Tonio Zarb is the President of the Institute of Financial Services Practitioners (IFSP), sits on Finance Malta’s Board of Governors, and has previously served as President of the Malta Institute of Accountants.
His 32-year career with KPMG Malta was largely spent leading the firm’s advisory function, eventually serving as Senior Partner between 2012 and 2020. He remains with the firm as a consultant and advisory engagement leader.
What attractions does Malta hold for investors in the field of finance?
In line with the global evolution in the financial services industry, Malta has evolved into a completely transparent jurisdiction both in terms of beneficial ownership as well as with respect to the clarity of its laws and regulatory framework.
The country has a solid legal and regulatory infrastructure in all sectors of the financial services industry, with a competent and accessible regulator.
For instance, Malta is the only EU member state with Protected Cell Company legislation in place. These innovative and cost-efficient structures have enabled further growth, particularly in the insurance sector.
Malta is a lower cost jurisdiction when compared with most other financial centres, with a favourable fiscal regime complemented by a cadre of highly knowledgeable, multilingual professionals with substantial expertise built over decades.
It is also an attractive location for expatriate professionals and executives given its enviable location in southern Europe, its Mediterranean climate and lifestyle, and its unique culture.
How has Malta’s financial services infrastructure impacted the island’s economy and contributed to the success story of other local sectors?
Financial services and infrastructure directly and indirectly impact most other sectors in Malta.
The IFSP, together with the Malta Institute of Taxation and the Malta Institute of Accountants, recently commissioned a survey to quantify the key role Malta’s financial services sector plays in the island’s economy. This report showed that, in 2019, the EFIS sector directly generated 19 per cent of the total value added of the economy, as well as 22,200 jobs – equivalent to 10 per cent of the economy’s total. To other sectors outside of financial services, the EFIS sector also had an estimated impact of €194 million of value added and a further 4,700 jobs.
How does Malta’s financial services sector help prospective investors through their investment journey on the island?
Malta has a mature, well-established professional financial services community, with a variety of accounting and legal firms, as well as corporate services providers (the latter are also regulated and supervised). These firms help familiarise incoming investors with Maltese laws and infrastructure, and assist them in implementation.
They play a key role in advising potential investors on the best way to steer their individual needs by providing advice on the regulatory framework, assisting with licensing applications, and helping clients navigate the tax system.
In addition, foreign-owned firms also often opt to use the outsourcing services of the professional and other specialised financial services providers, such as fund administrators and insurance managers.
What types of investment or elements of the global financial system are best suited to Malta’s financial services sector?
Malta has had success across a broad range of financial services-related business, from insurance, asset management, and securitisation to other financial services evolving into e-money service providers and FinTech.
For instance, Malta continues to be an attractive EU captive domicile for large international groups, particularly in view of the proportionate risk-based regulatory approach, as well as other benefits, such as the Protected Cell Company structures mentioned earlier.
What key advice would you offer to prospective investors?
Visit the island! Particularly for their first meeting, potential investors should visit Malta for two to three days, both to meet their professional advisors and regulators, according to their needs, and to get the vibe of the island. Often, that is enough for investors and professionals to extend their visit from a few days to a few decades!
This feature was first carried in the Malta Invest 2023 edition. Malta Invest is the first-ever comprehensive international investment guide focusing on Malta as a destination. It is produced by Content House Group.