before March 2013, but both main political parties have committed to aiding FDI in Malta and pro- viding the necessary incentives to attract businesses to set up here, so we expect strong continuity. Being part of the EU, large infrastructure proj-
ects or other general tenders tend to be governed by public procurement rules in line with the EU Directives; Malta has free access to the Single European Market for goods and services and the same with inbound products from the EU. Beyond that, the main regulatory influence tends to be tax legislation, which is geared up through a system of tax credits and deductions to be very cost effective. Malta adheres to the EU framework on free trade and employs a number of international tax treaties to compliment this. There are no exchange con- trols, and freedom of movement of capital and services within the EU has allowed Malta to open its doors and announce that it is open for business. The favourable tax system and network of tax treaties also makes the remittance of capital much more efficient. The banking industry has been long established
in Malta, and has really come into its own follow- ing the privatisations of the 1990s leading up to EU accession. Malta’s foreign borrowings amount to around 5% of all outstanding debt, and the banking sector is a heavy investor in this, thus hav- ing a very stabilising effect. Similarly, the banks do not really rely on the international inter-bank mar- ket for their liquidity needs and are funded mostly by local deposits. Consequently, the main players in the banking industry are robust and have breezed through the last EBA stress tests. The incoming regulations from Basel III/CRV IV will further strengthen the banks’ positions, although it should not really have too much effect as the expo-
“
Malta is really
geared up to attract investment
”
sure to complex financing instruments is minimal (although the local asset managers have become increasingly sophisticated recently). To this end, it is expected that some work will come through from the collateral optimisation side.
Be prepared Of course preparedness is always a key element: tax planning is crucial, as is ensuring that everything is above board with the local regulators. Beyond that, sourcing talent is something that requires work – the demand tends to outstrip supply in key areas which means that finding quality professionals (for example actuaries or portfolio managers) can take longer than expected. That being said, the tax schemes available allow highly-qualified persons to relocate to Malta under favourable tax treatment, making it an interesting proposition for prospective employees – and the weather certainly helps. In terms of compliance, Malta has been keen to
shake off the image of a so-called offshore jurisdic- tion. In tandem with new Prevention of Money Laundering and Financing of Terrorism Regulations coming into force in 2011, the focus has been very much on effectively reaffirming rig- orous anti-money laundering checks and ensuring all is above board. Maltese law relating to business in general,
including corporate and insolvency, is based heavi- ly on English law and refers to English law or EU law in the case of lacunae; thus Malta has the good fortune to have a fairly sophisticated corporate law framework, supported by a proper trusts law – moreover, newer areas of law, such as finance and aviation, tend to be determined by English law principles in any case, if there is not an EU regula- tion or international treaty. Naturally there is always room for development, but the legal frame- work has been fairly flexible to adapt to new indus- tries with minimal change. Traditionally investors have been wary of gov-
erning contract laws outside of their comfort zones; however, Malta has invested heavily in its dispute resolution network to establish a world class arbi- tration centre which is a cost-effective and time- effective alternative to litigation. Consequently, there has been more acceptance of Maltese law as governing law. On the whole, Malta is ideally placed as a gate-
way to both European and external markets, as well as accessing growing local opportunities. There has been strong commitment to upping the level of investment and the incentives are in place to attract employment opportunities. There is still some way to go, but with synergistic relationships between the government and private industry, opportunities abound for those seeking value.
About the author Dr Jospeh J Vella was called to the Bar in Malta in 1973. Today, he is the managing partner of the firm. His main area of practice is in the commercial and corporate fields. He looks after a prestigious and varied client list among which are prominent local and foreign privately owned companies as well as a number of government institutions. Vella has gained considerable experience in representing clients overseas,
particularly with respect to cross border acquisitions. Vella has been regularly involved in the government privatisation process with respect to various companies acting as an adviser to the government.
Contact information
Dr Joseph J Vella GVTH Advocates
192, Old Bakery Street, Valletta, VLT 1455, Malta T: +356 21 228 888 F: +356 21 228 808 E:
jj.vella@
gvthlaw.com W:
www.gvthlaw.com
About the author Dr Albert S. Grech graduated Doctor of Laws from the University of Malta in 1971 and has been in private practice since. His area of practice is commercial law with a particular focus on corporate matters, governance, franchising and distributorship licensing. He also advises on intellectual property matters and has been involved in a number of leading cases in this field. He acts for a wide range of companies, both local and international, and sits on a number of boards in a non-executive capacity.
Contact information
Dr Albert S. Grech GVTH Advocates
192, Old Bakery Street, Valletta, VLT 1455, Malta T: +356 21 228 888 F: +356 21 228 808 E:
albert.grech@
gvthlaw.com W:
www.gvthlaw.com
018
IFLR|FOREIGN DIRECT INVESTMENT
www.iflr.com
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48