Swedish high profile businessmen encouraged to invest in Malta

The Scandinavian Business Forum Malta, in collaboration with Finance Malta, recently hosted a delegation of 13 high profile Swedish businessmen to learn more about Malta’s potential for investment, particularly in the financial services sector.

The Swedish group, which consisted of individuals who hold highly impressive commercial track records in investment banking, property, capital markets and private equity/asset management funds, selected Malta as their destination for this year in view of Malta’s growing reputation as a well- regulated European financial centre.

The Swedish delegation was addressed by Mark Fenech, chairman of the forum, Kenneth Farrugia, chairman of FinanceMalta and Chris Curmi, a partner at Deloitte Malta.

Dr Fenech explained to the Swedish businessmen that Malta laid the foundations of its financial services industry way back in 1988 “on the strength of the promulgation of an offshore legislative framework and the establishment of the Malta International Business Authority as regulator”.

In the following years, Dr Fenech said, this legislative framework was deliberately moved onshore and, in anticipation of Malta’s accession to the European Union, the Malta Financial Services Authority was founded in 2002.

“With the advent of globalisation, Malta today is again in tune with its centuries-old tradition and, rather than welcoming ancient sea-farers, is increasingly attracting a myriad of reputable international financial services operators from all over the world,” he said.

Dr Fenech listed the main factors which contributed towards the attraction of financial services business to Malta, namely a well-trained workforce highly proficient in the English language, a comprehensive legal and regulatory framework, a competitive fiscal regime which entitles operating companies to a 6/7ths refund of the 35 per cent corporate tax upon dividend distribution, a low-cost base, 50 double taxation agreements, an excellent IT infrastructure, a legislative framework fully compliant with EU regulations and Malta’s strategic location, its record of security and stability together with a warm Mediterranean climate.

“Indeed, we can today declare with confidence that the sum-total of these various factors have yielded tangible and encouraging results. Malta’s financial services sector currently accounts for about 12 per cent of the Island’s GDP and it is estimated that by 2015, this sector will contribute up to 25 per cent to the island’s GDP.

“Furthermore, it is highly significant that over the last few years, the sector has expanded by 30 per cent per year and now employs over 7,000 people in the industry, which figure is roughly equivalent to four per cent of the workforce,” Dr Fenech said.

The Scandinavian Business Forum chairman said Malta has also managed to make deep inroads in other areas such as investment funds, trusts, banking and insurance.

“As far as investment funds are concerned, this industry has continued to grow and there are currently some 400 funds domiciled in Malta. The same can be said for the insurance and banking sectors which are at the moment witnessing periods of rapid growth.

“The number of insurance companies registered in Malta now stands at 41 (up from just eight in 2004) while, as far as banking is concerned, 24 foreign and privately-owned credit institutions and 15 financial institutions are now listed on the website of the Malta Financial Services Authority. At the same time, over 200 international banks and financial institutions have registered an interest in providing services in or out of Malta,” he said.

Dr Fenech said such encouraging results strengthened Malta’s credentials as a financial services centre of excellence, which credentials are today recognised internationally.

“Indeed, Malta is ranked 52nd among 133 economies in the global competitiveness table with the 13th soundest banking sector and 13th in the financial sophistication category. Malta has also been ranked first by the European Commission with respect to e-government services. Moreover, the Global Financial Services Index published by the City of London has ranked Malta in fourth place as the financial centre which is most likely to increase in importance in the next few years.”

FinanceMalta chairman Kenneth Farrugia gave an overview of the development of Malta’s financial services industry, pointing out that of the €550 million foreign direct investment into Malta in the first six months of 2010, 83 per cent was in financial intermediation. Mr Farrugia said banks’ assets in Malta reached €49.50 billion, which represented a 21 per cent year on year growth.

Mr Farrugia highlighted the fact that the funds sector is the fastest growing financial services sector in Malta. There are a total of 410 funds registered in Malta worth €8 billion and 108 new fund licences were issued in 2010, he said. The insurance sector, Mr Farrugia said, was expanding rapidly, and the annual gross premium written in 2010 amounted to €670,182, 354. Assets under management in 2010 amounted to €1.1 billion.

Chris Curmi, a partner at Deloitte Malta, dwelt specifically on Malta’s fiscal regime and gave the Swedish delegation a presentation entitled “Taxing in Malta and Structuring Opportunities.”