Doing Business in Malta

Forward-looking Malta has laid the groundwork for a strong economy and an International Finance Centre of repute. A range of emerging sectors and business opportunities will help it retain its competitive position. 

Despite being the EU’s smallest member state, Malta has been one of the most exciting countries to watch and invest in. Over the years, the island’s leaders have been on a mission to make Malta a magnet for financial services. It was their vision to turn the island into a platform for international business and to develop a model economy, which has regularly been among the best in the EU.

In no small part, Malta’s rise into the ranks of Europe’s leading finance centres has been driven by the island’s reputation for stability, predictability and security which has made it an exception among other global financial centres. A robust, EU-compliant regulatory framework, diverse ecosystem and deep talent pool also helped financial services companies from around the world to find opportunities for doing business in Malta.

Behind Malta’s ascent is a combination of sound policymaking and a pro-business environment, and its development has largely been attributed to its focus on knowledge and value-added industries.

While financial services has become a key pillar of its economy, Malta also boasts a thriving tourism industry, is home to a large maritime service cluster and supports a host of other sectors including ICT, advanced manufacturing and life sciences.

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Banking & Financial Services in Malta

Much of Malta’s economic growth can be attributed to the excellent regulation of banks and the financial services sector. Maltese banks also have a strong local deposit base, and the banking sector is not significantly exposed to foreign sovereign debt risks. In addition, assets held by the island’s five core banks are twice the size of Malta’s GDP, which itself is only half the EU average.

Malta’s banking system is well regulated by the Malta Financial Services Authority. On 1 May 2004 the Central Bank of Malta joined the European System of Central Banks (ESCB) and on 1 January 2008 it became part of the Eurosystem. The main objective of the Eurosystem and the Central Bank of Malta is to maintain price stability. In order to meet this objective, the Central Bank of Malta participates in the preparation and decision-making process of the Eurosystem’s monetary policy.

The country's banks are able to provide a full range of personal, commercial and trade services to clients. With five retail banks and over 20 international commercial and trade banks already operating in or from Malta, this sector has become one of the most robust on the island. With the growing number of insurance companies that choose to domicile in Malta, Malta's banks have also built expertise in the management of insurance company investment portfolios.

Business Culture in Malta

A similar etiquette to that of the UK prevails, though retaining a Mediterranean flavour. Meetings and the way business is conducted may be less formal than in Northern Europe, however, appointments need to be scheduled in advance and punctuality is expected and appreciated. Business attire is suits and business cards should always be presented; business people should be formally addressed, especially those in senior positions, until a relationship is established, where a first-name basis would then be appropriate. International Malta uses English as an official language, alongside Maltese. Use of English is universal, making Malta instantly accessible to anyone conversant in English. Many Maltese also speak a third language, usually Italian, German or French.

Business Hours in Malta

Offices are usually open between 08:00/09:00 and 17:00/18:00 from Monday to Friday although this can vary according to the industry. Most offices are closed on Saturdays and Sundays. In summer, most government offices work half days. Most banks are open from 08:00 to 14:00 from Monday to Friday, and Saturday until 12:00. Retail outlets are typically open between 09:00 and 19:00 from Monday to Saturday although there are still certain outlets that do close for lunch between the hours of 13:00 and 16:00. Shops are generally not open on Sundays and public holidays though certain retail outlets are open in the main tourist centres. There are open-air markets in certain towns and villages as well as a daily street market in Valletta.

Government Regulation & Tax System

Malta is an independent parliamentary republic with a parliament-elected president as head of state, and a prime minister leading an elected government for five-year terms. The country has a long-established and strong democratic tradition with high levels of voter participation. It is a member of the European Union, the Council of Europe, the United Nations and the Commonwealth. The rule of law is respected in civil society and the power is smoothly transferred following, regular, fair and open elections. No one group or class dominates the society or the economy. The Maltese Government has a tradition of encouraging foreign investors to establish operations in Malta and has always adopted policies that favour an open economy and direct investment. In fact, Malta is one of the EU's most open economies as a traditional trading nation reliant on import and export. Read further information about the tax system in Malta.

Doing business in Malta | FinanceMalta 

Recession Proof

Malta stands alone as an oasis of financial prosperity in a Europe desiccated by the financial crisis. From a financial standpoint, Malta is proof that you do not have to be a big country to be a big player. Home to a population of just over 421,000 people and just 316 square kilometres in area, the island prides itself on being one of the best performing Eurozone economies, registering healthy economic growth and low unemployment.

Adapting and Growing

As a hub for business from European and North African countries, Malta is marked by its flexibility, innovation and competitiveness. It is with these qualities that Malta has gone from strength to strength since it gained independence from Britain in 1964. In particular, Malta’s financial services industry has been a key focus of the government and a great success story in the country’s growth over the past twenty years.

Central Location

Located at the centre of the Mediterranean, the Maltese Islands lie virtually midway between Europe and North Africa, some 90 kilometres south of Sicily and 300 kilometres north of Libya. This makes the island an excellent gateway for business between Europe, Africa, the Middle East and Asia. The capital city, Valletta, is both the administrative and business centre of the country.

Committed to Business in Malta

Malta’s parliament recognises the importance of business success to the nation’s prosperity and are committed to developing key industries, such as finance sectors, ICT and aviation, as well as encouraging more direct foreign investment. Over the past years, both government and opposition have worked hand-in-hand to create the right legislative and regulatory framework for financial services firms to grow and prosper.

Political Framework

Today, Malta is a democratic parliamentary republic in which executive powers rest with the Prime Minister. The President fulfils the function of Head of State. Elections are contested, for the most part, by the two main parties: the Labour Party and the Nationalist Party.

Economic Power

Malta has posted healthy economic growth in recent years. Strong labour market fundamentals, recovering investment and an accommodative fiscal stance are projected to have resulted in real GDP growth of 5 per cent in 2016. This has allowed Malta to maintain one of the lowest unemployment rates in Europe - 4.2% in January 2017.

Diversified Economy

Over the past years, Malta has diversified and thrived. Popular as a safe and sunny tourist destination for sun-starved northern Europeans, the tourism sector contributes some 25 per cent to the island’s GDP. However, a variety of service businesses have joined the traditional economic generator, and services now account for 75 per cent of Malta’s GDP. Industry accounts for 23 per cent and agriculture for 2 per cent.

A Future in Services

Malta has played to its strengths by establishing itself as the most successful knowledge-based economy in the Mediterranean region. Key to this success has been the growth of service-focused businesses in fields such as ICT and the booming Maltese financial services industry. Expansion of the aviation and maritime industries together with life sciences and education pave the way for a prosperous future.

Towards the Future

As hard work and diligent regulation have built the foundations for Malta’s recent achievements, the country’s future well-being is crucially linked to its success in moving further up the value chain and finding markets for the export of high-quality products and services. One of Malta’s aims is to become the European financial centre of choice. Outside of Europe, Malta continues to build its good relations with China, with both nations keen to encourage cooperation between their financial services sectors.

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