INTRODUCTION TO MALTA
Today’s encumbering financial environments
In today’s major markets such as the U.S.,many individuals, businesses, etc. with diverse growth and development goals are experiencing frustration by today’s constrained fiscal environment.Intrusive governmental bureaucracies, punitive tax regulations, tight procedural clamps, dwindling flexibilities, and the like often seem more like barriers rather than expeditors for their interests. Moreover, many emerging growth opportunities are quickly monopolized by the top echelons of moneyed power, stifling competition.Notably, for instance, top-end cap concerns are often quick to usurp growth openings in South Asia -- the world’s fastest growing investment region, according to The World Bank.
Overshadowing it all … the unsettling specter of uncertainty!
Today a cloud of uncertainty hangs over today’s established financial centers.Particularly concerning is the currently pronounced trend towards intransigent nationalism … and away from international economic cooperation. A most pronounced development, in this regard, has been Britain’s departure, via the Brexit referendum vote, from the European Union – “No one knows what happens now. The collective imagination leads to dark places,” reports The New York Times.* “Western democracies are in the midst of an upheaval they only dimly grasp” reports another article in The New York Times. ** Still again, another recent headline in Times of Malta proclaims: “We’re living in uncertain times.”***
Presenting Malta … An Alternative Setting
Currently, the independent island-nation of Malta is offering an alternative setting for individuals and businesses seeking an economic universe that’s more open and receptive to expansionist-minded capitalists. Here is a number of compelling advantages this inviting island nation has to offer:
Unbridled Horizons for Capital Ascendancy
- Strategically centered geographical location
- Sound, stable and secure economy
- State-of-the-art telecommunications
- Stable, business-friendly government
- Modern business infrastructure
- Congenial, receptive business environment
- Highly educated, qualified, loyal, flexible workforce.
- Reliable support services with pro-active dispositions
… Highly attractive tax incentives and programs!
These and other values are attracting foreign enterprises to Malta from a host of diverse industries …. financial and insurance, manufacturing, ICT development, healthcare, pharmaceuticals, biotechnology, aviation and maritime services, education, logistics and others. To maintain momentum and encourage still more business, Malta is working hard to clear the way with compelling incentives … particularly in tax relief. In short, Malta is geared up as an environment largely unbridled from the obstructionism and uncertainties encountered elsewhere.
Welcome! We are a company called Malta Inc. …
… and we invite those of you with sizable assets considering alternative growth avenues to investigate opportunistic situations in Malta. The information on this website can get you started and there are many other sites on Malta as well . If along the way, you find Destination Malta is exciting interest for you, we would be pleased to set up a meeting to discuss how doing business in Malta may energetically serve your needs. Simply go to “Contact Us” on this site and follow the directions. We look forward to hearing from you.
Presenting Malta … An Alternative Setting for Business Development
A unique amalgam of three small islands known collectively as Malta … located in the center of the Mediterranean just south of Sicily … is stepping up to the plate as a new frontier for business ventures. It’s a fresh new horizon … brimming with enterprising possibilities. As a newly emerging player on the global landscape, Malta offers unbridled horizons … a setting notably untethered from the constraints and uncertainties of the world’s highly-developed markets.
Thus far, however … this physically minute destination is still flying below the radar in terms of general awareness … so the time is propitious for alert capitalists to, as opportunity beckons,heed the call!
Historical background: From long-enduring subservience to breakaway independence
A historical overview of Malta provides telling perspective on how Malta came to be where it is today.Actually, Malta has been around for a long time … the Maltese islands were first inhabited by Neolithic peoples from nearby Sicily circa 3,500 BC. Over the ensuing centuries, the Maltese Islands existed not as an independent entity but as a subjugated vestige within great empires that assumed control and held sway over its dominion. In turn, Malta lived under the yoke of the Phoenicians, the Romans, the Arabs, the Normans, the Knights of St. John and the French.Each of these succeeding rulers has left a lasting imprint upon the inhabitants of Malta and their descendants. But it was Malta’s 150 years’ experience with the British … its last and most recent foreign overseer... that eventually led the way to its present emergence as an independent force.
As recently as the latter part of the twentieth century, Malta was freshly born as a nation in its own right … obliged to no master but itself ... and flush with dynamic potential for its very own economic ascendancy. The story of this transition begins when the British helped the Maltese expel the French and subsequently gained full sovereignty of the islands by the provisions of the Treaty of Paris in 1814. After World War 11, the Maltese expressed their desire for self-determination. Subsequently, Malta was granted independence on september 21, 1964 and became part of the British Commonwealth. Today, the British influence on Malta is very much in evidence in its business, governmental and educational systems as well as in its daily life – English is one of the two official languages, along with Maltese.
(A more detailed chronology of Malta’s long and colorful history is available elsewhere on this site.)
Malta’s transformation into a business-centered entity
Unleashed from the shackles of its past containments, a new Malta is bursting forth as a modern economic partner... not without irony … extending its hand to ‘invasions’ by foreign business interests around the globe. Malta was viewed as essentially a popular tourist destination.In fact, tourism today remains the strongest contribution to Malta’s GDP. In the interim, however, Malta has been actively redrawing its image to that of a major business center. In this regard, the island nation is in the throes of vigorous growth in more business-oriented sectors such as financial and insurance services, iGaming, aviation, the maritime industry and the film industry.
Economic data reflects this compositional shifting. In 2015, Malta’s Gross Domestic Product (GDP) rose 28% over 2011 to 8.8 million euros. The World Economic Forum (WEC) reports that Malta’s competitive status globally is on the ascent – in the most recent WEC ranking, Malta recorded the fifth largest increase out of 138 countries surveyed.
Foreign direct investment (FDI) in Malta is reportedly on the ascent. According to Malta Today, FDI increased 2.8% year-on-year in 2015 to €152.3 billion. The major bulk of this investment revenue springs from the financial and insurance industries which accounted for 97.8% of the total investment or €149.0 billion -- a year-on-year increase of 2.5%. Casting a wider net beyond this core category of investors suggests the likely possibility of newly-minted growth for Malta from appropriately budgeted investors within other economic realms.
A “safe haven” lives on as a central hub for modern commerce
The etymology is uncertain but one account has it that the name ‘Malta’ comes from the Phoenician word 'Maleth' meaning ‘safe haven.’ In any case, the Phoenicians – the first major empire to conquer Malta around 1200 BC – certainly appreciated the ‘haven-like’ strategic advantages of the island-nation’s pivotal location.Set at the crossroads between the north and south divide of the Mediterranean basin, Malta has from the beginning been a strategically critical gateway for both military and commercial operations. And it was certainly this key geographic centrality that helped to galvanize interest in the area by the host of succeeding conquerors.
Today, the sense of Malta as a ‘safe haven’ takes on new meaning as a harbor for financial transactions. The strategic value of Malta’s pivotal physiognomy looms larger than ever as an ideal industrial hub – with convenient gateways to and from mainland Europe, North African and the Middle East. This asset is maximized sharply by Malta’s state-of-the-art port infrastructure. On May 1, 2004, Malta accentuated its geographical link to Europe’s economic centers by joining the European Union. Importantly, however, Malta remains a world unto itself – and relatively ‘unbridled’ from the financial travails of other EU members.
Exploring Malta’s new horizons
If you would like to explore an environment comparatively unhampered by overarching constraints ... with economic stability that isn’t undermined by global uncertainties … consider examining your options within the now-independent and primed for growth archipelago of Malta. We, an advisory company called Malta Inc., have prepared this website to help you explore Malta’s current horizons – and get an overall awareness of special features and programs that may titillate your fiscal appetite.
To identify particular opportunities that may directly serve your personal needs, we recommend a customized evaluation by qualified experts. At Malta Inc., we stand ready to provide such service.
Charting Malta… a Primer with Prime Potential: Location. Location. Location.
The first thing you see … Malta’s natural position as a global thoroughfare
The nation of Malta is strategically located virtually in the center of the Mediterranean Sea within the southern European zone; its coordinates are 35° 53′ 0″ N, 14° 30′ 0″ E. The nearest land mass to Malta is the island of Sicily.The African continent lies to the south and west of Malta (Tunisia is located approximately 490 km to the west and Libya is located approximately 545 km to the south).
Malta proper is an archipelago comprised of three islands: Malta, Gozo and Comino. Among these, the island Malta is the largest of the trio and the cultural, commercial and administrative center. Valetta, the capital city of all of Malta, is located on the island of Malta. Gozo, the second largest island, is more rural in nature,with activates such as fishing, crafts and agriculture more prevalent. Comino, the smallest of the three, is largely unpopulated with only one hotel.
with a total of over 450,000 residents occupying a relatively minute area of 316 square kilometers, Malta today is one of the most densely populated areas on earth.Notably, however, these inhabitants have proven to be a most positively engaging group for both tourists and businesses alike:
- Reflecting the influences of the myriad cultures that have held sway over them, the Maltese people are markedly interesting and sophisticated individuals. Ethnically, they are a poignant palate of English, Arab, Sicilian, Norman, Spanish, and Italian as well as assorted other divisions.
- When it comes to religious affiliation, however, the Maltese are virtually all of one voice – 98% are Roman Catholics.
- The Maltese are a highly education highly educated populace with superlative average rates of 96% in school attendance and 93% in literacy – notably exceeding norms set by Europeans in general.
Beyond statistical dimensions, the Maltese of today are a warm and friendly lot, welcoming outsiders into an environment ofeaseful comfort and security. Notably, industries of various hues that have set up shop in Malta consistently report that Maltese employees are diligent, hardworking, reliable and reflect a positive attitude.
Malta’s topography and climate
- Malta has a total land area of 315.6 kilometers. The island of Malta has the largest land area of all the islands: 245.7 kilometers or 78% of the total. Gozo has 68.7 kilometers or 22% of the total while Comino has 3.5 kilometers or 1% of the total. There are also 18 other, uninhabited islands.
- The Maltese islands have a cumulative shoreline of 138.6 kilometers.
- Despite their compact size, the Maltese islands have a considerable diversity of landscapes and ecosystems – generally characteristic in range and variety of the Mediterranean islands.
- The surface of the islands is made up primarily of limestone. The landscape comprises karstic limestone plateaux, hillsides covered with clay taluses, gently rolling and terraced limestone plains, and valleys which drain run-off during the wet season. The western coasts of Malta and Gozo exhibit steep sea-cliffs; the eastern shores of both islands are gently sloping. There are no mountains, lakes, rivers or streams on Malta, although there are some minor springs.
- The traditional Maltese townscape, still very much in evidence, is very distinctive. Constructed in the Islands’ soft globigerina limestone, the vernacular farmhouses and townhouses with their colorfully-painted wooden balconies (‘gallerija’) are interspersed with ornate, Baroque-style Churches. Recognizing Malta’s historically vulnerable position in the Mediterranean, there are many impressive fortification structures in Malta, also of limestone. Contemporary architecture is introducing new influences, styles and materials, including a move towards higher buildings.
- Malta’s climate is relatively steady with semi-arid like conditions characteristic of the Eastern Mediterranean. In the hottest months of the year (July, August, September), the average temperature ranges from a low of 21.2 degrees Celsius to a high of 30.7 degrees Celsius.
- Winter is typically the only rainy season in Malta, and very dry years may be interrupted by sudden flooding and prolonged heavy rain.
Malta’s long history as a subordinate entity
The pint-sized entity known as Malta has led a frenetic, drama-packed existence almost from the dawn of civilization itself. The original Maltese, Neolithic peoples from nearby Sicily, were originally an independent and creative people – during their Neolithic period, they created magnificent megalithic structures which, as the oldest such structures in existence, are today a major tourist attraction. But that all ended when the Phoenicians took over as rulers. Over the ensuing centuries, the Maltese Islands existed not as an independent entity but as a subjugated vestige to great empires that assumed control and held sway over its dominion. In turn, Malta lived under the yoke of the Phoenicians, the Romans, the Arabs, the Normans, the Knights of St. John and the French. The British were the last power to rule Malta and set the stage for Malta’s move to independence.
Key junctures in Malta’s pre-independence history
- c4500 BC: the Maltese Islands are first inhabited, by Neolithic peoples from nearby Sicily. The oldest existing megalithic structures in the World, including Hagar Qim, Mnajdra and the Tarxien Temples were constructed during the Neolithic period (pre-dating the Egyptian Pyramids by approximately 1000 years).
- c1200 BC: the Phoenicians occupy Malta. The name 'Malta' is said to be derived from the Phoenician word 'Maleth', meaning ‘safe haven,’ and the roots of the Maltese language are said to stem from the Phoenician period.
- c218 BC: Malta is occupied by the Roman Empire (during the second Punic War)
- 58 AD: Christianity comes to Malta, when St Paul is shipwrecked (on the island of Malta). St Paul introduced Christianity to the Maltese during his three month stay.
- 535 AD: Malta becomes part of the Eastern Roman or Byzantine Empire.
- c800 AD: the Arabs arrive in Malta. The Maltese language is the chief legacy of the Arab occupation; modern Maltese has many elements of Arabic.
- 1090: the Normans invade Malta. The Norman Count Roger is said to have given the Maltese Flag its red and white colors and to have re-Christianized the Maltese after the Arab occupation.
- 1522: the Order of St. John Knights Hospitallier comes to Malta (after having been expelled from Rhodes), and Malta becomes the focus of Ottoman attacks in the western expansion of the Ottoman Empire.
- 1565 AD: a Turkish armada besieges Malta. ‘The Great Siege of Malta’ lasted four months, with the Knights emerging victorious. The Great Siege prompted the Knights to build the fortified city of Valletta. In the two centuries of the Knights Period that followed, Valletta became a flourishing center for trade and learning.
- 1798 AD: Napoleon invades Malta and expels the Knights. French rule lasted only two years however. The Maltese rebelled and ousted the French in 1800, after asking the British for help.
- 1815 AD: the Maltese ask the British to stay on the Islands and the occupation of Malta by the British is legalized.
- 1921 AD: Malta achieves responsible government, and all internal domestic affairs are to be in the hands of the Maltese with Britain retaining responsibility for foreign affairs and defense.
- 1939 AD: the Second World War sees Malta’s strategic position in the Mediterranean exploited by the British as a basis for Mediterranean and North African operations. The Maltese Islands were extensively bombed by the Axis over a two and a half year period, which led to the recognition of Maltese ‘bravery, heroism and the sacrifice of its people’ when King George VI awarded the Maltese people the George Cross Medal.
Independent Democracy finally comes to Malta
On September 21, 1964, emerging from its eternally-long existence as a subservient entity, Malta was granted independence.Subsequently, “Freedom Day” was celebrated on March 31, 1979 when the last of the British troops departed from Malta. Later, on May 1, 2004, Malta became a member of the European Union and of the Euro Area on January 1, 2008.
Malta’s stable governmental apparatus
- Malta is a democratic republic with a ‘parliamentary representative’ system. The President is the Head of the State; executive powers rest with the Prime Minister (Head of the Government) and the Cabinet. The Prime Minister is the leader of the party with an electoral majority. A unicameral Parliament of 65 representatives is elected every five years.
- Although Malta’s government is actually a multi-party system, national and local elections are effectively bi-party affairs. The main political parties are Partit Laburista (the center-left Labor Party), which is currently in power, Partit Nazzjonalista (the Christian Democratic, center-right Nationalist Party, and the main opposition party), and the notably smaller Alternattiva Demokratika (the green party).
- Since itsindependence, two parties have dominated Malta's government: the Partit Nazzjonalista (Nationalist Party) and the Partit Laburista (Labor Party).
- Malta is divided into 68 elected local councils, with each council responsible for the administration of cities or regions of varying sizes.
- Malta’s judiciary is independent. The chief justice and 16 judges are appointed by the president on the advice of the prime minister. There is a civil court, a commercial court and a criminal court.
Malta’s Banking Sector … Bedrock Foundation for Economic Stability
At the heart of Malta’s economic stability is a solid banking sector, transformed in the last decade from a retail bank sector serving only the local community to an international hub for global transactions. A study by the European Central Bank (ECB) shows Malta’s banking sector is one of the most robust and resilient in the EU. During the recent financial turmoil in the global banking industry, the impact on Malta’s banking sector was markedly minimal.For the second consecutive year, Maltese banks returned solvency rates that were almost double the EU average. The ECB study also shows that the capital buffer retained by local banks at 16.2% was also, by far, Europe’s highest.
The Maltese banking sector consists primarily of the Central Bank of Malta, the Malta Financial Services Authority and credit institutions (i.e. banks):
- The Central Bank of Malta is primarily responsible for maintaining price stability through the formulation and implementation of monetary policy. It is also responsible for the promotion of a sound financial system and orderly capital markets.
- The Malta Financial Services Authority (MFSA) is the single regulator for financial services in Malta. It is the unified regulator for all banking, investment and insurance businesses. The MFSA also houses Malta's Registry of Companies.
- Credit institutions (i.e. banks) receive deposits and grant credit facilities. Additionally, they provide a wide range of financial services to their clients. .
Malta’s banking system has also been ranked as the tenth soundest in the world in the 2008/9 World Economic Forum’s Competitiveness Index. The sector continues to experience brisk growth having leaped from four retail banks just a few years ago to over 24 credit institutions and 15 financial institutions license by the MFSA. Both domestic and International expansion -- into markets such as North Africa and the Middle East – is being anticipated.
Malta’s State of the Art Telecommunications Infrastructure
- Malta provides ample service in terms of Internet access and broadband connectivity. Internet access is available through various systems including dial-up, cable, DSL and wireless. Broadband coverage is widely available across Malta and Gozo while wireless connectivity is expanding to include outdoor public spaces.
- Eurostat figures for 2015 show that 80% of Maltese households have Internet access. 82% have broadband access. Malta ranked 15th in the EU-28 in respect of households with Internet access, but was above the EU-28 average in respect of broadband access. The EU-28 average in 2015 for households with Internet access was 83%; 80% had broadband access.
- A 2015 survey by the Malta Communications Authority shows, similarly, that 77% of residential users have Internet access. The majority of households surveyed were satisfied with the quality of Internet service.
- E-commerce take up in Malta in 2013 (Eurostat) was 46% -- approximately the same level as the EU-28 average of 47%. More recent reports show on-line shopping is gaining popularity with the Maltese.
- The Internet country code for Malta is .mt. The European Union domain (.eu) is also used in Malta, shared with other EU Member States.
- Mobile penetration in Malta in the last quarter of 2015 was 129%, where 74% of all subscriptions were pre-paid subscriptions.
- A 2015 survey by the Malta Communications Authority revealed that 85% of residential users had a mobile phone; only 22% of residential users were on a contract (post-paid).
- 54% accessed the Internet via their mobile phone (Smart Phone), which is significantly higher than in 2013, when only 37% of respondents then claimed to have a Smart Phone. In 2015, those accessing the Internet via their phones did so for social networking (74%), to view e-mails (60%), for general browsing (57%), to view news (29%) You Tube (11%). 24% made calls over the Internet through their mobile.
- The same 2015 survey revealed that 87% of those with a mobile connection were satisfied or highly satisfied with the level of service provided by their operator. Only 9% of respondents claimed to have changed operators in the previous two-year period.
Malta’s Roster of Business Incentives
Malta Enterprise, the country’s economic development agency, offers a host of incentives for the development of industries and enterprises within the nation. Here are some of the key programs:
The Business Development & Continuity Scheme facilitates value added projects that are expected to contribute to the regional development of Malta and to support existing undertakings to sustain operations during restructuring.
Investment Aid Tax Credits are intended to sustain the regional industrial and economic development of Malta. This measure facilitates initial investments by encouraging the setting up of new establishments and the expansion and development of existing businesses.
Malta Enterprise, via Business START is offering a seed funding for start-ups. The measure is intended to support Small Start-up Undertakings that have a viable business concept and are in the early stage of its development.
In collaboration with the Energy and Water Agency, Malta Enterprise is assisting undertakings to invest in cogeneration equipment (i.e. energy efficient solutions that simultaneously generate thermal energy and electrical and/or mechanical energy).
Soft Loans support enterprises through loans at low interest rates for part financing investments in qualifying expenditure.
The Business Advisory Scheme is designed to provide business undertakings operating in Malta with advisory services that suit their specific circumstances. Business Advisory Services are provided with the aim to support undertakings identify strengths and overcome weaknesses in specific areas.
Malta’s ‘In-Residence’ Tax Incentives …
Malta’s tax incentives are targeted to and loom large as a draw for foreign business. In contrast to often-restrictivebarriers setup for outsiders by other countries, the Maltese systems are designed to effectively ‘unbridle’ or loosen tax regulations for foreign companies doing business in Malta.Together with Malta’s entrance into the European Union in 2004, these incentives have made Malta a highly advantageous location for foreign business interest resident in Malta.
Full imputation system
Through the establishment of a company registered under Maltese law, international entrepreneurs are able to reap the advantages of the so-called full imputation system of taxation when distributions are made to them as non-resident shareholders.Under this system, dividends paid by a company residing in Malta carry a tax credit equal to the tax paid by the company on the profits out of which the dividends are paid. Shareholders are entitled to deduct the tax credit attaching to the dividend against their total tax income tax liability. Recipients of dividends may elect for a refund of the Malta tax paid by company.Malta does not impose any withholding taxes on dividend, interest and royalties and does not have any Transfer Pricing and CFC legislation.
Double Taxation Relief
The possibility of double taxation arises when a Maltese company or a Maltese resident individual incurs tax outside Malta, while still obliged to declare that same income in Malta. Malta has double taxation treaties with 65 countries, allowing individuals and businesses to avoid being taxed in two places.Malta offers three main mechanisms for providing relief from double taxation:
- Treaty Relief: This mechanism is based on the availability of a double taxation treaty between Malta and the other contracting state. Malta currently has over 70 tax treaties, with the majority being based on the OECD Model Convention, and practices the credit method of double taxation relief. Most of the treaties provide for a reduced withholding tax on dividends, interest and royalties paid to Maltese residents.
- Unilateral Relief: This is a type of relief which may be claimed by Maltese resident individuals and/or Maltese registered companies, including branches of overseas companies, who derive income arising outside Malta and in respect of which foreign tax would have been suffered. Unilateral relief may be received when a double taxation treaty is not in force between Malta and the State where the income has been sourced. Similarly to treaty relief, the credit provided will not exceed the total tax liability perceived in Malta.
- Flat Rate Foreign Tax Credit (FRFTC): The FRFTC may be claimed by a Maltese registered company (including branches of overseas companies) relevant to income derived from abroad. The FRFTC involves a relief of 25% of the net foreign income, before deducting any allowable expenses. The FRFTC may be claimed without the need for the company to have incurred foreign tax, but a number of conditions must be satisfied.
Growth in Foreign Companies Operating in Malta
Foreign direct investment (FDI) in Malta is reportedly on the ascent. According to Malta Today, FDI increased 2.8% year-on-year in 2015 to €152.3 billion.*The number and diversity of prestigious companies opening and sustaining their facilities in Malta attests to the compelling character of the island nation’s business advantages.
Here is a partial listing of foreign companies operating in Malta:
- Actavis Malta(link)
- Cardinal Health(link)
- De La Rue Currency & Security Print Ltd(link)
- Dedicated Micros (link)
- Methode(link is external) (link)
- HSBC Bank Malta(link is external (link)
- Lufthansa Technik(link is external) (link)
- Playmobil Malta(link is external) (link)
- Siegfried Generics(link is external) (link)
- STMicroelectronics(link is external) (link)
- Toly Products (link)
- Trelleborg Sealing Solutions Malta(link is external) (link)
- Uniblue Systems Ltd(link)
- Banif Bank
- Deutsche Bank
- HSBC. Fund administrators such as Apex, Citco and Custom House
- insurance managers such as AON, Marsh and Munich Re.
- A number of Fortune 100 companies have set up operations here, including multinationals such as BMW, Citroën, Peugeot and Vodafone