Malta stakes out its place among Europe’s top financial centres
Recent reforms by Malta’s government are enabling the island to take an increasingly important role in Europe’s fund management market.
Two cornerstones of Malta’s development as a financial services centre are the opening of the Malta Financial Services Authority in 1995 and the island’s accession to the EU in May 2004.
Both decisions stem from a decision to abandon its ‘offshore’ status and so take on the established European financial centres, such as Luxembourg and Dublin.
The strategy of coming ‘onshore’ with the aim of becoming a competitive financial services centre has proved to be far sighted, while its policy of being flexible, adaptable and resilient in the face of the turmoil caused by the financial debt crisis and economic recession has put Malta in a strong position.
The investment funds industry in Malta has grown considerably since Malta’s accession to the EU, from about €2bn in December 2006 to €8bn, as at December 2011, an increase of 75% over five years.
The island’s growth is reflected in other statistics. The World Economic Forum’s Global Competitiveness Report for 2011-12, which gave the island a GDP of $8.3bn (ranking it 119th out of 142 countries in 2010) and a population of 400,000, ranked Malta as having the 12th soundest banking system, while placing it 15th for financial market developments and 21st for its regulation of securities exchanges.
The majority of Maltese funds have been set up by small- to medium-sized managers, launching with relatively low levels of seed capital. This trend is changing and larger funds are being set up in Malta.
Around 80% of the funds licensed in Malta are Professional Investor Funds (PIF) and 20% are Ucits. Malta has adopt ed a policy of being approachable and business-friendly, while building a strong and EU-compliant regulatory structure.
The implementation of the EU’s AIFMD legislation has resulted in a growing trend of re-domiciliation of funds from traditional offshore jurisdictions.
It is well positioned to continue to compete with its counterparts in Luxembourg and Dublin, in a world that has become conscious not only about costs, but quality of services.
Gianluca Tadiello, sales director for Italy and South of Switzerland of Amicorp Fund Services, says: “Our cost effectiveness and efficiency has enabled us to approach different types of client, ranging from small asset managers coming out of trading desks of international banks looking to launch their own hedge fund, to family offices or big and branded management companies needing a quality service for their alternative or Ucits funds.”