MALTA
Finance
A post-Brexit gateway
Malta can provide an ideal platform for British financial firms looking for a mirror operation offering free access to the European Union
Sources: World Economic Forum, European Commision
As Britain prepares to negotiate the terms of its divorce from the European Union, Malta is positioning itself as a friendly destination for financial companies which may find that London no longer offers them a perfect platform for continent-wide activities.
If Brexit is indeed 'hard', Malta could lend a helping hand, although the country's authorities are eager to point out that their courting of London's financial firms will not stray into outright aggression.
"In the event that the British need a parachute or a gateway, they are going to find Malta really available and we would welcome them. We are currently meeting with the British Bankers' Association, and the Mayor of London to allow them to see for themselves what Malta can offer," says the country's finance minister, Professor Edward Scicluna.
But Professor Scicluna is quick to add that Malta's relationship with Britain will never sour. "We have done so much business with the UK and we have such strong historical ties. We are simply saying that we are here if they need us."
Malta's pitch is that companies will be able to operate naturally from the UK while maintaining their access to Europe by setting up a lean mirror operation in another EU member state. "Operators can set up in our regime; it will be low-cost, so the margin will not be significant. They retain what they have in London and create a passporting company into Europe from Malta," explains Kenneth Farrugia, chairman of FinanceMalta, a public-private initiative set up to promote the local sector.
What companies that relocate will finds is that Malta is a growing financial force. From a low base of just three percent in the 1990s, the sector now contributes more than 12 percent to Malta's GDP.
In what is becoming a boom in the middle of the Mediterranean, Malta already has 40 fintech firms operating from its territory thanks to its commitment to encouraging financial start-ups. As well as taking advantage of a positive regulatory environment, this fintech cluster is driven by strong ICT performance on the island and knowledgeable supporting financial services.
Despite the growth, Professor Scicluna insists that the island nation maintains its friendly, dynamic environment in which to do business. "We stand out in that a businessperson can have an idea and immediately go to the relevant minister or prime minister and discuss it. If it requires a tweaking of the legislation, we can do it in a matter of months, as we did with the insurance industry to draw up the first legislation in the whole of the European Union to create cell structures."
If Brexit is indeed 'hard', Malta could lend a helping hand, although the country's authorities are eager to point out that their courting of London's financial firms will not stray into outright aggression.
"In the event that the British need a parachute or a gateway, they are going to find Malta really available and we would welcome them. We are currently meeting with the British Bankers' Association, and the Mayor of London to allow them to see for themselves what Malta can offer," says the country's finance minister, Professor Edward Scicluna.
But Professor Scicluna is quick to add that Malta's relationship with Britain will never sour. "We have done so much business with the UK and we have such strong historical ties. We are simply saying that we are here if they need us."
Malta's pitch is that companies will be able to operate naturally from the UK while maintaining their access to Europe by setting up a lean mirror operation in another EU member state. "Operators can set up in our regime; it will be low-cost, so the margin will not be significant. They retain what they have in London and create a passporting company into Europe from Malta," explains Kenneth Farrugia, chairman of FinanceMalta, a public-private initiative set up to promote the local sector.
What companies that relocate will finds is that Malta is a growing financial force. From a low base of just three percent in the 1990s, the sector now contributes more than 12 percent to Malta's GDP.
In what is becoming a boom in the middle of the Mediterranean, Malta already has 40 fintech firms operating from its territory thanks to its commitment to encouraging financial start-ups. As well as taking advantage of a positive regulatory environment, this fintech cluster is driven by strong ICT performance on the island and knowledgeable supporting financial services.
Despite the growth, Professor Scicluna insists that the island nation maintains its friendly, dynamic environment in which to do business. "We stand out in that a businessperson can have an idea and immediately go to the relevant minister or prime minister and discuss it. If it requires a tweaking of the legislation, we can do it in a matter of months, as we did with the insurance industry to draw up the first legislation in the whole of the European Union to create cell structures."