Malta expecting a “bumper year” for new formations
Professor Joe Bannister, chairman of the Malta Financial Services Authority (MFSA), believes the jurisdiction is on track to have a strong year of new formations.
Malta is one of the European Union’s most prominent captive domiciles, joining Dublin and Luxembourg as one of the preferred options for corporates.
“Things have changed since May this year and we are getting quite a few inquiries for captives and traditional (re)insurance companies,” Bannister told Captive Review. “We expect it could be bumper year for captive and reinsurance companies coming to Malta.”
Bannister said he met with one large corporate recently that is considering forming a captive in Malta, while a reinsurance company is also considering setting up a captive on the island.
At present there are seven pure captives and one protected cell company (PCC) captive licensed in the domicile. The PCC contains 12 active cells.
The official statistics, however, do not paint an accurate picture of Malta’s status since any ‘captive’ writing third party business is not classed as such. Peugeot Citroen, Vodafone and Nissan are among a host of companies owning insurance entities in Malta, but these are not counted in the official tally.
Among those captives that are counted within the seven number are Ergon Insurance Ltd, owned by German energy company Uniper, and Werla Insurance Company, owned by UPM-Kymmene Corporation, a Finnish forest industry company. Falcon Insurance, owned by metals and mining corporation Rio Tinto, is in run-off.
“This is something that we discuss internally,” the Professor added. “The statistics do look poor, but in reality this is the right classification and we do not want to mislead. Often what happens is a company looks to form a captive here, but then they see how easy it is to add third-party business and so they do that as well.”