Malta outranks many European jurisdictions in Basel AML Index

In the latest edition of the Basel AML Index Malta has outranked several European finance jurisdictions and has seen itself classified as one of the least risky jurisdictions in terms of risk of money laundering and terrorist financing around the world.

The Basel AML Index is an independent annual ranking and focuses on anti-money laundering and the financing of terrorist including factors that are considered to impact the risk of such including transparency, the rule of law and corruption.

Placed in 118th position out of 129 countries Malta thus outranked European partners such as France (113th position), United Kingdom (106th position), Germany (102nd position) and Italy (77th position).

Malta on the other hand was outranked by the likes of Montenegro, Israel and Sweden where the risks where considered as lower.

Commenting with local news portal MaltaToday Finance Malta chairman Kenneth Agius stated that the result reflected Malta’s robust regulatory and legislative framework “as well as its commitment to the international standards of transparency and effective exchange information through a broad network of EOI instruments”. In his comments to MaltaToday Farrugia further amplified that “the country’s high regulatory standards are modelled on EU legislation and best practice, whilst at the same time allowing for the flexibility necessary in a modern and dynamic environment, without imposing undue bureaucratic burdens on operators”.

Malta’s Budget for 2019 forecasting further economic growth

Malta’s Minister for Finance the Hon. Prof. Edward Scicluna yesterday presented the House of Representatives in Malta with the Budget for 2019.

In the budget document presented to the House it was reported that during 2018 real economic activity in Malta continued to report robust growth with real growth reported at 5.4%. Amongst the highest contributors to growth where the gaming industry, professional services, real estate activities, ICT and financial and insurance activities.

GDP figures indicate that during 2019 real GDP growth will stand at 5.3% with the economy set to continue reporting robust economic activity; even if the said growth rate is expected to ease.

Furthermore revenue from the Individual Investor Programme (IIP) and sustained economic performance are expected to lead the government to be able to sustain current surplus positions. For the year 2019 fiscal surplus is expected to reach 1.3% of GDP while public debt as a percentage of GDP is projected at 43.8%. The same budget reveals that during 2019 real investment levels are expected to grow by 8.4%.

Minister Scicluna also announced the government’s intention to transpose into legislation the EU’s Anti-Tax Avoidance Directive (ATAD 1) and the ratification of the OECD’s Multilateral Instrument. Minister Scicluna further confirmed the government’s intention to adopt in a timely manner the EU’s ATAD 2, DAC 6, DRM. Furthermore Malta shall introduce a Patent Box Regime and shall continue to strengthen the strategy to counter money laundering.

The budget also included a number of other measures aimed at providing assistance to a number of sectors in society including pensioners and low wage earners.


Malta establishing itself as a leader in the maritime industry

Malta’s Minister for Transport, Infrastructures and Capital Projects Ian Borg recently announced that over 800 yachts of over 24 meters have been registered under the Maltese flag. Dr. Borg further confirmed that the register had grown more than 10 per cent from the previous year.

This would confirm what many analysts have been insisting; namely that the Maltese shipping registry has been experiencing unprecedented success; being also officially recognised as the largest shipping register in the EU and the sixth largest globally. Malta is thus on track in establishing itself as a leader within the maritime industry.

Two factors that have led to this success by Malta are the reputation enjoyed by the Maltese flag and the Maltese register and, the possibility of fiscal planning.

The Tonnage Tax scheme, relaunched by the government in May this year, has various incentives to further attract commercial yachts, allowing ships carrying specific shipping activities to be exempt from Maltese income tax in relation to income derived from the yachts, its working capital and dividend distributions. The Maltese Tonnage Tax scheme has recently been fully endorsed by the European Commission.

S&P gives Malta a positive outlook

Standard and Poor’s has affirmed Malta’s ‘A-/A-2’ ratings with a positive outlook.

In it’s report S&P acknowledged the consolidation of government finances, reduced general government debt relative to GDP and structural reforms. The positive rating reflects Malta’s strong growth performance, the recurring current account surpluses by Malta’s large services exports and the improving general government budgetary position and fiscal management.

The report also noted that domestic banks are highly liquid and possess a low loan-to-deposit ratio.

2019 is expected to see growth moderate but to still exceed that of peers at similar income levels and stages of development.

In a reaction Malta’s Minister for Finance Edward Scicluna welcomes the positive feedback and confirmed that the government was committed to ‘continue along this successful path’.

Mounting concern over Italy’s budget

The government’s budget plans for 2019 in Italy are causing concern and have sparked a sell-off of state bonds. The Italian government offered a budget with a deficit of 2.4 per cent of GDP for the next three years.

Concern has thus mounted that this budget not only puts Italy on a collision course with the European Commission but that indeed it cements the fact that the government is not committed to tackling the country’s immense debt pile.

The figure of 2.4 per cent marks a political victory for Luigi Di Maio and Matteo Salvini who had to overcome the resistance of Economy Minister Giovanni Tria, an unaffiliated technocrat, whose department had forecast that a 2019 deficit above 1.9 per cent would put at risk the containment of Italy’s debt; already the highest in Europe after Greece.

Analysts have already speculated that the budget might also go down poorly with ratings agencies. Italy’s rating is a particular concern, as the country is only two notches above the dividing line between investment grade and junk.

“Malta’s financial services industry has registered sustained growth”

“Malta’s financial services industry has registered sustained growth in the overall ecosystem. This growth in the industry came from increases in investment services, insurance operations, retirement schemes, trusts, securitisations, new fund licenses and financial institutions with year on year growth rates ranging from 5 to 17 per cent. Furthermore, last year Malta saw a total of 573 new notifications from international firms passporting to Malta”.

This was stated by the Chairman of FinanceMalta Mr. Kenneth Farrugia during his address of FinanceMalta’s annual conference, this year entitled ‘Finance without Frontiers’.

In his address Mr. Farrugia stated that in the future the industry needed to be more dynamic in working closely with education service providers to offer bespoke educational programmes as well as create an efficient process to recruit foreign nationals. He also spoke of the need to increase engagement with the banking sector and the Malta Financial Services Authority to ensure that the industry remained agile in servicing growth objectives.

Mr. Farrugia also explained that there needed to be stronger industry engagement with the regulator and policy-makers to induce financial services innovation and, finally, the industry needed to engage a three-pronged political, regulatory and industry PR outreach programme to support key initiatives in mainstream communication channels.

The conference which also had workshops tackling the GDPR, MiFiD II, MiFiR, the Payment Services Directive II and the Insurance Distribution Directive was also addressed by the Prime Minister of Malta Dr. Joseph Muscat who spoke of Malta as a leader in DLT technology.

War Chest Fiduciary Services Limited is a member of FinanceMalta.

US at risk of landing on Tax Blacklist

The US is at risk of landing on the European Union’s tax haven blacklist if it does not agree to exchange the bank account details of non-US citizens with governments around the world by June 2019.

This would be the result of the US failing to meet the 2019 deadline of adopting the OECD’s Common Reporting Standard (CRS).

Reports have also indicated that the 2017 US tax act has been referred to the OECD Forum for Harmful Tax Practices to determine whether this violates international standards and the outcome is said to be a determining factor as regards whether the US violates the EU’s corporate tax haven criteria.

Malta’s ‘A’ rating reaffirmed by S&P

Standard & Poor’s Global Ratings has confirmed Malta’s credit rating at A, maintaining the outlook for the country as positive. Furthermore S&P highlighted that it “could raise the ratings on Malta over the next 18 months”.

S&P further explained that , “Our ratings on Malta are suporter by its strong growth performance coupled with consistent current account surpluses driven by its large services exports, as well as its improving budgetary position and fiscal management”, further declaring that “We anticipate Malta’s growth will likely exceed that of peers at similar income levels and stages of development.”

In its report S&P explained that the ratings could be raised over the next 18 months if Malta maintained its economic growth and fiscal performance.

2017 another year of growth for Maltese Financial Services

Data published by the Malta Financial Services Authority (MFSA) has revealed that 2017 was another year of growth for the Financial Services sector in Malta with the issuance of various licenses and authorisations including in the areas of insurance, investment services, investment funds and trusts.

At the end of 2017 the MFSA had 63 entities authorised to conduct insurance activities under the Insurance Business Act and 162 investment services companies licensed of which 9 were licensed as Alternative Invesement Funds, 58 as Professional Investor Funds and 30 UCITS funds. Numbers which represent significant increases from the end of 2016.

Malta’s Financial Services sector thus has continued to flourish with Malta increasingly becoming a jurisdiction of choice for a growing number of internationally reputable investors.

War Chest to address STEP Italy event in Treviso

War Chest’s Corporate Administrator Dr. Angelo Micallef shall be one of the guest speakers at an event organised by STEP Italy in Treviso on Tuesday March 6th. The event shall have as its central theme Fondazioni Maltesi di diritto privato: profili civilistici e fiscali (Maltese Private Foundations: Legal and Fiscal aspects).

Dr. Micallef shall be addressing the event in representation of War Chest Fiduciary Services Limited which is duly licensed by the MFSA in Malta to act as an administrator of Private Foundations. The seminar shall also be addressed by other experts including a notable and eminent Professor on fiscal law in Italy.

The seminar shall be held between 17:30 and 19:30 at BM&A Studio Legale Associato, Viale Monte Grappa 45, Treviso, Italy with those wishing to attend being invited to send an email to by Friday March 2nd. Availability of places is limited.