Malta Country Commercial Guide
Learn about the market conditions, opportunities, regulations, and business conditions in malta, prepared by at U.S. Embassies worldwide by Commerce Department, State Department and other U.S. agencies’ professionals
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Financial Services
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Overview

The Maltese financial services sector is the fastest growing sector of the economy.  Financial services accounts for approximately 11 percent of Malta’s GDP, and the industry is largely based on the core sectors of asset management, investment funds, insurance, private wealth and corporate services, with the introduction of fintech, including blockchain and e-payments, as well as the aviation, yachting, and maritime services industries.  

Malta’s financial services industry is likely to continue to see growth in fund administration, asset management and asset servicing, and corporate banking as a result of Brexit.  Malta has gained international recognition as a world-class center that has attracted blue chip banks, fund managers, investment houses, and professional practices from the United States, United Kingdom, Germany, Austria, and Switzerland, among others.  As of 30 June 2020, there were 566 funds domiciled in Malta, of which 63 were Alternative Investment Funds (AIFs). This product type continues to gain ground, and this seems to be a segment poised for further growth notwithstanding the current market environment.

While Malta has a reputation as a jurisdiction for smaller financial services companies and start-ups, the fund sector is maturing and attracting sophisticated asset management activities.  

Malta has developed a comprehensive package of laws that regulate the provision of financial services and provides a favorable legal and regulatory framework for the provision of such services.  This shows the government’s commitment to sustained development in the sector.  The Malta Financial Services Authority (MFSA) enforces the legislation within this sector, which adheres to EU standards and codes, as well as those of most other international frameworks.  The Companies Act provides for the establishment of investment companies with variable share capital and companies with share capital denominated in a foreign currency.  The law allows for nominee shareholding both for local and foreign companies.  The Investment Services Act regulates the entire range of investment business in Malta. 

Malta is embracing Blockchain technology, including cryptocurrency and other fintech solutions. (see Blockchain and Artificial Intelligence section above).  In July 2018, the Maltese Parliament passed three bills into law - the Malta Digital Innovation Authority Act (MDIA Act), the Innovative Technology Arrangements and Services Act (ITAS Act) and the Virtual Financial Assets Act (VFAA).  Malta’s new regulations offer comprehensive details on the treatment of cryptocurrencies, the launch of initial coin offerings and subsequent treatment of assets offered to investors as well Blockchain/DLT service providers and services that they offer, including the setting up of cryptocurrency exchanges.

In June 2021, the Financial Action Task Force (FATF) put Malta, on its list of jurisdictions under increased monitoring, also known as grey list. FATF determined that the country is still lacking in two areas, and was given a three-point action plan to address the treatment of Ultimate Beneficial Owners (UBOs), and the investigation and prosecution of tax evasion.  The Maltese government made a high-level political commitment to work with FATF to strengthen its anti-money laundering and counterterrorist financing (AML/CTF) regimes.

Opportunities

Opportunities exist in Blockchain technology, trade finance, group marketing of regional business activities (typical representative office), regional private banking business activities, trust business, investment banking and advice, venture capital banking, captive insurance, fund management and custody service, private pension funds, and all types of outsourcing and coordination services, such as accounting and administration, insurance management, fund administration, and electronic payments systems.

Resources

  • Finance Malta
  • Malta Financial Services Authority

 

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