Malta has long been able to boast a vibrant tourist industry – blue skies, blue waters, 300 + days of sunshine a year and a growing high end holiday destination, which has seen 1.6 million tourists visit Malta in 2013. Today, Malta also boasts a vibrant financial services sector – youthful, energetic and innovative, as evidenced by the various financial services clusters shaping the industry in the Insurance, Funds, Trusts and Foundations sectors, which are primarily driven by the international financial services operators that have established their presence in Malta. Malta is now being recognised as a serious player on the international financial stage.
At FinanceMalta we are very proud of what Malta has achieved over the last two decades as an international finance centre. Malta’s economy has been successfully diversified and today there are a number of equally vibrant sectors such as the aviation and maritime sectors, and high end manufacturing, adding a new and significant string to our economic bow with the creation of a knowledge-based industry to shore up our traditionally successful tourist and construction industries. Today, Malta has a highly balanced yet dynamic economy in which manufacturing accounts for around 14 per cent with financial services at around 13 per cent of GDP and employing 10,000 workers.
In March 2013 general elections were held, which saw the Labour Party being voted to power. After just over 20 years under a conservative leadership, as with all political leadership changes, this had the potential to induce a degree of uncertainty for the country and in particular for the financial services sector – traditionally a politically sensitive area for many countries. However, it is testament to the sector’s importance and to the united approach that Malta’s political parties have taken towards financial services over the past two decades that the change was a seamless one to the business in the sector. The ‘business as usual’ message sent out by the Government shored up the confidence investors have in doing business here and as a result the industry has continued to register strong growth traction.
Malta’s stability has already been somewhat tested by the credit crisis and resultant global downturn, however, Malta’s economy proved stoic in the face of the financial storm. While recession hit much of Europe, Malta’s GDP continued to show year on year growth, which proves that the ‘steady as she goes’ strategy has been the correct one.
As a result, it is not a coincidence that the financial sector has been built around strong growth in the funds and insurance sectors, with wealth management clearly beginning to make headway and the strong banking backbone continuing to support the various sectors. In addition Malta’s stock exchange plays an important role in the growth of Malta’s financial sector as evidenced by the sustained investment in its technological platforms, which has strengthened the offering of specialised, cost effective services and products. However, as we look to the future and to growth prospects going forward, Malta aims to further strengthen its position as an international finance centre in the EU, to make it the ‘go to’ option for investment and doing business.
Malta has an attractive package to market: its remain a highly competitive place within which to conduct business, with an English speaking and highly qualified professional work force and a sophisticated telecommunications network that simplify and enhance the services our financial sector supplies. Equally important, Malta is strategically located in the EU providing access to the south and south east fascia of the Mediterranean, which positions it as a strategic gateway to the MENA region, whilst at the same time, by way of its EU membership, non EU business that establishes itself in Malta will also have access to the EU marketplace.
But you don’t need to take it on my word alone – Standard and Poor have reaffirmed Malta’s stable outlook as well as its BBB+ / A-2 rating, Malta was ranked 14th out of 148 jurisdictions for the soundness of its banks in the 2013-14 Global Competitiveness Report, in the Global Financial Centres Index it was amongst the largest risers in the ranks, moving up 15 places from 68 to 53 and it was awarded ‘Most favoured domicile in Europe’ in Hedge Fund Service Provider rankings 2013 by Hedge Funds Review.
For a jurisdiction with a land mass of 122 square miles and a population of less than half a million, Malta is certainly making its mark on the global financial stage. Despite the uncertainties in Europe, Malta has been “a steady ship” amongst the troubled waters of the last five years and it continues to move forward at a steady pace as the economic outlook clearly confirms.
Kenneth Farrugia, Chairman of Finance Malta