The financial sector in Malta experienced an unprecedented growth in recent years, mainly due to the accession in the European Union in May 2004, which provided Malta with the spur it needed to attract new investment opportunities to the island.
The Investment services industry in Malta started to benefit from passporting rights since UCITS schemes, and now also alternative investments funds, can be registered and licensed in Malta and passported to any EU country as well as the MFSA’s membership in the European Security and Markets Authority (ESMA) have both contributed to guarantee a sound regulatory and legislative framework which inspires confidence in investors and entrepreneurs. Moreover, the Euro adoption in 2008 helped Malta eliminate the exchange rate risks, allowing businesses and individuals to start enjoying previously unprofitable trades.
The World Economic Forum’s 2014-2015 Competitive Index, ranks Malta 47th overall out of 144 countries, 36th for Business sophistication and rates its banking system as the 13th soundest in the world.
All of this, coupled with the government’s vision to ascertain Malta’s position as a European Centre for excellence in financial services and international business, provides an optimum operating environment for business ensuring the island’s placement on the radar of the international finance industry.
Moreover, Malta’s financial centre currently enjoys greater credibility when compared to past years due to various factors. The island’s financial stability has exhibited a very good resilience in the latest financial crisis. In fact, in a report published by the IMF, it was stated that although vulnerabilities have increased, Malta’s financial sector has so far withstood the global financial turmoil relatively well. The conservative policies which Maltese financial institutions have induced in the running of their business, with regards to structured financial products, lending policies and borrowing in a traditional retail funding model, have in fact safeguarded Malta’s financial stability from systemic events, adversely encountered in other economies.