation’s drive and ambition to BOV and HSBC are the largest players in the local retail sector. transform itself into a centre for financial excellence. APS Bank, Lombard Bank and Banif Bank also have a significant presence on the island. The local banks are retail-deposit With a well-developed network of correspondent banks and representative funded, and their loan portfolios are diversified in different offices, we have the infrastructure and expertise to manage corporate banking for companies registered across international jurisdictions. sectors of the economy. A number of niche banks offer corporate banking services or seek to attract customers from Being firm believers that economic achievement does not subsist on its own, the local saving and investing community with competitive we have pledged our commitment to our country to aim towards success while interest rates. The largest international banks are subsidiar- acting responsibly towards the society within which we operate. ies of Turkey’s Akbank and Garanti Bank. They use Malta as At Bank of Valletta we aspire to exceed customer expectations by offering a a booking centre for foreign-exchange loans. Other leading trusted, genuine and truly caring service, adding value every time we connect. banking groups with a presence in Malta are Deutsche Bank, BAWAG, IIG Bank and CommBank. In addition to the banks, Your success is our goal. 33 financial institutions such as foreign exchange businesses Corporate FinanCe Bank of Valletta p.l.c. is licensed and factoring operations of international corporations, as well trusts to conduct investment services as a number of payment institutions, have operations in Malta. business and to provide trustee Wealth ManageMent services by the Malta Financial payMent solutions Services Authority. Healthy Ratios Fund serviCes €48bn A deep-rooted, conservative approach to banking adopted by Issued by Bank of Valletta p.l.c. 2131 2020 I bov.com 58, Zachary Street, Valletta VLT 1130 - Malta deposits in Maltese Banks the domestic banks in Malta has served the island well. Bank (January 2015) funding depends on retail deposits rather than wholesale bor-

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rowing, and over the years, the island has stuck to this conven- Dynamic Regulator tional banking approach. The country’s banks maintain sub- Strong financial sector oversight is a critical pillar in Malta’s stantial liquidity, adequate capital and prudent lending policies. 11.O8% success as a financial centre and supports the robustness tier one ratio of the At the end of June 2014, the domestic banking sector reported a of its banking sector. Banking legislation is founded on domestic banking sector European Union legislation and is compliant with the Basel tier one ratio of 11.08 per cent, with the latter being well above (June 2014) the new Basel III minimum requirements of 6 per cent, even Core Principles. The presence of a single regulator, the Malta when adding in the new capital conservation buffer of 2.5 per Financial Services Authority (MFSA), which has built a repu- cent. And while the loans-to-deposit ratio in the euro area aver- tation for being a meticulous, yet accessible, supervisory body, aged around 106 per cent, it stood at 66 per cent for the Maltese Political and economic ensures that banks are closely monitored and fully compli- banking sector. In contrast to many European countries, banks’ stability, cemented by ant with regulations. Changes introduced by the EU’s Single deposits and credit to the private sector continued to increase. EU and eurozone membership, Supervisory Mechanism (SSM) came into effect in November In January 2015, Malta’s sector held deposits of more than €48 together with a sound 2014, transferring the supervision of the eurozone’s largest billion, with resident deposits accounting for €14.8 billion and regulatory framework, have banks to the European Central Bank (ECB) in Frankfurt. In foreign deposits for some €33.4 billion. The Maltese banking provided a solid base on which Malta, HSBC Bank Malta, BOV and Deutsche Bank fall in this sector is also profitable, with core domestic banks on average the business has flourished. category. reporting a return on equity of nearly 20 per cent, which is sig- Growth in the banking sector While the MFSA is cautiously selecting and screening new Malta’s professionals nificantly higher than the EU average of 5 per cent. however may be subdued in applicants, it has pointed out that the appetite for a banking also believe that there Malta’s international banking segment also finds the island the immediate future, with licence has been diminishing. In fact, most banking aspirants is strong potential to to be a profitable base. Credit institutions benefit from its stricter capital, liquidity and operate as non-banking financial services companies or have attract more eCommerce growing international finance centre and the high demand for other requirements now business models that do not require them to follow the strict payment business specialised, sector-specific banking solutions that come with being imposed on credit rules that deposit-taking institutions are required to uphold. and payment factory it. Malta offers plenty of opportunities for specialised banks, institutions in the wake Many of these companies have found a new home in Malta operations to the island niche players or institutions targeting regional markets. Trade- of the financial crisis.” as the regulatory framework also caters for financial activities and promote Malta as finance specialist FIMBank, which grew from its base in Malta which do not require a full banking licence. Credit card com- a location from where to become an international banking brand, is one of Malta’s James Bonello panies, payment service providers, payment gateways, card to service customers greatest success stories. The bank was founded in Malta in 1994 Secretary General, Malta issuers and eWallets are today regulated under the Financial across the globe. and has set up offices in major cities across the world. Bankers’ Association (MBA) Institutions Act. As one of the EU front-runners in terms of IT adoption and sophistication, Malta also provides a favourable regulatory framework for eBanking solutions, allowing banks that serve their clients exclusively online to start operations with a lower capital requirement compared to a full banking licence.

An Expanding Landscape Malta’s expanding international finance sector offers credit and financial institutions plenty of growth opportunities in areas such as ship finance, investment banking and custody services. Malta is also a land of opportunity for banks looking for an EU-compliant, yet flexible, domicile that provides access to the EU market and the neighbouring countries of North Africa. Malta’s professionals also believe that there is strong potential to attract more eCommerce payment business and payment factory operations to the island and promote Malta as a location from where to service customers across the globe. ¢ Capital Markets Capital Markets 32 33

Capital Markets Market Activity The MSE operates two distinct markets. The Main List consists of equities, corporate bonds, government bonds and treasury bills. Staying on 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 Course opportunity to access capital markets. In 2014, the Maltese capital market registered a remarkable The Malta Stock Exchange is actively increase in business generated through the issue and admis- targeting international small-cap sion of new financial instruments to the Main Market, as well companies with high-growth potential as an increase in the number of listed organisations and second- to drive its ambitious expansion plans. ary market activity. The 2014 market turnover value reached a new record level of over €940 million, a significant €166 million (21.4%) increase from 2013, while market capitalisation reached €10.3 billion.

The German Connection he Malta Stock Exchange (MSE) is carving out a niche Key to the Exchange’s international strategy is its technology al- as a preferred international market for smaller growing liance with the Deutsche Börse Group. In 2012 the MSE allied companies and well-established, mature businesses with the German heavyweight in order to benefit from the Tseeking to expand. New, internationally recognised technolo- Group’s fully electronic trading system. By welcoming the MSE gies have been adopted in order to improve the MSE’s appeal into this network of 4,500 traders in 18 different countries, new as an international listing venue. The Exchange uses Deutsche doors were opened for issuers and investors as well as for the Börse’s Xetra trading platform and has implemented an inter- MSE itself. Apart from admission and trading, the Exchange also national clearing and settlement system, which connects the offers a comprehensive range of back-office services, including Exchange to brokers, traders and investors worldwide. The maintenance of share and bond registers, clearing and settle- Central Securities Depository (CSD) has also continued to ment, and custodial services. expand its range of services that are on offer for listed and un- On the settlement and custodial side, linking up with listed companies across Europe. Always evolving, the MSE is Clearstream, Deutsche Börse’s liquidity provider, removed now launching two new products creating more opportunities further barriers between Malta and the rest of the world’s trading for SMEs and increasing access to international markets. centres. The MSE also started to provide fund custodial services, offering them to locally listed Professional Investor Funds. These Quick Expansion forward leaps in technology have allowed the MSE greater access The Malta Stock Exchange is a relatively young bourse. MSE 2014 Results to worldwide investors. In addition, international investors can Founded 23 years ago, it has grown swiftly to secure its place now easily include securities issued in Malta within their portfo- in Malta’s international financial sector and provides a fully- lios through the MSE’s link with Clearstream. The investment in fledged regulated market. Traditionally, the Exchange mainly 25,657 technology will continue over the next years as the MSE moves serves the Maltese market: local companies tap the market for Number of total trades towards integration with Target 2-Securities, the pan-European equity, and investors tend to be domestic institutions or the Security Settlement System developed by the European Central general public. Many of Malta’s largest corporations are third €940m Bank, to which the Exchange will be migrating in June 2015. or fourth-generation family businesses, and they have come Value of trades The Exchange’s credible track record has enabled it to obtain rec- to appreciate the possibilities that a listing offers them, such ognition from other leading stock exchanges, and since 2010 Malta’s as providing an exit route for dormant family shareholders. €10.3bn equity market has been included in the FTSE’s Global Equity Index However, the Exchange has recognised that future growth has Market capitalisation Series (GEIS). The MSE has also achieved recognition from the UK to be driven by international expansion and it is determined to tax authorities and recently was granted recognised exchange status realise its international ambitions. by the Securities and Exchange Commission in the US. Capital Markets 34

Listing Location The MSE is presenting itself as an ideal place to accommodate specialist services, providing small and medium- cap companies a step towards eventual listing on the main European exchanges, and is aiming to become one of the top three European stock exchanges catering for SMEs by the end of the decade. To expand its services, the MSE has two new innovative products in the pipeline that are set to increase international market access and bridge the financing gap We were the arrangers for SMEs. The first project, MSE International, will provide of the first Exchange access to a vast range of international securities, together with Traded Instrument (ETI) issued cost-effective clearing, settlement and custody services. The under the Malta Securitisation initiative is the result of the MSE’s use of the Xetra trading Act which went live on the platform operated by Deutsche Börse in Frankfurt. The coun- European Wholesale Securities terparty to all trades will be a specialist trader providing li- Market. The “Dynamic Trading quidity and access to a world of international securities and Strategies ETI” is linked to and will trade at best execution price. A second initiative seeks to- backed by a performance- create an opportunity for SMEs to raise capital. A key feature linked bond issued by a of this new product is that a corporate advisor is required Special Purpose Acquisition before and after the IPO, to ensure that transparency and cor- Vehicle allowable under the porate governance efficiencies are achieved and retained, thus Securitisation Act of Malta. creating greater investor confidence in the issued company. This really is a first for Malta SECURITISATION OF The product has the potential to become a major pillar in the and clearly demonstrates provision of capital financing to SMEs. The small and inti- the advantages of Malta as a ALTERNATIVE INVESTMENTS mate character of the MSE allows for greater flexibility when domicile for the issuance of accommodating these companies, providing more efficient Exchange Traded Instruments.” service than they might receive elsewhere. Malta’s strategic → Repackaging alternative asset classes into position in the Mediterranean also lends itself to becoming Andreas Woelfl UCITS eligible assets. a gateway to European investors by using the EU Prospectus CEO, Argentarius Directive to tap into the wider EU capital market. → Conversion of non bankable assets into transferable What differentiates the Malta Stock Exchange is its very high standard of personal service, which provides a lot more securities ready for deposit with a custodian. support in the preparation for an initial public offering (IPO) than on a larger exchange. In addition, costs and fees remain → Private label solutions for packaged retail investment competitive while those making primary and secondary ap- products (PRIPs). plications can expect a swift, well-organised process. Both local and foreign companies can also benefit from ancillary → Listing agent for asset backed securities and structured services ranging from admission and trading to depository and custodial services. These services provide important financial instruments on an European regulated market. income for the MSE during times of subdued trading, as well as broadening Malta’s relevance by countering the natural Argentarius ETI Management Ltd limitations of Malta’s small internal market. 116/8 ‘San Juan’, St George’s Road St Julians, STJ3203 Malta www.argentarius.pro Contact: Andreas Wölfl (CEO) · Phone: +356-2010-7357 · e-Mail: [email protected]

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Debt Securities Following its vision of becoming an international player, the MSE has also created a market for debt securities in cooper- The European ation with the Irish Stock Exchange. The European Wholesale Securities Market (EWSM) is aimed at a global client base, Wholesale targeting issuers who desire a European listing for distribution to European investors. While primary market infrastructure, listing, promotion and other corporate services are provided Securities by the Irish Stock Exchange, the MSE functions as the market I think there is a very operator and offers secondary market services. The MSE is op- positive level of confidence timistic that the EWSM will satisfy a demand that is not met by in us. We boast a comprehensive Market (EWSM) existing markets and will account for substantial revenues, as range of services that are well as bolstering the already established relationship between augmented by international Potential Roles for ombining the strengths of two reputable European the two countries. In 2013, the market welcomed its first listing relationships. We see significant Malta-Based Firms exchanges, the EWSM is a joint venture with the Irish when Grand Harbour, an issuer registered in the Netherlands, opportunities in the international Stock Exchange (ISE) and the Malta Stock Exchange markets, both within and outside u issuer C(MSE), creating one truly European market designed to meet listed seven classes of securities, while in July 2014, Argentarius ETI Management issued the first Exchange Traded Instrument the EU environment, through international debt issuer requirements. (ETI) under the Malta Securitisation Act on the EWSM. the attraction of listing and u originator / Arranger Malta is now offering the possibility for the listing of trading facilities, as well as other wholesale securities. The European Wholesale Securities Conditions for Growth specialised custodial relationships.“ u trustee Market (EWSM) is a new EU-regulated market for whole- The Exchange has always been at the forefront of initiatives sale debt, asset-backed and derivative securities dedicated to to help develop Malta into an international financial centre. Eileen V. Muscat u custodian the needs of arrangers and issuers of wholesale debt products. Despite its size, the MSE offers all the benefits of a well-reg- CEO, Malta Stock Exchange The EWSM delivers service excellence to international market ulated, transparent marketplace, with the added advantage of u investor participants as well as process efficiency, a price promise and a providing a personalised and swift service. The island’s stable highly professional regulatory regime. economic and political climate provides potential issuers and u legal / Accounting As the listing authority the Malta Financial Services investors with peace of mind when conducting business with INTERNATIONAL / Tax Advisor Authority (MFSA) approves prospectuses for securities to the MSE. It is a crucial time for Malta’s capital markets as new AFFILIATIONS be admitted to the EWSM under the Prospectus Directive, initiatives – such as the introduction of market-makers and a u niche Markets as well as the on-going requirements of issuers under the new trading system − are expected to yield visible results over Malta Stock Exchange Transparency Directive. The MFSA adopts a pragmatic mar- the coming years. ¢ is a member of: u insurance Securitisation ket-oriented approach to prospectus review and approval, u federation of European including guaranteed review times of three business days Securities Exchanges (FESE) u debt linked to life for initial submission and two business days for subsequent u european Central settlement policies drafts of prospectuses. Securities Depository The guidelines provide for the appointment of a Listing Association (ECSDA) u debt linked to renewable Agent for the admission process to ensure smooth and timely u World Federation of and green infrastructure interaction between issuers and arrangers on the one hand and Exchanges (WFE) the MFSA and EWSM on the other with respect to regulatory u international u intellectual Property requirements. The MFSA-approved Agent may be a body, cor- Organisation of Securities structures porate, partnership or firm incorporated or established in the Commissions (IOSCO) EEA and be independent of any Issuer, or related service pro- u association of National u finance for Transportation vider, to which it provides listing agent services. The EWSM is Numbering Agencies. The Projects approved as an EU regulated market under MiFID and consid- Exchange is also a signatory ered a Recognised Stock Exchange under the UK Income Tax to the EU Code of Conduct u project bonds Act, 2007. ¢ for Clearing and Settlement. Investment Funds 39

PRIVATE & CORPORATE BANKING / WEALTH MANAGEMENT / FUND CUSTODY Investment Funds Depositary Lite1 We’re AIFMD ready – your Depositary partner in Malta. FUNDamental Advantages Just a few hours flight time from London, Malta has become a hotspot for fund managers and other service providers using the island as a cost-effective operating base.

The AIFMD sets out a number of regulatory requirements that need to be met by alternative investment fund managers marketing funds in the European Economic Area (EEA). Alternative investment fund managers that market non-EEA alternative investment funds to professional investors in EEA countries must comply with Depositary Lite regime. Sparkasse Bank Malta plc 101 Townsquare, Through its Depositary Lite solutions Sparkasse Bank Malta will be able to Ix-Xatt Ta’ Qui-Si-Sana, support these alternative investment fund managers falling within scope of Sliema, SLM 3112 – Malta the AIFMD. Services include: provision of Bank account, cash flow monitoring2, safekeeping of assets3 and oversight duties4. Contact our dedicated teams of experts for further information. The Depositary Lite service forms part of our overall AIFM solution but is available as a standalone too.

1 Vide Article 36(1)(a) AIFMD 2 Vide Article 21.7 from the said directive 3 Vide Article 21.8 from the said directive 4 Vide Article 21.9 from the said directive

Tel: +356 2133 5705 • Fax: +356 2133 5710 • [email protected] • www.sparkasse-bank-malta.com

Sparkasse Bank Malta plc is authorised to conduct Banking business and to conduct Investment Services business by the Malta Financial Services Authority (MFSA).

Part of the Austrian Savings Banks - Banking since 1872

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alta has become the European domicile of choice fund structures domiciled on the island, the Royal Bank of of the investment funds industry and a true al- Canada funds, has assets under management of more than ternative to Luxembourg and Dublin, which until $2 billion. Mrecently were the continent’s leading asset management The sector also gained momentum due to an influx of centres. The island has proven itself adaptable and innovative asset management companies. Around 80 fund managers are in response to the regulatory wave that has hit the European currently operating in Malta, including companies such as funds industry. Malta’s professional investor fund (PIF) Liongate Capital Management, Clive Capital, Comac Capital regime has long been the island’s main selling point, and and BlueGold Capital Management, while 28 fund admin- despite regulatory changes, this is set to remain an attrac- We believe that Our willingness and istrators such as Valletta Fund Services, Apex Fund Services, tive option in addition to the recent introduction of alter- Malta’s main growth capability of getting Custom House, Praxis and Citco have set up on the island. native investment funds (AIFs) under the EU’s Alternative opportunities currently lie a job done are our major A high number of Maltese funds choose to work with local Investment Funds Managers Directive (AIFMD). Many in the investment services strengths. I stress on the word service providers. For example, in the field of fund administra- within Malta’s industry believe that this will help the island and funds sector, this being ‘willingness’, as there seems to tion over 70 per cent of the funds domiciled in Malta use local to quickly develop the necessary competitive edge to attract particularly favoured by the be a general sense of apathy administrators. more best-in-class service providers and sophisticated asset MFSA’s decision to retain the in the market towards new management activities. Professional Investor Fund business. Luckily this has Fund Structures regime as an alternative to not infected Malta’s overall Malta was one of the first countries to bring its regulatory Growth Drivers the new regime transposed approach. Moving forward, regime in line with the EU’s AIFMD. Promoters of alternative Malta’s accession to the EU marked the island’s journey in terms of the Alternative the main challenges and funds can now choose between the island’s PIF regime that towards becoming a world-class fund domicile. The sector Investment Fund Managers opportunities will stem from offers three types of funds and which are linked to different has grown at a much faster rate than many professionals Directive (AIFMD).” regulation – as one door shuts, eligibility criteria for investors based on their experience and had anticipated. Passporting rights for Undertakings for several others will open up.” knowledge, or the newly introduced AIF regime that allows Collective Investment in Transferable Securities (UCITS) Dr Bradley Gatt managers to launch AIFs targeting professional investors were introduced, and Malta experienced phenomenal growth Partner, DF Advocates Paul Mifsud under the AIFMD. Although each manager should carefully in the field of alternative funds with its PIF regime targeting Managing Director, Sparkasse examine which structure fits their business model, the PIF financially literate, high-net-worth investors. Ironically, Malta regime is generally more suited to smaller managers with less also benefited from the financial crisis as more fund manag- than €100 million under management and who continue to ers were forced to rethink their operating conditions, and market their funds in the EU under the private placement so began looking for cheaper alternatives to the traditional regimes as long as these are available. The AIF regime then European fund domiciles. Over the past years fund registra- ticks all the right boxes for managers of larger funds who tion has more than tripled. While in 2004 there were some want to take advantage of passporting opportunities. 130 funds registered on the island, this number has grown to Asset managers will also drive future growth. Fund man- over 580 today. The combined net asset value of these funds agers today use the island primarily to tap into EU markets, totalled €9.7 billion at end June 2014. and the recent regulatory changes have also attracted fund managers to relocate to the island. Seasoned fund managers, Small & Large in particular from offshore jurisdictions such as Switzerland The strength of Malta’s fund sector is evident in the fact that and the Cayman Islands, are now opening offices in Malta. the country was voted as the favoured European fund domi- With the AIFM Directive coming through, some non-EU cile in Hedge Fund Review’s 2013 and 2014 Service Provider managers have decided to move onshore or to set up paral- Rankings. There is no doubt that, to date, Malta’s growth lel EU fund structures in order to continue marketing their story has largely been affected by how successful the island products to EU investors. In addition, the island is also at- has been in attracting start-up fund managers. Most funds tracting medium-sized managers from other parts of the EU, launched from Malta are in the $20 to $50 million range, including the UK, Belgium and Italy. however funds in the region of $100 to $200 million are becoming more common in recent months. One of the largest Investment Funds Investment Funds 42 43

Regulatory Excellence Custody in Demand The authorities are making extensive efforts to ensure that Another area that needs to see substantial growth is fund Malta’s regulatory framework strikes the right balance between €9.7bn custody. The MFSA has negotiated a derogation from the EU combined, net asset providing effective regulation and straightforward licens- requirement of AIFs to appoint a local custodian until 2017. value of funds in Malta ing procedures. The regulator, the Malta Financial Services However, from then onwards AIFMs in Malta are required to (June 2014) Authority (MFSA), performs its regulatory function in a con- use a local custodian. In the meantime, Malta has also intro- structive and helpful manner. Operators based in Malta cite the duced a ‘depository lite’ regime, and in certain instances, the licensing process with the MFSA as being quick, thorough and MFSA allows recognised fund administrators, investment efficient, usually taking approximately two to three months if Malta’s fund industry firms, as well as licensed custodians to carry out depository all documentation is provided. Fund promoters are encour- has achieved functions, without being subject to the strict requirements of aged to meet with the regulator prior to applying for the au- remarkable growth, particularly the AIFMD. While many hope that by 2017 custodians will be thorisation of a fund to discuss the application of regulations. when one considers its very allowed to provide their services on a cross-border basis, and In particular, if fund structures are complex, promoters find humble beginnings. This custody passporting is currently being discussed at EU level as the accessibility of the MFSA beneficial and value the opportu- was primarily driven by the part of UCITS V, Malta is keen to attract foreign custodians to nity to have face-to-face meetings. presence of a meticulous, yet set up on the island. Investment funds can be formed in a number of possible ve- responsive and pro-business, hicles, including open-ended and closed-ended corporate enti- regulatory body, as well as a Within and Beyond the EU ties, trusts, limited partnerships and contractual funds. While highly developed operational However, for the time being, there is little evidence that the the investment company with variable share capital (SICAV) infrastructure. Going forward, custody challenge is draining any significant amounts of busi- is to date the most widely used vehicle in Malta, the island there are clearly strong growth ness away from the island. And now that the full extent of also enacted regulations which make it possible for a fund to prospects, and it is vital for the regulatory developments, such as the AIFM Directive and the be constituted as an Incorporated Cell in an Incorporated Cell key stakeholders to ensure UCITS IV Directive, which brought about the management Company (ICC). Malta has also extended this structure into a that Malta remains both highly passport for fund managers, are known and established, Malta platform concept that involves a Recognised Incorporated Cell responsive and competitive”. hopes to see a significant migration of funds and service pro- Company (RICC), providing administrative services to any viders to the island. The country also provides distribution op- number of Incorporated Cells licensed as investment funds. Kenneth Farrugia portunities to other countries in the Americas, the Middle East Chairman, Malta Funds and Asia where in particular UCITS are welcome. Malta has a Operational Advantages Industry Association (MFIA) vast network of some 70 double taxation treaties, among them While many other international centres have become expen- are countries such as China, India, Hong Kong and the US, in sive, Malta offers various other cost advantages: the cost of addition to agreements with foreign regulators that ensure a high-quality staff and office space is still well below Western smooth trading environment for the funds industry. Malta’s European levels, and professional and supervisory fees are also fund sector is also eyeing the growing wealth in the Arab coun- significantly lower. For instance, set-up costs for a fund average tries of North Africa, and Shariah-compliant funds can gener- between €25,000 to €35,000 and are hence significantly lower ally be set up in Malta. than in competing domiciles. With the ‘Big Four’ accounting firms all established on the island, Malta has the capacity and Holding its Own expertise to help the fund industry continue to expand. They Effective regulation and a highly personalised approach have add extra weight to the small and medium sized accountancy 1st place helped Malta to establish itself as a fund domicile of interna- Europe’s favoured firms, and large number of legal firms, that service the fund tional repute. In recent years, Malta’s support industry, includ- fund domicile sector in Malta. While in certain cases there is a shortage of ing lawyers, accountants, administrators, consultants and the Hedge Fund qualified staff for senior positions, the island has introduced regulator, has gained the necessary experience and expertise to Review’s 2013 special tax incentives for high-calibre professionals to relocate, meet the requirements of more demanding, larger fund sector and 2014, Service making it relatively easy for firms to fill positions. participants. ¢ Provider Rankings Insurance & Reinsurance Insurance & Reinsurance 44 45

Insurance & Reinsurance alta is a relative newcomer to the international insurance market, yet it has made significant strides in attracting world-class companies to its shores, includ- Ming some of the largest ‘blue chip’ corporations in the world. Shaking up Malta championed the introduction of innovative structures such as Protected and Incorporated Cell Companies, and has built up a reputation for being a cost-effective EU base for insurance and reinsurance providers and a high-quality captive the Market Total Gross domicile. The industry is confident that the Maltese market Premium Written will witness growth in the coming years and is embracing op- Malta has established a foothold in the European insurance market. portunities resulting from Solvency II. With new legislation on 2.6 bn Its up-to-date legislation and its ability to provide cost-effective and reinsurance special purpose vehicles, Malta is also positioning tailor-made solutions have made the island a top domicile option. itself to tap new markets, in particular insurance securitisation 2.5 bn transactions. 2013 2.4 bn Expanding the Market

2.3 bn Malta’s insurance sector has long been open to foreign invest- 2012 ment. Private and commercial insurance was first developed 2.2 bn between the two World Wars when a number of underwriting agencies representing British insurance companies set up here. 2.1 bn Following major consolidation in the UK market during the 1990s, many of the British insurers exited Malta’s small market, 2.0 bn creating the opportunity for local agencies to convert into independent insurance companies. But it was Malta’s entry into 2011 1.9 bn the EU in 2004 that truly transformed the insurance landscape, with EU regulations enabling foreign companies to insure 1.8 bn assets and risks anywhere within the Union. This attracted insurers seeking a more cost-effective jurisdiction, as well as 1.7 bn non-EU insurance companies or intermediaries seeking to tap into the EU insurance market. They are allowed to write di- 1.6 bn rectly into Europe, thus avoiding the need to engage additional, and often expensive, fronting insurers. 1.4 bn

2010 Industry Growth 1.2 bn The number of insurance companies registered in Malta increased dramatically, from just a handful before Malta’s 1.0 bn 2009 EU accession to 60 by the end of 2014. These were made up of 45 licensed non-life insurance companies, six life insur- 0.8 bn 2008 ance firms, two composite and seven reinsurance enterpris- 2007 es. According to the International Monetary Fund, Malta’s 0.6 bn insurance companies also appear healthy, with relatively 2006 0.4 bn sound capital and liquidity ratios. In addition, there are 15 insurance managers registered in Malta. This growth has 2005 0.2 bn also impacted the level of employment: while the industry 2004 employed a little over 600 people up to 2004, the total is now 0.0 bn more than 1,200. Insurance & Reinsurance Insurance & Reinsurance 46 47

Names of Repute will strengthen Malta’s role as an alternative risk transfer domi- It is testament to Malta that international insurance managers cile as they link the insurance industry with the capital markets. such as AON, Marsh and Willis have established operations on They also allow Malta to attract reinsurance sidecars and hedge the island. Reinsurance provider Munich Re also has a presence funds interested in entering the reinsurance business. on the island, while global corporations such as BMW, Peugeot, Citroën, Volkswagen, Vodafone and RWE have set up captive Helping Hands insurance companies. Companies that are primarily active on Insurance companies in Malta can rely on a wide support the local market include Middlesea Insurance, Atlas Insurance, network, including three associations: the Malta Insurance GasanMamo Insurance, Citadel Insurance, Elmo Insurance Foreign insurance companies Malta’s EU and Association (MIA), the Malta Insurance Management and HSBC Life Assurance. These companies service some 85 operating out of Malta eurozone membership, Association (MIMA) and the Association of Insurance Brokers per cent of the local personal and commercial market, while the have greatly supported the positive our legislative framework (AIB). The sector is also backed by a large number of legal two major life insurance companies, Middlesea’s MSV Life and performance of the industry. Local and tax system, as well as firms, as well as accounting and auditing practitioners that HSBC, handle some 90 per cent of the life market. insurers are now focusing on the the presence of a reputable range from local practices to the global ‘Big Four’. Over the growth of the domestic market. We regulator make up Malta’s past years, Malta’s lawyers and accountants have also acquired Record Premium Growth are confident that fiscal incentives and strength as an insurance the specialist insurance knowledge needed for more complex The combination of local and international markets has led to educational campaigns will leave a centre. In addition, Malta has a services, like the re-domiciliation of captives from another ju- record growth in gross written premiums (GWP). Companies longer-lasting impact on certain sectors competitive, English-speaking risdiction to Malta. wrote €2.58 billion in gross premiums in 2013, up from €2.31 within the life and non-life pillars and professional workforce, which billion in 2012. While GWP have been almost equally split facilitate their uptake by society at large.” also satisfies the needs of the A Competitive Domicile between the life and the non-life segment, premiums relating to industry for ancillary services, While many foreign companies primarily chose Malta because risks or commitments based outside Malta have rocketed from Adrian Galea particularly in terms of IT, it is the only full EU member state with dedicated cell legisla- €1.2 billion in 2010 to over €2 billion by end 2013. International Director General - Malta accounting and legal services.” tion, they soon realise that there are several other advantages insurance business now accounts for more than 80 per cent of Insurance Association such as highly qualified insurance professionals and a business- the total GWP. Local premiums increased by 9 per cent over the Mark Spiteri friendly environment. This makes the island an attractive out- period 2012-2013, after a 2 per cent drop in 2011-2012. Chairman - Association of sourcing destination for foreign insurance companies, manag- Insurance Brokers (AIB) ers, brokers and other intermediaries. Functions such as claims Innovative Legislation administration, analytics, customer care, policy administration, Insurance business is licensed and regulated by the Malta sales and distribution can be outsourced to Malta with a view Financial Services Authority (MFSA). Malta’s legislative frame- to reducing costs. And with its innovative legislation and op- work is innovative in that it caters for insurance set-up options erational advantages, the country is possibly top of the list for considered to be relatively new and progressive in the context companies that seek to relocate to another jurisdiction and of the rest of the EU. The country has enacted legislation that require vehicles for specific needs, such as third-party business allows the set-up of captives, which are referred to as ‘Affiliated Through the introduction or solutions to reinsurance issues. Malta’s re-domiciliation leg- Insurance Companies’ (AICs) under Maltese law, and is the of the Securitisation Cell islation allows for a seamless transfer of structures in and out of only full EU member state with legislation for Protected Cell Company Regulations it is now the island, without the need to wind up operations. Insurance Companies (PCC) and Incorporated Cell Companies (ICC). possible to segregate different sets companies are also exempt from paying duty on documents on Both structures allow firms to write risks through cells within of assets and risk instruments within the insurance of risks situated outside Malta and from paying a core company and provide businesses with a cost-effective al- a single SPV, thus allowing for the contributions to the Protection and Compensation Fund with ternative to setting up a stand-alone insurance company. Malta’s launch of multiple asset-backed respect to the same risks. PCC legislation is applicable to all insurance companies, insur- or insurance-linked securities ance managers and brokers. without incurring any risk of cross- Embracing Solvency II Malta has also recognised the growing importance of insur- contamination between the different Most insurance professionals believe that Malta’s legal frame- ance-linked securities (ILS) and catastrophe bonds, as well as sets of creditors and investors.” work – and specifically the PCC structure – is the island’s main the convergence of reinsurance and capital markets. The island selling point. While the confusion around the introduction of has enacted legislation allowing for the formation of reinsur- Dr Louis De Gabriele the Solvency II Directive has slowed market growth, Malta’s ance special purpose vehicles (RSPVs). These new regulations Partner, Camilleri Preziosi Advocates insurance professionals believe the PCC regime is well placed Insurance & Reinsurance International Pensions 48 49

to provide insurers with a cost-effective way to manage higher International Pensions capital and compliance requirements under Solvency II, once it comes into force in 2016. The structure offers economies of scale, cost burden Stepping into the sharing and provides the cell with access to knowledge and management expertise pooled within the core of the PCC. In particular, growth is expected to stem from mid-cap companies as most larger companies already have insurance vehicles Global Spotlight in place. For these companies, Malta’s PCC structure with its The biggest challenges associated lower costs could be an attractive option. for the insurance industry Malta has become one of the most popular destinations for The cell model also proves attractive to insurance interme- are the continuing length of British expats to transfer their pensions to, and the island is diaries, and a few insurance brokers have already transformed time that it is taking to have now targeting the wider European pensions market. themselves into PCCs, with the expectation to rent out cells Solvency II legislation in place to other brokers. Foreign brokers could also benefit from the and the prevailing economic creation of their own PCCs or cells in Malta in which they recession in the EU. However, alta is emerging as a leading financial destination for could place the business of customers, for instance small and growth opportunities are in international pension management. Offering a new medium-sized companies, who do not have the capital to the Protected Cell Company breed of retirement products, the island provides create their own stand-alone company. sector and the securitisation Mthe ideal solution for high-net-worth individuals looking for sector where catastrophe bonds Growth Potential can be a major development an investment vehicle, international workers planning for retirement and global corporations seeking pension schemes for Malta has become an important player in the global insurance in the local legislation.” their staff. While Malta is primarily catering to the UK market market, and the presence of all the major insurance managers thus far, other European cross-border schemes are currently enhances the country’s reputation. Offering EU passporting John Tortell We are fortunate being established. rights, a fiscally beneficial environment and competitive oper- Chairman - Malta Insurance in Malta that the ating costs, the island is expected to remain a hotspot for direct Management Association (MIMA) authorities have developed QROPS Destination insurers seeking a cost-effective location. It will be a magnet, detailed legislation to support Malta’s growth as a financial service centre created a market for too, for multinationals looking for reinsurance solutions and the pensions industry. With UK-linked pension products. Qualifying Recognised Overseas service providers with an international client base eager to tap a serious system of taxation, Pension Schemes (QROPS) were first introduced in Britain in into the EU insurance market. To exploit its full growth poten- separate registration and 2006 to make the process of transferring pensions to another tial, the island only needs to ensure that it continues to offer approval process for Pension country for UK pensioners living abroad a simpler affair. In innovative solutions, sustains a low cost base and maintains an Scheme Administrators 2009, the Malta Financial Services Authority (MFSA) procured efficient operating environment. ¢ and the requirement for confirmation from the British tax authorities that pension an annual independent schemes established on the island, and regulated by the MFSA, Industry Growth 2004-2014 Number of Insurance Companies Audit, the Maltese system are eligible for recognition as QROPS. Therefore, pension rights assures that Malta really can be transferred into it without a UK tax charge. The inter- does lead the way.” est in Malta as a QROPS jurisdiction has been on the increase 60 ever since this recognition was obtained, and the country has 50 Dr Matthew Brincat become the main market for UK expats’ pensions. General Secretary, Malta In addition, a retirement scheme licensed in Malta is also 40 45 - Non-Life Association of Retirement eligible as a Qualifying Non-UK Pension Scheme (QNUPS). 30 Scheme Practitioners (MARSP) Money transferred into these schemes is free from UK inherit- 20 ance tax. The island is also making a name for itself in relation 10 6 - Life to Institutions for Occupational Retirement Provision (IORPs). 2 - Composite 8 16 22 30 41 45 50 54 58 60 60 7 - Reinsurance 0 These schemes can be set up in Malta to be passported to other 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 EU and EEA member states. With IORPs, the EU is trying to International Pensions Corporate Structuring / Mergers & Acquisitions 50 51

establish a second pillar for a pan-European pension system, Corporate Structuring / Mergers & Acquisitions and the island’s professionals believe that Malta is the ideal base for operators of such schemes. A Growing Sector A Structure Malta licensed its first six pension schemes in 2010, but since then the amount of schemes available has accelerated year-on- year. By the year 2012 Malta was home to 17 different pension to Build on schemes, while at the end of 2014 there were 35 schemes estab- Malta is a key lished. As in other areas of financial services, Malta’s approach centre for pension As a gateway to the world, Malta is attracting growing to legislation and regulation in this sector aims at providing transfers as it has a well numbers of corporate planners to use the island to the necessary safeguards to ensure the smooth operation of defined regulatory and channel their international investments. pension schemes and pension funds. The regulatory frame- legal framework. All Maltese work, which requires the registration and ongoing supervision licensed administrators are n open economy, low effective tax rates and excellent of pension schemes, as well as service providers and scheme required to have a minimum professional services. These have been the natural administrators, investment managers and custodians through level of capital adequacy and strengths of Malta for decades and have made it a key the MFSA, makes Malta an attractive location for accrued a proven ability to meet their Acentre for corporate structuring. The island is increasingly cap- pension funds for expatriates living around the globe. financial commitments.T he regulatory approval process turing the attention of ‘blue chip’ corporations and corporate Attracting Investors is robust and tests the nature planners for international transactions and investments into Europe, as well as into the world’s leading emerging markets. Maltese QROPS and QNUPS are ideal for those who have of the proposed business. In A Malta company offers an easy solution to the most varied previously built up UK pensions but are no longer a UK resi- addition, an extensive double international business needs. Through a Malta company, oil dent, such as British expatriates and foreign nationals who taxation treaty network majors can hold exploration rights, football clubs can manage have worked in the UK and have accumulated pension funds allows Malta to provide a their intellectual property, manufacturers can trade in EU and there. A QROPS scheme held in Malta can be highly advanta- defined tax treatment for international markets, while small, medium and multinational geous, benefitting from excellent flexibility and strict regula- scheme members living in companies can use it as a financing vehicle for new invest- tion in an English-speaking environment. In addition, with no various parts of the world.” ments. As a member of the European Union and the eurozone, requirement to buy an annuity, and with the ability to receive a and in close proximity to the African continent, Malta is ex- lump sum of 30 per cent of the fund’s value, a QROPS gives the Justin Caffrey panding its role as a regional hub serving Europe and Africa in pension holder greater control of their pension. Managing Director, the same way that Hong Kong serves as a hub for Asia. While Malta has seen the breakthrough in the interna- Harbour Pensions tional pension sector due to its attractiveness for QROPS and From Offshore to Onshore QNUPS, it is now aiming to come to similar agreements with The last few years have seen a wave of companies being struc- other countries. Mobile workers across the European Union tured from Malta, but the island has been a valuable base for are said to account for 5 to 10 per cent of the Union’s workforce, companies for far longer. Offshore companies were introduced and the island sees an opportunity to cater for the pension in the 1980s, but with the country’s decision to move onshore, needs of companies and individuals from EU markets. While these companies were converted into structures compatible industry professionals believe that different taxation and regu- with EU law. With the island’s accession to the EU in 2004, latory systems in EU countries will impede growth in the field Malta’s tax regime – which had been in place since 1948 – was of occupational pensions in the short term, they are convinced approved by the European Commission. The country oper- that there is already tremendous potential for private pension ates a full imputation tax system under which companies are plans. ¢ taxed at a rate of 35 per cent. However, shareholders are entitled to refunds for the tax paid by the company. The island also meets international tax standards and is included on the so-called ‘white list’, set out by the Organisation for Economic Corporate Structuring / Mergers & Acquisitions 53 Committed to excellence The incorporation of Co-operation and Development (OECD). Adhering to the companies and the highest anti-money laundering standards, Malta’s regulatory structuring of deals framework has been assessed numerous times. These measures through the island have helped the country to quickly develop a reputation as a has steadily increased quality jurisdiction that offers the complete package investors in recent years. The are looking for: strong regulation, high levels of transparency Registry of Companies and good governance. has recorded Popular Vehicles Incorporating a company in Malta is relatively easy and 5,144 only takes a couple of days. Every company must be registered with the Registrar of Companies at the Malta Financial new listings in 2014 Services Authority (MFSA), which today lists some 65,000 companies. The most commonly used vehicle for internation- MamoTCV Advocates is a tier-one law firm in Malta with a strong international practice and al business is the Limited Liability Company, but businesses actively involved in all areas of commercial law, with a particular focus on financial services. can also choose to set up General Partnerships, Co-operatives The Financial Services Department within the firm is committed to providing bespoke and Limited Partnerships. Malta has also introduced special legal solutions to credit and financial institutions, investment firms, family offices and other legislation for the formation of Protected and Incorporated stakeholders in the financial services industry. Our mission is to deliver high-quality services in Cell Companies. Cell companies are used in the insurance structuring and implementing investment proposals, operations and products in a pro-active, and fund sector and are usually promoted by offshore juris- efficient and timely fashion. To this end, we continue to foster and develop our local and dictions, making Malta the only full EU member state to offer international network with a view to offering comprehensive and integrated services to clients. these structures. 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 FINANCIAL SERVICES CORPORATE AND COMMERCIAL company can hold shares in onshore and offshore companies, as well as equities, bonds, loan portfolios, real estate and Investment Funds Corporate Law Shipping & Aviation other asset classes. In addition, Malta registered companies Custody Services Insolvency Construction can be used for listing on foreign stock exchanges. The popu- Portfolio Management Mergers & Aquisitions Privatisations larity of Maltese special purpose vehicles is also increasing, Malta has Other Investment Services Project Finance Competition and structured finance transactions are experiencing particu- proven itself as a larly strong growth at present. Insurance and Re-Insurance Trusts Public Procurement trusted jurisdiction with Captive Insurance Intellectual Property Employment corporate planners and Increased Corporate Activity Pensions Schemes Media, Communications & IT Consumer Affairs multinationals alike. In The incorporation of companies and the structuring of Taxation Securities Law Gaming & Lotteries fact, we are experiencing a deals through the island have steadily increased in recent years. Financial Intermediaries EU Law Litigation & ADR surge in demand as clients The Registry of Companies has recorded 4,540 new listings in structure more and more 2013, a jump of over 13 per cent on 2012. In 2014, this figure operations through Malta.” shot up to 5,144 new incorporations. But it is not only new incorporations that are highlighting Malta’s credentials in this Nick Captur sector. The island’s practitioners also report that Malta is seeing MamoTCV Advocates T: (356) 2123 2271 / 2123 1345 Clients and Markets Palazzo Pietro Stiges, F: (356) 2124 4291 / 2123 1298 more re-domiciliations of companies from other European ju- Leader, Deloitte 103 Strait Street E: [email protected] risdictions, such as the Netherlands, Cyprus and Portugal, as Valletta VLT 1436, Malta www.mamotcv.com

Corporate Structuring / Mergers & Acquisitions Corporate Structuring / Mergers & Acquisitions 54 55

well as the relocation of management and effective control of companies to Malta. Malta is also being used as a platform for M&A transactions. Foreign companies are setting up a European business base through establishing a Malta company, which would then acquire another European company or group, or through 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 advanta- As a country we ensure geous fiscal treatment of locally registered companies used as that what we offer is vehicles for cross-border acquisitions. Equally important, the attractive while adhering to minimal tax leakages mean bidders using a Maltese company our international obligations. to launch an offer for a foreign firm are able to put in a more at- Despite being very selective tractive bid in an auction process. Malta’s network of 70 double in the type of business we taxation treaties further strengthens the country’s position as accept, Malta continues to a key corporate location. Thus far, the majority of transactions see growth across all areas of coming through Malta are predominantly European, but there the financial services sector.” is increased interest from outside the EU, including America Savvy Service Providers and Asia. Dr Rosanne Bonnici Whether dealing with re-domiciliations, M&A, or finding the Partner, Fenech & right corporate structure, Malta’s service providers are able to Rule of Law Fenech Advocates provide clients with the full range of services. They have acquired Malta’s position as a top international business hub is solidly the experience and in-depth knowledge of company formations, underpinned by a regulatory framework aimed at attracting mergers and acquisitions that comes with frequent exposure to reputable players, and fuelled by the relentless commitment of international transactions. Their reputation is excellent, and most the MFSA, and practitioners alike, to retain a quality service of the country’s legal firms are part of international networks, and high standards of business regulation. The Maltese legal such as Lex Mundi and Lexis Nexis, and are regularly ranked on structure is a hybrid system of Civil and English law. While it Chambers, Martindale-Hubbell and Legal 500. The ‘Big Four’ ac- is based on the civil law pattern of continental Europe, most counting firms have a presence in Malta, while the large number administrative and fiscal legislation is constructed on the of small and medium-sized firms have made significant strides English model. Malta’s unique legal and regulatory framework in establishing the country as a serious and well-respected finan- also gives the island an advantage in M&A activity, as practi- cial services centre. Most firms also offer company secretarial, tioners have a cultural affinity to both systems and can easily management and directorship services and are authorised by the bridge the gap between continental European and UK legal Malta is a tax-efficient Malta is competing MFSA to offer trustee and fiduciary services. frameworks. Maltese legislation also allows foreign companies and cost-efficient very well at the to change their domicile to Malta, without the need of winding jurisdiction. Maintaining the expertise level. Clients from The Malta Solution up their operations in the foreign country and incorporating a supply of high quality human the big jurisdictions, even The country’s reputation is something practitioners in Malta new company in Malta. This results in substantial cost savings resources will be a challenge, the UK, leave the drafting take very seriously. Malta emphasises that it is not a tax haven; for the company and makes it attractive for already established but Malta’s regulatory regime of the documents of service the island keeps its regulatory framework in sync with the companies to move their seat to Malta, while Maltese law and the local practitioners’ provider agreements to changing demands of the industry and in line with the re- allows for companies to re-domicile out of Malta in an equally professional work ethics will the local law firms.” quirements laid out at EU level. This ensures that Malta retains straightforward process. provide new opportunities maximum relevance, effectiveness and attractiveness to the in- in wealth management, Dr Joseph Saliba ternational financial community. And as more and more corpo- insurance and financing.” Partner, Mamo TCV rations establish companies with substance and shift away from brass-plate companies, Malta stands out as a cost-effective EU Louise Borg Vella jurisdiction which has a well-educated workforce that is able to Director, Papilio Services deliver innovative solutions to complex transactions. ¢ Corporate Headquarters Corporate Headquarters 56 57

Corporate Headquarters A Stage for Global Companies As Malta’s profile as a safe and secure entry point to European and African markets continues to evolve, more and more companies are relocating their headquarters functions to the island.

alta is gaining ground as a location for international and regional headquarters. The combination of its central Mediterranean location, highly skilled in- Mternational workforce and high quality of life not only make Malta an attractive choice 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 gaining attention as an international management centre and an ideal hub to enter neighbouring markets.

Central Location 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, historically Malta has been the link between the two continents. Malta’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. Corporate Headquarters 59 FUND ADMINISTRATION | DEPOSITARY | CORPORATE SERVICES | INSURANCE SERVICES

Leading Companies Increasing numbers of companies from all economic sectors are looking to Malta and are locating regional headquarters or certain key functions on the island. The international trading arm of the HeildelbergCement Group has its headquarters in Malta, and shipping company Palmali manages its global fleet from the island. Lufthansa Technik found the country to be a convenient location to establish a regional service centre as Malta has gained a result of the country’s favourable situation in the southern recognition as one of European Mediterranean region, as well as its proximity to Uncommon knowledge the leading European financial Africa and the Arabian Peninsula. Konica Minolta has set up a services hubs. Its EU membership, sales, services and support centre for Central Asia, the Middle extensive network of double East and Africa in Malta in an effort to break down the barriers taxation treaties and favourable of distance, language and culture. Real world challenges are more fiscal and non-fiscal incentives Companies from the finance sector have also found Malta a multi-dimensional than just have created an attractive profitable base. Trade finance specialist FimBank has its global square pegs and round holes. business environment. Its headquarters in Malta, and a number of foreign banks use Malta The Heritage Group provides interest in SMEs and start-up as a springboard to the Mediterranean and North Africa. The solutions in financial and companies, and cultivating its oil and gas industry has also discovered Malta as a safe service insurance services. In Malta, we reputation as a European funds centre in the Mediterranean, while in the IT sector, Malta has specialise in the provision of fund domicile, are certainly Malta’s become a prime jurisdiction for gaming companies offering administration, depositary, trust greatest key opportunities and corporate services. Within games to players in many European countries. Generally, Malta for economic growth.” the Group, shared service is a top location to carry out functions such as strategic plan- philosophy, ethics and support ning, the management and supervision of subsidiaries, mergers infrastructure complement Dr Neville Carabott & acquisitions, the management of Intellectual Property, corpo- uncommonly deep knowledge Managing Director, rate finance, trade finance, risk management, research and de- and a willingness to go the extra Heritage Fund Services velopment, logistics, as well as ICT and data centre operations. mile in making the complex appear simple. Rewarding Environment Doing business in and from Malta is easy. As home to a major To find out how our solutions could work for you, international financial services sector, the country has a highly please call Neville Carabott developed business infrastructure, making it an ideal base for on +356 2090 8900 or email region-wide corporate coordination and central management [email protected] functions, sales, marketing and customer service. A neutral, pro- business and economically stable country, Malta offers companies a perfect climate 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. Political stability and solid legal, banking and accounting systems make investing in Malta both attractive and safe. www.heritage.co.gg GUERNSEY | UNITED KINGDOM | MALTA There is optimism in Malta that the country’s importance as a management centre is set to grow. The island believes it Issued by Heritage Group Limited (registration no. 37760) on behalf of the Heritage group of is particularly attractive as a location for American and Asian companies. Where appropriate, Heritage Group companies are licensed by the Guernsey Financial firms wishing to enter the EU or the North African markets. Services Commission, the United Kingdom Financial Conduct Authority and the Malta Financial In its efforts to persuade growing numbers of foreign compa- Services Authority. Corporate Headquarters Trusts & Foundations 60 61

nies to use it as a base, Malta emphasises that it is also a great place for small and medium-sized enterprises seeking growth Malta may not be Trusts & Foundations opportunities outside their home countries. With operational costs being 20 to 30 per cent lower than in most other Western the most obvious European countries, Malta offers smaller companies a con- location as either ducive business environment in which to build up European, the European or Defending a Title African or Middle Eastern networks. global headquarters With the ink still drying on recently updated legislation, Malta Gateway to Africa of a firm, but the maintains its rank among the premier league of trust jurisdictions. As growth opportunities continue to move away from the tra- island is improving ditional markets, most multinationals want Africa to become part of their expanding global footprint. It is a continent ripe its competitive with potential, and an increasing number of corporates believe position steadily. locating key business functions close to the growing number of African consumers is increasingly important. 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. Malta’s business community believes the island 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.

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

A Magnet for Foreign Companies Malta may not be the most obvious location as either the European or global headquarters of a firm, but the island is improving its competitive position steadily. In the long term, the 14O prospects are good that Malta will benefit from growth in the Fiduciary service providers operate in Malta. region and become an increasingly popular choice for the location of international and regional headquarters. ¢ Trusts & Foundations Trusts & Foundations 62 63

new era for Malta’s trust and fiduciary sector began Approved Malta’s civil law framework. Nevertheless, the island’s practi- in the spring of 2014 when the island’s Trusts and tioners point out that foundations are also of increasing interest Trustees Act was modernised. While the country has Service to affluent individuals from common law countries. They like Abeen a prominent player in administering private wealth struc- Providers the fact that a foundation offers all the benefits of a trust, with tures for over 20 years, the latest legislative update brings the the added advantage that the founders can maintain a greater country into line with international trends and rival trust juris- level of control. Unlike trusts, foundations have a separate legal dictions, ensuring that Malta remains one of the ‘go-to’ names Malta’s specific trust personality and can hold assets in their own name. for those in search of wealth management solutions. Another legislation creates a highly example of Malta’s competitive offering in this sector is that Malta is a responsive regulated environment for Tailored Products foundations can also be established, making the island one of and service- the set-up and management Malta’s trust practitioners and foundation administrators stress the few places in the EU catering for both trusts and founda- driven jurisdiction which of trusts and foundations. that both structures have their specific uses and operate in par- tions. This ‘marketable advantage’ has attracted 140 service implements high levels of Trustees have to be licensed, allel in Malta. Malta does not offer ‘off-the-shelf’ trusts, and providers, including large banks, independently owned trust investor protection and and foundation administrators each trust is structured carefully to reflect the requirements of companies and smaller niche providers. transparency. It is one of the have to be authorised by the client. Malta’s legislation recognises all forms of trusts one few jurisdictions that cater for the Malta Financial Services would find in other jurisdictions, such as discretionary trusts, A Long Tradition both trusts and foundations. Authority (MFSA), which accumulation and maintenance trusts, fixed interests trusts, Trusts were originally developed in England in the 12th In addition, Malta has a has gained a reputation as spendthrift and charitable trusts. In addition, the trust law century. After centuries of cultivation, this idea was officially sophisticated legal framework an effective and responsive identifies a number of commercial situations within which the introduced into Maltese legislation in 1989 as a ‘ring-fenced’ and a sound regulatory regulator of the industry. use of trusts would attract more favourable treatment. These vehicle, only allowing non-residents to set up such structures. infrastructure which is Regular audits of all trustees include security trusts, unit trusts or collective investment However, after ratifying The Hague Convention in 1994 and capable of supporting ensure ongoing integrity. schemes and securitisation, among others. Trusts can also be becoming an EU member state in 2004, Malta has made signif- complex businesses operating converted into a company and vice versa. Foundations can be icant investments in the development of its legal and regulatory throughout the financial The Continuation of used in most cases where a trust or a company could be set up, framework, adapting its legislation and tax regime to make it a services ecosystem.” Companies Regulations with the most common structures having a wealth planning truly attractive and effective jurisdiction for establishing and also provides existing trust and philanthropic background. managing trusts. In recent years the island has also created Dr Jean-Philippe Chetcuti companies the opportunity to specific legislation to establish clear judicial and tax regimes Chairman - Society of Trust and re-domicile to Malta, without Top Trust and Legal Professionals for the set-up of foundations, which had previously only been Estate Practitioners (STEP) Malta the need of dissolution in their Having structures available is not enough: clients also expect recognised through case law and doctrinal writing. The new jurisdiction of incorporation experienced and professional service providers. The Malta framework made this instrument more secure and the creation and re-incorporation in Malta. Financial Services Authority (MFSA) oversees trustees and of a foundation even more attractive for foreign clients. Conversely, a trust company foundation administrators who appreciate the highly regu- set up in Malta always has lated environment, as it provides certainty to clients that they An Instrument of Choice the option of continuing are dealing with professional firms. Some 140 service provid- Whether for tax planning purposes, inheritance planning, outside of Malta, subject to ers operate in and from Malta. This yields a highly competitive shareholdings or the protection of assets, trusts and founda- the necessary regulatory landscape for clients who are spoilt for choice when choosing tions are becoming the first choice for everyone from high-net- approvals being obtained. a service provider. In addition, many companies in Malta are worth individuals to corporate entities. The recent banking fail- Since Malta recognises authorised to act as foundation administrators, with major ures, financial crises and economic recessions have also made foreign trust law, a trustee players like Vistra, Alliance Trust Company Limited, Bentley asset protection popular for those of more modest means. operating in Malta does not Trust (Malta) Limited and EMCS International, among them. While there are no figures on the number of structures need to adopt Maltese law as established in Malta due to the sector’s confidential nature, the law of the trust and can A New Dawn foundations appear to be primarily attractive to continental continue to hold property Trusts and foundations have been set up in Malta to safeguard European, Middle Eastern and Asian clients for whom the under foreign law trusts to everything from heirlooms, to stocks, bonds, art and real estate. concept of a trust is less familiar. Trusts are usually found in service clients worldwide. The changes to the Trusts & Trustees Act are expected to make common law countries, however with the passing of the Trusts Malta an even more attractive destination for wealth manage- and Trustees Act in 2005, trusts became fully ingrained in ment. The perpetuity period of trusts has been extended by 25 Trusts & Foundations Trusts & Foundations 64 65 Trusts and Foundations

years up to 125 years. The other key change concerns settlor WHY Resources & Support powers. Typically, a trust may be invalid if the person establish- MALTA? The MFSA has gained a reputation as an effective and respon- ing it retains control over the assets, however, the updated law sive regulator that works hand-in-hand with the government introduced specific circumstances when a settlor may reserve to cement the island’s position as a wealth management hub. powers under the terms of a trust without the trust being con- Legal and administrative support ranges from small bou- sidered a sham. Another major amendment is the introduc- A civil law jurisdiction tique practices to the global ‘Big Four’ accountancy firms tion of family trusts and Private Trust Companies (PTCs). A that has developed with Deloitte, PwC, Ernst & Young and KPMG all operating family trust can hold assets to the benefit of one specific family, a trust concept by branches on the island. The MFSA also operates a fast-track whereby the trustee must be a company that only provides integrating it with old authorisation for trust companies licensed in other approved services to that specific family trust. A minimum share capital Roman law sources jurisdictions. Many are now choosing Malta over other big requirement of €15,000 has also been introduced for trustees in names in the industry given the island’s status as EU member addition to a number of other amendments. Recognition of state, as well as its fiscal and political stability. foreign trust law A Clean Reputation Enjoying Cost Benefits Historically, trusts and foundations have been seen as instru- Offering the set-up Malta’s other key selling point is the value for money it can ments designed to maintain discretion and have been associat- of both trusts and offer those looking to the EU for wealth management solu- ed with tax avoidance structures. Unlike tax havens or offshore foundations tions, including significantly lower set-up and administrative jurisdictions, Malta, as an EU member state, has a respectable costs than those in other countries. Legal costs, management international image – a factor which should not be underes- Legislation published fees and auditing rates are all lower than in the majority of timated. Malta’s advantageous taxation regime enhances the in English European jurisdictions due to the fact that well-educated attractiveness of the jurisdiction, though naturally the actual staff can be sourced at two-thirds of the labour costs found in impact of taxation on trusts depends on a number of issues, EU and eurozone other Western European nations. This means that, on average, including the type of assets and the status of residence of the location setting up a trust in Switzerland will cost a minimum of €5,000, beneficiaries. However, where the beneficiaries under a trust whereas in Malta the cost of setting up a trust is around €1,500. are non-residents and the income of the trust does not arise in Competitive fiscal Malta, there is no taxation in Malta. Foundations may choose environment Growing in Prominence to be treated as a trust or as a company in which case they can The outlook for the future of Malta’s fiduciary industry is potentially benefit from the country’s tax refund regime. High professional bright, with the country thriving from a growing international standards with reputation. A Maltese trust or foundation offers security, as- many accountants, surance and flexibility in an EU-regulated environment, while bankers, lawyers and maintaining the principle of confidentiality that clients expect. investment advisors The sector boasts unique legislation that allows the individual holding overseas requirements of each client and company to be met. Further, qualifications and Differences between Malta Trusts and Foundations Malta is one of the few southern European countries enjoying having international a stable political and economic environment, and more and experience Trusts Foundations more clients are finding Malta trusts and foundations as their preferred vehicles for managing their wealth. ¢ Fast-track authorisation Do not have a separate Have a separate for trustees licensed legal personality legal personality in other (approved) jurisdictions Defined in terms of Defined in terms of the assets relationship making up the foundation English-speaking country with a pro- Trustee is the legal Foundation is the legal business government owner of the assets owner of its own assets Wealth Management Wealth Management 66 67

Wealth Management alta has built up a world-class platform for the private wealth and asset management industry. The country is a welcoming place for high-net-worth Mindividuals due to its mixture of innovative products, expe- A Diversified Portfolio rienced professionals, strong regulatory framework as well as personal and cost-effective services. It offers all the favourite Malta has emerged as a premier wealth management hub that investment vehicles of wealthy clients, while allowing investors represents quality, trust and confidence to asset owners and managers. to protect their assets through the establishment of trusts and foundations. Malta now eyes an even greater presence in the wealth management sector and is distinguishing itself from traditional wealth management hubs by branding itself as a holistic lifestyle and residency destination for affluent foreigners. It offers significant advantages for yacht and aircraft registration and boasts a collection of prestigious residential homes that can be purchased for occupancy or as an investment. Offering clients the convenience of providing a comprehensive range of services, from banking to recreation, Malta is set to confirm its role as an international wealth hub.

Trust & Confidence Malta has created a finely tuned regulatory regime that provides confidence in the quality of supervision while ensuring that the demands of the investment community are met. In recent years, the island has honed its expertise in many areas of finance, including banking, investment funds and corporate structuring. The high standards of the country’s service providers and its diversified economy have served to protect it from the ravages of the global financial crisis. While the global wealth management industry is at an inflection point, challenged by regulatory reforms and the loss of clients’ trust as a result of the financial crisis, Malta believes it can enlarge its market share and attract larger volumes of client assets. And indeed, the island’s stable economic climate, business friendly regulatory practices and experience in running a financial centre place Malta in an advantageous position in terms of wealth management.

Holistic Services 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. Private bankers and asset managers cater to all levels of wealth from the mass affluent to the ultra-high-net-worth individual. A wide range of investment vehicles is available – from simple trusts and company structures for families, to high value and Wealth Management Wealth Management 68 69

more complex set-ups involving trusts, companies, investment system, through which shareholders can claim a tax credit for funds and foundations for affluent clients. The island’s mem- the tax paid by the company. There are many reasons why an bership of the EU further strengthens its competitive position individual may wish to establish corporate entities in Malta, as it provides asset planners the security of a reputable jurisdic- ranging from the simple creation of a company to own, for tion, coupled with flexible business entities that can accommo- High-net-worth example, a holiday residence, a yacht or a private aircraft, to the date the most diverse needs. Equally important, the country individuals appreciate more complex set-ups required in the structuring of Islamic has an excellent legal infrastructure, which is supported by the security that the Finance transactions. experienced professionals that can combine all the separate island’s regulatory strands into a unified and comprehensive wealth management system provides and Investment Tools offering. emphasise that the Malta is also offering solutions to those clients who are interest- true value of Malta’s ed in wealth preservation through trusts and foundations and A Range of Service Providers wealth management to those who want to achieve yield through investment funds In recent years, the island has been experiencing a steady industry lies in the and the like. The island is one of the few jurisdictions where influx of banks specifically established to offer investment island’s reputation as a both trusts and foundations can be set up. Both structures banking, private banking and wealth management services to stable financial centre. allow the creation of customised solutions that will fit the most their wealthiest clients. Specialist wealth managers are offering diverse personal and business needs, ranging from succession Swiss-style private wealth management, while a large number planning to estate management. While Malta has a pedigree in of banks provide professional financial advice and products to the field of administering trusts since the 1980s, the country high-net-worth, corporate and institutional clients. The island has recently updated its legislation to bring it in line with the has also attracted a number of family offices, which are finding latest trends and to ensure that Malta maintains its competitive it a compelling alternative to traditional wealth management position. centres and have transferred all or part of their operations to Since Malta joined the EU in 2004, the island has risen as a the island. With some 140 trustees and 120 investment services centre of merit in the field of investment funds. With more than firms registered in Malta, the sector is rapidly evolving. Local 580 funds established in Malta, the country’s fund administra- corporate service providers are also extending their offerings, tors and managers have a solid track record in setting up and and Maltese professionals such as tax advisers, lawyers and ac- managing different investment vehicles for institutional and countants are recognised to be among the best in the world. individual investors. Asset management companies in Malta have launched fund platforms which are exclusively open to A Stable Centre family offices and third-party managers to provide them with High-net-worth individuals appreciate the security that the is- an efficient and cost-effective solution to enter the market. land’s regulatory system provides and emphasise that the true Investors preferring physical assets are increasingly looking value of Malta’s wealth management industry lies in the island’s at Malta, too. Already a strategic port of call for superyachts reputation as a stable financial centre. Malta offers an OECD crossing the Mediterranean, there has been growing demand and EU-approved efficient fiscal framework, combined with from high-net-worth individuals for private yacht and aircraft around 70 double taxation treaties and a strong banking sector. solutions. The introduction of extensive VAT incentives for the In addition, the country’s prudential supervisory system, registration of yachts under the country’s flag, and the excel- under which trustees and other investment service providers lent infrastructure of the island’s marinas make Malta a logical have to be licensed by the Malta Financial Services Authority choice to base a yacht. The island also offers tax-efficient ways (MFSA), gives comfort to clients by ensuring that certain regu- to purchase and manage aircraft and has developed a strong latory standards are met. legislative framework that has paved the way for the easy regis- Having been ranked as the 10th soundest banking sector tration of private jets. in the world by the World Economic Forum’s Competitiveness Index 2014-2015, Malta’s banks are well capitalised and have Global Outlook emerged from the recent turmoil in the financial markets rela- Traditionally, Malta’s wealth management offering has been tively unscathed. The country experienced no banking failures focused on Europe, with many companies even specialising or bailouts. The island also operates a fiscally attractive tax in certain markets, such as the UK or the German-speaking Wealth Management Family Offices 70 71

nations. However, thanks to a growing number of double taxation treaties with high-growth economies in Asia and Latin Family Offices America, Malta is set to cater to a wider audience. Malta is also keen to take advantage of global trends, most notably growth in Asia where the number of high-net-worth individuals is increasing faster than in the rest of the world. In addition, the Good Fortune country is positioning itself as an attractive place for high-net- worth individuals to reside in an effort to create an international lifestyle hub. Malta has recently introduced residence programmes, offering foreigners a flat tax rate of 15 per cent on in the Family foreign income if they purchase property in Malta. The country has also enacted legislation offering foreigners the option to Malta is becoming a natural destination for wealth obtain Maltese citizenship through an Individual Investor management firms, and more and more family offices are Programme. opening to manage the affairs of ultra-wealthy families. International wealth planners and advisers find Malta the ideal location for the structuring, holding and managing of client’s assets due to its lower cost-base. Salaries and other operational costs are 20 to 30 per cent lower than in the traditional wealth management centres. Despite the lower cost, the level of service found in Malta is high, and many Maltese firms say they instil their staff with a ‘service mentality’ rather than focusing on sales, as is the case with other investment institutions.

The Total Package The landscape for international wealth management has changed over the past five years. After the financial crisis, client expectations grew more sophisticated and competition intensified. Trust and reputation have become more important. Malta’s sound banking system, innovative investment vehicles, and its deep pool of legal and financial advisors are highly valued now, and are expected to pull a lot of clients to the island’s shores. Initiatives to update the island’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 investor’s decisions when choosing an international wealth management centre. ¢ alta is positioning itself as one of Europe’s main family office locations as the island is gaining ground as an International Financial Centre (IFC). Affluent Mfamilies and their wealth managers are increasingly turning to Malta, and firms are seeing client interest in topics such as family decision-making, wealth structuring and the setting up of family office structures. Offering the entire spectrum of -ser vices, the country’s firms have built up a reputation of personalised assistance and tailored solutions over the years that now allows them to fully embrace the family office model. Family Offices 73

Family Office Roots The roots of Malta’s family office sector can be traced back to the island’s birth as an IFC. Although the Maltese family office sector is still very much in its infancy, the composite services have been on offer in the country for much longer. Malta was an early mover in this sector 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. As more clients are now beginning to appreciate the island’s relationship-driven business culture and service- oriented workforce, Malta’s family office sector is maturing rapidly. Wealth management firms seek to serve their clients TECHNICAL EXCELLENCE more holistically by moving up the value chain and are launching complete family office services. The island is increasingly being seen as an alternative to the traditional family office loca- PRACTICAL SOLUTIONS tions of the US, UK and Switzerland, and Malta is attracting money-managers from the world’s banking centres to establish fully-fledged offices on the island.

High-End Financial Services One of the key attractions 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. In addition, 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, camilleripreziosi.com affluent families and their advisors can benefit from the island’s low administrative costs, simple licensing arrangements and an effective regulator in the form of the Malta Financial Services Authority (MFSA).

A Variety of Options Globally, the combined wealth of ultra-high-net-worth individuals stands at US$14.7 trillion, with North America having the largest percentage, followed by Asia and Europe. 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 of- Asset Management and Funds - Employment and Pensions - Capital Markets - Competition and EU Law ficers’ to Malta, they highlight the availability of a full suite of Corporate and Commercial - Corporate Support and Compliance - Banking - Dispute Resolution investment vehicles and corporate structures. The island has Telecommunications, Media and Technology - Aviation - iGaming and Landbased Gaming world-class regulatory frameworks for holding companies, Infrastructure, Energy and Resources - Investment Services Regulation - Insurance - Intellectual Property Mergers and Acquisitions - Public Procurement - Real Estate and Construction - Shipping and Yachting investment funds and fund platforms, as well as trusts and Taxation - Finance - Tourism, Leisure and Hospitality - Estate Planning, Trusts and Foundations foundations, and is constantly developing new solutions that Family Offices Philanthropy 74 75

can be used in a family office setting. Malta’s trust law has just been updated, and the new version includes the concept of a Philanthropy 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. A New Path to Purpose Cost Efficiency As the worlds of philanthropy and finance collide, Malta It is estimated that there are around 6,000 family offices world- stands out both as a centre for asset protection, and as a wide, and the number of high-net-worth individuals is set to jurisdiction for initiating philanthropic intentions. grow in the coming years. However, in order to remain cost efficient, a family office also needs to control the cost of its operations, which includes not only staffing costs but also overhead administrative costs and the costs of running an IT system. Many family offices are currently analysing their cost structure to restructure their operations, and Malta, with its cheaper fee and salary structure, expects to welcome more family offices in the near future. The island’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 gener- alta is emerging as a valuable partner for tailor- ally deal with the backbone of the family office itself. Most made philanthropy solutions. Charitable giving multi-family offices are open to clients with at least US$20 has steadily grown in recent years, and philanthro- Mpists interested in impact and social investing are looking at million, and a few hundred million is usually considered as the minimum needed to operate a reasonably sophisticated Malta due to the fact that the island offers both trusts and single family office. However, Malta is also attractive to clients foundations as tools for charitable giving. who are not considered part of the super rich: sharing high- The roots of philanthropy reach deep into Malta’s history end wealth management services, or sourcing a few services and culture. The island was home to one of the first interna- from Malta’s experienced service providers, is also a reasonable tional charity organisations; the Knights of St John, drawn proposition for the average wealthy family. from Europe’s nobility to fund its charitable and humanitarian work, ruled Malta for almost 300 years. In more modern times, Evolving & Expanding interest in philanthropy has been growing as many billionaires With a growing number of high-net-worth families seeking believe that leaving enormous riches to their children will spoil new, more secure alternatives to traditional investment them and cause them harm. Predictions are that wealthy fami- banking as a result of the financial crisis, the demand for in- lies worldwide will donate over US$6 trillion to charities over dependent assistance and advice will continue to grow. Malta’s the next 35 years. With prominent examples, such as Bill Gates strategic position in the Mediterranean, sound legal framework and Warren Buffet, who have given away large parts of their and appealing tax benefits are expected to help family office wealth, the idea of ‘giving while living’ has re-emerged. services to expand. Despite challenges and competition from Wealth Transfer Tools some of the more established locations, the island is gaining prominence as a professional and attentive centre for affluent The practice of large-scale personal philanthropy as a form families, wealth managers and high-net-worth individuals. ¢ of wealth management begins to enjoy a significantly higher profile in Malta’s International Finance Centre (IFC). While Philanthropy Citizenship & Residency 76 77

philanthropy was once considered as a collection of money or simple donations, today it is increasingly being seen as a com- Citizenship & Residency prehensive, socially beneficial investment. The contemporary manifestation of philanthropy in the guise of charitable trusts and foundations provides potential philanthropists with glob- Mediterranean ally recognised structures for both wealth transfer and the effective management of charitable institutions. While trusts are a common law concept, Malta’s Trusts and Trustees Act creates a unique framework within the island’s Pulling Power civil law environment and enables residents and non-residents alike to set up various types of trusts on the island. Purpose A country full of history, passionate people, excellent weather and trusts can be created for a charitable or a philanthropic purpose crystal clear seas, Malta is a place that expatriates like to call home. rather than for specific beneficiaries, including vehicles which aid in education, healthcare, society, national heritage, human rights, the environment and even conflict resolution. While the same functions can be asked of foundations, the concept has its roots in civil law, which could be more familiar to Middle Eastern and continental European clients who may prefer to establish a foundation rather than a trust.

Network of Supporters Malta’s 140 trustees and foundation administrators are authorised and supervised by the Malta Financial Services Authority. This ensures a secure environment for charitable organisations wishing to maintain the transparency and accountability of their operations. In addition, the substantial number of doctors, qualified professionals and experts available on the island make up an ideal market for philanthropists and service providers to tap into when seeking advisers, international project managers or chairpersons for their organisations.

Global Landscape of Giving Despite the financial downturn in the face of global recession, philanthropy has continued in its upward trajectory. In the US alone, where a large number of foundations are already in operation, there was a total of $316.23 billion donated in 2012 by individuals, foundations, estates and corporations. This figure has increased for the past three consecutive years, and similar trends can be observed elsewhere, such as in the UK, Canada and Switzerland. Encouraged by these examples, Malta believes it has the potential to offer the international community a top-notch philanthropic platform. The country is in close proximity to markets in continental Europe, while it also has ties with many other countries; including countries in Asia, North Africa, the Middle East and the Americas. ¢ Citizenship & Residency 78

alta has long been a favourite of retired British expats seeking sun, but the island is growing in popularity with other European nationals, as well as individu- Mals and families from Asia, the Middle East and the Americas. With Malta’s warm and sunny weather, historic charms and Mediterranean bliss, it is easy to see why the island is one of Europe’s top expat destinations. Malta has recently implemented a new residency programme, which has made relocating to the island easier and more affordable than ever before. This Malta’s Individual programme ultimately offers foreign nationals a flat tax rate of Investor Programme 15 per cent if they purchase or rent property on the Maltese (IIP) is the only one of its kind Islands. Seeking to attract highly talented and networked endorsed by the European people from around the world to Malta, the country has also Union. We consider the IIP started offering a citizenship by investment programme, the as an opportunity to attract so-called Individual Investor Programme. talented people and high net-worth entrepreneurs and A Warm Welcome professionals to the island by granting them citizenship. We There are many reasons why expats have joined the 1.6 million LEGAL & TAX ADVISORY . CORPORATE & FIDUCIARY . COMPLIANCE & MLRO . DIRECTORSHIP tourists flocking to the Maltese Islands every year. Year-round are aware that citizenship is ASSET/FUND MANAGEMENT LICENSING . FUND RE-DOMICILATION . BANKING & FINANCE sunny skies have definitely been one of the foremost draws to a very complex and sensitive REGULATORY COMPLIANCE . DIRECTORSHIP . BACK & MIDDLE OFFICE . COMPANY SECRETARIAL this alluring island, while a beneficial tax treatment has helped matter, therefore we have to attract foreign residents to Malta for the past 50 years. The developed a four-tier due first measures to attract foreigners came into place following diligence system to ensure independence from Britain in 1964, when a fiscal strategy was that applicants are worthy implemented that offered a special tax rate to foreign residents of Maltese citizenship.” who had an above-average income. At that time, most individuals who relocated to Malta were British. A further residency Jonathan Cardona programme was introduced in 1988 which built on this idea, CEO, Identity Malta offering foreign nationals a 15 per cent flat tax rate and attracting expats from all parts of the world. While this programme has been updated over the years, the flat tax rate has been retained. In addition, a resident of Malta who is not domiciled in Malta will be taxed solely on income and certain capital gains arising in Malta or income remitted to Malta, and not on a GUIDING YOU TO NEW HEIGHTS worldwide basis......

Top Destination DF Advocates is a Malta based law firm providing advice to international and local clients in day-to-day operations, local and cross border transactions and a multitude of complex While Malta has historically been a popular choice for those issues spanning various industries with a specific focus on financial services. looking for increased quality of life in a Mediterranean island ...... setting, 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 highly as a place for career progression Il Piazzetta, A, Suite 41, Tower Road, Sliema, SLM 1607, Malta. and financial gain, as well as for a lifestyle change, demonstrat- T: +356 2131 3930 F: +356 2134 0916 E: [email protected] ing that the country delivers across numerous elements of expat life. In particular, the continuous development of Malta’s WWW.DFADVOCATES.COM Citizenship & Residency Citizenship & Residency 80 81

International Finance Centre contributes to attracting expats Luring Professionals from all over the world. The country continued to open its Over recent years, Malta has attracted younger, ca- borders through accession to the EU in 2004 and the Schengen reer-oriented expats who work in various sectors area in 2007; the fruits of this can be seen in the fact that there of the island’s growing economy and who have are currently over 21,000 foreigners, about five per cent of the chosen to relocate to take advantage of job oppor- total population, living in Malta and contributing to the island’s tunities. Malta introduced a scheme that offers economy. professionals, in a range of executive positions in these sectors, a flat tax rate of 15 per cent for Mediterranean Residency 1O a number of years, provided they have an annual Malta aims to attract both foreigners from inside and outside REASONS income of at least €81,205 (basis year 2014). Any the EU. While EU nationals are free to live and work on the income over €5 million is tax-free. Conveniently island, non-EU nationals are required to adhere to visa poli- why expats located at the centre of the Mediterranean within a cies. Affluent non-EU foreigners can also take advantage of the few hours flying time from major European cities, the country’s Global Residency Programme, including the 15 per enjoy living country is also the ideal location for globetrotting profes- cent flat tax rate on income remitted to Malta. The programme sionals working in Europe, Africa or Asia. is linked to the purchase of property, however investment can in Malta be as low as €220,000 for property in the south of Malta or in Retirement Heaven Gozo. The value of property bought in the remaining parts of Pensioners can benefit from the Malta Retirement Programme Malta has to be at least €275,000. Alternatively, they can rent Fabulous all-year The Maltese Islands which has been designed to attract nationals of the EU, EEA property for €9,600 per year in Malta and €8,750 per year in 1round weather with 6have a low crime rate and Switzerland, offering a 15 per cent tax rate for individuals. Gozo or the South of Malta. A similar programme for EU/ 300 days of sunshine Retirees can also make use of Malta’s wide network of double EEA/Swiss Nationals, the Residence Programme, was launched and a crystal clear sea Excellent social life taxation agreements. Under most tax treaties that Malta is in summer 2014, offering individuals from those countries the 7for all ages, with bars, party to, pensions are tax-exempt from the country in which same 15 per cent tax status. Short distances clubs and restaurants they are sourced, as long as the person is residing and receiving 2between destinations to suit all tastes and the pension in Malta. This means pensioners can remit their European Country cuts commuting time budgets and a thriving pensions to Malta and have them taxed at only 15 per cent if Possibly the most attractive feature of the Global Residence to a minimum cultural scene with big they apply for the Malta Retirement Programme. Programme for non-EU nationals is the opportunity of visa- name concerts, outdoor free travel throughout the Schengen area. Applicants from un- Friendly and festivals and a number of Captivating Island stable countries in search of a safe residency location for their 3hospitable local theatres and cinemas Aside from the fiscal benefits of relocating to Malta, expatriates families are expected to see the benefit of the programme as population can rest assured that they would be living in a country where well. They might also be attracted by Malta’s recently intro- Good medical crime is virtually non-existent. Despite the island’s size, there duced Individual Investor Programme. The programme offers No communication 8services with a are always new experiences to be enjoyed that range from scuba foreign nationals the possibility to obtain Maltese citizenship, 4problems with government hospital and diving and jetskiing to exploring Malta’s vast and engrossing after having resided in the country for 12 months, by paying English and Maltese as many private clinics history first-hand in its preserved medieval cities. Leveraging a €650,000 to the National Economic and Social Development official languages, while rich legacy of historical buildings and magnificent architecture, Fund, purchasing property having a minimum value of Italian is widely spoken, Above UK-average Malta boasts an abundance of lifestyle properties, ranging from €350,000 or leasing a property for a minimum annual rent of as well as German 9schooling in English- sea-front apartments to exclusive villas with private pools. €16,000, and investing €150,000 in government-approved fi- and French within speaking schools and a Anyone seeking to purchase property in connection with the nancial instruments, in addition to fulfilling a number of other the tourism sector respected university residency programme will be spoilt for choice. With a high criteria. standard of living, reasonable costs and no inheritance, wealth, Low cost of living A wide variety or annual property taxes in place, expats need look no further 5while all goods 10 of property is as Malta offers the best fusion of the traditional and the sophis- are easily available available in all price ranges ticated, the luxurious and the intimate, and embodies the very best in Mediterranean charm. ¢ Foreign Exchange Trading Foreign Exchange Trading 82 83

Foreign Exchange Trading Gaining Ground Malta is developing fast as Europe’s forex trading hub, providing both operators and investors with the security and legal clarity Hitting the that comes with a well-regulated environment. The key attraction for many firms is that forex companies based in Malta are licensed and overseen by the island’s financial regulatory body, the Malta Financial Services Authority (MFSA). Malta’s sophisticated IT and telecoms infrastructure along with the vi- brancy of its financial sector has also helped the country to gain Market a foothold in the global market that is estimated to have grown With currency trading booming, Malta to more than US$5.3 trillion a day. A wide range of market is on its way to becoming a centre for participants, including fully-fledged market makers, platform online foreign exchange companies providers, brokers and fund managers focusing on forex as an servicing the $5.3 trillion-a-day market. asset class, have opened offices on the island. Foreign exchange dealers such as RTFX, FXDD, Swissquote and Sensus Capital Markets all have operations in Malta.

Tier-1 Status alta is emerging as a foreign exchange (forex) Malta has been selective in order to attract only the most repu- trading hub in the Mediterranean, capitalising on its table operators to retain its tier-1 status. Although stringent growing financial centre and its telecoms infrastruc- regulatory standards might seem to be a barrier to growth, Mture. Internet and mobile technology have changed the forex the events in the international financial markets and related market activity significantly, a prominent trend that has helped regulatory issues have seen an increase in financial companies Malta succeed in the global race to gain a slice of this lucra- seeking to be licensed in EU-compliant jurisdictions. The repu- tive market. Currency trading is growing rapidly, and online tation of Malta as a well-regulated jurisdiction gives investors trading has been a major factor in the growth of retail trading, confidence, peace of mind, and the added comfort of knowing making forex more mainstream. Positioned at the heart of this they are trading with a company that is licensed and adheres to change is Malta – a country with an EU-compliant regulatory high regulatory standards. environment and a deep pool of financial talent. Malta’s EU status also means that certain forex products and services can be offered in all countries of the European Forex Popularity Economic Area (EEA), without the need to obtain authorisa- Malta is sending a very clear signal about its ambitions as a tion from the regulator in each country, through a process re- global forex hub. While London, New York and Hong Kong ferred to as passporting. This makes Malta attractive as a base have long been the international forex centres of renown, the for non-EU companies wishing to expand their operations, EU’s smallest member state is building on its unique value using the island as a launch pad into Europe. proposition. Part of Malta’s emergence as a forex hub is due to its strict adherence to the EU rulebook and an infrastructure Regulatory Reputation that is geared to financial services. This has attracted numer- The MFSA has built a reputation of maintaining a high stand- ous forex firms to set up on-the-ground operations in Malta. ard of compliance while eliminating unnecessary complexity For the investor, forex trading has only become a mainstream for operators. The island has established a set of conditions alternative over the past years as a result of the proliferation of governing operators’ diverse activities. Forex firms can apply online trading systems. On-demand access to the latest infor- for different types of licences with varying capital require- mation, combined with easy to use technology, has demystified ments, depending on the business model they choose to adopt. the forex market. Individuals and small businesses that would The framework places great emphasis on investor protection once have left forex to large banks and large institutional users and the handling of clients’ funds. In October 2014, the MFSA are now participating and trading forex directly. also tightened the licensing criteria for entities offering forex Foreign Exchange Trading Corporate Treasury 84 85

trading to retail investors. Forex companies licensed in Malta Corporate Treasury are also required to participate in the local investor compensation scheme. Analysts forecast that currency trading will continue to increase its stake in investors’ portfolios. However, Pooling Efforts for Basle III is expected to shake things up in the forex industry in the next years due to new liquidity requirements, which will impact the way firms hedge against risks and may make certain transactions more expensive. Growth Growing Strength Foreign exchange today is as much about technology as it is Liquidity management is a key function for about financial markets. Thanks to heavy investments in infra- corporations, and the benefits of Malta as structure to support the growth of its finance centre and other a treasury location are being recognised industries, Malta offers forex companies a ‘plug-and-play’ envi- by companies of all sizes and regions. ronment. 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 fibre-optic cables to mainland Europe. alta is following in the footsteps of Luxembourg, With eTrading now being the norm, all three operators also Switzerland and Singapore by establishing itself as emphasise that their bandwidth capacity is virtually unlimited, an international treasury centre. Increased volatil- Mity in the global economy and the growing complexity of in- which is reassuring for forex firms whose future growth will not be limited by connectivity issues. ternational markets are driving companies to seek improved In general, all-round costs are well below European aver- control, efficiency and transparency in their cash management, ages, with licensing and professional fees of lawyers, account- and renowned groups have chosen Malta to set up regional or ants and technology providers being very competitive. worldwide treasury operations. With lower costs than the established centres, coupled with sophisticated banking solutions Chasing the Money and a strong regulatory framework, Malta is quickly becoming Economic stability and political consensus have been central the preferred European location for treasurers and CFOs. to Malta’s success in attracting forex firms. In times when the protection of investors’ money is as important as returns, being Cash Management Hub regulated in a respected jurisdiction with a stable and proven Malta has developed strong skills in finance, accounting track record gives forex companies an added advantage in and banking, as well as in back and middle office activities. winning the confidence of international institutions and retail The island’s economy, the smallest in the European Union, clients. At the same time, companies can seek opportunities emerged from the international financial and European debt within the island’s international finance centre. Domestic op- crises relatively unscathed – a fact that has strengthened portunities for forex firms in Malta are expanding in tandem Malta’s growing reputation as a stable and reputable inter- with the island’s role as a global currency trading hub. ¢ national financial centre. In particular, the country won international acclaim for its solid banking system, which is the 10th-soundest in the world according to the World Economic Forum’s 2014-2015 Competitiveness Index. This has allowed the island to move up the value chain in financial services provision, with a focus on front office activities, complex transactions and high-level risk management. Corporate Treasury Islamic Finance 86 87

Centralising & Shared Services Islamic Finance In most cases, multinationals want a single platform that can offer them an overview of their position, and many of them An Open Door for 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 Shariah 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 Investment pooling, leasing arrangements, asset management, risk management and payment services can all be procured from the Malta is nurturing its ambition of same treasury service, whether the client is a single entity or becoming an Islamic finance hub, and the a group of companies. country’s location and robust regulatory The country’s economic soundness and political stabil- structure could work in its favour. ity also make Malta a prime location for treasury operations. In fact, the success or failure of a treasury service hinges alta’s finance linkages and close association with tra- on a number of factors, including the quality of a country’s ditional markets for Shariah finance could help the banking facilities, the ease of access to local stock exchanges island to emerge as a new Islamic financial services Mhub. Located strategically at the centre of the Mediterranean, and a liberalised capital market. While Malta possesses all these traits, it is also rich in professional expertise. Good Malta offers access to 230 million Muslims in Europe and North communication is also a vital characteristic for any corporate Africa, providing a massive client base for Islamic finance prac- entity seeking to exercise control over their cash and assets. titioners. As a member of the European Union and the euro- Malta has a strong telecoms network, providing efficient links zone, Malta has strong links with all EU member states, while to Europe via four submarine cables. Malta’s very competi- its extensive network of tax treaties, which includes countries tive cost-base, which is 20 to 30 per cent lower than those of such as Tunisia, Egypt, Morocco, Malaysia and the United Arab other Western European locations, has also opened the door Emirates, makes the country also a springboard into the wider for the island to become a major player in the treasury sector. Muslim markets. As an international finance centre, Malta is Its location between Europe and North Africa makes it at- seeking to play a role in Islamic finance by leveraging its ca- tractive for emerging market multinationals and companies pabilities and credentials in investment funds, wealth manage- expanding into regions such as North Africa and the Middle ment, corporate structuring, trade finance and insurance. East that are seeking a sophisticated, safe and stable financial centre to base their treasury operations. The Start of a Trend The Islamic finance sector has grown in recent years from being Gaining Attention a specialised niche to a global mainstream industry. Islamic Whether on a regional or global basis, a number of companies finance is estimated to be worth US$2 trillion, with an annual already use Malta to efficiently centralise their treasury opera- growth rate of 15 to 20 per cent. The market proved remarkably tions. Although many believe that the Mediterranean island resilient to the financial crisis, which has also made it popular still has a way to go to establish itself as world-class treasury with non-Muslims living in Europe. As an alternative form of centre location, Malta is set to jump to the head of the queue. finance, which prohibits interest on loans and generates profits This is due to the fact that it fills every one of the prerequisite in a socially responsible manner, international banks and fi- conditions set out by those looking to relocate, while boasting nancial services providers in Europe and elsewhere are increas- a number of additional unique selling points. It is as stable as ingly offering Islamic products. Investments are also expected to many of the current treasury locations, such as Switzerland or reflect real trade and business. In this climate, Malta is increas- Luxembourg, with the bonus of lower operating costs and less ingly being looked at as a jurisdiction of choice for sophisticated bureaucracy. ¢ institutions wanting to set up Islamic financial instruments. Islamic Finance Islamic Finance 88 89

Shariah Compliance Takaful & Retakaful While operators in Malta are seeing opportunities to offer Malta could also offer solutions for ‘Takaful insurance’ which is Shariah-compliant products, they are faced with the chal- structured as a charitable collective pool of funds based on lenge of applying two sets of rules to Islamic finance transac- social solidarity and co-operation. Takaful participants con- tions: Malta’s regulatory framework, and Shariah law. Malta’s tribute equally to a fund to help protect one another against regulations only allow banks to own property up to a certain risks, whereas in the conventional insurance model policy- percentage of their total assets. Hence, procuring finance in a holders pay premiums to protect themselves. Malta possesses way that is Shariah-compliant, where the bank buys the prop- the right legislative instruments to set up Takaful instruments, erty and sells it to the eventual purchaser after marking up and is the only full EU member state with legislation that the price of the property, is not possible. However, in 2015 allows for Protected Cell Companies (PCCs) and Incorporated the Maltese government expressed its willingness to develop Cell Companies (ICCs). A Takaful fund could be set up as a cell a framework for Islamic banking. Thus far, Malta’s strategy in both structures, which is then managed and administered of getting a share of the Islamic finance pie centres on wealth on behalf of the participants by a Takaful operator who charges management, estate planning and investment funds. an agreed fee to cover costs. People requiring insurance cover, such as health, accident or motor insurance, could contribute SPVs & Trusts to one or more cells to protect themselves against those risks. At the heart of Malta’s offering to the Islamic finance com- Malta also believes it has potential as an ideal base for reinsur- munity is the SPV which has become a key element in Islamic ance, or Retakaful, providers given that there are only some 20 finance transactions. SPVs can take the form of a limited li- Retakaful providers globally. This means that Takaful firms are ability company or a trust in Malta. Where a Malta SPV is often forced to transfer some of their risk to conventional re- used in an Islamic finance transaction, it can be particularly insurers, creating a window of opportunity for Malta to attract useful when combined with a Malta trust holding the shares new Islamic reinsurers into the market. in the SPV. Malta trusts are effective and reliable, and can offer customised solutions for wealth management as well Realising a Potential as succession planning. In the trust deed, settlors can define While Malta might not be the most obvious choice for how assets are distributed to the beneficiaries so that they are Islamic finance, practitioners in Malta believe the island can es- in accordance with Islamic rules of succession tablish its own place in this growing sector. Shariah-compliant investment banking, project and trade finance, as well as Shariah Funds Shariah funds and insurance, could all appeal to customers in It is also hard to ignore Malta’s potential for Shariah-compliant the nearby EU and North African markets. investment funds. Funds which comply with Islamic law can Islamic finance can be lucrative for Muslims and equally be set up either as Undertakings for Collective Investment in US$2 viable for non-Muslims with its ethical, transparent and non- Transferable Securities (UCITS), as Alternative Investment interest-bearing financial functions. Malta can also act as a Funds (AIFs) or as Professional Investor Funds (PIFs), which conduit into other EU countries, such as Italy, which is cur- are non-retail funds targeting the more experienced inves- trillion rently an underdeveloped market for Islamic finance, despite value of the global tor. Ijarah Funds, Commodity Funds and Murabaha Funds, having a Muslim population of over 1.5 million. The growth islamic finance market which generally invest in non-conventional asset classes, may of Islamic finance globally also means there is an increasing only be licensed in Malta as non-retail funds, whilst Shariah- demand for new Islamic-compliant business activities, and compliant equity funds can be set up as Maltese UCITS Malta’s government could follow in the footsteps of London schemes or as non-retail alternative funds. As the only EU and Dubai by issuing its own Sukuk, an Islamic finance bond. regulator, the Malta Financial Services Authority (MFSA) Rating agencies report that Islamic finance has remained a has also issued guidance notes on how to set up Shariah- demand-driven market, with scarce supply, still hampered by a compliant funds on the island. limited range of Islamic financial centres. This means the prospects are good for Malta to grow this sector further. ¢ Intellectual Property Intellectual Property 90 91

Intellectual Property alta is providing corporations and individuals with superb opportunities to exploit their Intellectual Property (IP). Whether referring to patents, trade Msecrets, trademarks, copyrights or even domain names, all of Discovering a the various types of intellectual property 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 New Value future is to become a trusted platform for international IP transactions offering support across the entire IP value chain, In a world where control of markets and materials is as important including protecting, managing and commercialising ideas as control of rights to new ideas and innovations, Malta has put the and innovations. management of Intellectual Property at the core of its financial sector. Emerging IP Business In positioning 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 other countries. IP rights can be filed in, or through, Malta, but due to the market size, the registration of IP rights on the island is relatively low. However, 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.

Maximising IP Asset Value 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 copyrights, brand-names, patents, designs and technical know-how. The company can enter into licence and franchise agreements with other companies 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 way of structuring means that the IP company can benefit from Malta’s competitive tax regime and will have access to the country’s wide network of double taxation treaties. To en- courage companies and professionals from around the world to bring their IP to Malta, the country enacted special tax incentives for the set-up of royalty companies. Royalties derived from a certain type of registered patent, copyright and trademark are totally exempt from tax. Intellectual Property Maritime & Yachting 92 93

IP Support Services Signatory to International Specialist service providers and Malta’s legal firms offer IP Conventions Maritime & Yachting owners assistance in developing IP management strategies, Malta is a member of all providing guidance through all aspects of IP strategy, protec- the major organisations tion, exploitation, as well as the enforcement of IP rights. They and treaties in the can conclude comprehensive portfolio reviews, which flag field of intellectual property, including: Powering issues such as business critical intellectual assets that should be protected, conduct searches in databases and registers, manage u World Intellectual Property the registration of IP rights in Malta, as well as in other coun- Organisation (WIPO) tries, and liaise with the relevant authorities for clients seeking u paris Convention to protect their creations and ideas. Malta also provides a for the Protection of Global Shipping strong and conducive business environment for companies Industrial Property Malta, with a population of just over 421,000, has built to manage and trade their IP. It boasts lower operational costs u berne Convention for up the largest maritime cluster in Europe thanks to its than many of its EU peers, while laws and legislation can easily the Protection of Literary appealing regulatory framework and service culture. be accessed due to the fact that English is an official language. and Artistic Works u universal Copyright Innovation as a Priority Convention (UCC) Malta has all the right elements in place to become a gateway u universal Copyright for international IP protection and to build up a vibrant IP mar- Convention and the ketplace that supports global operations. IP-related activities Agreement on Trade- also have a vital role in Malta’s wider economic development Related Aspects of plan. Less than 1 per cent of Malta’s GDP is currently produced Intellectual Property by Research and Development activity, but the island is deter- Right (TRIPs agreement) mined to change this. Malta is fostering the growth of sectors u WIPO Copyright Treaty such as life sciences, ICT and the creative industries, including u WIPO Performances and the construction of industry clusters and dedicated infrastruc- Phonograms Treaty ture that facilitates research and innovation. Offering compa- u World Trade nies a favourable location for the protection and management Organisation (WTO) of their intellectual property, the island is hoping that once the agreement IP is located on the island, the core business will follow. The u european aim is to bolster the country’s entire IP economy and support Patent Convention (EPC) activities across the entire value chain, from the creation to the u patent Co-Operation commercialisation and exploitation of IP. ¢ Treaty (PCT)

Registration of IP Rights in, or through, Malta The Malta Applications for patents or designs must be filed with the Office of the Comptroller of Industrial 1st Ship Register 6th Property. Malta is a signatory to the European Patent Convention (EPC) and the Patent Co- In In the Operation Treaty (PCT). As a result, applications for patents under these agreements can Europe World 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 Office of the Comptroller of Industrial Property. European trademark and design registration can be obtained from the EU’s Office for Harmonisation in the Internal Market (OHIM). Those applications can also be directed to the Malta office and individuals or enterprises can select the countries in which they wish to register their trademark. Maritime & Yachting Maritime & Yachting 94 95

alta has maintained its dominance as the flag- Competitive Edge ship register of European vessels. The island hosts Dedicated legislation and tight registration criteria, all in line Europe’s largest shipping register, has five per cent with EU Directives and International Maritime Organisation Mof the world’s superyacht fleet under its administration, and conventions, as well as a high-level 24/7 administrative service boasts a legal and regulatory framework that has made Malta are among the driving forces behind the success of Malta’s ship- a safe, efficient and profitable location in which to do business. ping industry. As one of only two open registers in the EU, regis- The success of the sector was founded on the island’s well-run tration is available to vessels owned by Maltese and non-Maltese international maritime register where high service standards persons, and in practice any kind of vessel may be registered. attract clients globally. Business streams such as ship finance, A customer-centric The Malta flag Traditionally, Malta has been a favourite among Greek ship litigation and maritime security are all experiencing growth competent workforce, should be the flag owners and, while Greek-operated ships and the Malta Flag while future plans, such as the construction of a new maritime a robust and dynamic legal of choice for any EU run/ administration still work hand in hand, the island has recently park, demonstrate the government’s confidence in the sector. framework, economic and based ship operation, or for seen an influx of vessels from Germany and Turkey. Attracted by political stability and the any superyacht operating minimal bureaucracy and efficient customer service, they appre- Maritime Tradition island’s strategic geographic or chartering in the EU. The ciate that Transport Malta, the regulator of all maritime activi- Malta has a centuries-old maritime tradition; the island’s stra- location have all contributed to confidence the Malta flag ties, is on call 24/7 to deal with problems. In addition, documen- tegic location midway between Europe, the Middle East and establishing Malta as the leading conveys is based on a solid tation can be lodged outside normal Central European working North Africa has seen it used as a transshipment hub for thou- maritime hub of the region.” reputation and high level of hours – a service which is important for ship owners and finan- sands of years by everyone from the Phoenicians to the Order service. Legal certainty and ciers coming from the Americas or the Far East. of Saint John. Valletta’s Grand Harbour became a major naval Ivan Sammut fiscal advantages are also very base during British rule in the 19th and 20th centuries. The Registrar, General of Shipping important considerations for A Flag of Confidence picture today is perhaps less colourful, focusing on commercial and Seamen at Transport Malta anyone looking for a jurisdiction The main reason that so many vessels choose to fly the Maltese and leisure shipping, but history has bequeathed Malta a strong to base his/her operation.” flag can be found in favourable legislation and regulations, of- maritime culture. fering ship owners substantial cost-savings. Registration costs Dr Anthony Galea and the fees of service providers have remained affordable, Industry Cluster Partner, DF Advocates while the Maltese flag also offers an advantageous tonnage Ship registration is today the main engine of growth in Malta’s tax system for income derived from shipping and ship man- maritime sector. Malta’s shipping register, although it was es- agement activities. Transport Malta goes to great lengths to tablished as recently as 1973, has grown steadily ever since. The emphasise that Malta is a flag of confidence and not one of register and tonnage alone has doubled in the past 15 years, convenience. The island’s status as an EU member state, its with Malta overtaking Greece and Cyprus to top the rank- state-of-the-art maritime framework and the excellent safety ings as Europe’s. Malta’s register ranges from oil tankers to su- records of Malta-flagged ships helped the island to be officially peryachts, from LNG carriers to cruise ships, and from bulk classified as a low-risk flag. Transport Malta has put a premium carriers to RORO ships. Today over 6,660 vessels sail under on quality by introducing regulations which require ships aged the Maltese flag, with over 450 superyachts (vessels over 24 15 years and over to pass additional inspections, and ships over metres in length) registered in Malta at the end of 2014. Over Malta’s well- 25 years are not accepted on the register. The island now has the past ten years, the global luxury superyacht market has established maritime one of the youngest fleets in the world. expanded beyond all expectations, and the development of a infrastructure, EU membership The island’s regulations are also attractive to yacht owners. new yacht code has made the registration of commercial and and reputable international For example, yachts registered as commercial vessels can pleasure yachts, including superyachts, in Malta very attrac- shipping register offer a benefit by paying an annual tax on the tonnage, rather than an tive. However, there is much more to the country’s shipping in- unique set of benefits for ship income tax on earnings. For yachts which are not commercial- dustry than its registered merchant fleet: Malta is also home to owners seeking a dynamic ly registered, Malta operates an attractive system for purchas- a premier maritime cluster, including excellent yacht marinas, and effective maritime centre.” ing and leasing. This enables yacht owners to pay VAT on their cargo port facilities, and shipbuilding and repair services. This yachts calculated on the percentage of the time that vessels are is in addition to a wide range of finance, law, insurance and Nigar Aliyeva Keating deemed to have sailed in EU waters – based on the assumption management facilities. Director, Palmali that the larger the yacht, the less time it stays in those waters Shipmanagement and vice-versa. Maritime & Yachting Maritime & Yachting 96 97

The Malta Flag in Figures (2013) Experience & Attractiveness The development of the international shipping 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. Among the initiatives being undertaken for continued success is one to protect Maltese registered vessels against piracy by allowing armed guards on board and introducing a licensing regime for private maritime security companies – a first in international maritime history. The island has also adopted a reduced VAT rate on short-term yacht charters commencing in Malta. 7 years 12 years While such charters will continue to be subject to a rate of 18 per Average age of vessels Average age of cent on the cost of the charter, this will only be applied propor- at registration merchant fleet tionally, 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.

The Malta A Variety of Services The newest addition to Malta’s maritime sector will be the Flag in 172,000 square metre Maritime Services Park to be construct- Figures ed in Marsa, which will host a range of technical and commer- 6,667 452 cial service providers, as well as providing space for offices, ships, including (2014) superyacht workshops and suchlike. Another key factor that provides the over 2,500 merchant registrations bedrock for such an appealing maritime sector is the various vessels fly the specialist companies that make up the rest of the maritime Maltese Flag cluster. This includes IT companies who specialise in marine software engineering and electrical engineering companies who develop and install vessel-management systems. There are also five marinas on the island catering for luxury, private and charter vessels. The sheer volume of facilities makes for a com- 57.9 million petitive and productive environment. gross tonnage Unrivalled Location Malta’s growth in the maritime sector has not happened by accident, but is the result of a constant effort to improve the island’s competitiveness and service offering. Today, the country’s legislative and regulatory frameworks rank among the best in the world, offering high standards, high service levels and a quality international reputation which makes flying the Maltese flag a competitive alternative to other registers. Given the cluster of services on offer, the island’s maritime professionals believe that other destinations will find it difficult to compete with Malta. ¢ Aviation Aviation 98 99

alta has forged a reputation as a key centre of activity in the global aviation industry and has gradu- ally built up the experience needed to compete Min a highly technical industry. A new legislative framework contributed towards Malta’s transformation into a competitive location for the registration of both private and corporate jets. The island is also home to a selection of maintenance, repair and overhaul (MRO) providers and hosts a number of 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 large aircraft-leasing, finance and charter companies. Aviation Developing an Industry 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, in addition to a small number of business jets Rapid Ascent to and light aircraft. It was only recently that the country decided to capitalise further on its aviation heritage. Key to Malta’s strategy to develop itself into an aviation hub in the Mediterranean was the introduction of a new Aircraft Registration Act in 2010. The success of the sector was also founded on Malta’s strong position in the maintenance and repair field. Besides Air Malta, 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 chose to explore the opportunities available on the island. Over the years, aviation has emerged as one of the fastest growing industries in Huge investments over the past years have the country: it currently provides 2.5 per cent of Malta’s GDP turnedS Malta intouccess a recognised address for aircraft and supports over 5,000 jobs. registration and aviation services, and the island is now positioning itself to take advantage of the growing finance and leasing markets. Aviation Aviation 100 101

Numbers Up session or control of the aircraft, selling or granting a lease on Malta’s aviation sector today aspires to follow in the successful the aircraft, and collecting or receiving any income or profits footsteps of the country’s long-established maritime industry, arising from the management or use of the aircraft. A simpli- which still retains the largest shipping register in Europe. And fied method of VAT assessment was also introduced at the end the country’s expanding aviation register is generally regarded of 2012 which makes the purchase and subsequent lease of an as a key driver behind the growth of the industry. The number aircraft more attractive, whereby VAT becomes due only for the of aircraft registered under the Maltese flag has rocketed in time an aircraft operates in the European Union. In addition, recent years, from just 90 in 2010 up to more than 165 today. Malta offers the aviation industry a competitive tax system and This growth is due in no small part to the sector’s helpful legis- Our continued access to over 70 double taxation treaties worldwide. These lation. Malta’s Aircraft Registration Act strives to do away with investments advantages, combined with EU membership and the fact that unnecessary red tape and regulatory burdens, while maintain- promoting Malta as an English – the global language of aviation – is one of Malta’s of- ing the added protection of being fully recognised by Maltese aviation centre of excellence ficial languages, enhances the country’s proposition as a base and EU law. The legislation allows the registration of an aircraft augur interest from companies for aviation operators. while it is still under construction, the recognition of fractional from the US and the Far East ownership and the regulation of trust agreements in relation to set up shop on the island. Malta Incentives to aircraft. Malta gives them further A major boost for Malta’s aviation industry was the inaugura- reach and accessibility to tion of the new €17 million, 200,000-square metre Safi Aviation Key Players Europe and Africa. These are Growth in Park in 2012, which hosts a number of business aircraft op- Corporate charter airlines such as Comlux, Orion Malta and not only companies interested erators and MRO facilities. The government sees this develop- Carree have all registered aircraft in the country. Aircraft man- in registering aircraft but also Aircraft ment as instrumental in attracting more large aircraft-leasing agement companies DC Aviation and Hangar 8 also estab- design, manufacture and and charter companies, thus sustaining the industry’s upward lished operations on the island. Austrian private jet company production organisations.” registrations trajectory. These strong investments in physical infrastructure VistaJet also registered a number of aircraft under the Malta 2010-2014 are also supported by a growing number of ancillary services flag, adding to the increasing number of private jet companies Dr Edward Zammit Lewis provided by law and accountancy firms, who are able to assist choosing Malta as an ideal location for the management of Minister for Tourism aircraft owners, managers, lessors and lessees, financiers and their fleets. aircraft MRO facilities on a wide range of issues. They advise Transport Malta, the regulator of both the maritime and on sale and purchase deals, aircraft registration, chartering and aviation industries, offers fees that are among the lowest in leasing, and the drafting of aviation-related service agreements the EU, as well as streamlined regulations that are in full com- pertaining to maintenance and repair. The growth of the in- pliance with the international safety standards set out by the dustry has also allowed the establishment of flight academies, European Aviation Safety Association (EASA). It also provides as well as permitting the Malta College of Arts, Science and an attentive, personal service to companies choosing to set up Technology (MCAST) to begin offering aviation-related train- on the island due to the current register size. As this sector ing. Added to its very supportive environment, Malta has taken expands at an increasingly rapid pace, and to maintain the strides to attract an even greater share of top-tier talent and level of service provided thus far, the island plans to establish world-class firms by extending tax-friendly policies, origi- an autonomous Civil Aviation Authority and develop a holistic nally drawn up for the finance industry, to the aviation sector. aviation policy. Foreign aircraft managers coming to Malta can now benefit from a reduced income tax rate. Finance Focus As well as developing cutting-edge legislation, Malta has re- Leasing Business cently sought to position itself at the forefront of aircraft Today, 40 per cent of the world’s aircraft are leased, and this finance transactions. The island has ratified the Cape Town 94 103 128 155 165 percentage is set to increase in the coming years. Aircraft Convention, which is widely recognised as the market stand- leasing offers tremendous opportunities for Malta to position ard in aircraft finance. The Convention provides certainty to itself as a Mediterranean hub alongside established or emerg- investors in the event of debtor defaults and details procedures ing leasing centres, such as Dublin or Singapore. The main that should be undertaken if this happens, such as taking pos- challenge for Malta’s aviation finance and leasing industry 2010 2011 2012 2013 2014 Aviation Payments Industry 102 103

in meeting its own growth targets is to develop the required Payments Industry expertise, but the island 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 Embracing 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. New Opportunities The Maltese aviation Malta is increasingly playing a role in the fast-developing Profitable Niches sector has been payments industry and is going all-out to capture Basing operations in Malta allows companies to access a overhauled by introducing a slice of this global trillion-dollar market. quality labour force including lawyers, and tax and aircraft novel concepts such as technical specialists. As well as housing some of the big names, fractional ownership, the the sector offers a range of opportunities for smaller compa- registration of security nies, with aircraft refurbishment firms being among the most interests, and the registration common. Other profitable niches, such as custom IT design or of private aircraft and aircraft specialist airline reservation call centres, are seeing the benefits under construction. This has of joining an expanding sector first hand. Major airlines also brought about a significant alta’s payment solutions industry has seen signifi- regard the country as a prime recruitment location for niche presence of international cant growth in recent years, and observers believe markets, such as aircrew training, due to the language abili- operators together with that growth is set to continue with consumers’ in- ties of the Maltese, their lower labour costs and their famously maintenance, repair and Mcreased use of mobile phone and credit cards. Numerous com- ardent work ethic. overhaul facilities.” panies processing online and mobile payments for customers from across the globe have emerged. A strong and innovative Capitalising on Malta George Borg Marks regulatory framework, state-of-the-art telecommunications in- With a rapidly growing aircraft register, appealing legislation Director General for Civil frastructure capable of hosting and delivering round-the-clock and a strong support infrastructure, Malta’s aviation industry Aviation, Transport Malta connectivity to mainland Europe, and the island’s accessibil- looks set to continue its extraordinary expansion. Although ity and lower costs have been a major draw to international the global aviation industry is challenged for profitability, the payment providers seeking a secure environment to offer new growth for years ahead seems to be assured by an increasing transactions channels. demand for safe and efficient transport in nearly every corner of the world. Due to its lower cost base and competitive tax ICT Impact framework, more and more companies are choosing to capi- Malta’s payments industry interacts directly with its strong tel- talise on the opportunities available on the island. This implies ecoms and financial sectors. The first payment service provid- that the aviation ecosystem will grow further and create more ers, card issuers, payment gateways and eWallets to set up on opportunities for service providers to expand in tandem with the island were attracted by Malta’s role as a hub for ICT firms. the sector. The government has also announced its intention to They started servicing and supporting the growing number invest heavily in the aviation industry’s research and develop- (250+ and counting) of iGaming companies that flocked to the ment sector in order to retain its competitiveness on a global island. At the same time, the island has built up a reputation as scale. Transport Malta has already identified the testing and a safe and stable international finance centre, having weathered licensing of drones as a growth area. Should Malta’s aviation the challenges posed by both the global financial crisis and the sector maintain, or even improve, upon its recent performance, EU sovereign debt crisis. With a cutting-edge IT infrastruc- there is little doubt that it will achieve its goal of emulating the ture, and with successive governments investing heavily in an maritime industry’s worldwide success and build up the critical eSociety, Malta has turned its attention towards establishing an mass to reinforce its position. ¢ independent payments industry and is focused on attracting payment and electronic money (eMoney) institutions to the island with some measure of success already being felt. Payments Industry Payments Industry 104 105

A Dynamic Centre Technology-Driven Business A total of 22 payment institutions operated in Malta at the Malta’s legislation To serve the industry’s needs, the country has expanded its end of 2014, up from 15 at the end 2012. Malta has proved international connectivity and communications capacity to be a dynamic on-the-ball player by offering a new licence is modern and enormously over the last few years, with four submarine fibre for eMoney institutions. Since October 2011, when the first sophisticated, optic cables connecting the island to Sicily. Malta also boasts company received its licence from Malta’s regulator, six other a number of specialist firms offering services to the industry. companies have followed its lead. The main difference between ahead of many of From legal, accounting and corporate services to technical se- the two types of service providers is that only eMoney insti- its competitors curity audits and PCI compliance testing, the country has es- tutions are allowed to issue electronic money in addition to in the areas of tablished a strong contingent of professional and technical ser- other services usually provided by payment institutions such as vices providers to meet the holistic requirements of electronic credit transfers, direct debits or money remittance. A number eFinancial services financial institutions.. of specialist PCI certified payment service providers have regulation and also established operations in Malta, offering a full range of facilitation. Tremendous Potential payment services. Malta’s professionals believe that potential exists to attract more payment business given the overall growth of the industry. The Safe & Secure presence of a large number of financial services, iGaming and With safety and security being an obvious concern for consum- eCommerce companies situated on the island means that they ers, and the desire of companies to be based within a reputable can tap into an established cluster of service providers as well EU jurisdiction, Malta offers the opportunity to operate in a as potential clients. The country’s payments industry offers well-regulated environment and service customers through- entrepreneurs significant opportunities to win business inter- out the European Union. Malta’s legislation is modern and nationally. While passporting rights offer access to European sophisticated, ahead of many of its competitors in the areas of markets, Malta’s geographical location means that companies eFinancial services regulation and facilitation. The island is in can also use the island as a springboard to African markets. particular being seen as a convenient location for the European In particular, developing countries are driving growth in this headquarters of American and Asian financial institutions sector. Mobile payments have played a big role in financial in- wanting to enter the EU market. A significant portion of the clusion in Africa where the population embraces new payment global payments sector is also made up of small technology options due to a lack of traditional infrastructure, such as credit start-ups. Malta’s lower costs give these companies significantly cards and banks. more runway. Quality Jurisdiction Types of Licences Innovative offerings in the payment acquisition space are Malta’s legislative and regulatory framework places great em- flourishing and are driving strong growth in e- and m-pay- phasis on anti-money laundering and anti-fraud measures. ments usage and prepaid cards. In Europe, the share of alter- Overseen and supervised by a single regulator, a licence from native payments, including mobile and e-wallets, is forecast to the Malta Financial Services Authority (MFSA) can assure reach up to 20 per cent of the total payments market by 2020. consumers of the integrity of a payment solution. Industry Nevertheless, the payments sector has become a crowded participants setting up in Malta can choose between four dis- market, and competition is intense. Reputation is more impor- tinctive licences: the banking licence, the eMoney institution tant than ever. In this climate, Malta offers the payments indus- licence, the financial institution licence, and the payment in- try highly advantageous conditions. The island’s well-respected stitution licence. While a fully-fledged banking licence offers banking system, and widely praised legislative and regulatory operators the opportunity to provide online banking services, regime, give payment providers the security of knowing they an eMoney institution licence is more attractive to standalone are operating within a world-class system, offering sophisticat- eMoney institutions such as eWallets because it allows opera- ed methods for online payments and ensuring that customer tions to start with a lower capital requirement (€350,000) when satisfaction is high. ¢ compared to a full banking licence (€1 million). Shared Services & Outsourcing 107

Shared Services & Outsourcing A Journey to Quality Malta has established itself as a powerful outsourcing partner that is increasingly winning high-value deals and offering knowledge-based solutions.

alta is a key contender for higher-value shared services centres that require different skill sets as the island is broadening its outsourcing offering for Mmiddle and back office functions. Once known only as a call centre location, Malta is now finding its role in financial services, IT and software development. The island has benefitted from recent ‘nearshoring’ trends of businesses westwards from Asia – with the search for higher quality eroding the traditional Postal services today global offshore dominance of India, the Philippines and China. are not only about With cost no longer the prime driver, Malta’s Business Process delivering mail from one point Outsourcing (BPO) industry offers high-end customer care to another. As customers and sophisticated service in an EU and eurozone location. increasingly seek innovative solutions, we believe there Moving with the Times is significant potential in Malta’s emergence as an outsourcing location began in the call- ancillary lines of business and contact-centre market and was built upon some of the such as financial services, country’s most fundamental strengths: the fact that English is document management an official language, near-universal fluency in Italian and wide- and hybrid mail.” spread knowledge of at least one other European language. Financial services companies were the first to take advantage Joseph Gafa’ of the development of the call-centre sector in Malta. One CEO, Maltapost example was Malta’s 2006 success in edging out India in the bid to host HSBC’s global call centre for English-language calls. While a number of other international call centres were set up on the island, 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’s 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, supporting a group’s global operations in areas such as HR, finance and IT. Shared Services & Outsourcing Shared Services & Outsourcing 108 109

European Location for the outsourcing of activities that are analytical or skills-in- The shift to higher-value services has greatly benefitted Malta. tensive. With strong data protection legislation and risk-man- Many Maltese firms now offer so-called Knowledge Process agement frameworks, Malta is recognised as a safer location Outsourcing (KPO) functions, in which more skilled profes- than other outsourcing destinations for the holding of custom- sionals can assist in knowledge-based areas of work on behalf er information. With the global outsourcing market expected of finance, insurance or banking companies. While developing to grow by 5 per cent annually and Malta’s status as a financial economies have struggled to acquire investments from client centre on the rise, the stage is set for the country to improve its nations, Malta has continued to show signs of evolution and already solid reputation as an outsourcing destination. maturity. Today the sector employs thousands of people, and Malta is a top nearshoring centre for Europe. A large number of Competitive Skills & Costs companies offer customer management, including sales, mar- The island’s close cultural affinity with the UK and the rest of keting and customer care, or enterprise services such as HR, Europe, combined with its strong work ethic, give it a signifi- finance and accounting. The key markets for Malta’s outsourc- cant advantage across many sectors. While costs may be higher ing firms are accounts based in the UK, France and Germany; than in Asia, many European companies that outsource work to though the next few years are expected to herald a period of Malta comment that it offers better all-round value for money: worldwide interest in what the island has to offer. the workforce is highly educated and wages are reasonable, and employee turnover is relatively low, resulting in reduced train- Building on Finance Strength ing costs and better quality of service. The island also boasts The largest BPO providers in Malta today are the Swedish an excellent ICT infrastructure. The robustness of the IT and company Besedo (specialising in content moderation and telecoms infrastructure, coupled with the good language skills media management) and Centrecom, an international call- and of the Maltese workforce, as well as an attractive business and contact-centre. Boasting large numbers of accounting firms, living environment, will further drive Malta’s outsourcing and including boutique practices and the ‘Big Four’, accountancy shared services success. is the biggest outsourcing sector. Companies are also offering foreign clients back-office services, such as the processing and Growing Business recording of invoices and sales transactions, accounts manage- In particular, the international finance centre is expected to ment and information reporting. In the area of shared services, create further growth for the industry, which could under- Malta is differentiating itself from traditional outsourcing loca- take routine or administrative tasks, such as filling in online tions by viewing shared services as a high-performance busi- data entry forms and processing insurance claims, or repeti- ness, and many entities are now expanding to deliver high-val- tive administrative work involved in fund administration. ue services, including business analysis and decision support to For international companies looking at setting up shared ser- their parent companies, in areas such as finance and account- vices centres, Malta offers a gateway to the European Union, ing, IT, HR, customer service, procurement, payroll, real estate equipped to provide both basic business support and best-of- and marketing. breed services for knowledge-intensive functions. The key markets for Malta’s task for the future is to continue to increase ef- Analytics & Data Malta’s outsourcing ficiency and proficiency in order to compete with other In recent years, Malta’s outsourcing industry has diversified, firms are accounts European destinations and to create broader awareness of what now delivering services in a wide range of sectors and indus- based in the UK, Malta has to offer. As the outsourcing market matures, Malta tries, including transport, financial, and software services, as France and Germany; will offer clients an attractive package: industry expertise and well as for investment, insurance and shipping firms. In the though the next few insight, analytics and innovation – at a competitive price. Any face of global competition, Maltese companies have focused on years are expected company looking at outsourcing mission-critical functions or providing high-end analytic services as most organisations are to herald a period of projects that involve sensitive data can rest assured that they today outsourcing not only business processes but also knowl- worldwide interest will receive service of the highest quality. ¢ edge ones, including market research and financial analysis. in what the island In particular, its pool of professionals with degrees in has to offer. finance, banking or insurance has made the island attractive Financial Software Development Interview 110 111

Financial Software Development Fintech Scene is on the Rise A community of innovators is developing in Malta as the finance industry joins the world of technology.

names have 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 alta’s growing financial technology cluster, or Fintech generalised product and service portfolios. Many of them today as it is known, is being fuelled by the island’s strength offer specific solutions and tailor-made products for a range of in the financial services sector and its continuously sectors, including financial services. Mdeveloping tech industry. Malta offers financial software developers the opportunity to be located in one of the fastest-growing Fintech Force finance centres, in close proximity to potential employers, con- Fintech has become a new force in the world of finance. While tractors and investors. Malta’s small size and low costs make it an more markets are becoming fully electronic, and the demand for ideal start-up location, while the potential synergies with Malta’s safe and secure eFinancial Services has intensified, the island is finance centre also make it a natural choice for international keen to bring a new breed of innovation to Malta’s International companies looking to expand into Fintech or use the island as a Finance Centre (IFC). This includes companies that will reshape springboard to nearby markets. As increasing numbers of firms the finance landscape by changing the ways in which people settle down on the island, Malta is carving out a profitable cross- Malta was the first borrow, save and make payments, as well as the ways that finan- industry niche. European country cial institutions operate their risk and security systems or deal to have a body of legislation with ‘big data’. Malta is promoting itself as a base for innovative Building up a Reputation regulating online gaming. entrepreneurs, technology-based companies at a start-up stage The growth of Malta’s information, communication and tech- This was a kind of evolution and firms seeking a headquarters for their regional operations. nology (ICT) sector has been nothing short of phenomenal. of financial services, given The first companies to take advantage of what Malta offers, the fiscal incentives we had in Dynamic Industry such as fiscal benefits, a strategic location in the centre of the the financial services regime, Though there has been turmoil in the financial markets world- Mediterranean and cultural proximity to Europe, were iGaming and gaming companies wide, innovation in financial technology has gone undeterred and eCommerce companies. The sector has expanded consid- started to set up here to and in fact accelerated. New regulatory challenges in the post- erably beyond its humble beginnings, now employing around benefit from them. Malta is crisis financial market landscape, and pressure on banks and 7,000 people and boasting a vibrant software development in- currently a top-five remote other financial services companies to cut costs, have created a dustry. It is constantly evolving, with growth being driven by a gaming jurisdiction, and the fertile environment for Fintech. Companies are now looking wide array of segments, such as cloud computing, mobile plat- sector generates around into more innovative and economical solutions to solve their forms and applications, social networking and animation. The 7 per cent of our GDP.” technology problems. With over 25 banks, 60 insurance com- island has attracted not only global brands but also smaller, panies and over 70 fund managers, in addition to many other more specialised software developers. Today, several hundred Joseph Cuschieri financial services companies, Malta’s IFC offers software devel- ICT companies operate in, or from, Malta. The majority of these Executive Chairman, opers a large potential client base on their doorstep. The island are micro-enterprises but, at the same time, many high-profile Malta Gaming Authority is also home to a number of eFinancial Services companies, Financial Software Development 113

DAIS 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 PERSONA testing of software, hardware and applications.

Supporting Fintech Business Tech firms point to Malta as an emerging Fintech location because it provides a wealth of talent, both tech and finance. Malta’s main assets The local labour pool is deep enough to meet the needs of are the continuous Government Politically ICT employers across the range of technical and creative skills, Official Exposed ICT investments in while specialist knowledge can easily be sourced from overseas. Person infrastructure and training Salaries are lower than in other Western European IT centres, which are supported by such as the UK or the Scandinavian countries, thus enabling Sanctioned Person of Individual Convicted the government’s strategic Interest of Bribery small and medium-sized companies to develop new products economic policies, an at affordable HR costs. International connectivity is guaranteed Special Convicted of Interest Corruption English-speaking and by three operators providing international gateway services via Person skilled workforce as well as fibre-optic cables to mainland Europe. the country’s proximity to Central and Western Europe. Championing Innovation Additionally, a variety of Often referred to as a ‘Mediterranean Silicon Valley’, Malta’s rapidly developing service small size also makes it the ideal test environment for new tech- industries allow vertical nologies and ventures in need of a flying start. Companies can specialisation in areas such as develop and test new products and services on the diverse, yet finance, eGaming and other concentrated, local market before exporting their services and IT-enabled services industries.” solutions to Europe and further afield. Global giants support the small island nation in its effort to become a centre for tech inno- Savas Manyasli vation. The island has partnered with Microsoft to create an inno- Founder and Solution Architect, vation centre, offering lab space and mentoring programmes to DAIS Software Limited early-stage companies or individuals. In addition, a Dubai-style technology park is being built and promises to further enhance the supportive environment for IT companies. SmartCity Malta is funded by Dubai Holding’s Tecom Investments, which initially DAIS Persona is a multi-function “customer Industries Product Solutions acceptance” software that combines client Law Firms Global Sanctions invested US$300 million in the project in 2009. The first building document management and a compliance search Corporate Services Anti-Bribery & Corruption in this self-sustained township was inaugurated in October 2010, tool for KYC/AML/CFT process. Designed as a Accounting & Audit Anti-Money Laundering with full completion scheduled for 2021. front-line screening and reporting tool to minimize E-Gaming Know Your Customer regulatory risks, DAIS PERSONA enables you E-Commerce Reputational Risk Management to automatically monitor, screen and search Payment Services Persons of Interest Diversity, Talent, Growth for an individual or a corporate entity against FX Brokerage Politically Exposed Person Malta is now reaching out to the global Fintech innovators as known sanction lists that include UN Sanction Real Estate Government Official technology is seen as having the potential to facilitate growth in list, US Treasury OFAC and EU Sanctions lists. Special Interest Person the island’s finance sector. While New York or London might be Special Interest Entity the more obvious bases for financial software developers, Malta’s sophisticated ICT infrastructure and affordable business costs, in a Mediterranean island setting, differentiate it from other DAIS PERSONA • Office 4 St Anne Court, 64 Bisazza Street, Sliema, locations competing to attract new IT talent, and will help the SLM 1642, MALTA • Email: [email protected] country to develop a burgeoning Fintech scene that sells into the www.dais.com.mt world’s financial markets. ¢ Arbitration Arbitration 114 115

Arbitration decide the case, thus ensuring that the arbitral proceedings commence right away. One of the key advantages of arbitration is that the parties can appoint an arbitrator with knowledge and understanding of the subject matter of the dispute. The MAC Picking up Speed has a number of Panels of Arbitrators with expertise on offer, ranging from specialist insurance, construction and taxation Malta is not short of experience when spotting global professionals to experts in the maritime, finance and account- trends and is making some headway in developing ing sector. Alternatively, parties can also engage a foreign arbi- itself as a centre for international arbitration. Malta’s strategic position trator who can also be chosen from the Panel of International in the centre of the Arbitrators maintained by the MAC. Awards delivered are final alta is flaunting its arbitration credentials and is Mediterranean with direct and binding and, once registered with the MAC, they consti- eager to position itself in the multi-billion dollar links to Europe, North Africa tute an executive title and can thus be enforced as court judge- arbitration market. As businesses are increasingly and the Middle East, together ments. An award can be appealed in a court of law on a point of Mreverting to alternative methods for the resolution of commer- with the availability of an law, which appeal will then render the award public. This right cial conflicts such as contract breaches, payment defaults and Arbitration Centre and a legal of appeal, however, can be excluded by agreement between the intellectual property theft, Malta is gaining momentum as an regime relating to arbitration parties. arbitral venue due to its geographically convenient location, its which is based on and conforms sophisticated physical and political infrastructure, as well as to international standards, Significant Advantages its legal framework that is on par with the best international makes Malta an ideal venue Although the exact cost of arbitration depends on the du- practices. for international arbitration.” ration of the proceedings, the number of witnesses and the expert analysis required, it is still usually cheaper than litiga- A Mediterranean Venue Dr Owen Bonnici tion. The parties agree a fee directly with the arbitral tribu- Despite being a small Mediterranean island, Malta has a Minister for Justice, Culture nal, making costs more calculable. Registry fees are lower in history of being a venue of international conflict resolution: and Local Government Malta than in other arbitration centres, such as London or the country hosted the famous Bush-Gorbachev summit in Paris, which makes the country an ideal location for arbitra- 1989 that ended the Cold War. Today, global corporations are tion of cross-border contracts whose parties wish to avoid the turning to the island to solve commercial disputes of all kinds risk of having to litigate in the other party’s courts. To ensure within the energy, construction, infrastructure, trade and com- the enforceability of awards, the Malta Arbitration Act incor- modities sectors. Located strategically between Europe and porates the 1958 New York Convention on the Recognition North Africa and within easy reach of the Middle East, Malta and Enforcement of Foreign Arbitral Awards, which has offers companies from the region the right environment in been signed by some 150 states, the 1923 Geneva Protocol which to solve commercial disputes. In 1996 the island im- on Arbitration Clauses, the 1927 Geneva Convention on the plemented the Arbitration Act, which is based on the Model Execution of Foreign Arbitral Awards, and the Convention Law on International Commercial Arbitration set out by the on the Settlement of Investment Disputes between States and United Nations Commission on International Trade Law Nationals of Other States. (UNCITRAL). This created a legal framework that gives parties all the necessary flexibility for arbitral proceedings, acting as a An Emerging Hub precursor for the establishment of the Malta Arbitration Centre While the MAC has been seen primarily as a domestic arbitra- (MAC) which started its operations in March 2000. Today, all tion centre, progress has been made in recent years to enhance arbitrations in Malta have to be carried out under the auspices confidence in Malta as an international arbitration hub. The of the MAC. island is in particular attractive to parties wishing to resolve disputes arising in the emerging markets of North Africa. Given Informal Proceedings the growing interest in arbitration, a central Mediterranean lo- Once the case is filed with the MAC, a consultation between cation such as Malta is sure to see an increase in the number, the parties is held in order to deal with all preliminary matters, size and complexity of international arbitration cases handled including the appointment of the arbitral tribunal to hear and over the coming years. ¢ Legislation & Regulation Legislation & Regulation 116 117

Legislation & Regulation Driving Progress The most important factor behind Malta’s success as a finance centre is regulation. While adhering to international best practice, the island’s approach to regulation remains flexible and versatile.

hroughout its short history as a financial centre, Malta’s The Malta Financial Services Authority regulatory framework has been the foundation upon One important milestone in Malta’s development as a fi- which the island has developed into a world-class base for nancial centre was the establishment of a single regulator for all Tfinancial services firms. Today, the island is not only following financial services, the MFSA (www.mfsa.com.mt), in 2002. The international standards but is enriching the global dialogue on MFSA took over the supervisory functions previously carried best practices and has become a trusted partner for the OECD, out by the Central Bank, the Malta Stock Exchange and the the EU and the Commonwealth. At the heart of Malta’s IFC is an Malta Financial Services Centre. Today, the MFSA licenses, reg- independent risk-based regulator, the Malta Financial Services ulates and supervises investment funds, banking and insurance Authority (MFSA), which grants licences and regulates financial business, as well as investment service providers and trustees. activities. There have been numerous amendments to the coun- In addition, the MFSA manages Malta’s Registry of Companies try’s legislation to ensure it remains up to date with changing as well as the Consumer Complaints division and regulates market requirements. the Malta Stock Exchange. The MFSA premises also house the Originally set up as an offshore financial centre in 1988, International Tax Unit of the Inland Revenue Department. Malta moved onshore in the early 1990s, bringing its regula- The MFSA’s approach to regulation and supervision is based tions in line with the EU ahead of becoming a member in 2004. on principles, rather than on rules, and is proportionate to the Having joined the European Union in 2004, Malta adheres size and nature of the business, without undermining investor strictly to EU anti-money laundering, insider dealing and pro- protection. The country’s small size allows direct contact with fessional secrecy laws, and its frameworks are aimed at attract- all licensees, which gives the MFSA a good understanding of ing only international businesses of repute. Malta’s adoption the soundness of the licence holders. The Authority encourages of the euro on 1 January 2008 has added further stability and finance professionals and companies that seek a licence to meet increased the ease of doing business across frontiers. Today, with the regulator prior to applying to discuss the regulations. business operates confident in the knowledge that Malta has an This process promotes mutual understanding. extensive network of double taxation treaties and applies EU The MFSA is an independent public body. The Authority regulations. In fact, Malta is first among member states in the is a member of the European Banking Authority (EBA), the timely transposition of EU directives into national law. Firms European Insurance and Occupational Pensions Authority operating in Malta may also benefit from a number of busi- (EIOPA), and the European Securities and Markets Authority ness promotional incentives and other advantages, including (ESMA). The Authority is also a member of the International the EU’s single passport regime and the ability to offer EU-wide Organisation of Securities Commissions (IOSCO) and the accepted products. In addition, although Malta’s framework International Association of Insurance Supervisors (IAIS) conforms to EU rules, there are still regulatory structures that as well as a signatory of the Multilateral Memorandum of are unique to the island. Understanding with other members of these Institutions. Legislation & Regulation Legislation & Regulation 118 119

Central Bank and highlight the standard licence conditions that will be applied The Central Bank of Malta (www.centralbankmalta.org) was estab- to a licensed entity. lished in 1968 and has contributed to the country’s financial and economic development, particularly by pursuing policies designed Banking to foster exchange rate and price stability within a sound financial Banking institutions in Malta are regulated by the Banking Act, system. Prior to 2002, the Central Bank of Malta was the regulator which is founded on European Union legislation and is compliant of banks and financial institutions, a role now undertaken by the with the Basle Core Principles. The non-bank financial institutions MFSA. The primary aim of the Central Bank is to maintain price (including eMoney institutions) are regulated by the Financial stability. With Malta’s accession to the European Union in May Institutions Act. In May 2010, the provisions of the Payment 2004, the Bank automatically became a member of the European Services Directive regulating payment institutions were transposed System of Central Banks (ESCB). In 2013, the Central Bank and into Maltese law. This was followed in June 2011 by the transposi- the MFSA have also established a joint financial stability board to tion of the EU Electronic Money Institutions Directive regulating strengthen the resilience of the financial system and to mitigate the Electronic Money Institutions. build-up of systemic risk. Insurance Transport Malta The insurance industry in Malta is regulated by two separate but Transport Malta (www.transport.gov.mt) is the authority respon- complementary laws: the Insurance Business Act, which provides sible for all modes of transport in Malta, including transport by for the authorisation and supervision of insurance companies by the air, rail, road, or sea, within ports and inland waters, and merchant MFSA; and the Insurance Intermediaries Act, which governs insur- shipping. Transport Malta’s role is to regulate, supervise, promote ance agents, insurance brokers, insurance managers and tied insur- and develop the transport sector in Malta. ance intermediaries. Different types of insurance companies, including companies carrying on affiliated insurance business (captives), Legal Framework of Key Sectors Protected Cell Companies, Incorporated Cell Companies, reinsurers Malta has developed a comprehensive legislative and regulatory and insurance intermediaries can be set up under Malta’s laws. framework to accommodate the financial services sector and to ensure adequate investor protection. All legislation and regulations Trusts & Foundations are published in English and Maltese, though the interpretation The Trusts and Trustees Act, which has recently been updated, of the English text prevails. The island’s legal system is rooted in regulates the setting up of trusts in Malta. The Act provides for both the Anglo Saxon common law tradition and the Continental the creation of trusts and authorisation and supervision of trus- European Napoleonic/Justinian code. Maltese corporate law, tees by the MFSA. Within its provisions, the Act incorporates the however, is very firmly based on British models. It allows for a Hague Convention on the Law Applicable to Trusts and on their variety of structures, giving the investor considerable flexibility Recognition, which Malta has ratified. The law regulating founda- within a well-regulated framework. tions is found in Act XIII of 2007 which introduced the Second Schedule to the Civil Code (Chapter 16 of the Laws of Malta). The Investment Funds legislation allows for the set-up of two types of foundations: private The Investment Services Act (ISA), and its subsidiary legisla- and purpose foundations. tion, is the principal legislative enactment governing the fund industry in Malta. It provides for the establishment of non-retail Malta Companies funds, including Alternative Investment Funds under the EU’s Companies are regulated by the Companies Act. A Malta company Alternative Investment Fund Management Directive (AIFMD) can be used for a multitude of business activities, ranging from and for Professional Investor Funds, as well as for retail UCITS holding and trading to eCommerce activities. The Continuation and non-UCITS. It also establishes the legal basis for the licens- of Companies Regulations provide for the re-domiciliation of ing and regulation of persons providing investment services or a foreign company and for the continuation outside Malta of a operating collective investment schemes. Additional legislation company incorporated in Malta. Maltese legislation allows re- includes the Investment Services Rules. They further explain the domiciliation from all EU, EEA and OECD countries, as well as scope and contents of the ISA, set out the application procedure from most offshore centres. ¢

Corporate Business Structures Corporate Business Structures 120 121

Corporate Business Structures Partnership Almost any form of business may be carried out in Malta by a partnership. General Partnerships must be formed by at least High Standards for two partners, who will be liable jointly and severally for the full debts of the partnership. The formation of a Limited Liability Corporate Success Partnership is also possible. Co-operative As good governance is emerging as a vital ingredient for success, A body of persons may also be incorporated as a Co-operative the underlying theme of Malta’s International Finance Centre is Society under the Co-operative Societies Act. A Co-operative internationally recognised best practice in corporate structuring. needs to follow a predefined process of registration and set-up, which requires the involvement of five members (persons or entities). A co-operative is a legal entity in its own right.

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, and 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 alta’s comprehensive and accommodating regula- memorandum and articles of association, or deed of associa- tory framework makes corporate structuring on tion normally subscribed by at least two persons. Under certain the island available to prospective investors from all conditions, it is also possible to register single member com- Mcorners of the world. Companies are being attracted to Malta panies. Companies and partnerships are registered with the largely on the basis of a proactive Malta Financial Services Registry of Companies, which is based at the MFSA. Malta also Authority (MFSA), which seeks to combine high-standard excels in the speed and efficiency with which investors can set regulation with an efficient response to industry and consumer up a company: once the Registrar of Companies has all neces- needs, reasonable fees and highly trained people. sary documentation and information in hand, the process may With around 70 double tax treaties under its belt, Malta take as little as 24 hours. Licensing by the MFSA is required offers investors an EU-compliant, yet flexible, tax-efficient for financial services firms before commencement of opera- domicile for business entities or corporate structures. Business tions. This process can typically be concluded within a couple may be conducted in Malta in a variety of forms: as a sole pro- of weeks. prietorship, a partnership, a limited liability company (private A Limited Liability Company (a company) is formed by or public), a branch of a foreign company, a trust, a co-oper- means of subscription to capital divided into shares. The liabil- ative, an investment company with variable capital (SICAVs), ity of the shareholders is limited to the amount, if any, unpaid a Protected Cell Company or an Incorporated Cell Company. on the shares held. The minimum share capital required to set up a private company is €1,164.69, with 20 per cent paid up Sole Proprietorship and subscribed to by at least two persons, except in the case of There are no particular requirements relating to the registra- single member companies, with restricted objects. In the case tion or organisation of a sole proprietor. The provisions of the of a public company the minimum share capital requirement is Commercial Code as regards commercial records and bank- €46,587.47, with 25 per cent paid up and subscribed for by at ruptcy apply to sole traders. The trader will be trading in his least two persons. own name, thus not benefitting from separate legal personal- Companies in Malta need to fulfil a number of statutory ity, and is therefore personally responsible for all the trading requirements. A private company requires a company secre- obligations. Also tax liability is calculated on the individual tax tary and at least one director who can be either a corporate rates of the proprietor. entity or an individual, Maltese resident or not. In addition, a Corporate Business Structures Corporate Business Structures 122 123

Maltese company needs to have a registered office in Malta and are protected from each other. This is done by the issue of cell a minimum of two shareholders. However, exemptions to this shares in respect of each individual cell. For tax purposes each rule apply. Due to Malta’s fully-fledged trustee regime, shares cell is treated as a separate entity. may be held by licensed trustees in a fiduciary capacity for, and on behalf of, the ultimate beneficial owners. In order to Recognised Incorporated Cell Companies apply for Malta’s tax refund system and achieve the intended In April 2012, a new vehicle was added to Malta’s repertoire of tax results, a company may be required to have additional sub- cellular vehicles, the Recognised Incorporated Cell Company stance in Malta. (RICC). This is a structure which allows the ‘core’ to provide, in exchange for payment of a platform fee, certain administrative Branch of an Overseas Company services to its Incorporated Cells (ICs). The range of permitted All bodies corporate constituted or incorporated outside administrative services for RICCs covers the typical platform Malta may establish a place of business in Malta. Overseas type services, such as assistance in setting up ICs, assistance in companies establishing a place of business in Malta should, selecting as well as contracting with certain service providers, within one month of the establishment of the place of busi- standardisation of documentation, and many other ancillary ness, deliver to the Registrar a number of documents. The services. As the RICC is itself a separate company, its share- documents to be submitted to the Registrar include an au- holders would be able to benefit from Malta’s tax regime for thentic copy of the charter of the company, a list of the of- limited liability companies. ficers of the company, and the names and addresses of one or more individuals resident in Malta authorised to represent SICAV the overseas company in Malta. Branches carrying out opera- Under Maltese law, Collective Investment Schemes may be tions in, or from, Malta are subject to tax in the same manner set up as SICAVs (Société d’investissement à capital variable), as a limited liability company. which is a type of open-ended investment vehicle. The amount of capital in a SICAV varies according to the number of inves- Protected Cell Companies tors. Each individual shareholder is entitled to voting rights and Malta’s company framework also allows for the formation of has the right to attend the annual general meetings. A SICAV is Protected Cell Companies (PCCs). Maltese law introduced formed under the Companies Act (1995), but as a partnership regulations which allow the PCC model to be adopted by limited by shares, and is used by mutual funds. Alternatively, regular insurance companies, insurance brokers and insurance Collective Investment Schemes may take the form of a limited managers alike. A ‘Cell Company’ is a company constituted or liability company with fixed share capital, an incorporate cell converted into a cell company having within itself one or more company, a limited liability partnership or an investment trust. ‘cells’ for the purposes of segregating and protecting the cellular Such schemes may also be set up by private contract. assets of the company. A cell company is a single legal person. A ‘cell’ is in turn a class of shares within a cell company desig- Trusts nated as a cell and created for the purpose of segregating and The principal Maltese law on trusts is the Trusts and Trustees protecting cellular assets belonging to the company. A cell is Act. Malta recognises all forms of trusts that one would find in not bestowed with separate legal personality. other jurisdictions, such as Discretionary Trusts, Accumulation and Maintenance Trusts, Fixed Interests Trusts, Spendthrift Incorporated Cell Companies Trusts and Charitable Trusts. Other solutions are now also on Malta introduced Incorporated Cell Companies (ICCs) for offer, such as family trusts, which allow settlors to establish a the funds and insurance sector in 2011. Similar to a Protected trustee company in order to manage the family estate under trust Cell Company, an ICC operates in two parts – the company for the benefit of family members - as opposed to placing assets core and the cells. A cell company can create one or more cells under the control of professional trustees. These Family Trusts within its company structure. However, distinct from the PCC are also eligible for exemption from authorisation, provided the model, each incorporated cell is a limited liability company family and its chosen directors fulfil certain conditions dictated endowed with its own legal personality. The cells are inde- by the MFSA. pendent from each other, and from a legislative point of view, Corporate Business Structures Taxation 124 125

Foundations Taxation 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 The Benefits of will. The foundation deed 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 Transparency which gives rise to income, as long as the foundation is only the passive owner of such assets. ¢ Fiscal stability, predictability and competitiveness have seen Malta beating off stiff competition from European investment destinations, without disregarding the need for transparent legislation.

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 Mthe EU. An efficient workforce, English as an official language and a strong, transparent tax system have all contributed to this growth. The island’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. 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 Co-operation 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 2013 review. Taxation Taxation 126 127

Corporate Taxation brokering treaties with China, India, Singapore, the United Kingdom, Hong Kong, Luxembourg, South Africa and the Income Tax United States of America, as well as most high tax coun- The Maltese tax system is the only remaining full imputation tries. In addition to this, the Maltese tax system also includes system in the EU. This means that tax paid by a company will Commonwealth relief, unilateral relief and the flat rate foreign essentially remain a prepaid tax on behalf of the tax liability of tax credit, thereby ensuring that income arising from overseas shareholders. All companies resident in Malta are subject to is not subject to double taxation, even if there is no double tax- income tax at a rate of 35 per cent. There is no separate corpora- ation agreement in force. tion tax. Under Malta’s tax system, upon a distribution of profits, shareholders are entitled to claim a refund of tax paid at the cor- Other Taxes porate level to avoid any double taxation of corporate profits. The refund may be equivalent to either 2/3 (when double taxation Customs & Excise Duties relief is claimed), 5/7 (in the case of passive interest and royal- As an EU member state, Maltese customs regulations follow ties) or 6/7 (in the case of trading income) of the tax paid at the European Union Customs Procedures. In general, goods from corporate level. Income and gains from a participating holding other EU member states are subject to VAT, while goods from (where a company holds directly at least 10 per cent of the equity outside the EU are subject to Customs and Excise rules. For shares of a non-resident company, or meets certain other criteria full information visit the Malta Customs Portal at http://ces. set out in the law), are exempt from tax. Alternatively, instead of gov.mt/index.jsp 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 VAT distribution of dividends. Value-added tax (VAT) applies to supplies of goods and ser- Malta’s key vices that take place in Malta, intra-community acquisitions Basis of Taxation and imports. The standard rate is 18 per cent, and a 5 per cent Companies incorporated in Malta are considered to be ordinar- double-taxation rate applies to the supply of electricity, printed matter and con- ily resident in Malta and are subject to tax on their worldwide partners include: fectionery. The VAT rate on holiday accommodation is 7 per income and capital gains. Companies incorporated outside cent. Zero rating applies to exports and intra-community sup- Malta are considered residents of Malta if their management plies, international transport, domestic passenger transport, Canada and control is exercised in Malta, but as they are not domiciled food, pharmaceuticals, and the supply and repair of ships and in Malta, they are subject to tax on income arising in Malta and aircraft. Exemptions from VAT include the sale and leasing of China on foreign income (but not capital gains) that they receive in immovable property, banking and insurance services, health, Malta. Companies that are not incorporated, nor managed or education and broadcasting. Hong Kong controlled, in Malta are subject to income tax only on income In terms of current VAT rules, persons whose annual turn- and capital gains arising in Malta. over is less than prescribed thresholds, ranging from €14,000 to India As part of the global fight against tax fraud, the importance €35,000, depending on the type of activity undertaken by such of substance and the need for sound commercial drivers when persons, have the option to register with the VAT Department Luxembourg structuring international operations has increased. Although the as a small undertaking. Such persons do not charge VAT and actual tax impact depends on the specific circumstances, compa- cannot recover VAT on their expenses but are still required Singapore nies are required to show that their Malta operations are genuine to issue fiscal receipts and file an annual return with the VAT and being run from Malta. In broad terms, this means compa- Department. Persons whose annual turnover does not exceed South Africa nies must show that the management, control and day-to-day €7,000 are not required to register for VAT, and thus will not be decisions concerning business activity are taken in the country. obliged to issue fiscal receipts or file any returns with the VAT United Arab Emirates Department. Double Taxation Treaties Malta-based entities are also allowed to benefit from the coun- United Kingdom Social Security try’s wide network of double-taxation treaties, with some 70 Malta has a comprehensive ‘cradle to grave’ social security United States of America currently active and others pending. Malta has succeeded in system. This system is financed through social security con- Taxation Taxation 128 129

tributions paid by each employee and employer. All employed and self-employed persons are required to pay Social Security 2015 tax rates Contributions (SSCs). The amount of SSCs payable by employees amounts to 10 per cent of the basic wage, subject to Rate Single Joint Parental a minimum linked to the national minimum wage and a computation (€) computation (€) computation (€) maximum linked to the maximum pensionable income. An 0% 0 - 8,500 0 - 11,900 0 - 9,800 equivalent amount is payable by the employer in respect of each employee. The SSC amounts to 10 per cent of the gross 15% 8,501 - 14a,500 11,901 - 21,200 9,801 - 15,800 salary, with a minimum of €6.62 per week and a maximum of 25% 14,501 - 19,500 21,201 - 28,700 15,801 - 21,200 €40.32 euro per week, to be paid by both the employee and 25%* 19,501 - 60,000 28,701 - 60,000 21,201 - 60,000 the employer. The employer must deduct the employee’s contributions from the wages and must remit the amount due, in- 35% 60,001+ 60,001+ 60,001+ cluding the employer’s share, to the Commissioner of Inland *Not applicable to dividend income which remains taxable at 35% 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 per cent 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.

Personal Taxation Individuals are charged on their income at progressive tax rates up to a maximum rate of 35 per cent. 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. Taxation Taxation 130 131

Part-time Income their first residence will pay duty at the rate of 3.5 per cent Employees, pensioners and students engaged in part-time on the first €150,000. Until June 2015, first-time buyers will work may benefit from a special rate of tax. Income derived be exempt from paying this duty. The Act also imposes tax on from part-time employment is taxed at a flat rate of 15 per cent, emphyteutical grants, auction sales, credit cards and insur- which is withheld at source by the employer. Employees who ance policies. carry on a part-time self-employment may also benefit from this reduced rate of tax. Inheritance and Gift Taxes There is no inheritance or gift tax in Malta. The transmission Wealth Tax or Net Worth Tax of property and company shares is, however, subject to tax There are no such taxes in Malta. under the Duty on Documents and Transfers Act. Tax is due by heirs upon inheritance of real estate and shares. Duty will Capital Gains be due at the rate of 5 per cent in the case of real estate and Tax on capital gains is levied on gains arising from immova- at the rate of 2 per cent in the case of shares. Transfers upon ble property situated in Malta, rights over securities, business, inheritance of residential property, from the deceased to the goodwill, patents, trademarks, trade names and the beneficial children, are exempt from duty on documents. Furthermore, interest in a trust. Capital gains are added to all other income first time donations of property from the parents to the chil- earned during the basis year and taxed at normal rates. dren, which will be used by the children as their sole residential property, are exempt from duty on documents on the first Property Transfer Tax €250,000 of the value of the property. 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 per cent of the market value of the immovable property.

Investment Income Insurance Managers: Trusts: When all the Resident individuals may opt to pay a 15 per cent final with- Insurance management beneficiaries of a trust are not holding tax on investment income. Quick companies are taxed like domiciled/resident in Malta, all companies registered in and where the trust assets Dividend Income Malta. Each cell in a PCC or are situated outside Malta, Malta operates a full-imputation system and accordingly tax Facts an ICC is treated as a separate no Maltese income tax (or paid by a company is imputed as a credit against the tax due by company for tax purposes. transfer duty) is payable. the shareholders upon a dividend distribution. Fund Managers / Fund Foundations: A foundation may Directors’ Fees Administrators: Fund be treated as a Maltese company Fees received, as well as remuneration to persons sitting on managers and fund and benefit from Malta’s full boards of directors of a body corporate, are also subject to tax Banks and Financial administrators are taxed like all imputation system. Foundations on such income at the normal rates of tax. Institutions: Banks and companies registered in Malta. may also opt to be taxed in financial institutions are the same manner as a trust. Duty on Documents (Stamp Duty) taxed like all companies Investment Funds: Malta- A tax is charged under the Duty on Documents and Transfers registered in Malta. domiciled funds are, as a Retirement Schemes: Act on the transfer of immovable property and securities. general rule, exempt from Licensed retirement schemes The tax on securities is 2 per cent, but is increased to 5 per Insurance Companies: Maltese income and capital are exempt from tax on income cent in the case of shares in property companies. A Duty on Special provisions apply to the gains tax as long as they do and capital gains, but this Documents and Transfers tax amounting to 5 per cent on the determination of total income not have over 85 per cent of does not apply to immovable market value of the property is levied on the purchaser when from the business of insurance. their assets situated in Malta property situated in Malta. buying real estate in Malta. Residents buying real estate as Taxation Taxation 132 133

Expat Taxation Conditions Global Residence Programme Highly Qualified Persons Rules Malta Retirement Programme

To attract highly qualified personnel from abroad, Malta has Eligibility Criteria Non-EU Nationals EU and non-EU Nationals EU, EEA and Swiss Nationals introduced an incentive scheme targeting foreign executives. Professionals in the financial services, gaming and aviation Cannot be an EU national, a Individuals having their domicile Individual is in receipt of a national of Iceland, Norway, outside of Malta and who are employed pension which shall constitute sectors can benefit from a flat personal income-tax rate of 15 Lichtenstein or Switzerland and in senior positions with a company at least 75% of the total income per cent on income up to €5 million. Any income over that must NOT hold dual-citizenship with that is licensed or recognised by the chargeable to tax in Malta. figure is tax-free. To qualify for this tax incentive, the employee any of the above jurisdictions. Malta Financial Services Authority, the Lotteries and Gaming Authority and must earn a minimum of €81,205 000 per year, amongst other Residents under this programme, companies holding an Air Operators’ criteria. EU nationals can benefit from the reduced tax rate for and their dependents, have to be Certificate issued by Transport Malta. an unlimited period, EEA and Swiss nationals for a period of covered by health insurance. The employee must earn a minimum five consecutive years, and third-country nationals for four of €80,100 per year (basis year consecutive years. 2013), amongst other criteria. Malta is also an attractive place for high-net-worth indi- Only highly qualified persons occupying viduals and their families to relocate to. While Malta offers a roles such as CEO, CFO, COO and CTO, unique lifestyle of unsurpassed quality that combines comfort as well as employees fulfilling certain core functions within a financial, gaming with luxury, the modern and the traditional, and work with or aviation company, are eligible. pleasure, the country has introduced a programme which offers foreigners favourable conditions if they purchase or Tax Rate 15%. 15%. 15%. Beneficiaries will need to pay a This flat tax rate applies to income Beneficiaries will need to pay rent property of a certain value in Malta or Gozo. The Global minimum tax of ¤15,000 annually. up to €5 million. Any income over a minimum tax of €7,500 an- Residence Programme is designed to attract individuals who ¤5 million will be tax-free. nually and a further €500 in are not nationals of the EU, the EEA or Switzerland and respect of every dependent. A married couple must pay €8,000. allows them to benefit from a reduced tax rate and a residence permit. A similar programme for EU nationals, the Residence Stay Requirement Permit holders are required to reside Individuals must not reside in any other Programme, was introduced in the summer of 2014. not more than 183 days in any n/a single jurisdiction for more than 183 foreign jurisdiction in any year. days in any year and must also reside in Malta for a minimum of 90 days a year, Tax returns averaged over any five-year period. The fiscal year aligns with the calendar year. Malta operates a self-assessment system. Taxpayers are required to declare their Min. Value of Property €275,000 (Malta) n/a €275,000 (Malta) income and calculate their tax, taking into account payments to be purchased €220,000 (South of Malta & Gozo) €250,000 (Gozo) in advance and any other tax credits. The tax payable must be Min. rental value per annum €9,600 (Malta) n/a €9,600 (Malta) settled at the time that the self-assessment is filed. For individ- €8,750 (South of Malta & Gozo) €8,750 (Gozo) uals, the deadline is 30th June. For companies, the tax return date is nine months after the financial year end, but not earlier Long-term residency Those who have been granted or n/a n/a have applied for long-term resident than the 31st March of each year. Tax returns of companies status may no longer benefit from have to be accompanied by an auditor’s certificate. Revenue as- the tax treatment under the sessments may be raised when a return is not filed, or where Global Residency Scheme. the Commissioner of Inland Revenue disagrees with the self- Application Procedure Application must be made to the Application must be made to: Application must be made to the assessment. Commissioner of Inland Revenue • The Malta Financial Services Commissioner of Inland Revenue through an Authorised Registered Authority (in the case of financial through an Authorised Registered Mandatory (for example, practitioners services professionals) Mandatory (for example, practitioners which are members of Malta’s finance • The Lotteries & Gaming which are members of Malta’s finance institutes, such as the Institute of Authority (in the case of institutes, such as the Institute of Accountants, the Institute of Taxation, gaming professionals) Accountants, the Institute of Taxation, the Institute of Financial Service • Transport Malta (in the case the Institute of Financial Service Practitioners or legal practitioners, in any of aviation professionals) Practitioners or legal practitioners, in any case, duly authorised to act as such). case, duly authorised to act as such).

One-time Application Fee €6,000 (Malta) n/a €2,500 €5,500 (South of Malta or Gozo) Interview A Guide for Doing Business in Malta 134 135 A Guide for Doing Business IN MALTA A Guide for Doing Business in Malta A Guide for Doing Business in Malta 136 137

Business Culture Average Salaries Investment and Trustee Services As a former colony of the United Kingdom, KEY FACTS per annum (€) A number of investment management compa- the Maltese business environment is strongly nies as well as asset managers from the fund influenced by British culture, but retains a Short Travel Times: CEO 96,000 industry provide services to the insurance in- Mediterranean flavour. Meetings and the way business is con- By air, main European dustry. With well over 100 investment services firms licensed ducted may be less formal than in Northern Europe, however, hubs and North Africa CFO 75,750 in Malta, corporations seeking assistance in the management scheduling appointments well in advance is necessary, and can be reached in of their assets are spoilt for choice. In addition, more than 100 punctuality is both expected and appreciated. When it comes two to three hours Financial Controller 49,000 Maltese and international fiduciary companies are licensed to to business attire, men wear conservative suits and ties and offer trust and trustee services on the island. Management Excellent ICT women suits or dresses. When greeting new business contacts, Accountant 32,000 their title and surname should be used and once a relationship Connections: Custodian Banking has been established, often a first-name basis is appropriate. Satellite technology Qualified Accountant 32,500 Malta hosts global custodians as well as and high capacity several other banks providing custodial ser- Language fibre-optic submarine Accounts Administration 15,000 vices through international partners. Bank of Maltese and English are the official languages, cables link Malta Valletta, Mediterranean Bank, Sparkasse Bank, Deutsche Bank, with English the main language of business with Europe Senior Compliance Swissquote and Custom House hold custody licences in Malta. and laws and regulations are published in both Manager 43,129 Retirement schemes are required to appoint custodians and languages. Many Maltese are also fluent in Italian, German or Major Transhipment trustees under certain conditions. Compliance Manager 30,242 French. Centre: Malta Freeport is a main Professional Services Fund / Portfolio Manager 36,400 Business Hours regional hub The excellence of Malta’s professional service Open Typical office hours are between 8.30 am and Senior Fund providers is internationally renowned, and 5.30 pm Mondays to Fridays, with a one-hour EU Member State: Administrator 29,590 the industry is well-equipped to offer support lunch break between 12.30 pm and 1.30 pm. In Passporting rights and strategic guidance. A large number of law firms operate summer, most government offices work half days. Most banks for services and Fund Accountant 25,000 on the island, which are regularly listed in Chambers, Legal are open from 8 am to 2 pm Monday to Friday, and Saturday companies 500 and other directories. International firms have a pres- until 12 pm. Most retail outlets are open from 9 am to 1 pm and Trust Manager 38,550 ence in Malta through associate links with local law firms, from 4 pm to 7 pm Monday to Friday, and on Saturdays shops Regional Ties: and many law firms have specialised in assisting international Senior Branch Manager 41,500 are generally open between 9 am and 1 pm. Malta has cultural and commercial and financial operators seeking opportunities in historic connections Branch Manager 34,872 Malta. Most lawyers have obtained post-graduate degrees at Banking & Financial Services to countries in major international institutions and have expertise in organi- The country’s banks are able to provide a full North Africa and Senior Insurance sational structuring and licence applications. Businesses are range of personal, commercial and trade ser- the Middle East Manager 55,000 also supported by a wide range of accounting and auditing vices to clients. With five retail banks and more practitioners from small boutique practices to the global big than 20 international commercial and trade banks already CET Time Zone: One Technical Insurance four accountancy firms, as well as various consultants provid- operating in or from Malta, this sector has become one of the hour ahead of GMT Executive 24,760 ing business advisory and back office support. Professional most robust on the island. HSBC and Bank of Valletta are the services costs are generally significantly lower than in other leading retail banks on the island, while smaller banks such Schengen Zone: Treasury Senior Manager 42,255 Western European locations. as APS, Lombard and Banif Bank help to keep the banking Malta is part of the Treasury Dealer 30,569 sector competitive and innovative. Malta is also home to spe- Schengen area, which cialists in trade finance such as FIMBank and BAWAG. With allows travel between Source: Castille Resources, the growing number of insurance companies that choose to member states Salary Survey 2013 domicile in Malta, Malta’s banks have also built expertise in the without internal management of insurance company investment portfolios. border controls A Guide for Doing Business in Malta A Guide for Doing Business in Malta 138 139

Location, Location, Location Malta’s strategic location at the centre of the Mediterranean has always been one of the key advantages of doing business in or from Malta. As an EU member state, businesses in Malta can passport their services to all other member states, tapping into the union’s internal market of over 500 million people, while the growing markets of North Africa and the Middle Eastern countries What employers bordering the southern coast of the Mediterranean basin are need to know: easily accessible. An insurer licensed in Malta may also cover C insurable risks in non-EU countries in which persons are • Probation: The length A allowed to procure insurance directly from a Maltese insurer. of the probation period Malta has an extensive network of double taxation treaties is normally six months B for a number of markets. The country is a signatory to some unless otherwise agreed D 70 agreements, among them China, India and the USA. To by both parties. provide access to international markets and to ensure a smooth • Weekly working trading environment for the financial services sector, Malta is time: 40 hours. working closely with other regulatory authorities. • Leave: Employees in full-time employment Real Estate are entitled to 24 days Malta offers a wide range of commercial and of vacation leave per Examples of Commercial Communications residential property for rent or purchase. year. Maternity leave for Property Rental Rates Malta’s small geographical size is a benefit in female employees in Malta’s telecoms network is reliable, stable and terms of short commutes. The traveling time between Malta full-time employment is secure. As the infrastructure has opened up to International Airport and an office is rarely longer than 20 18 weeks. The law also A Prestigious market forces, access rates have increased and minutes, and overall journeys are seldom longer than 40 provides for up to three Portomaso: tariffs have lowered. Malta has seen huge public and private minutes. Office space is available in purpose-built office blocks, months unpaid parental €300 - €427 per m2 sector investment in ICT over the past 15 years and today in converted houses and palazzos, apartments or within new leave in the case of per annum the country boasts a truly modern infrastructure. The coun- mixed-use developments. Malta offers enviable locations with birth, adoption or legal try’s ICT industry is a versatile and mature cluster, and the sea views and marinas as well as prestigious landmark office custody of a minor. B Prestigious country hosts more than 200 IT companies, including inter- complexes within easy commuting distance of residential • Social security: SmartCity: national giants such as Microsoft, Oracle and Cisco. Malta areas. Overall rental costs are around two-thirds to half of Employers pay social €220 - €280 per m2 is internationally connected through two satellite stations, those charged for comparable commercial spaces in continen- security contribution per annum one to the Atlantic Ocean region and the other to the Indian tal Europe. Malta has also become one of the most sought after at a rate of 10 per cent Ocean region, and four submarine fibre optic links to main- locations in Europe for foreign nationals to rent or purchase of the basic wage paid Professional land Europe, two of which are operated by GO and the rest by homes as an investment or for relocation purposes. A wide to their employees, C Sliema / St. Julians Vodafone and Melita respectively. All operators say their cables range of residential property can be found in Malta, ranging subject to a minimum Ta’ Xbiex / Gzira are designed to carry a lot more traffic than current levels and from apartments, penthouses, townhouses to villas, with or of €15.35 per week and €60 - €267 per m2 their capacity is unlimited. without a pool. Developments in recent years include marina a maximum of €35.39 per annum and coastal complexes at the top-end of the market. per week. Employees Human Capital pay another 10 per cent ECONOMICAL Highly educated, multilingual and diligent, of basic wages, subject D Central / North / South the Maltese workforce is the country’s greatest to the same minimum part of the island strength and most valuable asset. Employers and maximum. €30 - €80 per m2 will find Malta can offer great value for money as labour costs per annum are around two thirds of those in other Western European jurisdictions. Travel & Living Travel & Living 140 141

Travel & Living Beyond the Boardroom:

The Mediterranean at its Best Cosmopolitan, At the centre of the Mediterranean lies a world of sun-drenched but not Costly magic. From swimming, boating and diving to relaxing and Whether choosing a modest shopping, Malta offers a perfect blend of indulgences. apartment or a luxury villa, costs in Malta are very reasonable. Malta comes close to having the lowest cost of living in Europe, while still catering to all lifestyles. Moreover, the island offers highly sophisticated and reliable banking, taxation, insurance, social security and communications services.

A Short Flight Away Mediterranean Luxury Gastronomic Delight The World’s Best Climate Universal Use of English A Home in the Sun As a leading finance centre, Determined to uphold its When it comes to dining, With more than 300 days As an official language of For those looking for Malta is well connected. reputation as a five-star Malta is an island of staggering of sun a year, expatriates Malta, English is spoken by something more permanent, Malta International Airport, destination for high-end options. The food scene is in Malta often become the nearly everyone. English Malta boasts a wide range of the island’s only airport, is travellers and the global defined by an eclectic mix envy of friends back home. is so prevalent in Malta properties available to rent just two or three hours flying business elite, Malta features of Mediterranean cooking Hot, dry summers and mild that thousands of foreign or purchase, from furnished time from most European a number of international with strong Italian influences, winters have earned Malta students travel from all over apartments to farmhouses, cities. Several airlines and luxury hotels such as the fuelled by rich ingredients the title of world’s best the world to learn English villas with pools, and even operate regular flights to the Hilton, Excelsior, Radisson, fresh from farm and sea. There climate by ‘International on the island. It is the main palazzos, all at competitive island including Air Malta, Intercontinental, Westin are also many restaurants Living’ magazine. Even business language, while laws prices. Finding a good Lufthansa, Emirates, British Dragonara, Corinthia offering international in winter Malta enjoys an and regulations are published property close to amenities Airways, Air France, Alitalia, and the Hotel Phoenicia. specialities, and the choice average of 5 to 6 hours of in both Maltese and English. is fairly easy. Most notable Scandinavian Airlines, Superior accommodation is wide, from smart city sunshine and more than 12 Maltese is a unique language properties include five-star Ryanair, EasyJet, Turkish is also offered at the restaurants in Baroque palaces hours a day in summer. with Arabic roots and speckled apartment complexes built Airlines and Air Berlin. boutique hotel Xara Palace and family-run trattorias to with Italian, French and in Tigne and Portomaso. Relais & Chateaux. seafront fish restaurants. English words. Many Maltese are multilingual and also fluent in Italian, German or French. Travel & Living Travel & Living 142 143

The End of Long Active in Malta Commutes The sea, cafés, restaurants, In Malta the trip to work clubs, cinemas, theatres, sports is a breeze, as it takes only clubs or gyms are almost 45 minutes to cross the always within a walking entire island. Malta’s public distance of office complexes transport system covers or residential areas. Malta also every corner of the two hosts many great festivals of main islands. Water taxis culture and art. Each town are a scenic way to jump or village has its own annual between the capital Valletta feast and parade for their and the nearby headlands patron saint. For those in of Sliema to the west and need of some retail therapy, the Three Cities to the east. Malta is home to shopping malls for big brand names and markets for local goods.

Family Life Safe and Quiet Streets First Class Healthcare Work and Live Visa Free Outdoor Malta Centuries of Malta has a highly family- Few locations in the world Malta has some of the best As a member of the Schengen Malta’s Mediterranean Captivating History oriented culture. Almost all can offer the same high healthcare in the world, Zone, Malta attracts climate lends itself to a year- Heritage forms an important restaurants and public places standard of transparency, which is offered free to EU thousands of professional EU round outdoor lifestyle of part of island life. With are family-friendly, while security and stability that nationals residing in Malta, nationals every year, who are water sports, golfing, hiking, 7,000 years of history and nurseries are free and the Malta does. The country while foreign residents are free to reside and work on fishing, horse riding and many remains visible to this Government offers working follows a zero-tolerance advised to take out private the island. Non-EU citizens more. The conditions for day, Malta can be described families subsidies to cover policy for corruption, and medical insurance. As can find details about visa- scuba diving and snorkeling as an open-air museum. the cost of daycare. Older crime is almost non-existent. well as local clinics in each exempt countries and visa are excellent, particularly as Megalithic temples, medieval children can be enrolled Children play on the streets, town, Malta has a large and application procedures on the the sea temperature never towns and massive bastions in one of many excellent and there are still some areas modern public hospital, website of the Ministry for drops below 13C (55F). have all been declared as international private or local where people leave their Mater Dei, while also being Home Affairs and National Malta has one golf course, UNESCO World Heritage public schools, nearly all doors unlocked at night. home to the renowned St Security (www.mhas.gov.mt). located at the Royal Malta Sites. These formidable of which teach in English. James private hospital. Third-country nationals Golf Club, and gyms, football structures regularly provide Tertiary education is offered require work permits, and the or water polo clubs can be the backdrop for events listed through the University of granting of these is subject found all over the island. in Malta’s packed cultural Malta and other institutes to a labour market test. calendar such as concerts, and private colleges. plays or art exhibitions as well as its thriving film industry. Did you know? 144 Did youkn ? w Malta is Europe’s iGaming capital, hosting around 270 operators holding more than 460 licences for online offerings such as casino-style games, lotteries or sportsbooks. The island was the first EU member state to introduce iGaming-specific regulations.

Valletta is the first example The Maltese Islands have three of a city built according to sites inscribed on the UNESCO What has established our global detailed plans and a grid road World Heritage List. These are the system. The city got its name Steven Spielberg, Ridley Scott City of Valletta, the Megalithic reputation in the gaming industry? from Jean de la Vallette, the and Ron Howard are just a Temples and the Hal Saflieni Grandmaster who built it. few of the directors who have Hypogeum. The ancient Neolithic chosen to use Malta as a film temples found in Malta are the At the Malta Gaming Authority, our regulatory philosophy, organisational principles Malta was Vodafone’s first location in the recent past. oldest freestanding monuments and culture are focused on player protection. Malta’s transparent legal framework foreign venture outside the The list of major box-office in the world. They are even older and experience in regulating gaming has developed into a world class eco-system UK. The mobile phone giant’s hits under the island’s belt than the pyramids in Egypt. providing effective, innovative and efficient regulation.

Maltese company was set up is impressive and includes Our regulatory framework provides assurances both locally and internationally in 1990, and Vodafone Malta The Da Vinci Code, Troy, Proudly displayed in the top left that fairness and transparency are at the core of everything that we do. is now both the smallest and Gladiator, The Count of Monte hand corner of the Maltese flag, To this effect, our licensees are associated with the highest the oldest foreign subsidiary Cristo, Munich, Captain the George Cross was awarded levels of integrity and efficiency. in the Vodafone Group. Philips, and many others. to the people of Malta by King Proudly recognised as a world class authority in terms of George VI in April 1942 in innovation, governance and diligence. Malta receives almost four recognition of the outstand- times its population in tourist ing bravery of the population arrivals: there are 421,000 during the Second World War. people living on the island but 1.6 million tourists visited the country in 2014.

MALTA GAMING AUTHORITY Suite 1, Level 3, TG Complex, Brewery Street, Mrieћel, Birkirkara BKR 3000, Malta T +356 2546 9000 F +356 2144 6950 E [email protected] www.mga.org.mt

J952-MGA Advert Portrait.indd 1 17/12/2014 15:12 Who’s Who Who’s Who 146 147

Affinity Management Services (Malta) Limited Affinity Management Services (Malta) Limited is an independently owned Corporate Service Provider located in Pieta, Malta. The company administers a wide range of trust and corporate ownership structures and possesses a wealth of expertise in areas such as Yachting, Shipping, Aviation, E-Gaming, Fund Administration and general Trust and Company Administration. Our innovative and efficient approach enables our clients to enjoy the rewards provided by the expertise of our highly qualified and Who’sWho knowledgeable staff. Connect with Malta’s major legal firms, executives and professional advisors Andrew Morgan

orporate Services orporate Director

in Malta C

Accounting & Auditing Government Agency CapStone Group 149 Malta Gaming Authority 156 Level 4, Suite 8A, Rosa Marine Buildings, Pieta - Malta T: (+356) 2010 4700 • E: [email protected] • W: www.affinity-malta.com Deloitte 151 Malta Enterprise 157 Contact: Andrew Morgan – Director EY 152 Griffiths + Associates Ltd 154 Investment Services KPMG 156 The Equivest Alliance Foundation 159 Amicorp Malta Limited Amicorp Malta entities are part of the Amicorp Group. Working as a global team across Nexia BT 158 more than 41 offices in over 28 countries, each ofA micorp’s 950 + specialists contribute KYC & Compliance their individual talents to Amicorp’s broad range of expertise and experience. Amicorp Banking Services DAIS Software Limited 150 Malta is licensed by the Malta Financial Services Authority to set up and administer trusts and foundations and to provide fund administration and related services. In Bank of Valletta plc 148 addition, we assist international clients with company formations, management and IIG Bank (Malta) Ltd 155 Legal Services administration and related services, including financial reporting services, income tax, VAT compliance and payroll services. Amicorp is also licensed to assist foreign nationals Sparkasse Bank Malta p.l.c. 159 Camilleri Preziosi 149 and their dependants with acquiring a certificate of naturalisation as citizens of Malta. Chetcuti Caruana Advocates 149 Rudolph Psaila

orporate Services orporate managing director Capital Markets Services David Griscti & Associates 151 C Argentarius - ETI Management Ltd 148 DF Advocates 151 Fenech & Fenech Advocates 153 Corporate Services Fenech Farrugia Fiott Legal 153 Level 1, Blue Harbour Business Centre, Ta Xbiex Yacht Marina, Ta’ Xbiex XBX 1027 - Malta Affinity Management Services Malta Limited 147 GTG Advocates 154 T: (+356) 2258 4700 • E: [email protected] • W: www.amicorp.com Amicorp Malta Ltd 147 Mamo TCV Advocates 157 Contact: Rudolph Psaila - Managing Director Avanzia Taxand 148 Corporate Solution Limited 150 Media Services Apex Fund Services (Malta) limited DF Corporate Services Limited 152 CountryProfiler Malta Ltd 150 Apex Fund Services (Malta) Limited is part of one of the world’s largest independent DF Marine Consultancy Limited 152 fund administration companies with approximately US$25 billion of assets under Fenlex Group 153 Pension Management administration, 31 offices and over 350 employees across the globe. The Apex Global Network is at the heart of the company’s strategy of being located alongside its clients. Maitland Group 156 Harbour Pensions Ltd 155 Apex is unique in its ability to reach globally and service locally. We provide cross- Papilio Services Limited 158 jurisdictional solutions and the highest levels of personalised services. Vistra (Malta) Ltd 159 Postal Services MaltaPost plc 157 Anthony O’Driscoll Foreign Exchange managing director

FXDD Malta Limited 154 Shipping Services Administration Fund Palmali Shipmanagement 158 Fund Administration

Apex Fund Services (Malta) Ltd 147 6th Floor Airways House, Gaiety Lane, Sliema SLM 1549 - Malta Heritage International Fund T: (+356) 2131 1330 • E: [email protected] • W: www.apexfundserivces.com services Managers (Malta) Ltd 155 Contact: Anthony O’ Driscoll - Managing Director Who’s Who Who’s Who 148 149

Argentarius ETI Management Limited Camilleri Preziosi Our firm is a specialist provider of private label securitisation transactions through Camilleri Preziosi commands an outstanding reputation amongst clients and peers a network of Special Purpose Securitisation Vehicles that we manage. We are an as a leading Maltese corporate law firm. We are regularly ranked as a top-tier firm by authorised Listing Agent for the issue of Structured Financial Instruments at the Chambers, IFLR1000 and Legal 500. We retain a strong commitment to deliver a quality European Wholesale Securities Market in Malta and our speciality is the structuring and service in the practice of law. We do this by combining technical excellence with a issue of Exchange Traded Instruments (ETIs) used in the securitisation of Alternative solution-driven approach. The close relationships we develop and the keen interest Investments under the Securitisation Act of Malta. we take in our clients’ businesses enable us to give practical, effective advice and innovative solutions under the most challenging situations.

Andreas Woelfl egal Services Dr Louis de Gabriele apital Markets L C managing partner Partner

116/8 ‘San Juan’ St Georges Rd, St Julians STJ3203 - Malta Level 3, Valletta Buildings, South Street, Valletta VLT 1103 - Malta T: (+356) 2010 7357 • E: [email protected] • W: www.argentarius-group.com T: (+356) 2123 8989 • E: [email protected] • W: www.camilleripreziosi.com Contact: Andreas Woelfl - Managing Partner Contact: Dr Louis de Gabriele - Partner

AVANZIA TAXAND Capstone Group Avanzia Taxand is a member firm ofT axand, the global network of leading tax advisors. The Capstone Group is a well-established firm of professional accountants with Avanzia Taxand is dedicated to delivering top quality, tailored and practical strategic significant experience in multiple disciplines.T he Group is made up of Capstone Advisory tax advice and a range of corporate services to drive the performance of multinational Co. Ltd., providing accounting and tax advisory services and the independent audit firm, businesses. Our partners lead every engagement from start to finish, and achieve Capstone Assurance Ltd. The latter firm is duly authorised and approved to conduct excellence and efficiencies for our clients, globally. Avanzia Taxand is the leading tax statutory and non-statutory audits in Malta by the Accountancy Board. Industry-specific firm inM alta and was named ‘Malta Tax Firm of the Year’ by the International Tax Review high level business and tax advisory is provided to both local and overseas clients with in 2009 and 2013, whilst in 2011, 2014 and 2015 it was named ‘Malta Tax Firm of the special areas of competence within the financial services, remote gaming, pension Year’ by Corporate International. scheme administration, oil and gas, real estate, tourism and hospitality sectors. Walter Cutajar David Borg

orporate Services orporate managing Director BUSINESS Advisory Partner C Accounting & Auditing Accounting

Blue Harbour Business Centre, Level 1, Ta’ Xbiex Yacht Marina, Ta’ Xbiex XBX 1027 - Malta Suite 5, Level 1, Tower Business Centre, Tower Street, Swatar BKR 4013 - Malta T: (+356) 2730 0045 • E: [email protected] • W: www.avanzia.com.mt T: (+356) 2549 6500 • [email protected] • www.capstonegroup.com.mt Contact: Walter Cutajar - Managing Director Contact: David Borg – Business Advisory Partner

Bank of Valletta PLC Chetcuti Cauchi Advocates Bank of Valletta is the leading financial services provider in Malta, offering investment With offices in Valletta and London, CCA is a full-service Malta law firm combining banking, private banking, fund management, bancassurance, stockbroking and trustee sophisticated legal advice and bespoke tax planning with efficient company formation, services. The Bank serves its clients through an extensive network of branches, an investment fund licensing and company administration support. We deliver these International Clients Centre and a Trade Finance Centre, recognised by Global Finance all-round services fully in-house through our unique multi-disciplinary structure as the Best in Malta for two consecutive years. Business clients access expert advice with over 60 partners, associates and staff hailing from the legal, tax, accounting and and specialised service from Corporate and Business Centres. A fully-fledged Wealth IT professions. Our Specialist Practice Groups in Malta: Financial Services; Taxation; Management arm and Investment Centres offer tailor-made investment solutions. Gaming; Intellectual Property; Trusts & Estate; Immigration & Relocation; Media & Representative Offices in Brussels, Milan, Tripoli and Melbourne assist clients who have Telecoms, Maritime; Aviation; Accounting; Audit; ICT Consulting; and Corporate interest to grow their business in these countries. Bank of Valletta services are available Services.

Charles Borg egal Services Dr Jean-Philippe Chetcuti

24/7 via internet, telephone and mobile. L

Banking Services Chief Executive Officer MANAGING Partner

BOV Centre, Triq il-Kanun, Santa Venera SVR 9030 - Malta 120, St Ursula Street, Valletta VLT 1122 - Malta T: (+356) 2131 2020 • E: [email protected] • W: www.bov.com T: (+356) 2205 6200 • E: [email protected] • W: www.cclex.com Contact: Romeo Cutajar - Chief Officer Financial Markets & Investments Contact: Dr Jean-Philippe Chetcuti - Managing Partner Who’s Who Who’s Who 150 151

Corporate Solution Limited David Griscti & Associates Our difference is our approach, we consult our clients as their businesses wereour David Griscti & Associates is a law firm focused entirely on the financial services industry. own. Corporate Solution Limited is an established Maltese company that specialises in The firm assists and advises banks, asset managers, financial advisors, family offices, law International Business & Management Consultancy through offering an array of different firms and other financial intermediaries to structure, establish and license AIFs, PIFs and services under one roof to meet all your business requirements when establishing your UCITS, AIFM, De Minimis and UCITS managers, fund administration outfits, credit and other business in Malta - a thorough “one-stop-shop” comprised of a team of seasoned business financial institutions, forex and binary businesses and alternative unlicensed structures such professionals with an international background. This combination of business and technical as securitisation vehicles, private investment schemes, family offices, companies, trusts and expertise enables our clients to reach operating status in as expeditious a manner as foundations. Post licensing/registration the firm offers full legal, corporate and tax advisory possible. Our Team consists of members who speak fluently German, Italian, Russian, services, compliance and anti-money laundering services, company secretarial and executive Spanish and Turkish. Services include: Remote Gaming Licensing, Company Formation & board services, bookkeeping and accounting services as well as other supplementary back-

Ivan Camilleri egal Services Dr David Griscti

Ancillary Services, Corporate Structuring, Administrative & Back OfficeS ervices, Key Official L office services including support risk management services.

orporate Services orporate Director senior partner

C & Director Services, Turn Key Solutions for Gaming Licensing in all Jurisdictions.

Suite A, Triq Mater Boni Consilii, Paola PLA 1610 - Malta 168, St Christopher Street, Valletta VLT 1467 - Malta T: (+356) 270 280 86 • E: [email protected] • W: www.corporate-solution.eu T: (+356) 2569 3000 • E: [email protected] • W: dglawfirm.com.mt Contact: Ivan Camilleri - Director Contact: Dr David Griscti - Senior Partner

CountryProfiler malta LTD Deloitte CountryProfiler CP ( ) is an international media company that specialises in the Deloitte Malta is a multidisciplinary firm, which offers a wide range of professional publication of country reports and investment guides on the world’s most innovative services. With a globally connected network of member firms in more than 150 and high-growth markets for trade, foreign investment and international financial countries, Deloitte brings together world-class capabilities and high quality service to services. CountryProfiler’s publications provide blue-chip companies, their executive clients. Deloitte has the largest international tax practice in Malta, a dedicated financial management and professional advisors with global business intelligence and market services practice, an experienced audit team and a financial advisory arm, all servicing insight they require when managing cross-border operations, investing or doing a vast range of national and international companies, together with private and high- business with new markets. CountryProfiler’s publications are considered to be among net-worth individuals. the most prestigious economic intelligence products available. Garvan Keating Malcolm Booker

Media Services DIRECTOR EMEA CHIEF EXECUTIVE OFFICER Accounting & Auditing Accounting

64, St Anne Court, Flat 4, Bisazza Street, Sliema SLM 1642 - Malta Deloitte Place, Mriehel Bypass, Mriehel BKR 3000 - Malta T: (+356) 2034 2034 • E: [email protected] • W: www.countryprofiler.com T: (+356) 2343 2000 • E: [email protected] • W: www.deloitte.com/mt Contact: Melissa Puglisevich - Office Manager Contact: Malcolm Booker - Chief Executive Officer

DAIS Software Limited DF Advocates DAIS Persona is a multi-function “customer acceptance” software that combines DF Advocates is a Malta based law firm. We advise international and local businesses client document management and a compliance search tool for KYC/AML/CFT and entrepreneurs on local and cross-border transactions involving complex legal process. Designed as a front-line screening and reporting tool to minimise regulatory issues spanning various industries. Our specific focus is on corporate law, financial risks, DAIS PERSONA enables you to automatically monitor, screen and search for services, tax, gaming, maritime and aviation law. We also act for public and private an individual or a corporate entity against known sanction lists that include UN entities on procurement issues and privatisations. Through our affiliated company Sanction list, US Treasury OFAC and EU Sanctions lists. Powered by Dow Jones Risk DF Corporate Services, we are authorised by the Malta Financial Services Authority to & Compliance data solutions. provide fiduciary and trust services, whilst throughDF Marine Consultancy, we operate

ompliance our maritime law division and provide related advisory and back office services.

Juan Fach egal Services Dr Kevin Deguara L Business Development Director managing partner & C KYC

64, St Anne Court, Suite 4, Bisazza Street, Sliema, SLM 1642 - Malta Il Piazzetta A Suite 41 Level 4 Tower Road Sliema SLM 1607 Malta T: (+356) 2034 2037 • E: [email protected] • W: www.dais.com.mt T: (+356) 2131 3930 • E: [email protected] • W: www.dfadvocates.com Contact: Juan Fach - Business Development Director Contact Person: Dr Kevin Deguara – Managing Partner Who’s Who Who’s Who 152 153

DF Corporate Services Limited Fenech & Fenech Advocates DF Corporate Services Limited forms part of the DF Group which besides DFCS Established in 1891, Fenech & Fenech Advocates is a leading law firm in Malta, with encapsulates also DF Advocates, DF Marine Consultancy and DF Business Advisory. a strong commercial, corporate, tax, maritime, ship registration, M&A and financial DFCS is authorised by the Malta Financial Services Authority to provide trustee and services practice, and is a recognised pioneer in Maritime, eGaming and ICT law. The fiduciary services. We also provide directorship and company secretarial services, back largely international client base is serviced by a staff of over 85 people. The firm has office and company administration services. We also assist clients in setting up and advised blue-chip clients in various landmark transactions in Malta and overseas and operating gaming companies. Our client base spans over a number of EU and non-EU remains at the forefront of legal developments. Our team’s legal insight and business jurisdictions. In servicing our clients’ legal and fiscal needs,DFCS works in tandem with instinct provide clients with value-driven solutions. The varied tax and aviation practices DF Advocates, the law firm within the DF Group. are also a mainstay of the firm’s international work.

Dr Edward Saliba egal Services Dr Ann Fenech L

orporate Services orporate director Managing Partner C

Il Piazzetta A Suite 21 Level 2 Tower Road Sliema SLM 1607 - Malta 198, Old Bakery Street, Valletta VLT 1455 - Malta T: (+356) 2133 1040 • E: [email protected] • www.dfcorporate.com T: (+356) 2124 1232 • E: [email protected] • W: www.fenechlaw.com Contact Person: Dr Edward Saliba - Director Contact Person: Dr Ann Fenech - Managing Partner

DF Marine Consultancy Limited Fenech Farrugia Fiott Legal DF Marine Consultancy Services Limited (member of the DF Group) provides advice Fenech Farrugia Fiott Legal is a full-service law firm whose specific centres of expertise and assistance relating to yacht acquisitions, sales and construction of new-builds, include Corporate & Commercial Law, Mergers & Acquisitions, Taxation, Banking, yacht (both private and commercial) and ship registration, mortgage registration and Insurance & Investment Funds, Capital Markets Regulation, Trust & Fiduciary Structures, ship finance transactions in general. We also deal with vessel importations, customs as Shipping & Aviation Law, New Media Law, and Regulatory Compliance & Gaming Law. It well as VAT and income tax issues pervading the marine industry, including the setting has specialised units involving industry expertise in fund services, asset finance and the up and management of yacht leasing arrangements in terms of the Maltese Yacht iGaming sector. The firm’s clientele is versatile, both in terms of size as well as in terms Leasing guidelines. In servicing our clients’ legal and fiscal needs, we work in tandem of geographic spread. Our policy is to take a comprehensive and integrated approach, with DF Advocates, the law firm within the DF Group. in collaboration with other professional disciplines, where required.

Dr Anthony Galea egal Services Dr Tonio Fenech L

orporate Services orporate director joint managing partner C

Il Piazzetta A Suite 21 Level 2 Tower Road Sliema SLM 1607 - Malta Tower Business Centre, 1 Suite 5, Tower Street. Swatar BKR 4013 - Malta T: (+356) 2133 1040 • E: [email protected] • www.dfmarineconsultancy.com T: (+356) 2549 6400 • E: [email protected] • W: www.fff-legal.com Contact Person: Dr Anthony Galea - Director Contact: Dr Tonio Fenech – Joint Managing Partner

EY (formerly known as Ernst & Young Limited) Fenlex Group EY is a global leader in assurance, tax, transaction and advisory services. The insights As a leading management and corporate services provider, Fenlex caters to a large and quality services we deliver help build trust and confidence in the capital markets international client base. Fenlex is in the position to provide a wide range of services and in economies the world over. We develop outstanding leaders who team to deliver that include company incorporation and maintenance, tax and VAT compliance, on our promises to all of our stakeholders. In so doing, we play a critical role in building accountancy, payroll, bank account administration, directorship services, recruitment a better working world for our people, for our clients and for our communities. and HR Services as well as operational assistance. The company has been active in servicing the international business sector since the 1980s, and its clients are serviced by a multi-disciplinary team organised into three support units: Corporate Services, Accounts and Operations. Fenlex is closely associated with Fenech & Fenech Advocates, a leading law firm. Ronald Attard Karl Diacono

Country Managing Partner Services orporate Chief Executive Officer C Accounting & Auditing Accounting

Regional Business Centre, Achille Ferris Street, Msida MSD 1751 - Malta 85, St. John Street, Valletta VLT 1165 - Malta T: (+356) 2134 2134 • E: [email protected] • W: www.ey.com T: (+356) 2124 1817 • E: [email protected] • W: www.fenlex.com Contact Person: Jennifer Tonna - Marketing Manager Contact Person: Karl Diacono - Chief Executive Officer Who’s Who Who’s Who 154 155

FXDD Malta Limited Harbour Pensions limited FXDD Global is a global foreign exchange (forex) dealer and subsidiary of FXDD. Harbour Pensions Limited (“Harbour”) is regulated by the Malta Financial Services FXDD Global delivers innovative technologies and education that help empower Authority and listed as a qualified recognised overseas pensions scheme with Her client trading. FXDD Global provides services to individual and institutional traders, Majesty’s Revenue and Customs. Harbour is an established leader in the international hedge funds, commercial entities, brokerage firms and money managers outside pensions market, with a team of legal, financial and banking professionals offering of the US. FXDD Global offers a comprehensive array of trading tools and platforms the security of dealing with an experienced and well-respected retirement scheme to accommodate all strategies, with dedicated, 24-hour customer service for every administrator. The reputation of our practice in Malta is built on the quality of our account holder. FXDD Global is headquartered in Malta, regulated by the Malta services, our people’s professionalism and enthusiasm and the culture rooted in the Financial Services Authority (MFSA). commitment, integrity and values that we uphold. Lubomir Kaneti Justin Caffrey Chief Operation Officer managing director Foreign Exchange Foreign Pension Management Pension

K2 First Floor, Forni Complex, Valletta Waterfront, Floriana FRN1913 - Malta Suite A6, Skyway Offices, 177 Marina Street, Pieta 9042 - Malta T: (+356) 2013 3000 • E: [email protected] • W: www.fxdd.com T: (+356) 2123 3233 • E: [email protected] • W: www.harbourpensions.com Contact: Lubomir Kaneti - Chief Operation Officer Contact: Justin Caffrey - Managing Director

Griffiths + Associates Ltd Heritage International Fund Services (Malta) Limited Established in 1982 and located in Naxxar, our firm of Certified Public Accountants Heritage International Fund Services (Malta) Limited (“Heritage”) is part of the Heritage offers a one-stop shop assisting businesses in carrying out activities in, from or through Group. Heritage is an independent provider of client-focused, comprehensive, third- Malta. The firm’s activities include company incorporations, back-office services and party fund administration and depositary services with particular expertise in the international corporate structuring, especially within the context of Malta’s extensive establishment and servicing of private equity, property, infrastructure and esoteric funds tax treaty network and advantageous tax regime. Being members of PrimeGlobal, an investing in both developed and emerging markets. Heritage provides administration, international association of accountants and advisers, adds value to the servicing of accounting, corporate governance, company secretarial and compliance services as part clients’ needs within an international perspective. of its fund administration offering. Heritage also provides specialist depositary services to Alternative Investment Funds in accordance with the requirements of the AIFMD. These services include asset verification, cash monitoring and oversight. Peter Griffiths Dr Neville Carabott managing & tax director managing director Fund Administration Fund Accounting & Auditing Accounting

Level 1, Casal Naxaro, Labour Avenue, Naxxar NXR 9021 - Malta SmartCity Malta SCM 01, Suite 502, Ricasoli SCM 1001 - Malta T: (+356) 2738 3631 • E: [email protected] • W: www.griffithsassoc.com T: (+356) 2090 8900 • E: [email protected] • W: www.heritage.co.gg Contact: Peter Griffiths – Managing & Tax Director Contact: Dr Neville Carabott - Managing Director

GTG Advocates IIG Bank (Malta) Ltd GTG combines experience and knowledge to provide its clients with integrated IIG Bank (Malta) Ltd is a specialist trade finance bank focused on international commodity advice and assistance in the fields of shipping, commercial and corporate law, trade and does this through a comprehensive range of services that are tailored to meet financial services and intellectual property. A leader in communications, gaming the needs of its international trading customers spread over Latin America, Europe, and betting, e-commerce and information technology, GTG serves a diverse client the Middle East, Africa and Asia. IIG Bank (Malta) Ltd is dynamic and innovative in base, which also benefits from an international professional network including providing structured solutions for trading companies, distributors, manufacturers international firms, banks as well as business contacts in theM iddle East. The success and exporters, especially those trading in emerging markets. The Bank’s approach to of GTG is based on its dedication to client services, providing tailored, efficient and business is characterised by its desire to build long lasting relationships and by being value-added legal solutions. close to the customer to promote a better understanding of the complexities inherent in international trade flows.

egal Services Dr Robert Tufigno Raymond Busuttil L

PARTNER Banking Services Managing Director & Chief executive officer

66, Old Bakery Street, Valletta vlt 1454 - Malta Level 20, Portomaso Business Tower, St. Julians STJ 4011 - Malta T: (+356) 2124 2713 • E: [email protected] • W: www.gtgadvocates.com T: (+356) 2248 4510 • E: [email protected] • W: www.iigbank-malta.com Contact Person: Dr Robert Tufigno - Partner Contact: Raymond Busuttil - Managing Director & Chief Executive Officer Who’s Who Who’s Who 156 157

KPMG Malta Enterprise KPMG in Malta is one of the leading providers of audit, tax and advisory services Malta Enterprise is the government agency responsible for investment promotion and established since 1969. We are one of the largest professional services firms in Malta supporting industrial development in Malta. Its mission is to sustain Malta’s overall with a Partner and staff compliment of over 250. With a balanced mix of international competitiveness to create the right environment for successful enterprise on the Islands. and local clients, our goal is to turn knowledge into value for the benefit of our clients, The agency offers assistance and advice to those who seek to learn more aboutthe our people and the capital markets. We continue to build on past successes thanks to a multitude of business and investment opportunities available. Malta Enterprise develops clear vision, rigorously maintained values and, above all, our people. and administers a number of incentive measures to support the development and growth of enterprises established here. These measures are designed to address general economic growth without causing any distortion to competition. Tonio Zarb Mario Galea Senior Partner Chief Officer

Government Agency Government Investment Promotion Accounting & Auditing Accounting

Portico Building, Marina Street, Pieta’ PTA 9044 - Malta Gwardamangia Hill, Pieta, MEC 0001 - Malta T: (+356) 2563 1000 • E: [email protected] • W: www.kpmg.com.mt T: (+356) 2542 0000 • E: [email protected] • W: www.maltaenterprise.com Contact Person: Tonio Zarb - Senior Partner Contact: Mario Galea – Chief Officer Investment Promotion

malta gaming authority MaltaPost PLC At the Malta Gaming Authority, our regulatory philosophy, organisational principles MaltaPost is one of the country’s largest private employers. As the national postal and culture are focused on player protection. Malta’s transparent legal framework and operator, it collects and delivers mail to every address on the Islands, 6-days-a-week and experience in regulating gaming has developed into a world-class eco-system providing operates through a comprehensive retail network of outlets. It is regulated by the Malta effective, innovative and efficient regulation. Our regulatory framework provides Communications Authority and is listed on the Malta Stock Exchange. MaltaPost has assurances both locally and internationally that fairness and transparency are at the core developed a state-of-the-art document management centre in Xewkija, Gozo, which is of everything that we do. To this effect, our licensees are associated with the highest equipped to scan, archive and index information of both electronic and physical formats. levels of integrity and efficiency. Proudly recognised as a world-class authority in terms of innovation, governance and diligence, our mission statement reads: “To regulate competently the various sectors of the lotteries and gaming industry that fall under the Joseph Cuschieri Joseph Gafa’ Authority by ensuring gaming is fair and transparent to the players, preventing crime, Postal Services Postal corruption and money laundering and by protecting minor and vulnerable players.” executive chairman chief EXECUTIVE officer Government Agency Government

TG Complex, Suite 1, Level 3, Brewery Street, Mriehel, Birkirkara BKR 3000 - Malta 305, Qormi Road, Marsa MTP 1001 - Malta T: (+356) 2546 9000 • E: [email protected] • W: www.mga.org.mt T: (+356) 2123 6782 • E: [email protected] • W: www.maltapost.com Contact: Claudette Mifsud - PR & Marketing Manager Contact: Joseph Gafa’ – Chief Executive Officer

Maitland group Mamo TCV Advocates Whether you are a private or corporate client, Maitland can assist you. Maitland was Mamo TCV Advocates, a Maltese tier-one law firm, provides legal services for its founded in Luxembourg in 1976 and now employs over 700 people in 13 offices across 12 clients in all sectors of civil and commercial law, most notably banking and financial countries. The firm is a global provider of multi-jurisdictional legal, tax, fiduciary, investment services, corporate, communications, media and technology, intellectual property & advisory and fund administration services. Over the years we have added corporate anti-counterfeiting, shipping & aviation, and litigation services. The firm has a strong administration to our services, and the Malta office can provide directors, trustees and an international practice and networks which enable it to provide a ‘one-stop’ service entire suite of company secretarial services, including accounting and legal services, to to clients. The firm’s mission is to deliver high-quality services through its diverse local and international families, trusts, and corporate structures. We are also able to offer specialist resources and expertise in a pro-active, efficient and timely fashion, and advice on the local residence and citizenship schemes. Our team in Malta is able to draw to foster its local and international network to offer comprehensive and integrated on Maitland’s cross-border expertise and knowledge of multiple jurisdictions in providing services to clients.

Mel Roberts egal Services Dr Joseph Saliba

clients with optimal solutions. L

orporate Services orporate Head of Maitland Partner C Malta office

4th Floor, Avantech Building, St Julian’s Road, San Gwann SGN 2805 - Malta Palazzo Pietro Stiges, 103, Strait Street, Valletta VLT 1436 - Malta T: (+356) 2144 6377 • E: [email protected] • W: www.maitlandgroup.com T: (+356) 2123 2271 • E: [email protected] • W: www.mamotcv.com Contact: Mel Roberts - Head of Maitland Malta Office Contact Person: Dr Joseph Saliba - Partner Who’s Who Who’s Who 158 159

Nexia BT SPARKASSE BANK MALTA PLC Nexia BT provides a wide range of services including: basic company incorporation and Sparkasse Bank Malta forms part of the Austrian Savings Banks and the Erste Group compliance, specialised advisory services, audit, tax and accounting, for sectors such as Bank AG network. From Malta the Bank provides Private Banking and Fund Custody & financial services, international trade, remote gaming, investment funds, shipping and Depositary solutions. Fund custody is a core business for the bank, and its experience aviation. We offer international support including back office operations and advisory in the field allows for flexible and practical workable solutions. The bank provides services, in a responsive, proficient and professional manner. The firm is a member custody services to UCITS, AIFs and PIFs providing a personal, tailored and seamless of Nexia International, a top worldwide network of independent accounting and banking, execution and settlement solution. consulting firms with offices in over 105 countries. Our main strength lies in our skilled and highly professional staff providing innovative expertise and problem solving techniques giving our clients a competitive edge. Karl Cini Paul A. Mifsud

Tax and International Banking Services Managing Director Client Services Partner Accounting & Auditing Accounting

Suite 2, The Penthouse, Capital Business Centre, Entrance C, Triq taz-Zwejt, San Gwann SGN 3000 - Malta 101 Townsquare, Ix-Xatt ta’ Qui-si-Sana, Sliema SLM 3112 - Malta T: (+356) 2163 7778 • E: [email protected] • W: www.nexiabt.com T: (+356) 2133 5705 • E: [email protected] • W: www.sparkasse-bank-malta.com Contact Person: Karl Cini - Tax and International Client Services Partner Contact: Paul A. Mifsud - Managing Director

PALMALI SHIPMANAGEMENT LTD The Equivest Alliance Foundation Palmali Shipmanagement Ltd established operations in Malta in 2006 to provide As the gap widens between the super rich and very poor, The Equivest Alliance financial, technical, administrative and strategic services to our parent company Foundation has adopted an enterprising remedial approach to “Address the Balance” and third-party ship owners. Palmali Shipmanagement has been established to be a through its innovative application and mix of modern financial management skills by its leading provider of shipmanagement and related services to the shipping industry. two Founders, Alan Smith and Clive Ward. They bring over half a century of experience Our primary objective as a service company is to add value to our clients by delivering and professionalism to the benefit of the Foundation contributors and humanitarian quality services in a transparent, cost-effective and consistent way. We pride ourselves recipients. Equivest offers high-net-worth participants the opportunity to share in the on offering a flexible and customised approach to our ship management clients privilege of uplifting under-privileged communities whilst enjoying the security of seeking global solutions for all vessel segments. capital with a fixed yield. Malta was considered to be the most suitable jurisdiction for the Foundation headquarters. Nigar Aliyeva Keating Alan Smith KC director Joint Founder & Shipping ServicesShipping Palmali Services Investment chief executive officer Shipmanagement Ltd Villa Aurora, 14-16, Princess Elizabeth Street, Ta’ Xbiex XBX 1102 - Malta SmartCity, SCM01, Floor 04, Ricasoli, SCM 1001 - Malta T: (+356) 2138 8344 • E: [email protected] • W: palmali.com.tr T: (+356) 2131 2860 • E: [email protected] • W: www.TheEquivestAlliance.com Contact Person: Nigar Aliyeva Keating - Director Contact: Alan Smith KC - Joint Founder & Chief Executive Officer

Papilio Services Limited Vistra (Malta) Limited Papilio Services Limited is an independent service provider which operates in the Vistra is a leading independent provider of trust, fiduciary, corporate and fund services, tax and corporate sectors, offering high quality expertise and complete solutions for delivering personal tailored solutions to international corporations, institutions, international business structures, funds, companies, partnerships, trusts, foundations investors and high-net-worth individuals from around the world. Vistra Group has an and individuals. We provide advisory and compliance services for all of Malta’s international network, spanning approximately 1300 professionals in 32 countries, corporate and commercial fields, from company, trust and foundation formation throughout Europe, the Middle East and Asia. Vistra (Malta) Limited is licensed by and administration to book-keeping and accountancy. We also assist with direct and the Malta Financial Services Authority to act as Trustee. Through our multilingual and indirect taxation, including income tax, value added tax and capital transfer tax (stamp multidisciplinary staff, we provide a full range of services, including trustee & fiduciary duty); as well as providing all the other relevant services for individuals taking up services, company formation, management & domiciliation, accounting services, tax residence in Malta. compliance, bank account services, residency services, Individual Investor Programme Thomas Jacobsen Marco Bugelli Services and Marine & Aviation.

orporate Services orporate managing director Services orporate managing director C C

168, St Christopher Street, Valletta - Malta 114, The Strand, Gzira GZR 1027 - Malta T: (+356) 2122 7553 • E: [email protected] • W: www.papilioservices.com T: (+356) 2131 4259 • E: [email protected] • W: www.vistra.com Contact Person: Thomas Jacobsen - Managing Director Contact: Gerard Jan Van Spall - Commercial Director How safe is your harbour?

Come to ours...

www.harbourpensions.com

Harbour Pensions (FinanceMalta) Advert Sept 14.indd All Pages 25/09/2014 16:29 © 2013 KPMG, a Maltese civil partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. rights All entity. a Swiss International”), (“KPMG Cooperative International KPMG with affiliated firms member independent of network KPMG the of firm a member and partnership civil a Maltese KPMG, © 2013

Malta: Your Port of Call in Europe Malta is increasingly being recognised as a financially stable, cost efficient jurisdiction of choice for investing in and out of Europe. KPMG offers a one-stop shop solution through a dynamic team of professionals to assist you with all your needs. Leverage our technical skills and wealth of experience to your advantage today. Contact us: Tonio Zarb Senior Partner, Head of Advisory Services [email protected] Andre’ Zarb Partner, Tax Services [email protected] Juanita Bencini Partner, Risk Consulting [email protected] Hilary Galea-Lauri Partner, Head of Audit Services - Technical and Quality Matters [email protected] www.kpmg.com.mt