Malta: European but distinct


Malta is faring well as a leading European domicile. Here Dr Matthew Bianchi outlines the island’s continuing success.


centre. The country has been a member of the European Union since May 1, 2004, and a Eurozone member since January 2008.


M


Malta offers a sophisticated, comprehensive and robust regulatory system based on EU regulations. The workforce is highly skilled and multilingual, being fluent in at least two languages, among which are English and Italian.


The country also offers competitive cost structures when compared to


other jurisdictions, which translates into lower operational and set-up costs for companies wishing to establish themselves on the island. The country is located in the Central European time zone and is easily reachable from Europe’s capitals (via daily flights to Malta’s international airport).


FinanceMalta was established by the government, regulatory authorities


and industry practitioners in 2007, with a mission to promote Malta as a leading international financial centre. FinanceMalta supports the efforts of the Malta Financial Services Authority (MFSA) and is an important player in the creation of the Maltese financial services’ fast-developing landscape.


Malta: setting itself apart Malta has an established financial services centre of international repute,


with highly skilled and experienced professional expertise. The Malta Financial Services Authority (MFSA) is the sole regulator of financial services in Malta. Its approach is reputed to be ‘firm, but flexible’—encouraging informal discussion at all levels with insurance company stakeholders, sponsors, managers, applicants and other interested parties.


Malta’s EU membership also means that insurance companies authorised in Malta are able to avail themselves of the EU Single


alta is an independent democratic state with a history of political stability and parliamentary consensus that has helped to promote the country as an international financial


Passport and thus provide their services across the 27 member states (as well as to the three European Economic Area [EEA] countries) on the strength of their authorisation in Malta.


Malta is also the only EU member state to offer the option of setting


up a protected cell company (PCC) structure to underwrite insurance business. A PCC is a regular trading company constituted as a cell company, which can create one or more cells for the purpose of segregating and protecting the cellular assets from each other and from the assets of the parent company. This enables promoters to come together within the PCC framework and to share overhead costs, whilst at the same time, being protected from each other’s liabilities.


Captive insurance companies that are already authorised in another jurisdiction may be authorised by the MFSA to be registered to continue to operate in Malta—a process known as redomiciliation. Legislation in Malta allows for companies to continue their corporate existence when moving from one jurisdiction to another.


Regulatory environment An insurance company has to apply for an insurance business licence


with the MFSA. If the company is to be incorporated as a PCC, each individual cell also requires MFSA authorisation.


Insurance and reinsurance companies registered in Malta are regulated


by the Insurance Business Act, 1998 (Chapter 403 of the Laws of Malta) and the various regulations and MFSA rules issued under the act.


As a full European Union member state, Malta incorporates the relevant prudential supervision EU directives within its insurance legislation. Adherence with these EU directives means that insurance supervision (in particular regarding own funds and solvency margins) in Malta is far more stringent than that in traditional offshore domiciles.


30 emea captive 2011


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