Dr Matthew Bianchi, Malta Insurance Management Association
Malta continues to attract rising levels of captive business to its shores, as Dr Matthew Bianchi explains.
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, with English and Italian featuring prominently.
M 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 accessible from Europe’s capitals (with daily flights to Malta’s international airport).
FinanceMalta was established by the government, the 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 Malta’s fast-developing financial services landscape.
Setting itself apart from other domiciles
Malta has an established financial services centre of international repute with highly skilled and experienced professional expertise. The MFSA is the single regulator of financial services in Malta. The MFSA’s 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 passport and thus provide their services across the 27 member state bloc (plus the three European Economic Area countries) on the strength of their authorisation in Malta.
alta is an independent democratic state with a history of political stability and parliamentary consensus to promote the country as an international financial centre. The country has been a member of the European Union since May 1, 2004.
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 every other cell and from the assets of the company. This enables promoters to come together within the PCC framework and to share overhead costs while 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 as continuing in Malta; this process is known as redomiciliation. Legislation in Malta allows for companies to continue their corporate existence despite moving from one jurisdiction to another.
Malta’s tax and regulatory environment and the impact of changing standards are described below.
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 thereunder.
As a full EU member state, Maltese insurance legislation incorporates
the relevant prudential supervision EU directives. Adherence with these EU directives means that insurance supervision (in particular as regards own funds and solvency margins) in Malta is far more stringent than that in traditional offshore domiciles.
Tax environment
Maltese companies engaged in international trading and/or holding activities are taxable, onshore limited liability companies registered in Malta under the terms of the Companies Act, 1995. These limited
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