Oppor o t r unit i ie i s e s W it i hin i T h T e e M alt l e t s e e s e Fin i ancia i l l S ec e to t r o Banking

Transcription

1 Opportunities Within The Maltese Financial Sector Banking

2 Growth of the Industry

3 Malta s international banking centre has been gaining considerable ground in establishing itself as a finance hub in the Mediterranean region. Over a decade, the sector has transformed itself from one having four retail banks serving the local population to a reputable international banking centre currently hosting twenty three banks. February 10 3

4 This influx includes several leading foreign banking groups, with a spread of majority shareholding from: Australia Austria Bahrain Belgium Finland France Kuwait Netherlands Portugal Saudi Arabia Turkey Greece United Kingdom February 10 4

5 Scope of Activities

6 Malta joined the European Union in May 2004, and successfully adopted the euroin January This inspires confidence, and allows operators easy access to European markets. February 10 6

7 February 10 7 The Island s strategic location in the centre of the Mediterranean also makes it a convenient gateway to North African markets, and an ideal base for institutions wishing to tap into the everincreasing wealth being generated in the region.

8 As growth continues, so does the range of products and services being offered in and from Malta. These include: Retail Syndicated Loans Private Banking Banking Trade Finance Trust Business The fast growing Insurance and Investment Fund sectors in Malta also provide opportunities for the provision of custodian services, fund administration, fund management and other related services. Investment Banking Treasury Operations February 10 8

9 A Robust Regulatory and Legislative Framework

10 The Malta Financial Services Authority (MFSA) is the country s single Regulator for all banking, investment and insurance business. February 10 10

11 Its high regulatory standards are modelled on EU legislation and best practice, whilst allowing for the necessary flexibility in a modern and dynamic banking environment. The flexibility of, and ease of accessibility to, the Regulator are amongst the most appreciated advantages enjoyed by financial sector operators in Malta. February 10 11

12 Banking business in Malta is regulated by the Banking Act. Closely supervised by the MFSA, Maltese banks remain well capitalised and have high liquidity ratios as well as sound, well-diversified loan and investment portfolios. Their prudent business model has enabled them to emerge largely unscathed from the turmoil of the 2008 international banking crisis. February 10 12

13 February The World Economic Forum s October 2008 report on global competitiveness ranked Malta amongst the top ten countries insofar as soundness of the banking system is concerned.

14 Customer confidentiality is adequately safeguarded by the provisions of the Banking Act, the Professional Secrecy Act and the Data Protection Act. The 3 rd EU Directive on the Prevention of Money Laundering and Funding of Terrorism has been fully transposed into Maltese legislation to guard against abuse of the financial system for criminal purposes. February 10 14

15 Investment Services business is likewise underpinned by the Investment Services Act and the Financial Markets Act, which transpose the provisions of the Markets in Financial Instruments Directive (MiFID) into domestic legislation. February 10 15

16 An Advantageous Business Domicile

17 An ideal geographic location, the benefits of EU membership and euro adoption, a prompt, efficient and accessible Regulator, PLUS... February 10 17

18 A well-educated and motivated work force: The island has a good source of well-educated people and a cadre of qualified professionals in law, accounting, taxation, I.T. and other disciplines required by the financial services sector. The work force possesses good language skills English is universally spoken and written; many Maltese are fluent in Italian and may also speak French or German. A positive work ethic prevails. February 10 18

19 Costs are measurably lower than in other European centres: Salaries average one-third to one-half of the EU level. Other operating costs are likewise competitive. Excellent office space and housing are available at reasonable rents. February 10 19

20 An attractive fiscal regime: Companies incorporated in Malta are taxed at the standard rate of 35% on their worldwide profits. Malta branches of banks which are incorporated outside Malta are taxed on a remittance basis (i.e. income arising in Malta and foreign source income received in Malta). Malta s tax system is, and always has been, based on the full imputation system -shareholders receive full credit for any tax paid by the company on profits distributed as dividends. Double tax relief is available for foreign tax suffered on income taxable in Malta. Relief is provided for under each of Malta s double tax treaties or unilaterally as provided for under domestic law. Malta has double taxation treaties with over 50 countries, and others are being concluded. February 10 20

21 An attractive fiscal regime: When the Malta company distributes a dividend to its shareholder, the shareholder should be entitled to a partial refund of the Malta tax paid by the Malta company on the profits distributed. In the case of profits derived from trading activities, the size of refund would generally be around 6/7ths of the Malta tax paid, thus effectively reducing the overall effective tax burden to around 5%. A participation exemption applies to income and gains derived by the Malta company from material foreign shareholdings (minimum 10% holdings or value of 1.164m) satisfying certain basic conditions. February 10 21

22 An attractive fiscal regime: No withholding tax on most interest and royalties paid to non-residents. Malta has no CFC legislation, no thin cap rules and no sophisticated transfer pricing rules. Exemption from stamp duty applies on most international share transfers. February 10 22

23 Vision for Continued Growth

24 ...following our successes in this area my Government believes that the sectoral contribution to the gross domestic product can be increased to 25% and thus establish itself as a reputable financial services centre in the region The Hon. Lawrence Gonzi Prime Minister 26 November 2008 The Maltese financial services sector is fast becoming a cornerstone of the economy, broadly accounting for around 12% of GDP. The Government's vision is to increase the industry s contribution significantly by Banking has a central role to play in this ambitious development, and in projecting the island s well-earned reputation as an international financial centre of excellence. February 10 24

25 Malta is a European country with a well established legal, regulatory and commercial infrastructure... It also has distinct cost advantages compared to Europe, but with the full benefits of forming part of the European Union... The Maltese workforce is well educated and highly skilled... Malta offers a competitive place to do business within the EU... We have a successful business here and we are keen to build on this success HSBC Bank p.l.c., UK February 10 25

26 Thank You