Malta Country Report 2008

Foreign Investment Real Estate Strong inward flows into Malta’s growing business centre

Steady growth is leading to more five-star high rise developments

SmartCity

Malta partners with Dubai to drive innovation in Europe’s ICT sector

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MALTA THE MEDITERRANEAN’S KNOWLEDGE-BASED SMART ISLAND

Economy: Holding its own in an uncertain world Malta’s Financial Centre Heads for the Top: Increased investment underpins rapid growth Europe’s iGaming Capital: A growth story that shows little sign of slowing

Logistics Hub

Malta’s location could be its golden ticket €10.00

Mediterranean Lifestyle

Continental charm in an idyllic island environment

Editor Blanche Gatt /CountryProfiler gatt@countryprofiler.com Regional Directors Kristina Ernst / CountryProfiler ernst@countryprofiler.com Garvan Keating / CountryProfiler keating@countryprofiler.com Project Manager Mandrina Caputi / CountryProfiler caputi@countryprofiler.com Administrative Director Rick Martin/ CountryProfiler martin@countryprofiler.com RESEARCH Victoria Vasiliou / CountryProfiler vasiliou@countryprofiler.com

CountryPr filer Malta 2008/2009

Art Director Ramon Micallef/ Box Design ram@box-design.net Advertising Sales sales@countryprofiler.com Photography Alan Carville Malta Tourism Authority Airmalta Printing Gutenberg Press Ltd, Malta All rights reserved. Reproduction in whole or part is strictly prohibited without written permission.

Opinions expressed in CountryProfiler Malta are not necessarily those of the editor or publisher.

All reasonable care is taken to ensure truth and accuracy, but the editor and publishers cannot be held responsible for errors or omissions in articles, advertising, photographs or illustrations.

CountryProfiler would like to thank the Office of the Prime Minister, Ministry of Finance, the Economy and Investment, Ministry for Infrastructure, Transport & Communications, Ministry of Foreign Affairs, Air Malta, Malta Enterprise, Malta Financial Services Authority, Finance Malta, Malta Tourism Authority, Lotteries & Gaming Authority and Malta Maritime Authority for their support and assistance.

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CONTENTS 10 14

Industry Profiles

Malta at a Glance: Key Facts and Figures Country Overview: The Promise of Progress Preparing for a bright future, Malta is building a knowledge-driven society

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Interview: Prime Minister Lawrence Gonzi Optimistic and confident, Malta’s Prime Minister is convinced Malta can weather the economic storm hitting the global economy

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Economy: Resilient and Responsive Malta’s small size and flexibility give it an advantage in tackling the effects of world events

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Government and Politics: Sophisticated Political Landscape A stable democracy; Malta holds general elections every five years

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Foreign Direct Investment: Growing International Recognition Wins Investment for Malta High levels of inward investment confirm Malta’s attractiveness as an FDI location

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Corporate Location: Corporate Eurozone Location for International Business Cost effective and in close proximity to Europe, Malta makes an ideal base for international companies

Business Process Outsourcing: Outsourcing to a European Base Call centres, data processing and management services are being offered from Malta with increasing success

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Remote Gaming: Reaping First-Mover Rewards Malta is recognised as Europe’s leading Tier One by operators around the world

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Manufacturing: Knowledge-Driven Manufacturing Shifting from mass-production to precision engineering, Malta’s manufacturing industry is moving with the times Pharmaceuticals: Malta’s Healthy Pharma Industry A new industry cluster has grown up in Malta, attracted by legislation, incentives and human resources Aviation: Malta has won repeated investment from world leaders in the MRO indsutry Information and Communications Technology: Driving Malta’s Knowledge Economy Malta’s efforts to reshape its economy have meant ongoing high levels of investment in ICTs, from education to infrastructure

Financial Services: Malta’s Financial Centre Wins International Recognition Malta’s financial services sector is working hard to raise the island’s international profile Banking: High Performance Sector Attracts International Players Consistent high performance keeps Malta’s banking sector growing

Captive Insurance: EU Legislation Boosts Malta’s Captives Industry Ten years in the making, Malta’s captive sector is maturing fast Fund Management and Administration: Europe’s Emerging Fund Domicile Small and adaptable, Malta’s lower costs and excellent regulatory regime make it an attractive proposition

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Capital Markets: Steady Growth Consolidates MSE Success Both listings and investors are increasing in number and value as the Malta Stock Exchange grows steadily

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Energy and Environment: Seeking Sustainable Alternatives Reducing Malta’s dependence on imported oil and meeting EU deadlines becomes more urgent as financial and environmental costs mount

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Construction and Development: Up-Market Properties Leading the Sector A levelling-out of price growth in the property market has not stalled Malta’s development of luxury properties

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Maritime: Leading Maritime Centre Long-established tradition sustains Malta’s flourishing maritime industry

131 Doing business in Malta Introduction Business Culture and Environment Foreign Investment Incentives Access to Markets Legal and Regulatory Framework Taxation Corporate Business Structures Transport and Logistics ICT and Communications Utilities Human Resources Labour Relations Education and Training Commercial and Residential Property Expat Issues and Immigration Business Costs Financial Services Professional Support Services

Malta life

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Visiting Malta: Mediterranean Magic Short business trip or two week holiday, there’s always time to fall in love with Malta

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Tourism: New Travel Trends Boost Destination Malta Low cost airlines, business travel and proximity to Europe are helping to extend Malta’s tourism industry revival

Living in Malta: Excellent Quality of Life Malta offers a great lifestyle in a relaxed, sunny environment

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Buying Property in Malta: A Home in the Sun Looking for a second home or planning to relocate entirely? Malta offers a wonderful climate, excellent lifestyle and some exquisite properties

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Agribusiness and Food: The Value of Quality This small but significant sector is looking to focus on quality rather than quantity

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Business Profiles: Companies, Government Agencies and Organisations

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Film: On Location in Malta Movie producers pick Malta as their location of choice, bringing a bit of Hollywood glamour to the Mediterranean island

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Trusts, Financial Planning and Wealth Management: Dynamic EU Environment for Managing Wealth Reguation, discretion and experience underpin Malta’s offering as a wealth management centre

Transport & Logistics: Hub For Global Logistics Malta’s strategic position at the centre of the Mediterranean makes it a natural location for transport and logistics operations

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Malta at a Glance

Key facts and figures

Country Official Name: Republic of Malta Capital: Valletta European Union: Member since May 2004 National Holiday: September 21 - Independence Day (1964) Time: 1 hour ahead of GMT (2 hours ahead in summer) Measures: Metric and Imperial

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Country Overview ocated in the centre of the Mediterranean, the Maltese islands consisting of Malta, Gozo, Comino and two uninhabited islands, lie midway between Europe and North Africa, 93 km south of Sicily and 290 km north of Libya. Malta’s 7000-year history has seen a succession of foreign conquerors ruling the island until 1964, when Malta gained independence from Britain after 160 years.

Malta, with its 400,000 inhabitants, is the smallest of the 10 countries that joined the EU in May 2004 and adopted the euro as the national currency in January 2008. Since independence Malta has transformed its economy to become a leading centre for financial services, ICT, container and freight transhipment, high value manufacturing and tourism.

The Malta Flag

TIMELINE

The Malta flag was officially adopted on September 21, 1964. The flag of this island nation uses the traditional red and white colours of the Knights of Malta. The George Cross (upper left), outlined in red, was added to the flag in the 1940s, as King George VI of Britain presented it to islanders for outstanding gallantry during World War II.

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5,000 B.C. First human settlers 60 A.D. Shipwreck of St. Paul the Apostle 395 Byzantine Rule 870 Arab Rule 1091 Norman Rule 1530 Knights of St John Rule 1798 French Rule 1814 Malta a crown colony of the British Empire World War II Heavy bombing by German and Italian air forces targeting Allied bases 1942 King George VI awards colony the George Cross - Britain’s highest civilian decoration - for heroism 1947 Self-government granted 1959 Self-government revoked 1962 Self-government restored

Geography Location: The Maltese Archipelago lies virtually at the centre of the Mediterranean, with Malta 93 km south of Sicily and 290 km north of Africa.

Gibraltar is 1,826 km to the West and Tel Aviv is 1,940 km to the East.

Structure: Archipelago comprised of five islands - Malta, Gozo and Comino (inhabited) Fifla and Cominotto (uninhabited) Area: 316 sq km (Malta 246 sq km, Gozo 67 sq km, Comino 2.7 sq km) Climate: Mediterranean climate with mild, rainy winters and hot, dry summers.

Sunny climate with a daily average of five to six hours sunshine in mid-winter to more than 12 hours in summer.

Main Towns Population in ’000s: Valletta (capital) 9.1, Birkirkara 22.1, Qormi 20.2, Sliema 13.5

1964 Full independence 1964-71 Nationalist Party pursues pro-Western alignment 1971 Dom Mintoff’s Malta Labour Party takes power; new era begins of non-alignment and special friendship with Libya and Communist states 1974 Malta becomes Republic 1979 Closure of British military base 1984 Mintoff resigns, succeeded

by Carmelo Mifsud-Bonnici 1987 Victory of Nationalist Party marks move toward European integration. Eddie Fenech Adami becomes prime-minister 1989 Malta hosts first summit between Soviet President Mikhail Gorbachev and US President George Bush 1990 Malta submits application for full membership of the European Union (EU)

Why Malta?

People Population: 403,000 Nationality: Maltese Descendants: Maltese are descendants of ancient Carthaginians and Phoenicians, with strong elements of Italian and other Mediterranean stock.

Religions: Roman Catholic 98% Languages: Maltese (official), English (official) Literacy: 92.8% Median Age: 39 years Life Expectancy: 79 years Population Growth rate: 0.4% Government Form of State: Republic Head of State: President Dr Edward Fenech Adami Head of Government: Prime Minister Dr Lawrence Gonzi Suffrage: 18 years National Legislature: Based on universal adult suffrage.

Parliament elected every 5 years Elections: Last held March 8, 2008. Held every five years.

Legal System: Based on the English Common Law and Roman Civil Law Juridical Branch: Constitutional Court; Court of Appeal; Judges for both courts are appointed by the President on the Advice of the Prime Minister.

Economic overview Total GDP(€ millions): 5,398.5 (2007) GDP per Capita(€): 13,191 (2007) GDP per Capita(€ in ppp): 19,100 (2007) Real GDP Growth: 3.8% (2007) GDP Composition by Sector: Agriculture: 2%; Industry: 23%; Service:75 % Economic Sectors: Tourism, electronics, manufacturing, pharmaceuticals, ICT and Finance.

Main Trading Partners: Italy, UK, France, Germany, Singapore, US (2007) Inflation: 0.7% (2007) Current Account Balance (€ Millions): 292.3 (2007) Labour Force (000): 164 Unemployment: 6.3% (2007) Currency: Euro Trade: Euro Merchandise Exports (€ Millions): 2.2 (2007) Merchandise Imports (€ Millions): 3.4 (2007) Goods and Services Exports (€ Millions): 4.7 (2007) Goods and Services Imports (€ Millions): 4.8 (2007) No. of Tourist Departures (000): 1,243 (2007) Sovereign Rating Moody: A1 (2008) Fiscal Year: Calendar Year

1995 April Malta joins NATO’s Partnership for Peace programme, only to leave in October 1996 in order to maintain its neutrality 1996 Labour Party, led by Alfred Sant, regains power and shelves application for EU membership 1998 Eddie Fenech Adami’s Nationalist Party returns to power, revives application to enter EU 1999 Guido de Marco sworn in as President 2001 May Pope John Paul II visits Malta for the second time during his papacy, where 98% of the population are Roman Catholic. The Pope beatifies three Maltese clerics at an open-air ceremony 2002 December EU summit in Copenhagen invites Malta to join in 2004 2003 March Just over 53% of voters say yes to EU membership in a referendum 2003 April Fenech Adami’s ruling Nationalist Party claims victory in a general election,

confirming the pro-EU referendum result 2004 March Lawrence Gonzi sworn in as Prime Minister following retirement of Eddie Fenech Adami 2004 May Malta is one of 10 new states to join the EU 2005 April Malta joined the ERMII mechanism 2005 July Parliament ratifies proposed EU constitution 2007 July ECOFIN unanimously approved Malta joining the Eurozone in January 2008 2008 January Malta adopts the euro as the national currency 2008 March Nationalist Party wins general election

Consistently pro-business government policies Easy access to decision makers Exceptionally high productivity levels A ‘can-do’ business environment Excellent telecommunications Competitive corporation tax Sophisticated international financial centre Strategic location and marketing advantages State-of-the-art transhipment and distribution facilities Social and economic stability Multilingual and highlyskilled workforce Dedicated, competitively priced human resources Growing markets, quickly accessible from Malta Attractive package of business incentives A safe, secure and pleasant lifestyle

Public Holidays January 1st (New Year’s Day) February 10th (St Paul’s Shipwreck) March 19th (St Joseph) Good Friday Easter Sunday March 31st (Freedom Day) May 1st (Workers’ Day) June 7th (Sette Giugno) June 29th (St Peter and St Paul) August 15th (Assumption) September 8th (Victory Day) September 21st (Independence Day) December 8th (Immaculate Conception) December 13th (Republic Day) December 25th (Christmas Day)

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HISTORY

7,000 YEARS OF

HISTORY

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alta’s magnificent megalithic temples, evidence that the island has been inhabited since prehistoric times, rank among the oldest free-standing structures in the world. These exceptional prehistoric sites, together with the baroque city of Valletta, built by the Knights of St John, and the old medieval capital, Mdina, are all designated UNESCO World Heritage Sites.

The first recorded people to have settled in Malta were the Phoenicians. For the next two millennia the islands were colonised by a succession of peoples. Throughout history, Malta’s fortunes in peace and war were intrinsically linked to its strategic location at the confluence of shipping routes, with its deep natural harbours making Malta ideal for trade and defensive purposes.

The Phoenicians were followed by the Carthaginians, but after the destruction of Carthage, Malta was absorbed into the Roman Empire. St Paul the Apostle was shipwrecked on the islands in A.D. 60, converting the country to Christianity under the Roman governor Publius. In the later years of the Roman Empire, Malta formed part of the Byzantine bloc.

The Arab expansion reached Malta in A.D. 870 and the country remained under Arab domination until 1090, when Count Roger of Normandy added Malta to his conquest of

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Sicily. Malta shared in the fortunes of Sicily until 1530, when, in an attempt to strengthen the southern frontiers of his domains against Islam, Charles V of Spain offered Malta to the Knights of St John of Jerusalem, an international order of chivalry founded in the early years of the Crusades. For the next three centuries, the destinies of Malta and the Knights of St John were linked.

The Knights of St John were driven out of Malta by Napoleon in 1798, and the French ruled for two years. Malta became a British Crown Colony in the early nineteenth century and remained so until 21st September, 1964, when it became an independent sovereign state. In 1974, Malta was declared a republic. Malta is a member of the Commonwealth and of the United Nations. Soon after independence Malta was admitted to the Council of Europe.

In December 1989 Malta hosted the Bush-Gorbachev summit that sealed the end of the Cold War. In 1990, Malta applied for European Union membership.

Accession negotiations were concluded in December 2002 and the accession treaty signed in April 2003. Malta became a member state of the European Union on May 1st 2004 and adopted the euro as its currency on January 1st 2008. Malta joined the Partnership for Peace (PfP) in March 2008 and is a keen participant in the European Union’s Euro-Med process. n

The Azure Window, Dwejra, Gozo © Paolo Meitre Liberatini, MTA

Did you know?

■ Malta is the smallest EU country by both population and size.

Malta has 400,000 of the EU’s 495 million people, and is 316 square kilometres in size, out of the EU’s total size of 4,324,782 square kilometres ■ Malta is the third most densely populated country in the world, with 1256 people per square kilometre, after Monaco (16,135 people per square kilometre) and Singapore (7,641 people per square kilometre) ■ Malta has the fifth highest car ownership in the world, with two cars for every household.

The total amount of passenger cars during 2006 in Malta was 525 cars per 1000 inhabitants ■ Malta was Vodafone’s first foreign venture outside the UK. The mobile phone giant’s Maltese company was set up in 1990, and Vodafone Malta is now both the smallest and the oldest foreign subsidiary in the Vodafone Group ■ Malta is visited regularly by high profile super yachts, including Pelorus, Roman Abramovich’s

377- foot $100 million dollar super yacht, and Tom Perkins’ 289-foot $ 100 million sailing yacht, Maltese Falcon ■ Proudly displayed in the top left hand corner of the Maltese flag, the George Cross was awarded to the people of Malta by King George VI in April 1942 in recognition of the outstanding bravery and heroism of the island’s population who were subjected to unrelenting, devastating attacks and bombardments by the Axis powers during long periods of the Second World War ■ The ancient Neolithic temples found in Malta are the oldest freestanding monuments in the world ■ The Maltese Islands have three sites inscribed on the UNESCO World Heritage List.

These are the City of Valletta, the Megalithic Temples and the Hal Saflieni Hypogeum ■ The Knights of St John ruled Malta from 1530 to 1798, arriving on the island after they were defeated and expelled from Rhodes by the

Ottoman Turks, where they had ruled since 1309. Their legacy in Malta includes a wealth of military engineering and architectural wonders: forts, bastions, watch towers, aqueducts, churches and cathedrals, as well as the Sacra Infermeria (today the Mediterranean Conference Centre in Valletta), Europe’s foremost hospital in its day ■ A live Maltese Falcon was the yearly symbolic rent at which Emperor Charles V ceded the Maltese islands to the Knights of St John ■ The artist Michelangelo Merisi, better known as ‘Caravaggio’, spent a year and a half in Malta in 1606 – 1607. His greatest masterpiece, The Beheading of St John, was painted during his brief stay in Malta and is still on display in the Museum of St John’s Co-Cathedral in Valletta ■ Valletta is the first example of a city built according to detailed plans and a road grid system ■ Malta’s sister island Gozo is thought to be the mythical

island where the nymph Calypso seduced Ulysses ■ Malta has the highest number of churches per square kilometre in the world – 365 in all. One for each day of the year ■ Malta hosted the famous BushGorbachev summit in December 1989 where the end of the Cold War was finally sealed ■ Maltese born Edward de Bono, the originator of Lateral Thinking, is regarded by many to be the leading authority in the world in the field of creative thinking and the direct teaching of thinking as a skill. He has written 62 books with translations into 37 languages and has been invited to lecture in 54 countries ■ Joseph Calleja, considered to be the most exciting young tenor in the world today, was born and brought up in Malta. Calleja has sung in all of the world’s major opera houses and is one of just a handful of classical artists to have an exclusive recording contract with Decca Records.

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COUNTRY OVERVIEW

The Promise of

Progress

An English-speaking Mediterranean island with a long and diverse history, Malta is preparing for a promising future crafted on innovation and tradition

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he European Union’s smallest member state, Malta is a tiny island nation on the Union’s southern-most confines. Anchored in the centre of the Mediterranean, at the junction of Europe and North Africa, the island has gone from British colony to independent EU and eurozone member state in just four decades. Today emerging as one of the fastest growing business centres in the world, Malta is recognised as a front-runner in the provision of ICT and financial services in the Mediterranean region.

The island’s growing economy, registering GDP growth of 3.8 per cent in 2007 and 3.5 per cent and 3.2 per cent in the first and second quarters of 2008 respectively, is proving resilient despite the significant challenges it faces from rising food and fuel costs and their potential impact on competitiveness. While the island’s high exposure to external influences indicates that these difficulties may intensify through 2008, the Maltese government is optimistic that the island’s recently diversified economy can sustain sufficient

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growth to cushion the island from the worst of the effects.

Up to just a decade ago, Malta, with seven thousand years of history, two hundred generations of civilisation and twelve months of sunshine a year, was better known as a tourist destination for a mainly British and European market. Today, though tourism remains an important component of the island’s economic landscape, Malta’s traditional reputation as ‘just’ a sun and sea destination for holidaymakers is changing rapidly as the island adds weight to its claims for recognition of its distinctive role within the world business community.

Maximising the intrinsic value of its geographic location and its highly skilled, multi-lingual, flexible workforce, Malta is determined not to allow size to dictate success. A decade and a half of determined restructuring has turned Malta into one of the most attractive investment locations in the region, and the island is now well on its way to achieving its vision of becoming the regional centre of excellence in IT and financial services.

Vittoriosa Yacht Marina © Alan Carville

Positioned strategically between Europe and North Africa, the island promotes itself as a stepping stone between the two continents, and is building aggressively on its strong reputation as the ideal regional hub for expansion-focused businesses.

The island’s legislative and regulatory systems, formulated and implemented over the last fifteen years to create a solid yet flexible framework for business, its state-of-the-art telecoms infrastructure and wealth of highly skilled professionals in every field, plus the injection of EU structural funds accelerating the upgrading of the general infrastructure, combined with its central Mediterranean location and unique sun-kissed lifestyle are coming together to help Malta win both foreign investment and international recognition.

Mediterranean Island Just over 316 square km in area, the Maltese islands, comprising Malta, Gozo and Comino, lie midway between Europe and North Africa, 93 km south of Sicily and 290 km north of Libya. Malta’s

400,000 inhabitants are among the most international of peoples.

With a 7000-year history that has seen a succession of foreign conquerors ruling the island until 1964, when Malta gained independence from Britain after 150 years, the islanders have acquired a unique ability to adapt to new ideas and adopt, and improve, the best of them to their ultimate advantage.

The main island, Malta, is 27 km long and measures 14.5 km at its widest point. It takes just 45 minutes to cross Malta, reducing commuting times and increasing leisure time, enhancing the island’s overall superior quality of life and making this one of the few places in the world where you can enjoy ‘eight hours of work, eight hours of play and eight hours of rest’.

A rocky Mediterranean island with a dry and often windy climate, Malta’s countryside is characterised by the tiny terraced fields carved out of any available agricultural land, supported by laboriously constructed rubble walls, and utilising every available pocket of land, no matter how small.

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COUNTRY OVERVIEW

platform for the island’s economy, delivered a MALTESE LIFESTYLE In the four series of challenging economic shocks. At the The official languages are Maltese and English, decades since same time, the strategic decision to move away with 90 per cent of Maltese being totally from the low-cost manufacturing and package Independence, bi-lingual. English is used predominantly tourism that had driven the island’s economy in business, education, entertainment and Malta’s leaders up to then caused even further economic newspapers, while Maltese is more commonly have laid the jolts as the island struggled to cope with the used between family and friends, though most resultant loss of jobs in the manufacturing people easily switch between the two languages. foundations for sector. The island went through a trying period Maltese is a Semitic language believed to have a sustainable as large employers scaled or even closed down, developed during the Arab occupation of the economy based concurrent with a relative slowdown in tourism islands (870 – 1090 AD), and it is still the only as operators struggled to adapt to changing Semitic language to be written in a Latin script. on tourism, realities within the international market.

Most Maltese have a good command of industry and However, over the last couple of years Malta Italian while French and German are also widely services has been seeing the hard-won results of these spoken. Most business correspondence is in policies. New industry sectors, knowledge-based English, which makes Malta an attractive place activities that barely even existed two decades to conduct business. An added benefit derived ago, such as ICTs, iGaming, aviation services and from the Maltese’ excellent command of English financial services, are now jostling the shoulders of the upgraded is that Malta has become one of the most popular destinations for traditional leading sectors of tourism and manufacturing as they foreigners to study English. compete for the title of fastest growing sector. Forty years on, The Church plays an active role in most communities on the Malta has identified the economic strategies that will work for it, islands. This is reflected in the large number of churches to be and today the island enjoys a stable economy with high levels of found in Malta; 365 in all – one for each day of the year. Most inward investment and falling unemployment.

Maltese are Catholic, but other religious denominations are also represented. The influence of religion is also felt in the country’s Euro Adoption traditions with each town and village celebrating their patron EU membership since 2004 and efforts to meet the criteria for saint’s feast day with great pomp and gaiety. The food is mostly adoption of the euro in January 2008 caused at least some of the European, with a strong Italian influence and Maltese bread is above-mentioned challenges as Malta’s government introduced renowned to be excellent. often unpopular measures to reduce the deficit to below 3 per cent cut back levels of public debt to below 60 per cent of GDP, bring Creating an Economy down inflation (which has since risen again in tandem with the Before Independence in 1964, Malta was a Fortress economy, with rest of Europe) and rein in unemployment. a 150-year tradition of reliance on the British armed forces. The It may have been tough, but results have proved the efforts majority of the Maltese workforce was either employed directly by successful: euro adoption went ahead as planned on January 1st the British forces or in industries servicing the military machine.

2008 in a well-managed and stringently supervised transition that In the four decades since Independence, Malta’s leaders have has remained smooth well into 2008. Mechanisms such as the laid the foundations for a sustainable economy based on tourism, Fair Pricing Agreement in Retailing (FAIR) involving retailers industry and services. Apart from the natural beauty of the islands, and other businesses were employed to avoid artificial price with their golden limestone, crystal clear sea and charming rural hikes and shocks during the changeover period, and the multilandscape, Malta has no natural resources bar its people. And, sectoral information strategy coordinated by the National Euro while from the mid-1960s to the mid-1980s, Malta sold itself as Changeover Committee (NECC) has been credited with ensuring a manufacturing base for products like textiles and electronics, that euro adoption was achieved as smoothly as possible. using low wages and plentiful supply of labour as its main selling point, by the end of the 1980s it was recognised that educating the Attracting Investment workforce to include highly qualified professionals would attract The euro goal, finally achieved, has long been seen as a key element higher value added products and services to the island. in Malta’s potential attractiveness to investors, and as official reports over the last two years confirmed that Malta was on target Changing for Progress for achieving the Maastricht criteria, foreign direct investment Transforming the economy to fit the vision was not always figures for 2006 and 2007 bear this theory out while UNCTAD’s easy, especially post 2001. Privatisation of many government World Investment Report 2007 ranked Malta in 6th place globally enterprises, radical restructuring of state-owned companies, tight for inward investment performance. control on government expenditure, higher effective taxation The latest verified data available indicate that Malta attracted and a stringent tax compliance regime, all measures aimed at a healthy €696 million in 2007 in inward investment. While this reducing the country’s deficit and establishing a stable fiscal CountryPr●filerMALTA

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is significantly less than the record amounts registered in 2006 (€1.4 billion), figures for that year included one-off events such as the sale of national Telecoms operator, Maltacom (since renamed GO) as well as Malta’s successful bid for two major international projects, winning the largest foreign investment projects the island has ever seen: SmartCity Malta, an investment of US$300 million (€220 million) from Dubai Internet City’s Tecom Investments, and Lufthansa Technik’s €60 million expansion of their existing Maintenance, Repair and Overhaul (MRO) operations in Malta.

Highly educated, multi-lingual and extremely flexible as well as costeffective, Malta’s workforce is one of its greatest strengths.

Driven by People Euro anticipation and adoption can be credited with at least part of this success, but other essential elements have also been instrumental in ensuring the steady stream of investment into the country.

These include the dedicated and sophisticated legislative and regulatory systems put in place over the last decade and a half, and, very significantly, human resources.

Most investors and business operators already based in Malta cite their staff as being the main reason they keep their investment in Malta: highly educated, multi-lingual and extremely flexible as well as cost-effective, Malta’s workforce is one of its greatest strengths.

And as government and education authorities step up their efforts to marry the output of educational institutions with industry needs, working in tandem with the business community to create courses of study that correspond to specific industry HR requirements, Malta’s university and vocational colleges are producing an everincreasing stream of qualified professionals to service the growing financial services, ICT and the expanding health, pharmaceutical and electronics-related manufacturing sectors.

Growth Sectors Powering the Economy Malta’s accession to the EU in 2004 brought significant sectorspecific advantages. In financial services for example, one of the main reasons for Malta’s attractiveness as a domicile for financial services operators is the passporting rights firms enjoy to other EU and EEA areas, which has led to Malta becoming a magnet for insurance and fund management firms. This growth is reflected in international perception and the 2008 Global Financial Services Index, published by the City of London, ranked Malta in 4th place as the Centre most likely to increase in importance in the next few years, and in 5th place as the Centre where most organisations are likely to begin new operations in the next two to three years.

Other areas are also showing similar growth. Remote gaming is fast becoming a major revenue earner and employer, again driven for the most part by effective regulation and the sector now lists some 300 licensed remote gaming companies operating from Malta, up from just 20 in 2005. The ICT sector is also on a roll, with Malta based firms enjoying success on an 18

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international stage. Malta-developed software is making substantial leaps forward, and the new SmartCity project can only accelerate that trend.

Tourism, after a dismal showing in 2006, rallied powerfully in 2007, registering increases of 11 per cent in arrivals over the previous year.

This performance has continued into 2008 with figures for the first five months of 2008 indicating an increase of 16 per cent over the corresponding period in 2007. These results have already stimulated investor interest in increasing bed capacity, a development that complements the wave of new investment in five-star hotels and Meetings, Incentives, Conferences and Events (MICE) facilities that took place over the last year and a half.

This renewed activity continues to strengthen the island’s product offering, along with a focus on specialist markets such as cultural, religious, sport and medical or health travel. Long popular as a safe, sunny tourist destination for sun-starved Europeans, Malta is now being seen in a whole new light as government moves away from the traditional ‘sun and sea’ tourist market. Instead, the focus is on year-round travel and high-spending tourists in niche markets such as MICE, off-season pensioners escaping the cold northern winters and travellers exploring cultural, religious or medical tourism throughout the year. And with most of Europe’s leading low cost airlines now flying into Malta alongside flag-carriers offering regular flights to and from most of Europe’s major cities, better access to the island translated to increased numbers almost overnight.

Financial services, ICT, aviation services and tourism, as well as high-end manufacturing are the drivers of Malta’s modern economy, and all of them tap into the one resource Malta has to offer: its people.

Visible Growth Performing better than it has for years, Malta’s economy is beginning to reflect the value that only a couple of years ago seemed illusory: National Statistics Office, Malta (NSO) figures put the island’s growth rate for 2007 at 3.8 per cent, up from 2.9 per cent in 2006. Government forecasts of 4 per cent growth for 2008 have recently been revised downwards to 3 per cent, a reflection of the international situation, but the latest available figures (NSO) show that GDP grew by over 3 per cent in the first and second quarters of 2008.

This growth is visible in the continuing activity in the construction industry. With the economy performing well and generating wealth, new investment continues to flow into the sector, despite indications that prices may be levelling out for some classes of residential property. Informal estimates by leading architects value the ten or so large, high profile development projects planned for the coming five years, excluding the SmartCity project, at more than €2.33 billion.

COUNTRY OVERVIEW

Mediterranean Conference Centre, Valletta © Alan Carville

Buying property has long been the main form of investment activity among the Maltese, who see land as a secure, long-term investment on an island where land is limited. That accounts for the steady rise in property values that were seen over the past years and for the tendency among local investors to steer away from speculation and pass their land down through generations. EU accession and the phasing out of ownership restrictions propelled the property market to new heights up to 2007, when prices were rising by 12 per cent to 15 per cent a year. While they now appear to be stabilising in some areas, space limitation on Malta is widely expected to sustain demand in the long term.

Moving Ahead Malta’s strengths lie mainly in the resilience and ambition of its people, qualities that are a direct result of the chequered history that makes Malta fascinating. Offering foreign investors the security and ease of operating within EU borders yet within easy reach of the emerging markets of North Africa and the Middle East, supported by top class legislative framework, a stable

Financial services, ICT, aviation services and tourism, as well as highend manufacturing are the drivers of Malta’s modern economy, and all of them tap into the one resource Malta has to offer: its people

political and economic environment, and a cost-effective, driven workforce, Malta is moving ahead rapidly. For foreigners working in Malta, the combination of an efficient business climate and excellent infrastructure enhanced by the relaxed Mediterranean environment in which they operate offer a unique and magical opportunity to do business in the sun. n CountryPr●filerMALTA

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INTERVIEW

Interview

Dr Lawrence Gonzi Prime Minister

In the March 2008 elections, your party won a third consecutive term in government, your second term as Prime Minister. What are your objectives for the next five years, and what do you consider priority areas?

Our main priorities are those that we highlighted at the end of the last legislature through our Vision 2015 plan, which aims to carry Malta forward as a centre of excellence in a diverse portfolio of sectors. We essentially target seven areas, being information and communication technology (ICT), financial services, special value-added manufacturing, tourism, education, health and Gozo as an ecological island.

We have already achieved great advances in most of these sectors and are recognised to be amongst the best in the region in terms of performance. In ICT for example, both the SmartCity project and our extensive investment in the public sector have placed Malta in a leading position in this area and Malta has been recognised as being 2nd in Europe with the most advanced e-Government services. In financial services, we are amongst the best in the world. In terms of healthcare we have a brand new stateof-the-art hospital and tourism is also doing extremely well. In all these areas there is more to be done and we will be investing in our tourism product, for example, using EU funds granted for the purpose. All in all, we are on the right track and we will continue to work towards excellence in all these areas.

What are the main challenges facing Malta at the moment and how do you intend to address them?

Without a doubt, Malta’s greatest challenges are those that most countries are currently facing, and are directly related to the rising prices in foodstuffs such as cereals and fossil fuels, primarily in the case of oil. Malta is a small country that is totally dependent on fuel for the generation of electricity and water. Thus the central challenge for Malta is how to maintain a robust economy to cushion the effects of these price rises. I am optimistic: we have a resilient economy that we have restructured completely over the last four years. In addition we are now in the eurozone, which gives us the added benefit of currency stability. The two main issues facing us are the inflationary effect of these price rises and their potential impact on competitiveness. But Malta is not facing these challenges alone, and its small size and flexibility allow us to respond rapidly to situations. I am therefore optimistic.

Malta’s GDP grew by 3.8 per cent in 2007 while the first three months of 2008 have shown growth 22

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rates of 3.5 per cent, up from 2.9 per cent in 2006.

What is fuelling this growth and can it be sustained under the prevailing economic climate?

Last year’s growth was fuelled by domestic demand and inward flows of investment. This year, domestic demand and tourism are continuing their upward trend, and the financial services sector is also registering significant growth. Manufacturing in specialist areas such as pharmaceuticals is also developing well. The leap in tourism has created a demand for new hotels and bedstock, while ICT has hit the ceiling, chiefly through SmartCity which will be coming online next year, so that from 2009 this will make a significant contribution to GDP. In common with other EU countries, inflation in Malta has risen rapidly over the last months, reaching highs of 3.8 per cent and 4 per cent, Are you concerned that rising prices will result in rising wages and business costs and ultimately erode Malta’s competitiveness?

Inflation in Malta has risen in line with that in many of the EU member states. Whilst it is well within the average being recorded at an EU level it is still very much below that in some of the new member states. There is always a concern that inflationary pressures would result in second-round effects and thereby increasing payroll costs for enterprises. Such an eventuality might erode our international competitiveness. However, it is firmly believed that our workers’ conditions can continue to improve if all stakeholders work towards maintaining or increasing our international competitiveness, not least by raising our productivity levels. Our latest indicators suggest that we are managing to achieve this.

As the price of oil soars to record highs, what are the effects of increased energy costs on Maltabased businesses and what steps is government taking to embrace renewable energies?

Government is monitoring the developments in the international price of oil closely since the Maltese economy is currently exclusively dependent on its importation for all its energy requirements. Over the coming months we shall be embarking on a restructuring of the electricity and water tariffs.

Apart from the rising costs of oil, government also aims to produce at least 10 per cent of its energy needs by alternative means by 2020 as agreed by all EU Member States. The most feasible option we have in front of us is the development of deep

sea offshore windfarms; we are currently in the exploratory phase of this option. We are hoping to be in a position to make an announcement to this end very soon. We will also be introducing schemes which incentivised industry to install photovoltaic technology and we will be upgrading and improving the current scheme in which the electricity company pays for units sold back to the grid.

Malta adopted the euro as its currency on 1st January 2008. What is your assessment of the changeover process and has euro adoption added to the upward pressure on prices?

Euro adoption has reaped enormous benefits for Malta. Firstly, it has removed uncertainty over the rate of exchange of the Maltese Lira as well as the cost of having to switch currencies. As a result it has allowed us to be more competitive and, due to the dollar/euro rate, it has also cushioned the price of fuel and oil.

The changeover from Maltese Lira to the euro in January proceeded very smoothly and I am pleased to say that the EU Commission quotes Malta as a model for other countries, particularly in terms of the targeted multi-sectoral information strategy waged by the National Euro Changeover Committee (NECC). We managed to achieve the changeover without facing undue negative effects on inflation. We also avoided price hikes over the changeover period through mechanisms such as the Fair Pricing Agreements in Retailing (FAIR) initiative that involved retailers and other businesses in an agreement to adopt dual display prior to the mandatory period but also not to increase prices due to euro changeover, and ensured effective supervision and enforcement of this initiative.

Which particular sectors do you see as being most interesting in terms of potential future growth to foreign investors?

As outlined in Government’s vision 2015, Government’s goal is to make Malta a centre of excellence in ICT, financial services, special value-added manufacturing, tourism, education, health and Gozo as an ecological island. We attach a high degree of potential for knowledge-based activity across a wide variety of sectors, ranging from ICT and pharmaceuticals to financial services. With regards to ICT, SmartCity is the exemplar of the government’s belief in the importance of this sector. Moreover, Government’s plan to extend the ‘smart’ concept to the whole of

the country making it SmartMalta will surely attract even greater investment from ICT businesses.

Turning to particular sectors, the Maltese government is working to strengthen Malta’s position as an important financial services centre in the Euro-Mediterranean region.

The Government is also promoting the development of highvalue-added activities which offer higher pay for greater skills, in sectors that include pharmaceuticals, biotechnology and sophisticated technology. Coupled with incentives for industrial investment and improved support services in this area, high value-added manufacturing is also considered as a potential sector of investment by foreigners.

Malta has been classified as the fifth most taxfriendly country for companies according to the 2008 Forbes Tax Misery and Reform Index and the most attractive country in the European Union in terms of taxes and social security contributions paid out by companies. Can you outline the main reasons why Malta’s tax regime is now so attractive?

We’ve always had an attractive tax system, which has proven to be a big advantage. The reason is that under our full imputation system, International Trading Companies operating in Malta could pay an effective rate of tax lower than five per cent (4.17 per cent). The way it works is that the company pays 35 per cent tax on profits, but on distribution of dividends the tax is refunded to foreign shareholders, effectively reducing tax to five per cent of profit. This system has recently been updated and is fully compatible with EU rules.

What are Malta’s unique selling points as an international business centre?

We have ensured all the main criteria are available to Malta’s clients, including professionalism and education, Maltese legislation, our language skills (especially English), the quality of life we offer, our political and economic stability, the fact that we are an EU Member State, our size and the accessibility of government and authorities. We naturally also have an extremely advantageous tax system and tax treaty network, yet it is not the tax system on its own that makes Malta the centre of choice for so many international businesses. It is the whole package, the whole pack of cards that gives Malta its leading edge over competitors. n CountryPr●filerMALTA

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ECONOMY

RESILIENT AND

RESPONSIVE

Malta’s small size and flexibility give it an advantage in responding to international events: the island’s economy continues to register growth despite the slowdown in its primary European markets

M

alta’s open economy makes it highly vulnerable to international events and trends: mid-2008 warnings of impending recession in the US and Europe and a global economic slowdown are sounding alarm bells in Malta too. However, Malta’s Prime Minister remains confident that the island’s diversified economy can cushion it from the worst of the buffeting. The European Union’s smallest member state is not immune to the inflationary woes hitting the rest of the Union, and in mid 2008 Malta is registering rising inflation figures of 4.1 per cent and over. Despite this, the island continued to register economic growth into 2008. GDP rose by 3.5 per cent and 3.2 per cent in real terms in the first and second quarters of 2008 respectively, tourism arrivals from January to May 2008 were up by 16.9 per cent over the corresponding period in 2007, and unemployment figures continued to drop with the registered unemployment rate (seasonally adjusted) hovering around 5.8 per cent of the labour supply.

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In 2007, the island’s GDP reached €5.4 billion, an increase of 6.1 per cent over 2006, while in real terms GDP grew by 3.8 per cent. Government forecasts of 4 per cent growth for 2008 have recently been revised downwards to 3 per cent, (the IMF predicts a more cautious 2 – 2.5 per cent) but the mood in Malta is optimistic despite the major challenges that the tiny EU nation is facing alongside its much larger peers. The reason for this optimism lies in government’s confidence that its laborious and oft-times painful restructuring of the island’s economy over the last fifteen years has given Malta a strong and competitive economy, securely powered by high levels of inward investment, sophisticated financial and ICT service activities and high-end manufacturing.

Indeed, the result of years of dramatic restructuring, Malta’s economy today bears little resemblance to the package-tourism cum mass-production structure it was just two decades ago.

Sophisticated knowledge industries, services, niche tourism and

The Maltese Falcon © Alexandra Pace

high value added industry now form the core of the economy, and they are performing well and contributing to the current period of steady growth.

Notwithstanding the critical importance of this economic redesign, Malta’s recent results would have been hard to conceive without the impetus of EU membership and euro adoption.

Preparations for EU membership coincided with shifting international trends across industries and sectors through the 1990s, all of which meant Malta had to strengthen and adapt its economic framework, both to reach compliance with EU standards and to ensure the island’s long-term competitiveness in a rapidly changing world market.

The island’s agility in adapting and implementing the new legislation, policies and institutional and educational reforms worked to its advantage and EU accession in 2004 marked a significant turning point in the modernisation of Malta’s economy.

History of Malta’s Economy Until independence in 1964 Malta was known as a ‘fortress economy’, with a 150-year tradition of reliance on the British armed forces. The majority of the Maltese workforce was either employed directly by the British forces or in industries servicing the military machine. After the Civil Services and the Armed Forces, the dockyard was the island’s main single employer.

With no natural resources to fall back on, the government chose tourism and manufacturing to build up the economy practically from scratch. The industries targeted were labour intensive ones to take advantage of the flexible labour force and low wages prevalent at the time. By the 1980s, rising labour costs necessitated that the government set about reengineering the economy to precision industries - high value and added value - such as electronics manufacturing, precision engineering and electrical engineering.

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Modern Day Economy The value added fuelling Malta’s modern day economy is services.

This sector has become the prime driver of economic growth and Malta’s strength has been the ability of its English–speaking workforce to fill service sector jobs in tourism, finance and ICT. Tourism is seeing a strong revival after hitting a low point in 2006, and 2007 saw an 11 per cent increase in arrivals, while the first months of 2008 are already showing significant year on year growth of almost 17 per cent in the first five months alone. The sector continues to be the leading services activity in terms of output as well as employment and foreign-exchange earnings. Emerging from a period of transition and changing market dynamics such as independent travel over package holidays, the advent of low cost airlines and the consequent increase in flights, connections and available seats has given the sector a much needed boost.

Financial services, long looked upon as a potential growth sector, is now actually fulfilling its promise. Currently accounting for 13 per cent of GDP, it is earmarked for significant growth to 25 per cent of GDP by 2015. The sector is fast becoming an important pillar of the economy, attracting fund and captive insurance companies to domicile on the island where passporting rights allow the industry to sell its services across the EU. This means that it is a lot cheaper to plan a pan-European expansion. This, coupled with the high skills levels available, has proved to be a magnet for insurance and fund management firms.

The ICT sector is also on a roll, with Malta based firms enjoying success on an international stage and Malta-developed software making substantial leaps forward. The new SmartCity project by Dubai’s Tecom Investments, developers and operators of Dubai Internet City, coming in at US$300 million, is the largest single FDI project ever undertaken in Malta. The project, which involves the development of SmartCity, an IT village expected to create over 5000 new jobs and planned to open in 2009, is cementing Malta’s credentials as a centre for ICT excellence. Since 2006 Malta also witnessed a significant expansion in the online betting industry, which caters entirely for foreign markets. Some 300 international remote gaming companies are now operating in Malta, up from just 20 in 2005 and indications are that this thriving sector will continue to grow.

Manufacturing, while still strong, has been losing ground for years and now accounts for just over 17 per cent of GDP, down from heady highs of 35 per cent to 40 per cent in the 1980s. The I am optimistic: we have a resilient economy that we have restructured completely over the last four years.

In addition we are now in the eurozone, which gives us the added benefit of currency stability. The two main issues facing us are the inflationary effect of these price rises and their potential impact on competitiveness.

But Malta is not facing these challenges alone, and its small size and flexibility allow us to respond rapidly to situations. I am therefore optimistic.

Lawrence Gonzi - Prime Minister Cospicua © Alan Carville

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ECONOMY

sector has been forced up the value chain shifting away from low cost, high-volume manufacturing such as textiles, clothing and footwear to more high-value capital and knowledge-intensive activities, such as semiconductors and pharmaceuticals.

Agricultural production and fisheries continue to decline in importance and now account for a little less than 3 per cent of Malta’s GDP and employ only 2 per cent of the workforce.

A good barometer of the country’s economic state of health is the construction industry. Informal estimates by leading architects value the ten or so large, high profile, development projects planned for the coming five years at more than €2.33 billion. While the surge in house prices over the last few years led to greater activity in the construction industry, its share in GDP has remained relatively stable at just over 5 per cent.

Economic Policy Malta’s path from fortress to an open transparent global economy witnessed a period of strong government intervention in the 1970s and 1980s with the imposition of protectionist policies ranging from import substitution, high import tariffs and quotas. By the 1990s the broad political consensus was to dismantle these barriers and pursue a policy of market liberalisation and EU membership further stepped up the tempo of liberalisation. EU membership and the adoption of the euro in January 2008 has seen the government undertake wide-ranging reforms from reducing budget deficits, controlling inflation, decreasing state aid to industry and an upgrading of environmental protection legislation.

Privatisation The privatisation of government enterprises has been a major revenue generating exercise. The two largest commercial banks, formerly state owned, were both privatised in the 1990s, as were the postal service and the airport in 2002. Next in line was the National Lottery in 2003 and then the Freeport, situated in the Port of Marsaxlokk, in 2004 which government granted on a 65-year concession to the French CMA-CGM Group to operate and develop. In 2006 the government’s remaining 60 per cent shareholding in the telecoms operator, Maltacom, recently renamed GO, was sold to Tecom Investments Ltd of Dubai. These sales, together with the closing down of chronic loss making companies, have brought in much needed capital and a reduction

The development of SmartCity, an IT village expected to create over 5000 new jobs and planned to open in 2009, is cementing Malta’s credentials as a centre for ICT excellence

in administrative costs. In mid-2008 government announced plans to privatise Malta Shipyards by the end of the year. An international call for expressions of interest was issued in August 2008, and government is hopeful that privatisation will not only relieve the state of the burden of subsidising a chronically lossmaking enterprise, but will also breathe new life into this longstanding maritime industry. Also on the cards for 2008 is the sale of three state-run yacht marinas, controlling two thirds of Malta’s current stock of berths. The announcement was made in late July 2008 and while no timeframe was outlined, the process is expected to be completed within a number of months.

MALTA’S ECONOMY RATINGS A+/STABLE BY STANDARD & POOR (2007)

Malta’s economy is on a much sounder footing and is characterised by added dynamism and resilience. Malta is demonstrating that it is able and willing to transform itself and branch into new areas, a direct derivative of the restructuring and transformation process that the economy has undergone in the past few years.

Tonio Fenech - Minister of Finance, Economy and Investment

AAA BY MOODY’S (SEPT 2007)

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fifth most open economy in the EU, and an average trade-toDeficit control GDP ratio of 81 per cent. Trade is of vital importance: many The recent period of growth was much needed: the Maltese goods the country requires are imported, as are most of the raw economy had been performing at under par for a number of years, materials required by the manufacturing sectors. This proportion weighed down with high public debt that was 75 per cent of GDP continues to increase with the advent of a large number of in 2004 and deficit budgets, caused by unsustainable expenditure services specifically designed for export. The EU continues to on social welfare, public-sector pay and the restructuring of statebe Malta’s main trading partner accounting for 61.2 per cent of owned companies. The overriding imperative faced by government Malta’s trading activity. 69 per cent of all imports to Malta come to cut these down to size led to progressively higher effective from European Union countries, mainly Italy, France, Germany taxation and the sale of assets. These measures brought results and and the UK while 51 per cent of Malta’s exports go mainly to the the government deficit was tamed to 1.8 per cent of GDP in 2007, same four countries. Asia lies in second place with 19 per cent though in the first five months of 2008 it widened again. of imports to Malta and 28 per cent of exports. America comes Public debt, at 62.5 per cent of GDP (2007), is also moving in in third with 6 per cent of imports and 14 per cent of exports. the right direction and a recently published EU report on the state The island imports mainly food, fuel, machinery and equipment of public finances in the Economic and Monetary Union (EMU) and manufactured goods as well as raw materials for industry, for 2008, drawn up by the Directorate-General for Economic while exports include machinery and transport equipment, and Financial Affairs of the European Commission comments manufactured goods and food. that Malta is on the right track to achieve a balanced budget by 2010 while the reduction of the general government gross debt is Future Economic Outlook planned to proceed at a satisfactory pace and is expected to fall Present-day Malta has a sophisticated economy with sound below the 60 per cent of GDP reference value by 2009. fundamentals. While the transformation of Malta’s economy While inflation was brought under control in 2006-2007 after created a series of tough challenges for the population, peaking in 2006 mostly as a result of the increased cost of oil, communications and IT have offered the small island inflation moderated to within the Maastricht criteria of under 3 economy the opportunity of finding new niches with which per cent by early 2007 with Eurostat figures released in January to compete on a global scale. Malta is reacting with vigour 2008 putting Malta in line with the rest of the euro area at 3.1 to the new opportunities being presented and over the next per cent. More recent statistics suggest euro area inflation had decade, the government intends to consolidate Malta as the risen to 4 per cent in June 2008, with Malta reaching 4.1 per cent centre for excellence in ICT and financial in May 2008, and observers are citing Malta’s services in the Mediterranean region and strong dependence on imported foodstuffs According to develop a service-oriented economy where as well as record oil prices as being the cause. efficiency, competitiveness and quality are the This is creating a challenging situation for Prime Minister hallmarks. the government, which is anxious to avoid Gonzi, however, effects that could erode Malta’s hard-won Confidence and Optimism competitiveness in the international market for Malta’s economy Government’s confidence in its economic foreign direct investment. According to Prime is resilient programme appears to be validated by the Minister Gonzi, however, Malta’s economy latest results and, while growing fears over is resilient enough to weather this storm and enough to inflation and soaring fuel costs are causing small and flexible enough to respond rapidly to weather this unease, an IMF report on Malta published evolving situations. in June 2008 stated that while growth may storm and small slow to 2.5 per cent in 2008, as a result of the Unemployment and flexible unfavourable global scenario, it will pick up Unemployment currently stands at around 5.8 again by 2009. This is good news for the general per cent of the labour supply, a result of the enough to population of Malta, who have embraced the continued expansion witnessed in the services respond rapidly myriad opportunities in business, education sector. This figure, down from around 7 per and industry opened up by the new growth cent in 2006, is expected to decline further to evolving sectors and EU membership. Malta’s people, as projects such as SmartCity Malta come on situations its business leaders and its investment stream. community are showing a firm commitment to cementing the economic path to stability Trade and prosperity that the island’s leaders have Malta’s exposure to international trade is one of sketched out for them. n the highest worldwide. In 2006 Malta had the

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GOVERNMENT AND POLITICS

SOPHISTICATED

POLITICAL LANDSCAPE

A stable democracy with high levels of voter participation, Malta holds general elections every five years

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Stairs outside Parliament © Alan Carville

I

n March 2008 the Nationalist Party won Malta’s General Elections for the third consecutive time. Prime Minister Lawrence Gonzi, in office since 2004, wooed voters with promises of stability and continued prosperity. It was a slim victory for the Nationalist Party, who polled just over 1500 more votes than the Labour Party.

Politically Aware With one of the highest voter turnout rates in the Western world, invariably over 90 per cent, Malta’s population is traditionally highly politically aware, participating enthusiastically in debates, elections and political events. Voter turnout for the March 2008 General Elections, at 93 per cent, was the lowest since 1971, and previous general elections have seen voter turnout rates as high as 96 per cent and over.

The Political Players Two parties dominate Malta’s polarised and evenly divided politics – the Nationalist Party, led by Prime Minister Lawrence Gonzi, adheres to traditional European Christian Democratic ideals, very much on the lines of the German CDU. The Malta Labour Party, led by newly elected leader Joseph Muscat, has roughly followed the trends of its British counterpart, shifting more towards the centre of the political spectrum and adopting a more managerial style outlook to running the country. Divisions between the two parties have been deep and most of the electorate has traditionally been closely affiliated to one party or the other. A significant development since independence has been the failure on the part of third parties to score electoral success. In the last election

(2008), the Democratic Alternative (a Green Party established in 1989) managed to secure only 1.31 per cent of the first preference votes nationwide.

The Political Landscape For 150 years the island was a British Crown Colony, an era that bequeathed an enduring legacy to the island as a whole, and the political system in particular. Under constant pressure from local politicians, the colonial authorities first granted Malta internal self-government in 1849. In 1921, the system of proportional representation was introduced during a general election that saw the first participation of political parties, as opposed to individual candidates. Malta achieved its independence from Britain in 1964 under a Nationalist government.

By 1971 the Labour Party under the leadership of Dom Mintoff had taken power and changed the course of Malta’s foreign and economic policy. Under Mintoff ’s administration Malta declared itself a Parliamentary Republic on December 13th, 1974.

The Labour administration governed uninterrupted between1971 and 1987 – a period where government played a central role in the economy and greatly expanded social services.

Following a policy of non-alignment and neutrality, the island established economic and cultural ties with the Arab world, the countries of the Eastern Bloc and China, while relations with Western Europe became cooler.

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GOVERNMENT AND POLITICS

history. Over the next nine and a half years the economy was liberalised, the country’s infrastructure was completely overhauled, the government’s role in the economy was reduced and relations with Europe and the West drastically improved. Malta officially applied for membership of the EU in 1990.

In 1996 the Malta Labour Party was back in power led by new party leader Alfred Sant who ‘froze’ Malta’s EU application. However, this government was short lived and only lasted 22 months in office, losing a key parliamentary vote.

The Nationalist Party was elected to office in September 1998 after a snap general election and it immediately ‘unfroze’ Malta’s EU bid. The main focus of the 1998-2003 Nationalist government was preparing Malta for EU membership and negotiating Malta’s EU accession package with Brussels.

environment, and succeeding in winning €855 million in EU funds for 2007-2013. At the same time, increased illegal immigration, spawning a number of right-wing movements, tax increases, inflation and a decline in the manufacturing and tourism industry over the last few years were cited as the negative effects of membership, and were the main issues upon which the Labour Party constructed its campaign at the 2008 general election.

Constitution, Institutions and Administration

International relations A member of the European Union, the Council of Europe, the United Nations and the Commonwealth, and a keen participant in the EuroMed process, Malta was the venue for the famous Bush-Gorbachev summit in December 1989 where the end of the Cold War was finally sealed.

The cornerstone of Malta’s foreign policy is its membership of the European Union, which it joined on May 1st, 2004. Malta is keen to see a further strengthening of the EU’s Common Foreign and Security Policy and supports the further enlargement of the EU, which it sees as a union of sovereign nation states and not a federal super state, and is keen to keep areas such as taxation, social security and defence under the domain of the member states. Malta joined the Partnership for Peace (PfP) in March 2008. On defence matters Malta usually allies itself with its fellow neutral EU member states such as Ireland, Sweden, Finland and Austria. The island has good relations with the Arab world, particularly the countries of North Africa.

European Choice Malta is a parliamentary republic with a parliamentA referendum on Malta’s EU elected President as Head of State, and a Prime membership was held in March Minister leading an elected government for five-year 2003. The ‘Yes’ camp, led by the terms. The country is divided into thirteen electoral districts that each elects five members to parliament governing Nationalist Party, won by a on a proportional representation system. comfortable 54 per cent of the popular vote. A general election followed The government of the country is the responsibility of a month later in April 2003 which the Prime Minister and the cabinet, which is chosen from the elected members of the successful party at the saw the re-election of the Nationalist general election. As in the UK, it is the prerogative of Party led by Eddie Fenech Adami. the Prime Minister to decide on the election day. Since In March 2004 Dr Fenech Adami independence in 1964, it has been the norm for the resigned as Prime Minister and was government to run its full term of office. In fact in only succeeded by Lawrence Gonzi. A one of the eight post independence legislatures (1996) has the incumbent party failed to complete its full term. month later Dr Fenech Adami was elected Malta’s President and in May The role of President as Head of State is largely 2004 Malta became a member of the ceremonial, although the President has the duty of European Union. safeguarding the constitution of the country as well as chairing the Commission for the Administration of The main focus of the Gonzi Justice. The present incumbent is Dr Edward Fenech administration in the four years Adami the former Nationalist Prime Minister. since was to make a success of Malta’s EU membership, to continue with Projecting Stability economic reforms and to adhere Successive governments have to the EU’s Maastricht criteria in recognised the importance of projecting an image of stability that order to qualify for membership of the eurozone by January 1st, is so important for the progress of a young country looking to 2008. This goal was achieved, and Malta now forms part of the establish itself in an increasingly globalised world. While political eurozone. debate is lively and often heated, both parties adhere to democratic Malta has adapted well to EU membership, investing rules to a degree that other new democracies can only envy. n EU funds in upgrading the country’s infrastructure and 36

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GOVERNMENT STRUCTURE

The President H.E. Dr. Edward Fenech Adami Office of the President, The Palace, Valletta Tel: (+356) 2122 1221 Fax: (+356) 2124 1241 Website: www.president.gov.mt The Prime Minister The Hon. Lawrence Gonzi Office of the Prime Minister, Auberge de Castille, Valletta Tel: (+356) 2200 1400 Fax: (+356) 2200 1467 E-mail: customercare.opm@gov.mt Website: www.opm.gov.mt Parliamentary Secretary for Tourism The Hon. Mario de Marco Auberge d’Italie, Merchants Street, Valletta Tel: (+356) 2291 5000 / 2122 4444/5 Fax: (+356) 2122 0401 Parliamentary Secretary for Public Dialogue and Information The Hon. Chris Said Auberge de Castille, Valletta Tel: (+356) 2200 1253 Fax: (+356) 2200 1247

Deputy Prime Minister, Minister of Foreign Affairs The Hon. Tonio Borg Ministry of Foreign Affairs, Palazzo Parisio, Merchants Street, Valletta Tel: (+356) 2204 2340, 2124 2191 Fax: (+356) 2123 5032 E-mail: info.mfa@gov.mt Website: www.foreign.gov.mt Minister of Finance, the Economy and Investment The Hon. Tonio Fenech Ministry of Finance, the Economy and Investment, Maison Demandols, South Street, Valletta Tel: (+356) 2124 9640-5 E-mail: info.mfin@gov.mt Website: mfin.gov.mt Parliamentary Secretary for Revenues and Land The Hon. Jason Azzopardi Ministry of Finance, the Economy and Investment, House of Four Winds, Hastings Gardens, Valletta Tel: (+356) 2298 5100 /104 Fax: (+356) 2298 5112 E-mail: info.mfin@gov.mt Website: mfin.gov.mt Ministry for Infrastructure, Transport and Communications The Hon. Austin Gatt Ministry for Infrastructure, Transport and Communications, 168, Triq id-Dejqa, Valletta Tel: (+356) 2122 6808, 2125 0685 Fax: (+356) 2125 0700 E-mail: mitc@gov.mt Website: www.mitc.gov.mt

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Minister of Resources and Rural Affairs The Hon. George Pullicino Ministry for Resources and Rural Affairs, Barriera Wharf, Valletta Tel: (+356) 2295 2000 - 2295 2222 Fax: (+356) 2295 2212 E-mail: info.mrra@gov.mt Website: www.mrra.gov.mt Minister of Education and Culture, Youth and Sport The Hon. Dolores Cristina Ministry of Education, Culture, Youth and Sport Casa Leone, St Venera Tel: (+356) 2148 5100 Fax: (+356) 2149 3747 E-mail: communications.moed@gov.mt Website: www.education.gov.mt Parliamentary Secretary for Youth and Sport The Hon. Clyde Puli Ministry of Education, Culture, Youth and Sport Casa Leone, St Venera Tel: (+356) 2148 5100 Fax: (+356) 2149 3747 E-mail: communications.moed@gov.mt Website: www.education.gov.mt Minister for Justice and Home Affairs The Hon. Carmelo Mifsud Bonnici Ministry for Justice and Home Affairs, Auberge d’ Aragon Independence Square, Valletta Tel: (+356) 2295 7000 Fax: (+356) 2295 7348 E-mail: courts.justice@gov.mt Website: www.mjha.gov.mt

Minister for Social Policy The Hon John Dalli Ministry for Social Policy, Palazzo Ferreria 310, Republic Street, Valletta Tel: (+356) 2590 3100 Fax: (+356) 2590 3216 E-mail: info.msp@gov.mt Website: www.msp.gov.mt Parliamentary Secretary for the Elderly and Community Care The Hon Mario Galea Ministry for Social Policy, Palazzo Castellania, 15, Merchants Street Tel: (+356) 2122 4071-7 / 2299 2458/2462 Fax: (+356) 2299 2459 Parliamentary Secretary for Health The Hon Joe Cassar Ministry for Social Policy, Palazzo Castellania, 15, Merchants Street, Valletta Tel: (+356) 2122 4071-7 Fax: (+356) 2125 2574 Minister for Gozo The Hon. Giovanna Debono Ministry for Gozo, St. Francis Square,Victoria - Gozo.

Tel: (+356) 2156 1482 Fax: (+356) 2155 9360 Freephone: 8007 5556 E-mail: info.mog@gov.mt Website: www.gozo.gov.mt

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FOREIGN DIRECT INVESTMENT

GROWING INTERNATIONAL RECOGNITION WINS

INVESTMENT FOR MALTA

Inward investment into Malta has reached between 7 and 9 per cent of GDP each year for the last four years, confirming the island’s attractiveness to international investors and supporting its claim to be one of the most advantageous investment locations in the Mediterranean

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anked in 6th place globally for inward investment performance in UNCTAD’s World Investment Report 2007, Malta attracted €696 million in investment in 2007. With the financial services, IT, high-end manufacturing and remote gaming sectors growing fast and the Malta Financial Services Authority (MFSA) reporting an average of 230 new company registrations a month, this is good news for Malta: the smallest member state in the European Union and eurozone, the island registered GDP growth rates of 3.8 per cent in 2007, with over 3 per cent growth reported for the first half of 2008.

This growth is largely driven by the flexibility, innovation, competitiveness and adaptability that have been key elements of Malta’s economic strategies since the island began to fend for itself after independence from Britain in 1964. These traits have helped the islanders adjust to changes in domestic realities as well as to the fluxes in international business requirements. This ability to accommodate necessity has kept investors interested in setting up businesses on the island, though the nature of those businesses has certainly changed over the last two decades.

Labour-Intensive to Knowledge-Based Malta in the 1960s attracted labour-intensive businesses in the textile and clothing industries; by the late 1980s it was recognised that Malta needed to develop away from the labour-intensive market targeted in the past, and to diversify its offering in order to keep up with global developments and remain competitive as an investment location. Today companies setting up in Malta are more likely to be software developers, financial services, iGaming, aviation, and pharmaceutical companies or manufacturers of high value electronic components and R&D, particularly in the medical, bio-tech and pharmaceutical industries.

Malta’s commitment to establishing the island as a centre of excellence in the ICT, financial services and high value added industry sectors is paying off rapidly. Two internationally renowned industry leaders have chosen this Mediterranean island as the location for key multi million dollar projects that constitute the largest individual investments ever made in Malta: Germany’s Lufthansa Technik and Dubai’s Tecom, developers and operators of Dubai Internet City, are firmly cementing Malta’s claim to priority billing on any investor’s agenda.

Valletta Waterfront

SmartCity is clearly the flagship of how Malta is being perceived as an investment location not merely in terms of ICT but even in the wider sense. Now, in addition to Malta Enterprise, Finance Malta, and our embassies promoting Malta as an investment location, we also have the international network of Tecom Investments (Dubai Holdings) selling Malta. Internationally the question is being asked, why did Tecom chose Malta? If they are seeing Malta as the right place for them, could it also be the right place for me? In these industries it’s all about names and movers creating a positive domino effect and this is what I believe the SmartCity investment will bring to Malta.

Tonio Fenech - Minister of Finance, Economy and Investment

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High Profile Investments Just over a decade after Malta’s government took the strategic decisions to transform the island’s economy by shifting the focus away from low-cost manufacturing and package tourism to knowledge-based industries and high-end manufacturing, the declared vision of seeing Malta take the lead as the regional centre for ICT excellence is becoming a reality. Tecom Investments are investing US$300 million on developing SmartCity, an IT village expected to create between 5000 and 8000 new jobs that is planned to begin operating in 2009, with completion scheduled for 2021. The significance of this development, in light of Tecom’s phenomenal success with their world-renowned Dubai Internet City, is underlined by Malta’s Prime Minister, Dr Lawrence Gonzi, who described the project as being: ‘destined to become the European outpost for global ICT and media firms who want to establish a presence in Europe as well as Africa’.

Concurrently, Lufthansa Technik is investing €60 million in new aircraft maintenance facilities to handle the Airbus A330 and A340 aircraft. Its Malta subsidiary, which currently employs 150 workers, already carries out C-checks on smaller A320 and Boeing 737 planes. A new hangar, expected to be among the first in the world able to take the new Airbus A380, is being built for the company, and the expanded operation, expected to be inaugurated in the last quarter of 2008, will eventually create over 500 new jobs for specialised personnel.

HR to Drive Industry Malta’s flexible and highly trained, multilingual workforce is the island’s most valuable asset. Wages in Malta remain below Western European average, and the island is ranked as one of Europe’s most profitable investment locations, according to Eurostat. The Maltese workforce has over the years proved itself to be hard working, diligent and highly productive. Foreign companies based in Malta all comment favourably about their experiences with the local employees in terms of productivity, profitability, dependability and rapid response times.

The high educational standard of Maltese workers is fruit of the diversification strategy of the Maltese government, who recognised that higher value added products required better and more flexible skills. The authorities have done their utmost to encourage students to take up technology related subjects, particularly at tertiary level. This strategy resulted in the creation of a dedicated college (MCAST) offering vocational courses tailored to meet the requirements of industry, as well as a greatly

expanded University, which grew from under a thousand students in the mid-1980s to over 11,000 today, and many other specialist institutes offering post-secondary education. Industry has become deeply involved in the process of selecting courses of study to offer new students, thus aiming to ensure that graduates with the right qualifications are available when needed.

Right Time, Right Place Malta’s key location mid-way between Europe and North Africa gives the island added advantage as an investment location. Malta’s proximity and cultural links to North African markets such as Libya, Egypt, Tunisia and the Middle East are attracting companies that are using Malta as a stepping stone for trading, distribution and marketing for their international operations in Southern Europe and North Africa.

With its Western European The survey on Malta’s attractiveness for investors, business environment, carried out by Ernst and sophisticated infrastructure, Young and published in excellent telecommunications, July 2008, shows that 78 comprehensive incentive per cent of top executives package, competitive labour taking part said that they have developed or costs, highly skilled and expanded their activities educated workforce and truly in Malta, while 71 per cent enviable quality of life, Malta said they would consider is targeting investment from expansion in the future. high value added industries and service providers.

And it is succeeding. Concerns that accession to the EU could prove a hindrance to investment from abroad have proved to be unfounded. Figures for 2006 register record levels of investment, with the latest verified data available indicating that Malta attracted €1.4 billion in 2006, a figure that included one-off events such as the privatisation of national telecoms provider Maltacom (€220 million), and €696 million in FDI in 2007. Subtracting the one-off events, these figures put FDI flows into Malta at between 7 and 9 per cent of GDP, and, according to Prime Minister Gonzi, indications so far are that 2008 will maintain this level.

Diverse Industrial Landscape Malta offers a highly competitive investment location for niche industries, particularly in the following sectors; financial services, medical, bio-tech, pharmaceutical, automotive, film, maritime activities, contact centres, aviation services, e-business and iGaming, back office services, electronics and

Malta’s unique value proposition lies in its own fabric. While a range of attractive fiscal and non-fiscal incentives have been designed to facilitate the establishment of foreign investments locally, these are peripheral to the natural attraction which Malta offers as an investment destination. The crucial consideration for investment lies in what I call: Destination Malta! Business is all about relationship building and maintenance, and relationships run into our bloodstream. The ease of doing business in Malta is largely related to our positive lifestyle, our openness to new ideas and business opportunities, as well as our warmth and positive disposition. On top of this, we enjoy political and economic stability and due to our strategic location we have strong relationships with the rest of Europe, North Africa and the Middle East.

Malta Enterprise will cut the red tape and roll-out the red carpet to make investments happen.

Alan Camilleri, Chairman - Malta Enterprise

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TARGET SECTORS

insurance and captive insurance. Financial software. Companies who specialise in short institutions present in Malta include HSBC, runs of complex high value items find Malta a Volksbank, BAWAG and FIMbank amongst particularly advantageous location. others, and most cite the excellence of Malta’s STMicroelectronics, one of the world’s Information and legislative infrastructure, the accessibility and most profitable chip manufacturers, is now Communications Technology responsiveness of the regulator and the high Malta’s largest private employer with over 2300 quality of qualified staff available as the main employees at its Kirkop plant. Smaller outfits Electronics reasons for investing in the island. find Malta equally favourable as an operating Knowledge Centre / Back base and De La Rue, Trelleborg Sealing Office Services Stability and Profitability Solutions, Baxter, Methode Electronics, Charged with the task of attracting foreign Bavarian Technology Systems, Seifert mtm Pharmaceuticals investment to the island, Malta Enterprise is systems, Metalform, Lufthansa Technik Health Care a government agency that offers assistance to and Brandstatter all have major production foreign investors thinking of setting up in Malta. plants in Malta. Recent investors include Logistics The island offers investors a comprehensive ABB Malta, ASPIDER Solutions, Olivibra package of incentives under the Malta Enterprise and The International Banking Corporation Oil and Gas Act. Incentives include soft loans, investment (TIBC) amongst others. The range of activities Maritime allowances, training grants, tax incentives and reflects the strategic focus on high value the provision of ready built specialised factory added activities: Products made in Malta and Aviation space. New provisions provide incentives exported worldwide include semiconductors, for those industries demonstrating growth electrical components and sub-assemblies, Training and Education and employment potential that are engaged pharmaceuticals and medicinals, rubber Film in manufacture, repair, improvement or and plastics, fabricated metal products and maintenance activities, and there are specific machinery, software, garments, food products incentives aimed at encouraging activities in the growthand consumer goods. targeted sectors such as pharmaceuticals, plastics, biotechnology, Malta offers one of the most progressive environments in electronics, electrical equipment and IT enabled services. the world for IT, iGaming and e-Business activities. Investment in these area is increasing at a rapid pace, attracting significant Complete Package foreign investment from around the world. Malta’s IT industry Important as they may be however, it takes more than financial is dominated by software activities and Microsoft, Cisco, and incentives to attract foreign investment and over the years Oracle have all established a significant presence on the island successive Maltese governments have done their best to ensure with the aim of using Malta as a research and development that the whole environment is conducive to FDI. The island’s testing ground for e-government solutions. Concurrently, the infrastructure is of a world standard and can cater to all US$300 million investment by Tecom to set up SmartCity is investors’ requirements. At the same time, living in Malta offers expected to establish Malta firmly as the European outpost for an excellent lifestyle in a glorious Mediterranean climate, the global ICT or media companies that want to establish a presence island is politically stable and within a few hours flying time of in Europe and North Africa. most major European cities. These combined advantages make Financial Services is growing to be one of the most significant Malta one of the most attractive investment locations in the economic drivers on the island, offering investors a stringent yet region, and international attention is fast being drawn to the flexible operating environment within the eurozone in banking, island and its potential. n financial planning, fund administration and management,

Malta’s unique selling point is its people. Investors from all over the world who have set up in Malta all agree that our human resources are unparalleled when it comes to high adaptability, linguistic abilities, technical skills, productivity and most of all reliability. High-end sectors with increasing value-added are set to grow further in the next few years, from service industries such as the financial and investment markets to technologically advances sectors like pharmaceuticals and the ICT sector in general.

Kevin Borg, Director General The Malta Chamber of Commerce

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Malta’s economic situation is mainly depending on foreign trade and direct investment particularly in ICT, manufacturing, tourism, e-commerce and financial services. By establishing itself in Malta, Regus, the world’s largest provider of outsourced workplaces solutions, enables both national and international companies to seize new opportunities in this growing market.

Olivier de Lavalette, General Manager - Regus

FOREIGN DIRECT INVESTMENT / CORPORATE LOCATION

CORPORATE EUROZONE LOCATION FOR

INTERNATIONAL BUSINESS

Competitive operating costs, easy access to market and availability of qualified personnel make Malta an attractive choice for companies

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ith business costs in Malta still around half to two thirds of those in the UK, an advantageous tax regime and a well-stocked pool of highly skilled employees, the island is setting its sights on attracting major corporations and multinationals to establish corporate headquarters on the island.

Boasting a set of key credentials such as reduced operating costs, effective tax rates of under 5 per cent for qualifying companies and a flexible, qualified and productive workforce, Malta feels confident of its competitiveness in this area and has already attracted companies such as CCBill, who have located their European operations, CCBill EU, in Malta. Situated on the southern-most confines of the European Union and the eurozone, Malta offers a stable, competitive EU and eurozone location from which to conduct business in Europe, North Africa and the Middle East.

Competitive Operating Costs Although Malta is an EU location with a sophisticated professional and business infrastructure, the island remains highly cost effective as a base to do business from, with operational costs in Malta generally a half to two-thirds of those prevailing in the UK. This applies to salaries as well as general business costs such as office space, service and utilities. Salary costs in Malta are 40 – 50 per cent of those in Ireland, the UK, France, Belgium, the Netherlands and Luxembourg.

Concentration of Qualified Employees Diligent, enthusiastic and quick to learn, the Maltese workforce is the island’s greatest strength and most valuable asset. Highly educated, most Maltese speak at least three languages, Maltese, English and Italian or French. The exceptional quality, flexibility and work ethic of the Maltese have attracted numerous international companies to Malta not only to provide support for overseas bases, but also as fully-fledged companies with their own operations. Malta boasts the oldest university in the Commonwealth outside the UK and has a tradition of academic excellence and research. Some 60 per

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cent of students (18-24 year olds) continue in education to tertiary level in some 85 or more institutes.

Access to New Markets Located directly in the centre of the Mediterranean, midway between North Africa and Southern Europe, Malta is one of the most easily-reached areas of the southern Euro-Med region.

Well connected by air and sea, Malta’s easy accessibility makes it ideal as a centre for doing business in the wider EMEA region, especially in the provision of trade and services to neighbouring, growing markets.

At just two to three hours’ flying time from most major European cities, Malta has direct, scheduled flights throughout Europe and the island is well connected for onward, long-haul destinations. Thanks to growth in its tourism source markets, Malta now also has a growing number of air links to Europe’s second cities and the newer EU accession states.

Advantageous Corporate Tax system Malta’s tax system, plus its extensive network of double taxation treaties, offers significant fiscal efficiency to investors and companies using the island as a base and has been recognised as one of the main drivers in creating an attractive environment for foreign investors. Malta has been classified as the fifth most taxfriendly country for companies according to the 2008 Forbes Tax Misery and Reform Index and the most attractive country in the European Union in terms of taxes and social security contributions paid out by companies.

The key reason behind this accolade is the island’s full imputation system of taxation, fully compliant with EU law and a system in which any income tax paid by a company is refunded to the shareholder upon a distribution of profits, to avoid any double taxation of corporate profits. As a general rule, 6/7ths of tax paid at the company level is refunded to shareholders upon a distribution of dividends, a system which has been described as very advantageous, fair, and providing certainty to international business. n

SECTOR PROFILE / MANUFACTURING

KNOWLEDGE-DRIVEN

MANUFACTURING

Moving from massproduction to high-end manufacturing has proven a successful move for Malta, now a centre for generic pharmaceutical manufacturers and precision engineering operations

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ver 200 international manufacturing and distribution companies have operations in Malta, a fifth of which have invested in major expansion over the last five years. Most of these operations involve cutting edge technology companies and skill-based manufacturing operations that now form the core of Malta’s manufacturing landscape. Precision engineering, pharmaceuticals, medical devices and electronics have now replaced Malta’s traditional low-cost, high-volume manufacturing operations like textiles and while low cost may have been the island’s calling card in the past, today it is cost effectiveness, efficiency, productivity and quick access to markets that underpin Malta’s success as a manufacturing location.

Recharging an Industry An island nation with no natural resources bar its people, Malta and its successive governments recognised that the island’s economic viability lay in the capabilities of its people, and that by honing their skills to focus on high value added end products, Malta’s manufacturing industry could target investment from niche market leaders and hi-tech specialist producers. To achieve this goal government introduced multiple educational and retraining initiatives designed to elevate the skills level of the Maltese workers in preparation for the inevitable restructuring of the island’s manufacturing base away from labour-intensive textile and clothing industries towards manufacturing of higher-value-added products.

Productive and Efficient HR This far-sighted policy is now bearing fruit: top quality manpower is today the hard currency of Malta’s modern, streamlined, manufacturing industry.

Investors cite productivity, dependability and the ability to innovate and assimilate new skills as the island’s most valuable assets, while the island’s vicinity to Europe’s main markets adds the value of rapid response times. Malta also provides a steady flow of multilingual, highly qualified, skills-rich graduates from the island’s university and vocational colleges, with the added benefit of lower costs, with wages and salaries in Malta still at around half to one third of those in most Western European cities.

Favourable Business Environment Malta offers a low-risk, pro-business environment that allows investors to establish operations quickly and efficiently. To support the high performance industries locating in Malta, government has introduced business-friendly policies and invested heavily in infrastructure. Apart from a full package of incentives, ranging from fiscal benefits to the provision of custom-built specialised factory space, Malta has also built up an advanced infrastructure that encompasses everything from state-of-the-art IT and telecoms facilities and logistics management to well-developed, sophisticated banking, financial services and professional business services sectors.

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Malta offers an all round favourable environment to investors, and is now considered one of Europe’s most profitable investment locations: the island was ranked in 6th place globally for inward investment performance in UNCTAD’s World Investment Report 2007.

Attractive Base Malta is attracting FDI from sectors where new technologies are driving production innovation and leading to new manufacturing processes. Today Malta offers an attractive environment to companies that focus on the manufacture of medium and hightechnology products requiring special skills, the manufacture of semi-customised small batch products requiring just-intime delivery, those requiring a significant degree of quality control, value-added, fast-response operations and Research and Development operations. Companies involved in electronics, automotive components, engineering, chemicals and pharmaceuticals find Malta particularly attractive; as designated priority sectors, incentives and facilities for these activities are highly developed and extremely advantageous.

Key Players Characterised by the presence of producers from some of the most sophisticated industries in the world, Malta’s manufacturing sector includes operators such as STMicroelectronics, De La Rue, Trelleborg Sealing Solutions, Activis, Baxter, Cardinal Health, Methode Electronics, Lufthansa Technik and Brandstatter, all of which have substantial manufacturing plants in Malta.

The high rate of multi-million dollar reinvestment by many of these companies, with 14 of the 39 foreign investment projects approved in 2006 being expansions by existing investors, offers a sharp perspective on the value proposition Malta presents to investors. Brandstatter and Lufthansa Technik are among those investing in major expansions, while De La Rue has also decided to step up its operations on the island and is currently in the process of building a new production line for the manufacture of biometric passports.

Robust Sector Contributing some 17 per cent of GDP and employing over 30,000 people, the sector is a key component of the Maltese economy, accounting for more than 85 per cent of Malta’s business output according to Malta Enterprise. As the demand for locations offering high productivity and an efficient and well-educated workforce grows rapidly, Malta is well positioned to offer international companies producing high end, precision products a unique proposition.

With the focus on manufacturing today firmly directed to quality, productivity and location, Malta is proving that it can deliver. And, as FDI flows increase and investments expand, it’s clear that the international investment community is responding rapidly. n

The key strength that Malta offers the investor is the possibility to set up a manufacturing operation here that has the potential to attain the same high levels of quality and efficiency to which he is accustomed, at a lower cost. Malta’s geographical proximity to Europe resulting in shorter lead times for delivery is also a factor when compared to Asian manufacturing locations.

Simon Alden, GM - Bavarian Technology Systems At Europe’s doorstep, Malta is renowned for its traditional commercial ties with all neighbouring Mediterranean countries. The Island is an EU member with an attractive technological, industrial, economic, financial and legal infrastructure in place, to cater for all international investor’s requirements.

Malta has an educated, flexible workforce; and hub transportation facilities to make it a striking base to any international corporation.

Tony Critien, MD - Sigma Coating Good infrastructure, political stability and good industrial relations all contribute to Malta’s strength as a manufacturing location. However, in my opinion our best asset is our work force. I find our employees to be extremely reliable, flexible and disciplined. They easily adapt to manufacturing different products in a very short time yet still remain very quality conscientious.

Ian Restall, Metallform [M] ltd The very recent changes in legislation consolidate Malta’s vision of being the regional trading post.

Investment in our IT infrastructure is essential not only to create jobs within the IT industry itself but to act as an important support arm for other industries that may wish to develop their presence in Malta. Then of course we have the weather.

Karl Diacono, Managing Director Impetus Europe Consulting Group Ltd A secure Island location, strategically positioned and offering a well educated, loyal, flexible and committed workforce the majority of whom have an excellent command of the English language. These were some of the major attractions which first brought De La Rue to Malta in 1975. I am pleased to confirm that none of this has changed and we continue to see the benefits, which come from a group of well trained, loyal, and highly motivated employees.

Ron Feenan, General Manager - De La Rue When we compare with similar plants abroad, we see that our employee turnover is low and wage costs, due to the high productivity are competitive and yield good profits. The Maltese adapt well and are keen to see their company thrive. Malta also has, in the last years, built up a good infrastructure of technical support companies. If you need qualified and highly trained labour at a reasonable cost to carry out product-development sales and marketing as well as production, then Malta is the place to invest in.

Helga Ellul, CEO - Playmobil (Malta)

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SECTOR PROFILE / PHARMACEUTICALS

MALTA’S HEALTHY

PHARMA INDUSTRY

A unique legal framework, solid incentives and excellent human resources are contributing to Malta’s burgeoning reputation as the ideal location for pharmaceutical manufacturing

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ne of the most recent new manufacturing sectors in Malta, pharmaceuticals is also one of the island’s greatest success stories. Today’s thriving generics pharmaceutical industry is just over five years old, yet already employs well over 700 people and exports products worth over €200 million. Attracted primarily by the island’s legal framework that allows the development of generic drugs in advance of patent expiry, companies migrating to Malta also benefit from a well-stocked pool of qualified personnel, a modern infrastructure, EU membership and direct access to markets in mainland Europe and North Africa.

Background in Medicine Malta claims a long tradition serving Europe’s health and pharmaceutical sectors: from the hospital built in 1574 by the Knights of St John, to the School of Anatomy and Surgery set up in 1676 and the Maltese medical school, one of the oldest in the Commonwealth, the island’s history shows centuries of dedication to healthcare. Today’s pharmaceutical industry, mainly composed of generics manufacturers, producers of active pharmaceutical ingredients and producers of healthcare products and services, continues this tradition of service: generics drugs, cued by observers to be the saving of Europe’s costly national health services, provide a cheaper alternative to branded pharmaceuticals, at exactly the same level of quality.

Attractive Package With the pharmaceutical sector being classified as a priority sector for the country, Malta’s investment promotion mechanism, the Malta Enterprise Act, offers an attractive package of incentives to investors, including fiscal benefits, the provision of custom-built industrial premises at low rates of rent, preferential loan financing, loan guarantees and assistance of up to 80 per cent of the costs involved in training of employees. In addition to this, investors also benefit from Malta’s excellent overall infrastructure, with international connections to all major air and sea ports in the region giving access to markets in both Europe and North Africa, as well as the fully developed banking, financial services and professional services sectors.

Attracting Big Names These advantages combined have served to attract some of the world’s most important generics manufacturers to the island.

Today’s sizeable and growing cluster of generics manufacturers in Malta is led by Actavis, a large Icelandic producer with a global workforce of more than 11,000. Others include the Arrow Pharmaceutical Group, Siegfried Holdings from Switzerland, the Spanish Combino Pharm and the Indian generics manufacturer Aurobindo. Amino Chemicals, a subsidiary of DiPharma SpA, produces active pharmaceutical ingredients in bulk for all main markets, while Cardinal health provides the industry with a broad set of healthcare products and services.

Malta’s Unique Selling Points Of course, 500-year-old hospitals make romantic anecdotes, but international companies investing in Malta are making their decisions based on the solid competitive advantages the island’s unique blend of legislation affords them. Since Malta falls outside the patent jurisdiction of a number of pharmaceutical products, Maltese patent law can allow firms to experiment on patented drugs before the patent expires, a provision known as the Bolar exemption. This is of vital importance to generics manufacturers.

It allows them to complete all preparatory work on a new product – including production development and licensing – while the branded original is still under patent. They will then be ready to market it immediately when the patent expires, gaining up to a year on manufacturers in countries without the Bolar exemption.

Qualified Manpower Malta’s strong tradition in healthcare means a steady stream of university-educated chemistry graduates are available to the pharmaceutical industry, as well as a selection of highly-trained personnel, experienced in using sophisticated, high-precision machinery. The fact that all staff are multi-lingual, usually speaking fluent English as well as one other European language, means that local personnel are able to handle scientific document writing and laboratory reports to the standards required by the industry.

Perfect Formula As the sector continues to grow, it is clear that there is a selfsustaining cluster on the make. This in itself is enough to attract more operations and Malta, just over half a decade after the first big company set up operations on the island, is now automatically put on a shortlist by companies in the sector. The legal framework, incentives offered and quality of manpower available are proving to be Malta’s winning formula, and the sector is tagged for longterm expansion and growth. n

The Malta manufacturing site has established itself as one of the key manufacturing locations for solid oral dosage tablets for the Actavis Group. The favourable patents environment together with an interesting incentives package served as a strong motivator in expanding our activities on the island. The fact that the same regulatory framework as that of the European Union now regulates the manufacture of pharmaceutical products in Malta is a great plus.

Additionally, a technically strong English speaking work force, consistently high quality levels and a flexible can-do approach all constitute powerful elements that help to make the Malta offering a very attractive one.

Sergio Vella, General Manager - Actavis Malta

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SECTOR PROFILE / AVIATION

AVIATION

Providing aviation-related services to the global industry, Malta is keen to expand this sector and has successfully won repeated investments from world leader Lufthansa Technik

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alta has been fostering an aerospace sector for many years. Small yet diverse, the sector offers a host of airline services ranging from maintenance, repair and overhaul (MRO) of aircraft, engines and components to airline call centres, financial services, software development, aircraft management and support services.

The arrival of Lufthansa Technik in 2003, a global leader in the maintenance, repair and overhaul (MRO) industry, heralded renewed confidence in the sector. Commencing operations with 160 staff, the company has already started expanding its operations, embarking on a €55 million expansion to set up new aircraft maintenance facilities to handle the Airbus A330 and A340 aircraft. The new hangar, expected to be among the first in the world able to take the new Airbus A380, will create over 500 new jobs for specialised personnel already being trained in preparation.

While Lufthansa Technik may be the poster boy for Malta’s aviation services sector, it takes more than one company to make an industry. Companies like Medavia and AeroMaritime have

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long-established operations on the island offering a range of services from aircraft maintenance to business charter brokerage.

On the IT side, companies like Megabyte have been designing and implementing custom IT projects for Air Malta and Cyprus Airways amongst other airlines, while specialist airline reservation call centres such as Centrecom have recently established on the island. Leveraging off the island’s international business and financial services infrastructure, other areas, including aircraft management and professional support services, are gaining momentum.

Government has been especially keen to expand the sector as the industry pays above average salaries and relies heavily on technical skills that make the jobs more sustainable. To promote the sector the government is offering an attractive package of both fiscal and non-fiscal incentives while also investing in sectorspecific education and workforce training. Malta College of Arts, Science and Technology (MCAST) offers three courses in aircraft maintenance, and is working closely with the industry to ensure sufficient suitably qualified graduates are produced to fill the 500

infrastructure, a tradition of engineering excellence, an established industry base, English-speaking workforce, an attractive corporate tax regime and a track record of success.

For Malta’s authorities, Lufthansa’s reinvestment is the best endorsement the country could have hoped for. It has provided a powerful impetus that strengthens Malta’s international reputation and has broadened the island’s ambition of positioning Malta as a centre of excellence for all aspects of aviation services. With ample space and excess runway capacity available at Malta International Airport, the airport authorities are encouraging the establishment of flight training academies, the location of simulator training systems, regional business jet operations, cabin crew training and the further expansion of MRO activities. On a wider level, airline call centres, IT support services, aircraft management, flight operations support, aviation financing and leasing sectors are all also being targeted as areas of great potential for the development of this sector.

jobs Lufthansa Technik has stated it will be offering in the next couple of years. Indeed, the growing importance of the MRO industry is credited directly to the excellence of its personnel and investors consider the quality and can-do flexible attitude of the Maltese workers to be the island’s greatest advantage.

Malta’s MRO and supporting service industry offers significant advantages to aviation companies: an enviable physical

The prime reason for Lufthansa Technik to form this joint venture in Malta was the high quality of the Maltese workers together with their commitment and flexibility as well as the competitive costs. For Lufthansa Technik, who already had European joint ventures in Budapest, Brussels and Shannon, the decision to open this joint venture in the Mediterranean basin was a commitment to the continent’s Southern part. The company is optimally located in the heart of Europe, between the African continent and Arab peninsula.

Louis Giordimaina, CEO - Lufthansa Technik

Sunny Outlook With both smaller organisations like Medavia and large organisations like Lufthansa Technik finding that Malta offers the right elements to ensure the success and future growth of their ventures, it is only a matter of time before other industry leaders and specialists follow suit. With the path already laid for them in terms of infrastructure, legislation, personnel and market access, any new MRO or service companies that choose Malta in the future will be positioning themselves to reap multiple benefits. All the right elements are in place; this is one niche sector that looks likely to expand significantly. n

Lufthansa Technik (Malta) is now gearing up critical mass to become a major player in the regions aircraft maintenance, repair and overhaul facilities. Air Malta can be credited for incubating this economic activity in Malta. We have also set up CentreCom, an international call centre specialising in travel and tourism services, as well as airline back-office functions.

Lawrence Zammit, Chairman - Airmalta

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INFORMATION COMMUNICATION TECHNOLOGY

DRIVING MALTA’S KNOWLEDGE ECONOMY

Aiming for the accolade ‘Regional Centre of IT Excellence’, Malta has invested heavily in ICT, from education to infrastructure, accelerating the island’s progress in one of the world’s fastest growing sectors

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he Global Information Technology Report 2006-2007 of the World Economic Forum ranked the Maltese government as the second most successful government in the world in promoting ICT. Indeed, ten years ago, when Malta’s government announced that they intended to turn Malta into the regional centre for IT excellence few would have guessed how swiftly they would achieve this ambitious goal. Today, however, with the US$300 million SmartCity project online for inauguration in 2009 and a host of new ICT sub-sectors already contributing significantly to the country’s economic transformation, it’s clear that the determination behind the ambition is now paying off.

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Branching Out The sector has expanded considerably beyond its initial humble beginnings and now boasts a vibrant and dynamic software development industry, while highly profitable sub-sectors such as iGaming and eCommerce have been enjoying considerable success over the past three years. The island’s strategic location has also proved alluring to international companies who have been locating IT training and sales and marketing functions to the island to service the European, the Middle Eastern and African markets. In more recent years Malta has emerged as a reliable IT near-sourcing location and alternative to outsourcing locations like India for more specialised high value development projects.

software development, application implementations and hosting, skills training and help-desk support and is already winning outsourcing investment over traditional destinations such as India. Malta has now set its sights on attracting business such as disaster recovery, data processing, data storage, payment gateways, database management, supply chain management centres and a variety of related services, all of which will enhance the overall success of the industry and continue to improve its potential for the future. In addition, Malta’s small population makes the island an ideal test-bed for innovative technology solutions.

The island’s pro-business environment and favourable IT infrastructure are proving an attractive proposition for IT companies across all fields. Adding to the island’s attractiveness is its close proximity to most European business centres, its highly qualified English-speaking workforce and a cost base that is around 30 per cent cheaper than other European locations.

And while costs may not be as cheap as Asia, many European companies who are outsourcing work to Malta comment that the island offers better all-round value for money.

SmartCity@Malta The SmartCity project, the first phase of which will be completed by December 2009, involves an investment of some US$300 million by Dubai Internet City’s Tecom. The project will see the construction of a state-of-the-art high tech business park comprising office space, residential areas, hotels, restaurants, a marina and shops, and is expected to open its first phase in 2009, with full completion scheduled for 2021. Set to become a key attraction for international ICT investors, SmartCity is being seen as Malta’s graduation certificate as the regional centre for ICT excellence. iGaming Apart from SmartCity, the most flamboyant success story of the sector is iGaming. Launched fairly quietly along with groundbreaking and highly sophisticated dedicated legislation, within a short period of time it was attracting some of the biggest headliners to move to Malta, including Betfair, Expekt, Unibet, Interwetten and CBM Bookmakers. Today Malta hosts around 300 licensed or provisionally licensed remote gaming companies which together

Consolidating and Expanding Core Business The core of the industry is to be found in the growing number of software development companies that have migrated to Malta over the last ten years. Industry giants such as Oracle, Microsoft, HP and SAP have all established operations on the island, while more specialized software developers such as Crimsonwing, Uniblue, GFI, Anvil, 2i, RS2 and Ixaris (Entropay) have equally found the island to be a profitable and productive location. US payment and billing solution provider CCBill EU has established its European headquarters in Malta.

Malta makes the right candidate for the outsourcing of specialist ICT services, such as systems design and integration,

Malta’s target is to have the ICT sector as one of the main economic pillars by 2015. To-date we have over 1000 companies providing ICT products/ services, but our target is not only the ICT sector but also companies operating in other sectors where ICT is an integral component to their operations. For example companies operating in the financial services are heavily reliant on ICTs and are often attracted to places where there are sound legislative and regulatory frameworks and an excellent ICT infrastructure which can support their highly secure transactions and applications.

Austin Gatt - Minister for Infrastructure, Transport and Communications

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Malta’s main asset is its intelligent, professional, resourceful, educated bi-lingual workforce. This together with a sophisticated latest state-ofthe-art infrastructure and a modern regulatory framework creates the right conditions for competition and investment. The electronic communications sector today accounts for approximately 3 per cent of Malta’s GDP and constitutes much of the underpinning of the country’s social and economic development.

Philip Micallef - Malta Communications Authority The software industry continues to grow at an accelerated rate and Malta offers some specific and unique advantages to those companies seeking to set up or partner in a friendly, safe, business and cost-effective environment. The time zone and proximity make it an attractive location and Malta also offers good cultural alignment, state of the art infrastructure and an educated workforce amongst other things. The combination of dynamic economic, social, cultural, political and human resource factors make it a viable IT investment location for service providers and companies considering outsourcing.

James Bonello, Managing Director - Crimsonwing The main reason why the island is an ideal corporate location is, of course, its people. The Maltese are highly educated, hardworking, efficient, resourceful and almost every other adjective you can think of when describing good employees. The University system on the island is excellent and the graduates produced have excellent exposure to theory and practice in their chosen fields.

The government has also made a considerable investment in other educational areas and smart, talented and most of all, educated graduates are now being produced by these institutions.

Adrian Camilleri, EU Head of Operations - CCBill EU Ltd. Malta’s geographic location as a gateway between Europe and the Middle East and Africa, and the talent and energy of Malta’s people, make it a great location for investment. As a member of the European Union, Malta is part of one of the world’s most important economic zones, and the EU has set itself very bold and ambitious goals under the framework of the Lisbon Agenda. Malta demonstrates some good cases of best practice in areas such as education, eGovernment and telecommunications – areas in which Microsoft has demonstrated a commitment to enabling people and their nations to realise their potential.

Jean-Philippe Courtois, President Microsoft International

have a total turnover of around €2 billion per year, with the larger companies turning over in excess of €100 million each annually.

Respected across the world for its excellent regulatory framework and reliable technical infrastructure, Malta’s iGaming sector is already providing government with unprecedented revenues in taxes and licence fees, an income that is likely to go up as the registration of new companies every day adds further to the strength of this sector.

Centre of Excellence in ICT Training At the same time, the commitment to IT education and the presence of these major companies is encouraging the rapid growth of Malta’s ICT Training Centre: large companies from across the world are choosing to send their staff to one of the many IT Academies and Colleges in Malta for their training.

The island offers cost-effective solutions in a serene and pleasant environment, elements that are winning contracts for the island and cementing its reputation for excellence in IT. Educating for Success The reasons Malta has become so attractive and in such a short time are various: unwavering focus in government policies has meant that while ICT companies were being encouraged to relocate to Malta through fiscal and other valuable incentives, educational authorities were stepping up IT training and producing hundreds of IT graduates every year. Apart from the Computer Science Department at the University of Malta, the Malta College of Arts, Science and Technology (MCAST) added a series of new IT courses to their curricula, and private colleges and institutions began affiliating themselves with British and European universities and academies, offering internationally recognised degree courses in a wide range of IT subjects. These initiatives began seeing results almost immediately: intake to ICT courses doubled between 2005 and 2006, and three of the largest IT companies in the world, Microsoft, Oracle and Cisco, have all set up specialised IT academies on the island.

What this means is that Malta is able to provide qualified personnel for all levels of staffing: from designers and engineers who work on the development of solutions, software, telecoms links and computer hardware, to people trained to use specific products as well as an overall IT literate population. As the sector grows, demand for qualified personnel is expanding fast, and one of the biggest challenges the Maltese government is facing is that of ensuring a sufficient stream of graduates to fill the positions opening up. Educational initiatives to stream students into ICT courses are ongoing and include annual ICT fairs and careers events.

Sophisticated ICT Infrastructure At the same time, Malta’s ICT infrastructure was up-graded, and then up-graded again, until today the island has one of the most sophisticated and reliable frameworks upon which to base its ICT industry. In addition, international connectivity has been expanded significantly, with two operators, Go and Vodafone, already providing international gateway services via submarine

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The success that Malta currently enjoys in the ICT industry is underpinned mainly by the training and certification of our IT professionals to international standards. This has allowed for cutting edge IT solutions and infrastructures to be designed, implemented and supported for industry, as showcased by the finance, e-gaming and telecoms industries. Selecting Malta as an IT investment location will ensure world-class IT solutions to the investor.

Raphael Micallef Trigona, MD - Systec Limited The key strengths of Malta as an ICT investment location is the commitment of the government to grow the industry in Malta and the state of the art infrastructures to enable the industry. It ranges from international gateways to offer connectivity to state of the art mobile communications and to provide the basis for productivity in this sector.

Iñaki Berroeta, Chief Executive Officer Vodafone Malta Ltd. Malta is a country that has a lot of potential and has a vision to grow and become a centre of excellence in many areas including ICT. GO is proud to be part of this vision and is investing to ensure its goals and those of Malta are attained.

The country has a solid and reliable services infrastructure, a top notch financial services sector, highly qualified and educated human resources, a strategy moving forward, and above all, it is an English speaking nation – with all its advantages.

David Kay, CEO - Go

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fibre optic cables to mainland Europe, satellite links and digital microwave links, while a third operator, Melita Cable, is planning to provide an international gateway of its own by mid-next year.

This provides considerable security to organisations, such as iGaming and eCommerce companies based in Malta that rely heavily on being connected 24 hours a day.

Leaders in e-Government Education and infrastructure are the twin poles Malta’s rapidly growing ICT sector were constructed upon, and as the investments into these areas matured, so did the sector’s potential expand.

One major milestone in this process was Malta’s development of e-Government services, begun in 2000, which are now among the most advanced in the world. Today, with some 90 per cent of government services accessible on the internet or mobile phone, it is a leader in Europe and the only EU country to have a single integrated national identity card and database. Malta’s success in creating and maintaining momentum in this area has raised the island’s ICT profile considerably, as major IT companies such as Microsoft, Cisco and Oracle among others, are attracted to work closely with government on its migration to digital space, offering both training and practical support.

International Recognition Today, Malta’s ICT industry is a versatile and mature cluster that is going through an exciting period of consolidation, expansion and validation. New investors such as Tecom, who also bought up government’s remaining shares in the state-owned telephone company Maltacom, since renamed Go, have brought fresh dynamism and an injection of much more than just funds. In choosing to locate SmartCity in Malta they have given Malta the type of international recognition it needs to develop its ICT industry further and expand its potential to the maximum. And for a country claiming the title ‘Regional Centre of ICT Excellence’, there could be no better international endorsement. n

SECTOR PROFILE / ICT / SMARTCITY

SmartCity

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he largest single private investment ever made in Malta, SmartCity will bring together a cluster of technology and ICT companies, offering custom-designed office space and facilities as well as residential and leisure areas in the 360,000 square metre, south Malta, seaside location of Ricasoli. While the project was first announced in 2006, Dubai Internet City’s Tecom Investments and Sama Dubai embarked on the first phase of their US$300 million investment in SmartCity Malta in May 2008.

Expected to establish Malta firmly as the knowledge-based industry hub for the Mediterranean region, SmartCity will follow the same core mission as its Dubai forerunner: To offer an ICTbased city concept where a knowledge-based industry cluster and companies are offered a state-of-the-art supportive infrastructure and environment. The one-stop-shop principle which SmartCity will be introducing to the region is intended to provide a range of services from a single window, enabling businesses to eliminate operational problems in setting up and running their companies, 62

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allowing them to focus their time and energy on their core competencies and business.

The largest ever single FDI or private sector investment in Malta, SmartCity is already attracting significant international interest from ICT companies across the world. SmartCity executive director Fareed Abdulrahman said that the concept adopted in Malta will be similar to that of Dubai’s Internet City; apart from offering permanent office space to established companies, they will also be offering temporary cost-effective office space to companies that want to test the viability of their business plan without making a large initial investment.

The Maltese government will be facilitating the one-stopshop concept through a government services unit in SmartCity itself. This unit, planned to operate hand in hand with various ministries concerned, will be offering a range of support services like business set-up, licensing, registration and incorporation services from a single window.

A city-concept development dedicated to technology, IT and media, SmartCity is putting Malta firmly on the ICT map of the region

The project will see the large tract of industrial land at Ricasoli, in the south of Malta, developed into the planned business park, comprising offices, residential units, hotels, leisure, retail and other commercial facilities. The 360,000 square metre development will include extensive landscaped green areas and public spaces (118,000 square metres), with 158,500 square metres allocated to the business park itself. The first buildings are scheduled for completion in December 2009, when 8000 square metres of office space will become available, while the entire project is expected to be fully complete in 2021.

The investors, developers of the hugely successful ‘Dubai Internet City’ which today employs over 15,000 people, have said SmartCity will create a minimum of 8,500 jobs in Malta within eight years. Malta has risen swiftly to the challenge of providing IT-trained professionals to fill these positions; the University of Malta, the Malta College of Arts, Science and Technology

(MCAST), and numerous private educational establishments have increased both the number of ICT courses offered and the number of places available, and government has announced that by 2009 educational establishments in Malta will have the capacity to provide training for over 1,500 graduates per year.

SmartCity is a definite signpost to Malta’s future as a top strategic ICT player in Europe. Recently ranked in leading global positions for promotion of ICT technologies, e-Government and e-Readiness by the World Economic Forum, the EU Commission and the Economist Intelligence Unit respectively, Malta has been targeting ICT as a priority industry for over a decade. SmartCity, leveraging off both Malta’s ICT strengths and the island’s strategic geographic location at the centre of the Mediterranean Region, ideally matches the island’s aspirations of becoming a satellite for ICT excellence in the region, and promises to bring global ICT relevance to this tiny but dynamic island in the Med. n

Malta was our choice for this project as it is very similar to Dubai in several respects. In terms of strategic location, size, connectivity, access to key markets, and high tourism orientation - both Malta and Dubai share a natural affinity.

Ahmad bin Byat, Executive Chairman - TECOM Investments

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OUTSOURCING TO A

EUROPEAN BASE

Renowned for its professional, multi-lingual workforce and state-of-the-art ICT infrastructure, Malta is emerging as Europe’s new near-shore contact centre and outsourcing destination

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relatively new sector of the Maltese economy, business process outsourcing (BPO) is one of the most recent success stories to emerge in Malta. Call centres offering multilingual services across a diverse range of business sectors from financial services to airline reservations have been enjoying significant success, while other areas such as shared services, data processing and management services are quickly gaining ground.

Why Malta?

With the expansion of the European Union, demand has increased for pan-European call centres that offer not just English but a multitude of other languages most notably Italian, German and French as well as Spanish. The success of Malta’s growing contact centre industry is constructed on some of Malta’s most fundamental strengths: the fact that English is an official language of the island, plus near universal fluency in Italian and widespread knowledge of at least one other European language. The island’s open business environment and flexible, can-do attitude, as well as its wide range of targeted incentives make it one of the most competitive locations for international service companies and outsourcing services.

ICT Foundation Underpinning the success of the sector, Malta’s state-of-theart ICT infrastructure has been key to the rapid development of international services, an area that is particularly dependent on reliable and sophisticated technology and international connectivity. With a steady stream of IT professionals graduating from the University of Malta, vocational colleges and private educational establishments every year, the industry is able to access a workforce sharply tuned to its requirements.

Industry Leaders While Malta will not be able to compete on scale, it does have the advantage to be able to add value in terms of higher-end customer care and sophisticated service, a fact that helped the island beat cheaper India for a 300-person call centre to handle ‘high-value’ English-language calls for UK-based bank HSBC. In addition to in-house deployments such as HSBC, which opened in 2006 and, following an expansion in 2007, involved a total investment

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of €12.5 million and created 500 jobs, there are a number of independent outsourcers established on the island namely Fraser Eagle, Dial-It and a host of others providing a range of services that include technical help, order taking, information lines, telesales and customer support services to a range of industries including travel and tourism, telecoms and financial services.

With an increasing number of companies now migrating back to Europe from Asia in search of higher quality levels and increased service, Malta’s excellent language skills, its close cultural affinity with the UK and Europe and its strong work ethic give the island a significant advantage.

All-Round Centre While call centres may be the most visible and successful sector of the BPO industry other areas of Malta’s service economy are equally gaining a foothold in providing high-performance services. A broad range of service areas from consulting, shared services, data processing, data storage, digital media and software development projects are being delivered from Malta, offering companies significant cost reductions and improved operational effectiveness.

Malta has proved itself a dynamic, on-the-ball player in the international services market. With its highly-qualified, multilingual workforce, advanced telecommunications structure, favourable business environment and strategic location in the centre of the Mediterranean, it has the potential to offer measurable added value to projects and operations that choose Malta as their preferred location. n

Enthusiasm, pride, dedication, loyalty and the multilingual competence of local human resources is what gives Malta the edge over other outsourcing destinations. Malta can never compete on numbers, but ranks high on quality of service. This valuable asset, complimented by modern infrastructure, reasonably low operational costs and an attractive taxation package, express Malta as a genuine near shore location to the pondering investor.

Ruth Vella, Director - Fraser Eagle Malta

SECTOR PROFILE / ICT / REMOTE GAMING

REAPING

FIRST-MOVER REWARDS

Malta’s continuing growth in the remote gaming sector shows no sign of abating. The country is now recognised as Europe’s most successful and prestigious Tier One location by companies and authorities around the world

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everaging off the island’s position as a reputable international business and financial centre, the government and its industry partners have set about creating and delivering one of the most progressive environments in the world for remote gaming business activities. While many countries offer online gaming-friendly environments, none have embraced the remote gaming revolution with such vision and vigour as Malta. To realise its ambitions of becoming a world leader in the competitive world of remote gaming, the government recognised early that it needed to take a proactive approach in encouraging remote gaming companies to locate to the island. Malta’s strategy has been to develop a solid foundation for the industry both in terms of legislation, services and technology infrastructure.

The advantages of operating within an efficiently regulated system are myriad, and Malta is already reaping the benefits of its revamped legislation. Eight companies every month apply for a licence to operate in Malta, and the sector already employs some 2100 people with another 500 providing ancillary services such as web hosting, security audit, certificate agencies, legal work and others. In 2005 the industry, then consisting of just 20 operating companies, handed over just under €5 million in taxes to the Treasury, while in 2008 the Maltese Government Budget projected that €12 million would be collected from the gaming sector. The relatively low licence fees of €7000 a year nonetheless offer Malta’s government yet another stream of revenue, and as the number of licensed operators rises steadily so too does that sum.

Already seeing a total turnover of €2 billion a year, the iGaming sector in Malta is one of the most dynamic new industries on the island. With in excess of 270 licensed operations and some 130 in the pipeline awaiting issue, that total would appear to be merely a starting point, and with the larger companies processing some €100 million each in annual turnover it’s clearly a sector with vast potential.

Regulatory Regime The introduction in 2004 of new remote gaming regulations by the Lotteries and Gaming Authority, the regulator for the iGaming industry in Malta, brought many new concepts to the gaming industry, with the most important of these being that regulations are technology neutral and game neutral, thus encompassing any type of gaming using a means of distance communication including internet, digital TV, mobile phone technology, telephone and fax. Malta was the first country in Europe to pass dedicated online gaming legislation.

Since Malta’s membership of the EU in 2004, the island’s regulations have been harmonised with those of other European states, but Malta still remains the only European country with a dedicated regulatory regime to govern online gaming. Awarded the Business Britain Magazine’s award for services to the Online Gaming Industry, the Lotteries and Gaming Authority (LGA) in Malta is considered exemplary in leading the way in terms of regulation and legislation for this industry. ‘What gives us the CountryPr●filerMALTA

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A regulatory framework for iGaming complimented with an effective Authority has attracted operators wanting to operate within the EU jurisdiction.

Our vision for Malta is to be recognised as a leading remote gaming jurisdiction of repute.

Nick Xuereb, Chairman - Lotteries & Gaming Authority The reasons for Malta’s success as an iGaming location is based on the fact that we have adopted a pragmatic approach towards the industry, understanding its needs and reacting quickly to its shortcomings. We listen and work with our industry partners to keep Malta a serious jurisdiction with strong dynamic regulation.

Mario Galea, CEO - Lotteries & Gaming Authority Our members feel that Malta provides the ideal jurisdiction from where they can carry out their remote gaming operations. They know it’s hard to get a license and maintain it but their position in the EU, their increased credibility having a license in Malta, justifies the tough licensing regime.

Daniela Grioli, Chairman - Malta Remote Gaming Council

edge over our competitors’ said Mario Galea, CEO of the Authority, ‘is the fact that we have good regulations in place, we have the functions and the processes to be able to enforce that legislation, we have put in place safeguards for the player, we promote responsible gaming, and we are very active in the market.’

KEY PLAYERS Betfair (Malta) Expekt Interwetten Unibet Pokerchamps

Primebet Industry Voice The Malta Remote Gaming Council (MRGC), launched in 2005 on the initiative of the Lotteries and Gaming Authority, is made up of all the stakeholders of the remote gaming industry, including licenced operators, data carriers, internet service providers, lawyers and professional services providers. With the objective of serving as an ongoing discussion forum between the Regulator and the industry, the MRGC gives a voice to the remote gaming industry, and is charged with building credibility in the industry, as well as promoting and enhancing it.

Tier One Jurisdiction The remote gaming sector in Malta literally leapt from nowhere right to the top of the league, and is already considered a Tier One operator. How did this happen? The legislation and strong regulatory regime plays the most important role, offering operators a stable and secure framework in which to carry out their business, adding weight to their reputation and giving them an advantage in dealing with banks, financial institutions and investors. Malta’s regulations were the first serious venture into cyberspace; in an attempt to reshape it into a well-regulated environment. Indeed, the LGA’s quest to keep criminality out of gaming and to adequately safeguard players is paramount.

However, beyond that is the fact that Malta, as an EU nation, offers operators a gateway for business in the EU and finally, while taxation is not the lowest on offer it is within the acceptable range and capped at €466,000 per year.

Operators are drawn to Malta by the attractive set of advantages the island offers over other locations. As a globally respected international financial centre, the island gives gaming companies a top tier address from which to base their operations and, with an established state-of-the-art telecommunications infrastructure capable of hosting and delivering round the clock connectivity as well as the presence of industry support services such as online payment processors, security auditors and gaming software developers, the island provides a tailor-made environment vastly conducive to growing a successful business.

In addition the island offers the benefit of low taxation, a network of double taxation agreements and a declared government commitment to encourage and develop the industry.

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Regulation and reputation together with our position in the EU to me is what provides operators with an ideal place to launch a start up or proceed with their existing operations. Players can find comfort in the fact that the online operator is regulated and that they can play in a secure, and fair manner. An operator can find all the assistance required to relocate and set up.

Alan Alden, Director - Kyte Consultants Malta has many selling points but its major point is its unique legislation, giving i-gaming companies the ability to grow in different directions, with their always demanding customers in a reputable EU jurisdiction. Today being able to safe-guard your players and your image is keeping Malta way ahead of the pack.

Ian Curtis, CEO - BellMed Information Technology Limited Malta is an EU Member State with a fully functional regulatory framework for remote gaming catering for all types of games and all channels of remote gaming, which is highly reputed across the globe as a serious and trustworthy operational base. This reputational edge, combined with a sophisticated telecommunications infrastructure and an efficient tax structure, provides a very attractive location for the establishment of remote gaming companies in Malta.

Olga Finkel, Managing Director - WH Law Malta is a highly reputable EU jurisdiction and offers a robust and clear regulatory regime on online gaming, as well as an excellent IT infrastructure and a multilingual workforce.

Malta also offers a competitive tax regime and a relatively low cost of living - apart from year round sunshine of course James Muscat Azzopardi, Partner Muscat Azzopardi & Associates Malta’s international recognition as a centre of excellence is the result of various factors, including a well-trained, motivated workforce; a low-cost environment, an advantageous tax regime backed up by nearly fifty double taxation agreements, a state-of-the-art ICT infrastructure and telecommunications infrastructure, a yearlong mild climate, its geographic location as well as the fact that English is an official language.

Tonio Ellul, Partner - EMD

Attracting Industry Leaders Malta’s strict regulation of online gaming and EU member status also qualified it to move automatically onto the UK government’s White List of localities from which online gaming companies are allowed to tap into the lucrative UK market and advertise their services in the UK. The news, coming out in mid 2007, prompted an immediate response from the online gaming industry, with no less than 27 international companies shifting their online operations to Malta in August 2007 alone. These include Intercasino, the second largest online casino in the world, William Hill, Littlewoods, Playboy Casino and Virgin Games amongst others.

The remote gaming industry in Malta is comprised of two distinct segments: online casinos and sports betting.

In the area of sports betting Malta has succeeded in attracting some of the leading European names to establish operations on the island while online casinos offer perhaps Class 1 – Online Gaming License the biggest opportunity for the island’s remote gaming Class 2 – Online betting office industry, and with the everlicense or an online betting increasing popularity of exchange office license Internet based games such as Class 3 – License to promote poker, progressive jackpots, and abet gaming from Malta roulette, blackjack and slots worldwide, the island is keen Class 4 – License to host and to attract leading operators in manage online gaming operators, excluding the licensee himself this area.

TYPES OF GAMBLING LICENSES IN MALTA

Thriving Sector Among the 272 companies already in Malta are Betfair, Expekt, Unibet, Interwetten and CBM Bookmakers, and, as others join the list at the rate of eight per month, this thriving sector becomes ever more attractive as a proposition to the remote gaming operators the world over.

Malta offers online gaming companies a secure, stable and well-regulated environment for all interactive gaming activities, as well as a highly developed legal and technological infrastructure, well placed to satisfy the needs of a continually evolving remote gaming sector. Add to that the island’s state-ofthe-art telecommunications infrastructure, low-tax environment and European Union membership and it is clear why the island has become an attractive proposition for online gaming operators from around the world. n CountryPr●filerMALTA

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The Malta Remote Gaming Council (MRGC) Serving the Remote Gaming Industry in Malta.

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n its three years of existence the MRGC membership has grown considerably. The number of remote gaming operators and service providers that are currently members represent a large section of the industry in Malta. It is hoped that the membership will continue to increase.

The MRGC is there to listen to the stakeholders and to convey the message to the relevant authority, be it the Lotteries and Gaming Authority of Malta, the EU commission or the National Statistics Office.

The MRGC attempts to keep its members informed of key events happening around the globe that directly or indirectly can have an impact on the industry. Where more than a simple email alert is required meetings are organised and all members invited to attend.

The MRGC has recently concluded a salary survey to determine the average salaries being paid to staff employed in the industry. The scope of the survey is to provide a benchmark for new operators joining the market so that Malta as a jurisdiction will remain competitive.

The MRGC is also tackling the serious issue of Responsible Gambling. Shortly, the MRGC will, together with the selected expert partner, provide a code of conduct, training and also a ‘seal’ of conformity on websites of operators complying with all the established requirements.

The statute of the MRGC identifies the following as being the 8 principal aims of the council: n n

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To provide a forum for discussion To attain the highest levels of sustainable development To act as the voice of the industry To promote fair and responsible gaming To establish and promote trade guidelines and practices that enhance consumer confidence To assist and make recommendations to the relevant authorities/organisations To build credibility in the remote gaming industry To generally promote and enhance the industry

The MRGC is following these aims vigorously as ONE VOICE on behalf of the Remote Gaming Industry.

You can join the Malta Remote Gaming Council online by visiting the website at www.mrgc.org.mt. Annual Subscription is €700. To qualify as a member you must be in possession of a remote gaming license in Malta, or be in the process of acquiring one or be a service provider established in Malta.

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MALTA’S FINANCIAL CENTRE WINS

INTERNATIONAL RECOGNITION

A relative newcomer to the sector, Malta is fast gaining recognition as a Eurozone financial centre of choice: a strong legislative framework and a flexible, pro-business attitude are increasing the island’s attractiveness to reputable organisations

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he Global Financial Services Index 2008, published by the City of London, ranks Malta in 4th place as the centre most likely to increase in importance in the next few years, and in 5th place as the centre where most organisations are likely to begin new operations in the next two to three years. In addition, coming out a few months after Malta’s successful euro-adoption in January 2008, the World Economic Forum’s Global Competitiveness report placed Malta in 20th place out of 131 countries for Financial Market Sophistication, ahead of Switzerland (21st), Belgium (22nd) and France (24th). Malta’s aspirations to become a leading regional financial centre appear ever more sound and achievable.

Malta’s emergence as one of Europe’s most up-and-coming international financial centres has been ten years in the making.

Billed as a credible alternative to both Luxembourg and Dublin the island’s flourishing financial sector has been experiencing unprecedented growth in recent years. Malta’s strength as a financial services centre is based on innovation and a strong desire to provide an optimum operating environment for business. The creation of a positive legislative framework that ensures strong compliance but also offers a non-standardised approach to dealing with its clients, where custom-made solutions can be delivered, has allowed Malta the chance to develop as a meaningful and reputable financial services centre, competing successfully against the most established locations in the business.

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Europe’s Emerging Financial Centre EU Membership has certainly provided Malta with the impetus needed to catapult it from a financial backwater to one of Europe’s fastest growing finance centres. Malta started laying the foundations for its finance industry in 1988 when government passed legislation establishing an offshore framework but by the early 1990s the island made the conscious decision to move onshore in recognition of a growing trend by the world’s financial industry to move more business onshore. At this time Malta was also seeking membership of the EU and in preparation for eventual membership in 2004, began to harmonise its legislation, enacting best practices and features from comparable centres such as Dublin’s IFSC. The impact of joining the EU has been very positive for Malta; the financial centre enjoys greater credibility, state-of-the-art EU compliant legislation and direct writing and passporting rights to the entire European market, ensuring the island’s placement on the radar of the international finance industry.

Economic Driver A relatively new area for the Maltese economy, the Maltese financial services sector is today fast becoming a cornerstone of the economy, broadly accounting for around 13 per cent of GDP and expected to contribute over 25 per cent by 2015. The

sector has been experiencing tremendous growth, expanding by 30 per cent in 2006 alone and with some 6000 people already employed in the industry, the Maltese government has earmarked the sector for priority billing and are determined to develop and protect the island’s reputation as a world-class international finance centre.

Onshore Dynamism Malta has received international recognition for its EU compliant and sophisticated regulatory framework, which is described as modern and in touch with today’s operating environment.

All financial services in Malta are subject to one regulator, the Malta Financial Services Authority (MFSA) set up in 2002. The single regulator means companies benefit from streamlined procedures and reduced bureaucracy, leading to lower fees and compliance costs and a more consistent interpretation of the rules and legislation. Demanding in its compliance requirements, the Authority nonetheless offers a non-standardised approach to dealing with its clients, understanding clients’ needs and providing guidance. One of Malta’s most appreciated advantages is the flexibility in the legal framework and accessibility to the regulator.

Effective, responsive and proactive is how the MFSA’s approach is described by the financial sector in Malta and it is this approach that makes Malta so appealing.

The Malta Advantage Being small and able to adapt quickly has given Malta a head start over many of its rivals; while many other international centres have become crowded and expensive Malta’s advantage is available capacity, low costs, prompt and efficient regulatory process that allows quick turnaround times in getting products to market.

The framework itself – conforming to all international standards yet flexible enough to allow a variety of structures to be formed, and bridging the gap between Continental European Roman law and Anglo-Saxon common law traditions. Malta’s additional advantages are its location as a Mediterranean hub with access to European, North African and Middle Eastern markets, its lowcost base (salaries are 3.5 times lower than in Luxembourg and 2.5 times lower than in Ireland), its European time zone location, its highly skilled, multi-lingual workforce (often speaking three languages: English, Italian and Arabic), and its back office and IT capabilities make it a natural choice. The well-developed banking and finance sector already employs a pool of over 6000 trained staff, and can support all international operations. Experienced lawyers, auditors, service providers and EU compliant legal and tax professionals support the Maltese financial sector in addition to an active stock exchange.

A significant advantage of Malta is the ability for companies to re-domicile themselves into the finance centre, possibly CountryPr●filerMALTA

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Malta has a number of unique selling points: the first is clearly the fact that we have now had our tax system approved at EU level as a fair and accepted system. The system itself is seen as a straight forward and competitive and now a recognised jurisdiction within the EU and not some sort of offshore regime.

The second is Malta’s excellent reputation as a serious and forward looking financial centre, and there is now international recognition that Malta is one of the fastest-growing financial centres.

Tonio Fenech - Minister of Finance, Economy and Investment

Most new business is being attracted on the strength of Malta’s institutional abilities and service-oriented financial community. The real strength however lies in the human resource which is well-prepared, competitive and has unlimited potential. Malta’s English speaking environment and widely recognised tax system, which is underpinned by an extensive tax treaty network, also makes it one of the most efficient places to do business in on an international scale. We are now a fully fledged financial services centre which is extremely well integrated into the global financial system. Business is developing across the board. However, one can point out insurance management, fund services and trust management, as well as various types of banking activity, as being fastest areas of growth at the moment.

Professor Bannister, Chairman Malta Financial Services Authority Malta’s unique selling point is by far its international recognition as a stable financial services centre of repute, providing a seamless framework that supports both domestic and international economic activity. Areas that could be identified as offering the greatest opportunity for growth include investment funds, captive insurance schemes and investment services licenses.

Michael J. Zammit, CEO - CSB Group As a full member of the EU Malta is ideally placed to serve as a base for financial services companies who wish to target EU markets. The currency of Malta is the euro and the business language is English, the work force is educated and adaptable. The living environment is an attraction for families to be based here.

Albert P. Mamo, CEO - GasanMamo Insurance Malta’s strong position as financial centre is based on its economic stability as part of the European Union, its legal security in an advanced legal system, its excellent infrastructure in terms of local financial expertise and its unique location as traditional springboard in the Mediterranean. Malta has still tremendous potential to develop this hub function to Africa and to the Arab world further.

Otto Karasek, Managing Director - BAWAG

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winning EU-wide passporting rights. Furthermore, investment funds are exempt from tax, while Malta’s tax imputation system entitles operating companies to a 6/7ths refund of a 35 per cent corporate tax upon a dividend distribution. Malta has double taxation treaties with 48 countries, including most of the major European trading nations, and is in the process of negotiating others. Income originating from overseas is not subject to double taxation, even if there is no double taxation agreement existing.

Malta’s competitive attractions are being increasingly recognised internationally by blue chip operators and by growing word-ofmouth recommendations that are helped in no small measure by Malta’s heightened international profile.

Making a Mark Since Malta’s entry into the EU in 2004, the financial services sector has been making significant inroads into the European financial services scene, particularly in fund management, banking, trade finance, intra-group financing, back office operations, mergers and acquisitions, call centres and insurance industries. Malta’s reputation as a hedge fund domicile has increased significantly following the revamping of the entire legislative system catering for professional investor funds as well as flexible legislation for hedge funds and specialty funds.

Malta Stock Exchange (MSE), once vying for business from family-owned companies on the island, is today listing equities, government paper and corporate bonds as well as a number of collective investment schemes. Although still relatively small in size, the MSE has large funds players among the funds listed on their boards. These include names such as Fidelity and HSBC among others. The island also has a growing trust sector following a revision of the Trust Act: a new Trust and Trustees Act was introduced which removed the old cumbersome trust structure and replaced it with a more globally competitive product. Malta’s burgeoning captive insurance sector is also developing rapidly despite being a relative newcomer to the captive market, and the island has enjoyed a considerable amount of success in attracting captive managers to establish on the island.

In Sight of Goal The financial services sector already employs around 6000 people, and the race is on to increase the significance of the sector to 25 per cent of GDP within the next few years. Malta is starting to take a tactical approach, targeting specific market segments where it has a competitive advantage. The promotion of the island as a dynamic financial services centre is certainly paying dividends, and Malta is now well placed to continue to attract business from across the world. Malta’s message to the financial services world is simple and straightforward: The regulatory system is world class, costs are comparatively low and the Maltese government and the industry are committed to putting Malta on the map as the foremost centre for financial services in the Euro-Med region. n

SECTOR PROFILE / FINANCIAL SERVICES / BANKING

Portomaso © Alan Carville

HIGH PERFORMANCE

SECTOR ATTRACTS INTERNATIONAL PLAYERS A consistently high-performing sector, Malta’s mature banking industry is expanding fast in both size and scope

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mall by international standards, Malta’s banking industry is nonetheless one of the most interesting economic drivers on the island. In just 15 years the island’s banking landscape has transformed itself from four retail banks serving the local population to an industry sector of world-class sophistication, with more than 20 foreign or privately-owned banks. Some of the most highly respected names in institutional finance have chosen to establish operations in Malta and use the island’s strategic location as a springboard for future development in the Mediterranean region.

Malta’s financial services legislation, which was hailed throughout the global financial community as being among the best in world for clarity, stringency and flexibility without imposing excessive bureaucratic burdens on operators.

Malta’s international banking centre has been gaining considerable ground in establishing itself as the finance hub for the Mediterranean region. The island’s strategic location between Europe and North Africa makes it an ideal stepping stone for financial institutions wishing to tap into the ever-increasing wealth being generated in the region.

Robust Legislative Framework Malta’s international financial centre has developed a highly reputable and regulated environment where the level of regulation and investor protection is equivalent to the world’s main international banking centres. Many of the leading banking groups were encouraged to establish state-of-the-art banking facilities by

Growth and Expansion As growth continues, the range of products and services being offered in and from Malta is expanding apace. These include retail banking, private banking, investment banking, trade finance, commercial banking, project finance, treasury and syndicated loans.

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Brand Guidelines

FinanceMalta

Memberships 2008

Aequitas Legal

Elmo Insurance Ltd

Logo Guidelines (abridged) Finance Malta

Akbank TAS

EMCS International Services Limited

Apex Fund Services (Malta) Ltd

EMD

APS Bank Ltd

Ernst & Young

Areti Corporate Services Ltd

Proposed by: JP Advertising

Atlas Insurance PCC Ltd

December 2007 Avanzia Tax Advisors Limited

FACT Group Fenech & Fenech Advocates Fexco Financial Services (Malta) Ltd

Baker Tilly Sant

FIMBANK PLC

Banif Bank (Malta) plc

Finacom Investment House Limited

Bank Of Valletta plc

Financial Planning Services

Barclays Bank plc

Finansbank (Malta) Limited

Bawag Malta Bank Limited

Finco Trust Group of Companies

BDO Consult Ltd

Francis J. Vassallo & Associates Limited

Bentley Trust Limited

Galea Salomone & Associates

Brian Tonna & Co

Ganado & Associates

Buttigieg & Refalo Advocates

Ganado Sammut

Calamatta Cuschieri & Co Ltd

Gasan Mamo Insurance Ltd

Camilleri Preziosi

Global Capital plc

Chetcuti Cauchi Advocates

Grant Thornton

Citadel Insurance plc

Griffiths & Associates

Corporate Services Limited

Heath Lambert Insurance Management (Malta) Ltd

CREDALTRUST Management Ltd

Heritage Insurance Management (Malta) Ltd

Credence Corporate & Advisory Services Ltd

Hogg Capital Investments Ltd

CSB Group

Hollingsworth International

Curmi & Partners Ltd

HSBC Fund Management (Malta) Ltd

D- Consulta Limited

HSBC Life Assurance (Malta) Ltd

Deloitte & Touche

HSBC Securities Services (Malta) Ltd

Dingli & Dingli Law Firm

HSBC Stockbrokers (Malta) Ltd

Finance Malta, Garrison Chapel, Castille Place, Valletta VLT 1063 - Malta Tel: +356 2122 4525 • Fax: +356 2144 9212 Email: info@financemalta.org www.financemalta.org

Hugh Peralta & Associates Advocates

Notabile Consulting Group Limited

International Insurance Management Services Ltd

Osiris Trust Ltd

International Management Services Ltd

Osprey Insurance Brokers Co Ltd

Investkredit International Bank plc

PKF (Malta)

Island Financial Services Limited

Portman International Ltd

Island Insurance Brokers Limited

PricewaterhouseCoopers

Island Insurance Management Services Limited

Qube Services Limited

Izola Bank Limited

Quest Investment Services

JACS International Ltd

Raiffeisen Malta Bank plc

JATCO Insurance Brokers Ltd

Rizzo, Farrugia & Co (Stockbrokers) Ltd

Jesmond Mizzi Financial Services Limited

RS Attard & Co - Moore Stephens Malta

KPMG

Sparkasse Bank Malta plc

Lombard Bank Malta plc

The Exchange

Loyens & Loeff

TMF FundAdministrators (Malta) Limited

Malta Institute of Management

TW Management Limited

Malta Stock Exchange

Valletta Fund Services

Mamo TCV Advocates

Volksbank Malta Limited

Marsh Management Services Malta Limited

W & D Corporate Services Ltd

Mediterranean Bank

Zammit & Associates - Advocates

Mediterranean Insurance Brokers (Malta) Limited

Zammit Pace & Co. Advocates

MelitaUnipol Insurance Brokers Ltd MFSP Financial Management Ltd

FinanceMalta sponsor members

Middlesea Valletta Life Assurance Co. Ltd

Meli Car Rentals Ltd (International Licence - Dollar Thrifty)

Mifsud & Mifsud Advocates

The Xara Palace Relais & Chateaux

Mizzi Holdings Ltd

Malta International Airport plc

MSS International Services Ltd

CHI Hotels & Resorts

Muscat Azzopardi and Associates Advocates

Gasan Enterprises Ltd

MZ Investment Services Ltd

John’s Garage Ltd

SECTOR PROFILE / FINANCIAL SERVICES / BANKING

The initial influx of foreign banking institutions located specific types of operations to Malta, mainly servicing their international customer base, while many of the international banks established in Malta were set up to handle their parents’ investment needs, and those of their larger domestic clients. They undertook what were essentially back–office roles, handling and managing funds on behalf of clients that were dealt with by their domestic arms. But a number of them also took on a more pro-active role. Malta-based banks have been participating in the funding of infrastructural projects in a variety of North African and Middle Eastern countries.

The opportunities in this segment remain substantial. Malta, with its Mediterranean pedigree on the one hand, its EU membership on the other and a solid regulatory structure underlying everything else, becomes a good domicile from which to source the funds the development of the region demands.

Malta hosts a number of specialist international trade finance banks who are mainly focused on highly specialised trade related instruments such as structured trade financing, forfaiting, factoring, traditional documentary credits and short-term credit facilities. Indeed, trade finance banks continue to be established in Malta, with three of the four banks registered in 2007 stating that they came to Malta specifically because of its advantages for doing trade finance. The reasons mirror those for the rest of Malta’s thrust to establish itself as an EU based financial services domicile of choice is strongly supported by the presence of an English speaking and highly qualified workforce, a robust onshore legal and regulatory framework, and the proactive regulatory approach adopted by the Regulator.

These factors are playing a significant role in the fast growing developments of the fund servicing, captive insurance and asset management sectors.

Tonio Depasquale - Bank of Valletta Malta has experienced a significant expansion in its ICT industry over the past years. RS2 has been present in Malta for twenty years and has participated in this expansion by setting up its development centre in Malta. RS2 has done this because it believes that Malta provides a sound infrastructure and has been witness to the qualities, dedication and communication skills shown by the local technology professionals.

Mario Schembri - RS2 Software p.l.c.

Malta is an excellent base for the establishment of internationally oriented financial services operations.

Overall operating, training, retention and recruitment costs are up to a third less than the EU average, and there is availability of highly qualified staff. Malta also has the potential to offer European companies an alternative option to Asia for back-office processing facilities and call centres due to the high quality workforce, lower operating costs, modern infrastructure and regional location. Government and regulators are supportive and helpful. The HSBC Group has invested heavily in Malta.

Malta is an important country for the HSBC Group, and we are looking to further grow our operations accordingly.

Alan Richards CEO - HSBC Malta

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the financial services sector: Malta is in the EU, which gives confidence and allows easy access to European markets. Yet Malta is posed half way between North Africa and Europe, giving it a way into both sets of markets.

The regulatory framework is rigorous yet flexible, and skilled personnel are available.

The island’s strategic location between Europe and North Africa makes it an ideal stepping stone for financial institutions wishing to tap into the everincreasing wealth being generated in the region

Banking Landscape Malta’s retail banking sector is one of the most consistently profitable sectors of the Maltese economy. With total deposits of €11 billion for a population of 400,000 the Maltese are extremely cash rich. The domestic banking landscape in Malta is dominated by the Bank of Valletta and HSBC Malta, who between them control extensive branch networks across the Maltese islands and account for around 80 per cent of the consumer banking market.

Among the more recent newcomers is the Portuguese retail bank, Banif Bank, which in January 2008 launched its entrance onto the domestic market with the intention of competing fully with the leading retail banks by establishing a full branch network of its own on the island. Two local players of note are APS Bank and Lombard Bank, which both operate a small number of branches. Foreign banks such as Volksbank, BAWAG, Sparkasse and FIMBank have all sought to carve out a niche for themselves in the local market and beyond, offering investment services, mortgages, commercial banking, deposit accounts and trade finance in addition to their international business. The latest new entrant in June 2008 is The International Banking Corporation (Malta) plc, (TIBC), a Middle Eastern bank that has chosen Malta as its base for Europe and the North Africa region.

Continued Growth Banking and finance provide the lifeblood of any economy, and just as EU membership has validated a whole host of financial service offerings in Malta, so too is the banking industry contributing enormous value to the improving overall economic performance of the island. As the Maltese jurisdiction becomes more familiar to banks across the world, the expectation is that many other banking institutions will follow the lead of HSBC, Volksbank, Sparkasse, Mediterranean Bank, Banif and the others, pumping ever more fuel into the engine driving Malta’s thriving financial services industry. n

sector profile / financial services / captive insurance

EU Legislation Boosts Malta’s Captive Industry Malta’s multi-lingual workforce, lower costs and full complement of professional services add impetus to the island’s bid to become one of the leading captive insurance domiciles in the European Union

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fter ten years of meticulous preparation, Malta’s captive insurance industry is now developing rapidly; EU membership bringing Single Passporting rights to Maltadomiciled companies giving the sector the impetus it spent ten years waiting for. Pivotal to this success is the island’s flexible legislative framework, with its attractive redomiciliation potential, and the renowned excellence of the island’s financial services regulator, the Malta Financial Services Authority (MFSA) Captives and Insurance Managers The first two international insurance managers to establish a presence on the islands were AON and Marsh, two market leaders that collectively manage more than half the captives registered across all domiciles. The big, international managers did not

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have the field to themselves, however. Smaller players on the international captives market also joined the fray, as did a number of local insurers and insurance brokers. From June 2005, when the first of Malta’s captive insurers had been established, the number of insurance companies domiciled in Malta grew fast: there were more than 20 registered by the end of March 2008, with more in the pipeline. However the majority of these have not been captive – or affiliated – insurers at all. After the first five were established, the next 15 were all direct writers, selling insurance beyond the confines of the parent group.

Since that first batch of five – the parents included RWE and BMW with a reinsurance captive – this trend has changed. It is no longer just the majors bringing in the business; the smaller managers, both local and foreign, are also finding clients.

sector profile / financial services / captive insurance

Ideal Location This bodes extremely well for Malta’s future aspirations to take a leading role in this expanding international industry. The island’s geographic position at the heart of the Mediterranean with easy access to Europe, North Africa and the Middle East is of particular advantage and means the island offers the advantages of an EU domicile to the larger captive players as well as the personal service of protected cell company legislation to the smaller insurers.

Direct Writing As the number of licensed captive insurance companies increases steadily, Malta is also developing itself as a centre for ‘direct writers’, attracting fully-fledged insurance companies writing third party business throughout Europe from Malta. The EU single passporting regime which allows insurance companies established in any member state to offer services ‘crossborder’ into any other EU country, has opened previously inaccessible avenues of opportunity to Malta and over the past few months the MFSA has licensed at least two motor insurers and one life insurer, all currently writing business in the UK, Ireland and other EU countries.

Protected Cell Companies As the only EU domicile with enacted protected cell company (PCC) legislation, Malta offers cells and their owners the opportunity to write EU based risk at lower costs and with full protection of cellular assets from any liabilities of the PCC’s core or of other cells in the structure. Malta’s first PCC attracted significant interest when it was launched in November 2006: Atlas Insurance PCC is one of very few EU domiciled PCCs. Atlas Insurance, a Maltese underwriter, converted to this highly flexible structure in 2007. The cellular structure allows companies smaller

Malta’s EU membership has certainly increased interest in Malta as a captive domicile. We offer a fresh jurisdiction that is EU compliant with the ability to write business directly into other EU states. In addition, Maltese insurance professionals are respected for their knowledge and expertise and can offer prospective companies looking to set up in Malta a world-class service.

Anne Marie Tabone, General Manager International Insurance Management Services Malta has enacted legislation (including PCC legislation) which enables international companies to transact insurance business on a ‘freedom of services’ basis to other EEA countries. Our clients, so far, have been impressed with the cooperation they have received from all parties to make this process as simple as possible.

Angela Wright March, Vice President, Captive Solutions Practice Marsh Management Services Malta Limited

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than the typical captive owner to benefit from self-insurance, and the company has been successfully marketing the benefits. So much so, in fact, that it expected to establish its first active cells during 2008. An indication of the potential of the PCC structure is AON’s stated intention to establish a branch of its White Rock PCC in Malta. AON has the lion’s share of the international cell company market. The company expects to repeat that performance in Malta.

Insurance Brokers Following the implementation of the EU Insurance Mediation Directive it is now possible for brokers and other intermediaries to avail themselves of the European Single Passport in much the same way as insurers. This has added to Malta’s attraction for European intermediaries, seeking international growth in a competitive jurisdiction and non-EU (including US based) intermediaries seeking to tap into the EU insurance market. The regulatory, fiscal and company laws are all conducive to growth in this area, particularly since they are modelled on UK statutory and regulatory rules and thus familiar to all major financial services players.

EU Opportunities All indications show that Malta is also aiming to position itself as an ideal EU home state for reinsurance companies outside the EU looking for a European foothold. In the wake of the EU’s Reinsurance Directive, it is expected that Malta’s tried and tested redomiciliation legislation will be well placed to offer reinsurance captives sitting outside the EU the opportunity to establish an EU domicile. This is where Malta’s growing reputation for excellence will kick in with maximum effect: not attempting to compete with the established giants of the Cayman Islands, Bermuda or its larger European rivals, the island is focusing on promoting its excellence and accessibility as a jurisdiction, its state-of- the-art legislation and its uniquely cost-effective, custom-tailored solutions in order to win investment from EU and globally-focused companies.

Quantity matched by quality is the MFSA’s guiding principle for this industry, a philosophy that looks set to put Malta firmly on the global captive insurance map. n

SECTOR PROFILE / FINANCIAL SERVICES / FUND MANAGEMENT & ADMINISTRATION

Europe’s Emerging Fund Domicile

Small and adaptable, Malta offers lower costs and excellent regulatory services in its bid for recognition as a reputable EU based fund centre

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nvestment funds and collective investment schemes are growing fast in Malta, with a combined net asset value of €8.1 billion in July 2008. This is a 68 per cent growth over 24 months, and an impressive vote of confidence in Malta as a fund domicile. This growth has been registered across the entire scope of fund business in Malta, from retail funds marketed to domestic savers to the rapid development of Professional Investor Funds, a diverse class including hedge funds. And in step with this, Malta has seen the development of a dynamic fund administration and management sector catering to the needs of foreign investors.

EU Membership Undoubtedly, EU membership provided the crucial catalyst in the development of Malta’s financial services industry. Accession brought the EU stamp of approval to Malta’s financial legislation, a body of laws that had been crafted and honed over the preceding ten years with the specific aim of creating a world-class regulatory regime that would form the basis of the island’s financial services sector. And with the advent of EU legislation establishing passporting rights for UCITS certified funds, meaning that appropriately licensed funds can be freely distributed in other EU jurisdictions, Malta is now well positioned as a serious contender for cross-border and international business.

Phenomenal Growth Optimism for the island’s prospects is high: in the last few years fund management and administration are growing at a phenomenal rate. While Malta initially attracted retail funds, a revision of its legal infrastructure has now seen the number of non-retail funds registering on the island increase rapidly. The latest confirmed and published data available show there were 300 funds registered in Malta as of the end of July 2008, for a total Net Asset Value (NAV) of €8.1 billion – close to double the €4.8 billion in 145 funds registered in November 2006 and up from just €1 billion in 2004.

Structures The basic structure used for collective investment schemes is the SICAV, which is uniquely suited to its purpose. In many ways it is a company, albeit a holding company with the specific aim of owning shares, bonds and other securities. As such, it can be listed on the Malta Stock Exchange (there is a separate list dedicated to this type of security, which allows for liquidity).

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The variable capital nature of the SICAV means that new investors can be added simply and easily, without having to wait for an existing investor to decide to liquidate his holding. It is also a structure that allows sub-funds to be established within the SICAV, so that each may pursue a range of specialised strategies, investing in distinct asset types and classes.

Professional Investor Funds (PIFs) are a new variety for the Maltese domicile, seeking progressively lighter regulation for funds targeted at increasingly financially literate investors.

PIFs are not retail funds. This means that the level of oversight and protection offered to investors is limited, the assumption being that the professional investor is well aware of the risks involved in investment markets and is in a position to take a decision to participate on well-founded grounds. This implies a level of knowledge that the regulator believes cannot be taken for granted for the bulk of savers and investors, who therefore require the authorities to establish much clearer rules for retail funds.

The PIF opens the door to hedge funds, pursuing a wide range of sometimes creative strategies and possibly investing in esoteric derivative products. But it also includes property funds. This is reflected in the regulations: PIFs come in three main categories, each with a different target market and distinct rules.

The more stringently regulated of the three are the PIFs targeting Experienced Investors. These require the investor to have worked in financial services, to have made a number of substantial investment transactions or to have experience in the type of property or investment the fund will be investing in. With one little codicil: the investor can satisfy this requirement by ‘providing any other relevant justification.’

To enter a scheme for experienced investors, a minimum entry stake of €15,000 is required. The bar is not set very high for this sort of fund: yes, it will invest in less mainstream assets, but marginally so. But the fund is limited to borrowing no more that its NAV for investment purposes. This includes leverage through derivative investment products. The two other fund classes have no effective limit on the leverage they can apply, assuming of course that they can persuade lenders they are a good bet.

The remaining two classes of PIFs – the PIFs targeting Qualifying Investors and the so-called Extraordinary Investors – raise the bar for participation while lowering the degree of regulation. Qualifying Investors are required to have net assets worth €750,000, with an entry threshold of €75,000. There are other ways to become a qualifying investor: for example, if the

SECTOR PROFILE / FINANCIAL SERVICES / FUND MANAGEMENT & ADMINISTRATION

total number of investors in the fund is limited to 10, being a relative or close friend of the promoter is one way of making the grade. Working for a fund administrator is another. But in each case, the principal remains clear. The investor is expected to have an understanding of investment markets, and having sufficient capital is assumed to be a proxy to that.

The Extraordinary Investor, as the name implies, has a much higher bar to leap. The minimum capital required is €7.5 million; the minimum investment is €750,000. And the investor needs to sign a disclaimer stating that he is aware of the risks involved in participating in the scheme.

Excellent Regulator Regulating this burgeoning sector, the Malta Financial Services Authority (MFSA) is confident that business will continue to grow. Hailed for its prompt responsiveness to industry needs, many operators already in Malta cite the licensing process as being quick, thorough and efficient - promising ‘in principle’ approval within one week and full licensing process within six weeks. In addition, the cost of high quality staff and office space Undoubtedly the USP for Malta in its quest to becoming a financial service hub are its EU membership, a proactive and approachable MFSA and most important of all, our command of the English language – we see the greatest opportunities lie in provision of back office investment & financial services to firms wishing to re-domicile structures and funds to an EU friendly Malta as a link to the rest of the EU. Our membership has been a great asset in contributing to the international recognition we deserve – there is no doubt in my mind that we can evolve to be a perfect conduit to the rest of the EU and this will contribute to the further evolution of the sector at large.

Paul Mifsud, Managing Director - Sparkasse Bank A single regulator that allows for a streamlined process with flexibility and accessibility to allow for custom made solutions. Experienced and cost effective service providers and a highly educated workforce are some of Malta’s key selling points. The growing number of global services providers that are locating in Malta enhances Malta’s reputation as a leading financial services centre and brings with it greater exposure and new opportunities.

Anthony O’Driscoll, Managing Director - Apex Funds Malta has a whole suite of positives for financial services companies including - Member of the European Union, the euro as a currency, extensive double taxation treaty network, language skills & qualifications of staff, quality telecommunications infrastructure, the availability of the Malta UCITS’ good supply of professional legal & accounting firms (big 4 on the island) regulator is approachable & flexible, effective 5% corporate tax (signed off by EU, internationally recognized Stock Exchange, close proximity to Europe /Middle East / North Africa, Central European time zone.

Tony Zahra, CEO - Fexco Financial Services (Malta) Ltd.

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is still well below Western European levels and professional and supervisory fees are also significantly lower. According to Malta’s fund managers the island’s main advantages lie in the proximity and access to the regulator, the swift decision making process, the level of service and the speed-to-market advantage that registering a fund in Malta allows.

Another advantage the island holds over established domiciles is that funds registered in Malta, while required to appoint at least one resident director, are not required to appoint a local administrator. The existence of locally-based administrators such as Valletta Fund Services (VFS), HSBC and Dutch Administrator TMF all offering fund administration services could be seen as a more convenient option, however the regulation ensures flexibility and choice. Fund administrators – of which, besides the big players there are now 11 – are now well established. Many of them administer the domestic market funds. Some, like VFS and HSBC’s operations, grew out of a desire to extend the expertise built up with in-house fund products to third parties.

It helps, of course, that the tax regime is welcoming. Income derived from a Malta-registered collective investment scheme is not normally taxed, and there are tax concessions on dividends from securities listed on the Malta Stock Exchange.

Administrators based in Malta are not limited to servicing funds domiciled in Malta; they can also administer funds authorised in other domiciles, provided this is allowed under the laws of the domicile concerned. On the other hand, as a general rule Malta allows funds based on the island to be administered by overseas fund administrators, provided these in turn are based in an EEA or recognised jurisdiction.

No Loopholes On the other hand, Malta’s tight legislation and highly personalised approach offers no loopholes for less-reputable funds to use as a ‘back-door’ into the EU. Funds looking to redomicile in Malta have to be able to show they have been operating for at least one year in their current home before applying to move, and Malta has turned away various funds which did not satisfy Malta’s strict standards for authorisation.

Investor Protection For reputable funds, of course, this stringency is a key advantage, often cited by fund managers in tandem with the regulator’s efficiency as the motivation behind their decision to move to Malta. And while this is valid across the financial services industry, in the fast-moving arena of fund management, with its acute level of responsibility to investors, it is a crucial factor.

Ideal Location Malta is flexible and business friendly, say the professionals in the business. The island’s high standards of regulatory oversight and processes, its dedicated customer-service ethos, highly qualified and multilingual staff and lower all-round costs are establishing its reputation and steadily building up its attractiveness as an international fund centre. n

SECTOR PROFILE / FINANCIAL SERVICES / WEALTH MANAGEMENT

DYNAMIC EU ENVIRONMENT FOR MANAGING WEALTH Offering the right balance between vigilant regulation, seasoned professionals and discretion, Malta provides advantageous financial planning solutions in a Eurozone location

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alta’s key location at the centre of the Mediterranean has made it a natural hub for wealth management and family offices in the region. Having won international respect for the excellence of its financial services industry and established itself as one of the safest and best run financial centres in Europe, Malta is emerging as one of the leading wealth management centres of the region.

Driving Malta’s success as a wealth management location is its ability to attract wealthy private clients to the island. High net worth individuals, globe-trotting professionals and retirees from Europe and beyond are attracted by Malta’s favourable residency and tax planning solutions. Unprecedented receipts from sales of oil and gas and other natural resources are generating substantial wealth across the Mediterranean region and given Malta’s proximity, strong commercial and cultural ties to its neighbours, demand from these countries for wealth management solutions are soaring.

At the same time Malta’s attractiveness as a corporate location is also creating its own demand from high-earning executives based on the island, leading many to believe Malta could well repeat the success of other regional financial hubs like Dubai and Hong Kong albeit on a much smaller scale.

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Innovative Investment Vehicles Malta’s strengths as a wealth management centre lie in its solid fundamentals; the financial centre offers a wide range of investment vehicles including specialist funds regimes, trust companies, and a positive tax regime. In addition the island offers an excellent physical and legal infrastructure which is bolstered by tried and tested professionals with a track record in structuring customised solutions and offering innovative approaches. The island offers a widely respected regulatory regime, skilled multilingual talent pool, and is an EU member state with a politically stable, low-risk environment that offers a very attractive international lifestyle - all within easy access of most European and Mediterranean capitals.

Strong Banking Infrastructure The island’s strong banking infrastructure caters to all levels of wealth from the mass affluent to the ultra-high-net-worth individual requiring the more personalised services of a private banker.

Malta has been experiencing a steady increase of banks specifically set up to offer investment banking, private banking and wealth management services to their wealthiest clients. Specialist

the actual impact of taxation on trusts depends on a number of issues, including the type of assets and the status of residence of the beneficiaries. However Maltese tax law states that income attributable to a trust is not taxable in the hands of the trustee if it is distributed to a beneficiary but is charged directly to the beneficiary on distribution of income. Providing all the beneficiaries of a trust are not resident in Malta and providing all the income attributable to a trust does not arise in Malta, this means there should be no tax due by the trust or by the beneficiary in Malta because non-residents are not subject to tax in Malta on income not arising in Malta.

Sophisticated Solutions Maltese professionals such as tax advisors, lawyers and accountants are recognised to be among the best in the world and this excellent reputation is helping to expand the Maltese product offering as a wealth management centre. Across the globe, the wealth management industry is both expanding rapidly and increasing in complexity, as client expectations grow more sophisticated and competition intensifies. Malta, offering solid fundamentals, an excellent reputation for high standards of regulation and supervision, competitive costs and a highly educated workforce, is proving to be one of the most interesting up-and-coming wealth management centres in the region.

wealth mangers such as Mediterranean Bank are offering Swiss style private wealth management, while foreign banks such as Sparkasse, Volksbank, BAWAG and Raiffeisen all offer management solutions from Malta. Concurrently, retail banks like Bank of Valletta, Banif and HSBC also offer wealth management services, as do a host of international asset management firms, consultants and other professional institutions offering personalised services to individuals or companies.

New Trust Legislation A key instrument in the attraction of wealth management activities to Malta has been the Maltese Trust and Trustees Act, which came into force in January 2005 as part of the revision of the legislative landscape. The new act creates a more streamlined and simplified trust regime, and makes Malta much more attractive to international clients, by offering greater flexibility and high standards of certainty. The new act permits the holding of any property for any person eliminating ring fencing and discrimination based on residence and nationality.

Malta’s advantageous taxation regime also enhances the attractiveness of this financial instrument, though naturally,

Malta’s unique selling points in EU in the financial services sector would include: a multi-financial service product based on flexible and efficient fiscal benefits to non-residents in harmony with EU legislation, competitive tax regime, a combination of a civil law with English law influence particularly in company law, taxation and trusts. Furthermore, our country size allows the conduct of immediate and effective meetings with the relevant authorities which add legal certainty for foreign investors.

The areas in using Maltese companies and also the creation for trusts in international structures are flourishing and augurs great opportunities for growth within the Financial Service sector in Malta.

Jesmond Pace, Managing Director - FACT Group Malta’s financial sector is growing rapidly to become an important financial hub in the heart of the Mediterranean. A number of factors contribute to this such as the efficient and flexible centralized Regulator, the solid legal and accounting framework, the modern IT structure, the strong banking and financial background, the highly qualified labour market and on top of them, the EU membership.

Frédéric Villa, CEO - Mediterranean Bank

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SECTOR PROFILE / FINANCIAL SERVICES / CAPITAL MARKETS

Steady Growth Consolidates MSE Success

The Malta Stock Exchange © Alan Carville

Young but ambitious, the Malta Stock Exchange is growing steadily as equity and fund listings increase in tandem with the number of individual investors

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hile Malta’s stock exchange may be small by international standards, with a capitalisation of just over €7.2 billion, EU accession in 2004 and the island’s recent introduction of the euro have created fresh opportunity for Malta to transform its stock exchange from a purely domestic affair to a creditable European listing location for small and medium companies.

The Malta Stock Exchange (MSE) now lists 36 companies, counting both equity and corporate debt listings, on both the main List and the second tier Alternative Companies List. Some of those companies have more than one instrument listed, bringing the total number of listings up to 51, nineteen of which are equities. In addition to all Government paper including stocks and Treasury Bills, it has some 300 funds listed on its boards, amongst which are various large international players such as Fidelity, HSBC and Société Générale.

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The Exchange has seen a slow but steady rise in private sector participation. The number of both equities and corporate bonds listed has grown over the years, with each new issue greeted enthusiastically by investors. In fact, the stock exchange now counts 65,000 individual investors, almost 16 per cent of the total population. Maltese businesses large enough to meet listing requirements – many of which are family held – are increasingly coming to appreciate the possibilities a listing opens up for them. Many participated in the past through the issue of corporate bonds, but stopped short of an equity listing. This is now changing gradually and through 2007, four companies prepared for IPOs. Of these, two floated in 2007; the other two during the first month of 2008. Another company went public in late spring 2008 and indications are that a number of new issues will come to the market during the second half of 2008.

SECTOR PROFILE / FINANCIAL SERVICES / CAPITAL MARKETS

EU Advantage Although the Maltese internal market is restricted by the island’s small size, the MSE has sought to counter its natural limitations through innovative and ambitious plans aimed at broadening its relevance on both a regional and an international level. EU membership in 2004 gave a further boost to these efforts, and the MSE is keen to maximise the opportunity membership presents to encourage companies, particularly small and medium sized companies, from other EU member states to list on the MSE. Updating Legislation While the MSE is seeking to take full advantage of all the opportunities being offered by euro adoption, MiFID and other international and national developments that will have a significant effect on its operations, the MSE has also taken a closer look at its own corporate structure and internal infrastructure, in order to continue to enhance its efficiency. Amendments to the relevant legislation have not only provided for the MiFID adoption, but have also provided for an expansion in services of the depository function, to enable this to move from a pure register service base to encompass also custodial and registrar related services. At the same time these amendments to the legislation have provided for a corporate restructuring of the Exchange, providing a platform for the eventual demutualisation.

Euro Adoption Euro adoption in January 2008 added another, expected dimension to these efforts, with heightened challenges on the flip side of the coin. While the opportunities presented by Malta’s membership of the eurozone include the potential for attracting investors previously cautious about bearing the foreign exchange risk of the Maltese Lira, it also raises the possibility that MSE-listed companies might migrate away from the MSE. However, the fact that other markets that have already been through the changeover to the euro did not experience a significantly large outflow means that while the MSE recognises there are challenges ahead, most are confident these challenges are manageable.

Attracting New Listings In the meantime, efforts to attract more local and international companies to list with the MSE are continuing; the small size of Another busy year lies ahead for the Exchange.

While international events will naturally continue to dominate the financial sector, the MSE will also continue to focus on its own operations with a view to continue to develop and consolidate its position within the local environment particularly within the framework of its new corporate structure.

Mark A Guillaumier, CEO - Malta Stock Exchange

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The small size of the Malta exchange means it is able to provide a more intimate, flexible and fast service at very competitive fees

the Malta exchange means it is able to provide a more intimate, flexible and fast service at very competitive fees, particularly to the smaller companies which might be too small to list on a larger exchange or indeed might feel daunted at approaching one of the larger, international exchanges. In this respect the MSE is also taking full advantage of the opportunities being offered by the introduction of MiFID and entry into the eurozone by creating new markets for smaller companies with less onerous access requirements; creating new market operators – such as market makers and also creating technical links with other exchanges, depositories and settlement systems that will facilitate entry into the Maltese market by large international investors, in both the primary and secondary market, thereby boosting liquidity.

Malta is a fully fledged international financial centre supported by professional and experienced brokers, banks, lawyers, accountants and other professional advisors all of whom can lend their expertise to assist all potential issuers on the market. Recent upgrades to the MSE’s entire IT infrastructure, including both the trading and depository operations, provide added functionality for the MSE to have a technical infrastructure capable of supporting all these changes.

Adding New Instruments The MSE’s management actively seeks out companies and funds to extol the benefits of being listed on the Exchange. The MSE also plans to take full advantage of Malta’s new Securitisation Act to promote Malta as a specialist centre for securitised vehicles and structures. Additionally, the MSE is adding new instruments to the equities and bonds currently listed on the MSE boards. Pension reform is also seen as the source of future opportunity; when personal pension funds become compulsory, locally managed pension funds should add liquidity to the Exchange’s instrument volume.

Tangible Results As the MSE continues to seek creative solutions to increase its level of business and raise its international profile, local investors have been more than satisfied by its performance over the last couple of years. As new strategies and policies are laid out by the management, all indications are that the pro-active character of the MSE will continue to deliver solid and tangible results. n

SECTOR PROFILE / ENERGY AND ENVIRONMENT

SEEKING SUSTAINABLE

ALTERNATIVES

Malta’s dependence on imported oil has long been recognised as unsustainable and the Maltese government is now actively seeking alternatives as it strives to meet EU deadlines and save on fuel costs

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till almost totally dependent on oil imports to supply its energy needs, Malta is now facing one of its greatest challenges of the last decade. With no natural, domestic energy sources to fall back on, imported oil is still the only type of energy used for electricity generation in Malta and the hefty increases in the price of oil have resulted in government’s imposing an everincreasing surcharge on consumer’s electricity bills (now at 95 per cent). Concurrent 10 per cent hikes in the price of transport fuel hit both the consumer and the business community hard and the need to address these issues is pushing the Maltese government to accelerate their search for alternative energy sources. In addition, Malta’s commitment to the European Union to ensure that at least 10 per cent of energy is generated from renewable energy sources by 2020 sets a very definite deadline. There is now a palpable sense of urgency about the issue, which lies high on the national agenda.

EU Obligations Malta joined the European Union in 2004, which meant transposing EU Directives on Energy and Environment into the national legislation. This impetus has spurred improvements in a

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host of areas, including waste management, and has also placed the island under a number of obligations such as reducing CO2 emissions by 20 per cent and using renewable energy sources to generate at least 10 per cent of energy by 2020. The sector is regulated by The Malta Resources Authority and comes under the brief of the Ministry for Resources and Rural Affairs.

The Electricity Grid Both Malta and its sister island Gozo are connected to a single electricity grid, with electricity generation coming from two fossilfuelled power stations having a total combined capacity of 571 MW. The power stations are run by Enemalta Corporation, also the national provider of oil, gas and petroleum. The two power stations currently supply all the electrical power needs of Malta and Gozo, though the country’s dependence on reverse osmosis plants for its water needs means the Water Services Corporation is Enemalta’s largest client, consuming 4 per cent of total electricity generated by Malta’s two power stations. Both the small size of the market and the lack of any interconnection with other countries, mean there is currently no competition in the Maltese electricity market.

Alternative Energy Sources This is set to change however. As the pressure to tap into more cost effective and environmentally friendly energy sources mounts on both the government and individual consumers, Malta is finally seeing a move towards adopting alternative sources of energy. Located in the centre of the Mediterranean, Malta enjoys an abundance of sunshine and wind, both resources that offer significant energy generation potential. In addition, energy production from waste has also been highlighted as a key renewable energy source for Malta.

Involving the Consumer To encourage individual investment in these areas, the Maltese government offers subsidies for the purchase and installation of domestic photovoltaic systems and wind generators. In addition, householders and companies installing photovoltaic cells for the generation of electricity are able to feed their excess production back into the national grid, and get paid for every unit, though the price Enemalta pays per unit is still lower than the price it sells electricity to the consumer.

The take-up of these schemes to date has been limited, mainly because the overall cost of installing these systems remains high, despite the government subsidies. On the other hand, there has been greater success with solar water heaters, also subsidised by government, and the Malta Energy Profile, published by the Malta Energy Efficiency and Renewable Energies Association (MEEREA) in 2006, claims that if 75 per cent of households were to install a solar water heater, this would translate to savings of five per cent of annual electricity generation.

In order to further encourage private consumers and SMEs to invest in solar or wind energy generators, the Ministry for Resources and Rural Affairs is now planning to introduce a more advantageous grant scheme on the purchase of renewable energy equipment. The scheme, which will cost the government €33 million, is partially funded by the EU.

The Maltese government offers subsidies for the purchase and installation of domestic photovoltaic systems and wind generators

early experimental stage and the process was not developed further. Plans are now being made for Malta to participate in the EU-funded Scottish project, Beatrix, led by Scottish Enterprise, which is currently carrying out research with deep sea wind turbines at a depth of 45 metres in the North Sea. The Maltese government is proposing to partner with Scottish Enterprise and take the wind turbines to depths of between 50 and 60 metres, but this is still at a very early stage and it will be at least six years

before it produces concrete results.

In the meantime, the Ministry of Resources is now reevaluating the possibility of establishing a wind farm closer to shore, an option that had previously been rejected due to concerns of various stake-holders over potential visual impact. Now, a potential site has been identified two to three kilometres off the coast of Malta, where the sea is between 16 and 24 metres deep.

Proven technology is already available for wind installations situated in up to 40 metres of water. Again, this project is at a very early stage and before the tendering process can start, the project needs to go through public consultation processes, as well as Impact Assessment and other studies on the site. If it does go through however, according to the Ministry of Resources, the site is large enough to provide 10 per cent of Malta’s electricity needs, fitting neatly with EU obligations and providing enough electricity to supply the entire island of Gozo.

Energy production from waste has been identified as another potential source of renewable energy. The overall potential for generating electricity from waste could reach 5.6 per cent, while power generation from waste would reach 0.24 per cent by 2010, National Projects according to a report by MEEREA quoting Malta’s report to the On a national level, the Maltese government is looking at EU on the implementation of the relevant directives. developing at least one offshore wind farm. Currently, wind energy The first energy from waste project is due to come on line is deemed to offer the greatest potential as a major contributor for during 2008 and will be based at the Sant’ Antnin Solid Waste Malta to reach the EU-set target for renewable energy by 2020.

Treatment Plant, one of the various waste management facilities Investigations on the best run by WastServ Malta Ltd. way to harvest wind energy The waste treatment plant on a larger scale are ongoing at the site is currently being and the government was upgraded with new technology initially looking at locating No commercially viable oil discoveries have ever been made in Malta, equipment that will allow the the above-mentioned wind despite the island’s proximity to the oil fields of southern Sicily, Libya plant to both process waste farm some 20 kilometres off and Tunisia. Efforts to find oil continue however and the Maltese and reduce its impact on Malta’s coast in deep water. A government has ongoing contracts with various oil exploration the environment. When the call for expressions of interest companies working within Maltese territorial waters. Latest developments upgrade is completed, the in this sector include a Production Sharing Contract with Heritage from companies involved in Oil Corporation signed in December 2007 and a Production Sharing Sant’Antnin Waste Treatment wind energy generation was Contract with Mediterranean Oil & Gas signed in July 2008.

Plant will process and treat issued mid-2006 but all offers 36,000 tonnes of dry recyclables received were still at a very

Oil Exploration

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and 35,000 tonnes of organic waste produced by residents in the vicinity every year. For this project, WasteServ has secured €16.7 million EU co-funding from the European Union Cohesion Fund. The plant will incorporate a Combined Heat and Power Plant, which will run on the biogas produced and generate enough electrical power for 1,400 households of 4 persons each, besides the heat required to run the plant.

Linking to the European Grid In addition to seeking alternative energy sources domestically, the Maltese government has also begun to look at the possibility of linking Malta to the European electricity grid via a submarine cable to Sicily. This includes looking at how the connection would be managed, with participation from the private sector. Among other things, this would introduce an element of competition to the Maltese power supply market, thereby satisfying EU guidelines on competition.

ENERGY POINTS Malta is almost totally dependent upon imported fossil fuels for its energy needs.

Currently over 63% of the primary energy is used for power generation.

The remaining oil consumption is mainly used for transportation (85%). Only a minor share is used for other purposes (15%).

Heavy fuel oil and light distillate are used for power generation.

Transport fuel consists of petroleum products and a small percentage of biodiesel (0.52%) (1.5 million litres of biodiesel).

collects used oil from households and commercial kitchens, taking it out of the waste stream, and supplies a fuel that does not contribute to carbon dioxide emissions since it essentially returns carbon extracted by plants from the atmosphere in the first place.

Use of biodiesel is increasing and it is now sold from 28 filling stations in Malta. However though sales increased from 1.4 million litres in 2006 to 2 million litres in 2007, there would appear to be a limit to the potential supply within the model the company is following, dictated by the volume of cooking oil used on the island.

Waste Management WasteServ Malta Ltd., established by the government in 2002, is responsible for operating integrated systems for waste management including minimisation, collection, transport, (Source: Energy Efficiency and sorting, reuse, utilisation, recycling, treatment and Renewable Energy, Malta Summary, disposal of solid and hazardous waste, including Plan Bleu Study, March 2007) systems for export of waste to destinations outside the Maltese islands. Its facilities include Fuel and Bio Fuel bring-in sites for separated, recyclable waste, civic amenity sites for Car ownership in Malta is one of the highest in Europe with the disposal of bulky waste, two engineered landfills at Ta’ Zwejra an estimated one private car for every two people in Malta. and Ghallis, a thermal treatment facility, or incinerator, and a site Unsurprisingly, the high density of vehicles on the island leads to in Gozo, as well as the previously-mentioned Sant’ Antnin waste rising consumption of fuel with the resultant increase in transporttreatment plant. related pollution. While in recent years leaded fuel has been Refuse collection is regular, and waste is disposed of at eliminated and has been replaced by a specific lead replacement engineered landfills, with a waste separation at source system about fuel, the high number of cars on the road remains a problem. to be introduced to facilitate recycling. Collection, run by the local Few people use the public transport system, which although councils through a number of contractors, happens on a daily basis still relatively cheap, is seen to be highly inefficient. The planned – except on Sundays – in most areas. liberalisation of the system over the next few years should change Some classes of hazardous waste are now being incinerated that perception and, it is hoped, encourage increased use of public in state of the art facilities operated by WastServ Malta ltd, and transport. as outlined above, this process produces enough energy to allow In the meantime, however, most people use their cars, despite the generation of electricity. By a similar token, the heat and gas hefty increases in the prices paid at the fuel pumps. So far, Enemalta generated by the landfills are being tapped to provide yet another Corporation has been the sole importer of petroleum and natural source of power. gas, but this situation is changing slowly. One Maltese company, an edible oil refining company, has begun processing used cooking oil Reaching a Target into biodiesel, solving two problems in one stroke. The company Malta has been slow to explore alternative sources of energy and is well behind its European neighbours in the adoption of renewable energies. However, since EU accession in 2004 The use of renewable sources of energy can help to reduce Malta’s dependence on fossil fuels although the Maltese government has begun to take the issue seriously, not necessarily at a lower cost considering present opening up numerous areas of opportunity for qualified day costs. Solar energy, wind energy and waste industry players to get involved, either through carrying to energy were indentified as having the highest out research and development projects on the island or by potential for exploitation in Malta. Investigations on the best way to harvest wind energy on a larger introducing innovative ideas that could help Malta achieve its scale are ongoing because wind energy is deemed EU targets as well as provide cost-control solutions to counter be the potential major contributor for Malta to reach rising fuel prices. While waste management has largely been the EU set target for renewable energy by 2020. tackled satisfactorily, areas such as electricity generation and George Pullicino - Minister of transport fuel provision, including biofuels, remain open to Resources and Rural Affairs new investment and new ideas. n 100

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SECTOR PROFILE / CONSTRUCTION AND DEVELOPMENT

UP-MARKET PROPERTIES

LEADING THE SECTOR

A levelling-out period in property prices has not depressed Malta’s construction industry, which continues to develop high-value properties for a growing market of international buyers

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fter a period of extraordinary growth in property prices over the last years, the final months of 2007 and first quarter 2008 showed signs that the market may be levelling out or ‘correcting itself ’ as real estate professionals describe it. The growth in Malta’s overall economy, of 3.8 per cent in 2007 and 3.5 per cent in the first quarter of 2008, is reflected in the number of high profile construction projects underway at the moment.

Multiple major construction projects worth an estimated €5.43 billion are scheduled for completion within the next few years and are destined to add 5,600 new up-market residential properties as well as many commercial and leisure units to the already strong real estate market.

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With economic recovery well on its way, demand for property is still set to continue strongly, both from local and the international buyers. Construction and real estate are two of the most profitable activities within Malta’s economic sectors and property remains Malta’s most popular, reliable and profitable investment. While asking price rises may be levelling-out from the heady heights of 15 to 30 per cent annual increases of previous years, the trend for property as favoured investment is not likely to change any time soon. Estate agents are welcoming the levelling out of asking prices, which they see as a healthy part of a regular cycle: one estate agent pointed out that periods of intense growth in asking prices are always followed by a levelling

out period where market value and asking price match more closely. Malta has not so far been affected by the housing market crises in other economies, and banks are still offering home loans which are available to both Maltese and foreigners buying property.

The extraordinary price rises of 15 to 30 per cent in 2004, 2005 and 2006 were a result of the post-EU accession demand for property in Malta from expats and citizens of other EU countries, for whom there are now very few restrictions on buying property in Malta. This demand is still there, as is clear from the official statistics and statements from estate agents, and while asking prices for maisonettes remained more or less

stable, with minimal growth in asking prices registered in the last quarter of 2007, prices for apartments, villas and houses of character went up respectively by 2.2 per cent, 7.6 per cent and 9.1 per cent over the same period in the previous year.

This dovetails well with the type of development currently under construction in Malta. As the demand for high-quality apartment and villas remains strong and prices continue growing at a healthy rate, it’s apparent that the construction and real estate industries have manoeuvred themselves smartly into the right place, at the right time.

Projects such as TignĂŠ Point, Pendergardens, Metropolis, Fort Cambridge, Villa Michel and others, all heading for completion in the next months or years, will add hundreds of new top-scale residences and purpose-built offices to the growing market for upmarket property. SmartCity, an IT business park that will include residential areas, retail and hotels as well as office space and business facilities, has just started construction on the first office block in the project, which will be completed by December 2009. The entire project, scheduled for final completion by 2021, will cover an area of 360,000 square metres and will comprise green areas, a man-made lake and entertainment areas as well as office and residential space.

The level of activity in the construction sector remains high, and over the last few years, egged on by the boom in property prices, the construction industry saw the start of numerous large top-of-the-range projects mentioned above, although its share in GDP has remained relatively stable at just over 5 per cent.

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The sector is mainly composed of small, independent, familyrun operations, and dominated by a handful of large companies that act as both developers and construction companies and are responsible for all the signature projects on the island.

With few exceptions all the activity is focused on Malta but the dominant operators are interested in joint ventures and strategic partnerships on international projects especially in North Africa and the Mediterranean region where they believe they can add significant value.

Residential Property The type of properties currently being built in Malta reflect the new philosophy filtering across all areas of economic activity: high value added is the catch-phrase of government’s strategy for the future, whether it’s looking at manufacturing, tourism or real estate. In property this means building five-star properties with five-star price tags, and the success of trail-blazer projects such as Portomaso and Tigné Point have encouraged other construction companies and consortia to form and emulate the type of development that includes residential units of the highest quality, marinas, sports and leisure complexes and a host of other residents’ facilities all set within beautifully landscaped grounds and boasting some uplifting historical landmarks such as a 15th century watchtower, a medieval chapel or an entire baroque fort within its environs.

Commercial Property While Valletta is Malta’s largest commercial district, with Sliema and St Julian’s coming a close second, the increased influx of inward investment in the ICT, financial services, iGaming and business services sectors is feeding a growing demand for specialised, top-of -the-range office space in all areas of the island. Business parks and office blocks providing this type of commercial property, complete with amenities such as high-speed internet connection, telephones and customised work spaces and offices, are being constructed in various locations in Malta, and planned developments include the ambitious Malta International Airport Business Park project as well as the $US 300 million SmartCity project.

Making Hay The current spate of building activity is at least partially due to the boost EU membership has given to Malta’s economy. Recordbreaking levels of inward investment plus the steady growth and consolidation of key sectors such as financial services, ICT and iGaming have fuelled the growth in demand for property, both residential and commercial, and is being taken as a strong signal of Malta’s economic regeneration. And though asking prices on certain types of property may level out to meet estate agents’ estimates of market value, the construction and development industry in general is in an excellent position to make the most of the myriad opportunities being offered. n

Artist Impression of the Fort Cambridge development in Tigné

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SECTOR PROFILE / MARITIME

LEADING

MARITIME CENTRE

Building on a centuries old tradition, Malta’s maritime sector offers a complete range of services, from ship registration to ship repair, cruise liner harbours to cargo port facilities capable of handling any type of cargo as well as offering an ideal yachting infrastructure and environment

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alta is blessed with an almost ideal geographical location to service the shipping industry. Located at the centre of the Mediterranean, the ports are just six nautical miles off the main East-West shipping lane from Port Said at the Mediterranean end of the Suez Canal and the Straits of Gibraltar, gateway to the Atlantic.

Malta has been a maritime centre for most of its history. Among the ruins of its prehistoric temples dating back 4,500 years, ancient Greek and Egyptian goods have been found. Obsidian from Lipari and Pantelleria and copper from Spain provided its tools. By the 17th century, Malta was a centre for the corsairing trade, and under British rule in the 19th and 20th centuries it was a major naval base.

The reality now is perhaps less colourful, focused on commercial and leisure shipping. But this history has left a strong maritime culture and some of the best maritime facilities in the Mediterranean.

This legacy means that Malta has a well-established network of shipping agents and maritime lawyers servicing the international shipping trade, and a state-of-the-art maritime legal framework with deep roots. Surprisingly, however, the Malta flag is relatively young: the register was only opened in the early 1970s. Since then, however, it has gone from strength to strength and is now the second largest flag fleet in Europe, after the Greek flag. It is ranked in the top ten worldwide. Malta also hosts the Regional Marine Pollution Emergency Response Centre for the Mediterranean Sea, The IMO International Maritime Law Institute, and the International Ocean Institute.

Malta Flag Safe ships and clean seas are the priority for Malta’s maritime industry, a policy that is successfully attracting increasing numbers of ships to its register.

Since accession to the European Union in 2004, the pace of development in the industry has picked up considerably. According to the Malta Maritime Authority (MMA), regulator of the sector, the fleet has grown about 12 per cent over the last year and Malta’s membership of the EU is widely seen as bringing positive opportunity for the industry in Malta.

The Maltese flag is the second largest in Europe after the Greek register and is ranked in the top ten worldwide, with just over 32 million tons of shipping registered under its flag, or just under 2000 vessels. Dedicated legislation, tighter registration criteria and improved regulation, all in line with EU Directives and IMO conventions, have spearheaded Malta’s determination to protect the reputation and image of the Register, and the MMA emphasises that Malta is not a flag of convenience but rather a flag of confidence.

White List Flag Substantially reduced detention rates have been achieved as a result of increased inspections and tighter documentation processes and in July 2006, Malta was recognised as one of the flag States with a high quality ranking by the Paris Memorandum on Port State Control.

Since 2006 Malta has been on The Paris MoU ‘White List’, which represents quality flags with a consistently low detention record.

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he Palmali Group of Companies, an international shipping organisation with its head office based in Istanbul, includes under its umbrella the expansive network of seventeen international offices, located all around Europe and Eurasia, Established in 1998, Palmali has grown rapidly from the initial service company offering agency services to vessels passing through the Bosphorus and Dardanelles Straits on their way to Turkish ports, into one of the largest oil and dry cargo carriers across the Black, Caspian, Mediterranean and Baltic Seas, as well as the waters of the world’s oceans. Palmali Ship Management Ltd established operations in Malta in 2006 to provide financial, technical, administrative and strategic services to our parent company fleet of ships.

Malta’s location at the centre of the Mediterranean and the good reputation of its Maritime Authority has attracted the registration of most of the company’s fleet since 2001. Palmali Shipmanagement has been established to be a leading provider of ship management and related services to the shipping industry.

Our primary objective as a service company is to add value to our clients by delivering quality services in a transparent, cost effective and consistent way.

The Malta Offices, based at the Portomaso Towers, St. Julians

Shipmanagement EXCEEDING ExPECTATIONS

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t Palmali Shipmanagement we provide the full spectrum of third-party ship management services. We pride ourselves on offering a flexible and customized approach to our ship management clients seeking global solutions for all vessel segments.

Supported by a team of highly experienced professionals Palmali Shipmanagement services cover all aspects of ship management including: ◆ ◆ ◆ ◆ ◆ ◆ ◆ ◆

Company Formation Vessel registration Full Technical Shipmanagement Ship inspection Dry-docking Vessel purchasing and Sale Taxation & financial consultancy Insurance

◆ ◆ ◆ ◆ ◆ ◆ ◆ ◆

Legal services Vessel operation Commercial Management Repair and maintenance, new building supervision Accountancy Administration Banking administration Crew management

Palmali Shipmanagement Ltd Palmali Shipmanagement Ltd • Portomaso Business Tower, Level 12, St Julians, Malta Tel: (+356) 213 88344/5/6 • Fax (+356) 213 88347 • Email: secretary@palmalimalta.com

SECTOR PROFILE / MARITIME

A significant development over the last few years was MMA’s introduction of a ‘sliding’ fee structure that provides a reduction on registration fees and tonnage tax to young vessels, while a surcharge is applied to vessels over 15 years of age. This policy is now paying dividends with the average age of vessels being registered reduced to just over 7 years old.

Ship Registration All types of vessels, from pleasure yachts to oil rigs, may be registered in the name of legally constituted corporate bodies or entities, irrespective of nationality, or by European Union citizens; there are neither trading restrictions nor age restrictions. However, ships of 15 years and over, but under 20 years, must pass an inspection by an authorised flag State inspector before or within a month of provisional registration; while ships of 20 years and over but less than 25 years must pass an inspection by an authorised flag State inspector prior to being provisionally registered. As a rule, trading ships of 25 years and over are not registered.

Maltese law provides both for bareboat charter registration of foreign ships under the Malta flag and also for the bareboat charter registration of Maltese ships under a foreign flag. Vessels so registered enjoy the same rights and privileges, and have the same obligations as any other ship registered in Malta.

For millennia, the Maltese Islands have played a central role in shaping the history of the Mediterranean region. Malta’s strength as a leading international maritime centre lies in its excellent geo-strategic location, its long and established tradition in providing maritime services as well as an adaptable and skilled English-speaking workforce.

Lino Vassallo, Executive Director Merchant Shipping Directorate - Malta Maritime Authority Since establishing operations on Malta in 2005 we have found Malta to be a very efficient jurisdiction in which to establish ship management operations. Malta’s well-established maritime infrastructure, European membership and reputable international shipping register offer a unique set of benefits for ship owners seeking a dynamic and effective maritime centre.

Nigar Aliyeva, Director - Palmali Shipmanagement Ltd The Maltese flag has earned an excellent reputation in the shipping world in addition to the financial and fiscal benefits offered by our jurisdiction.

Adrian Muscat Azzopardi, partner Muscat Azzopardi & Associates All matters relating to merchant shipping have always been at the forefront of Maltese economic development. Although the merchant shipping market in Malta is still strong we should not ignore the luxury yacht market. Malta can offer the full range of services to this market whether legal, logistical or operational.

David Tonna, Managing Partner - Mamo TCV

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Superyacht Incentives In recent years the luxury superyacht market (vessels over 30 metres in length) has been undergoing considerable evolution. In 1984 there were approximately 200 superyachts over 30 metres in the entire world. Today there are more than 3,000 superyachts in commission, with an average annual growth rate of 16.4 per cent over the last six years. These figures make the superyacht market a business niche with a rapidly growing level of attractiveness.

A number of superyachts have chosen Malta as their base in order to take advantage of the location and warmth of the island, as well as the favourable tax regime for boat ownership, which makes registering a new yacht over 10 metres in length under the Malta flag an attractive proposition.

In addition, two new incentives were introduced by means of legislation in Malta in early 2006. The first is the Commercial Yacht Code and the second is Yacht Leasing. The yacht commercial code gives the opportunity to superyacht owners to have Valletta - Malta as their home port. “As these vessels are usually meant for chartering, there is no VAT to be paid on the importation of these vessels in Malta,” said Bella Hili, Maritime Consultant with Ocean Finance Malta. “VAT will be paid on the chartering fee, the rate in Malta is currently 18 per cent. It is important to note VAT is paid on the chartering fee only.”

“The yacht leasing regulations allow the yacht to be bought by a Yacht Leasing Company (a company incorporated under Maltese Law) which will therefore be the owner/lessor of the yacht,” she explained. “Thus an agreement is entered into between the lessor (owner of craft) and lessee (the person who leases the craft) in return of a consideration (in the form of instalments). At the end of the lease, which can be of a minimum 12 months and maximum 36 months, the lessee has an option to buy the yacht at 1 per cent of the declared value. As a total the VAT rate paid can start from 5.4 per cent according to the length of the yacht. At the end of the lease a VAT paid certificate is issued by the VAT department of Malta which is valid all across the EU’.”

Building on Malta’s well-regarded reputation as a service centre and port of call for superyachts crossing the Mediterranean, the island’s maritime sector is confident that Malta is now an even more competitive proposition.

Yachting Base Malta is fast establishing itself as an attractive yachting centre and winter berthing base. The yachting community is well catered for when it comes to providing repair, haulage, storage and maintenance facilities. It boasts skilled boat builders, as well as shipyards, slipways and floating docks, catering for any vessel from the more modest to the most luxurious superyacht. Manoel Island Yacht Yard specialises in the refitting and repairing of vessels up to 40 metres while Malta Superyacht Services is regarded as one of the leading superyacht repair, maintenance and refit centres in the Mediterranean with some of the world’s most well-known yachts regularly using the island’s facilitates for both scheduled maintenance and full refits.

With five marinas and several yacht yards available, Malta also

caters to the leisure maritime industry. Malta’s yachting profile has been boosted by the Rolex Middle Sea Race, a 610-mile ocean race through some of the most spectacular maritime scenery around, including two active volcanoes.

Malta offers all a yachtsman needs, from agents and chandlers to shipyards. With its mild winters, the island is ideal for wintering and is also proving to be a good charter base.

24/7 One stop shop Offering a 24/7 service for registration, the MMA has technical staff on hand to guide ship owners and managers through whatever problems might arise and ensure that vessels are not delayed longer than necessary.

A select number of international classification societies and a world-wide network of appointed flag State inspectors extend the technical arm of the Maltese Administration to practically all ports in the world. In addition, ship owners benefit from attractive tax incentives, a flexible approach to crewing and preferential treatment at many ports.

International Maritime Centre Malta has a flourishing international shipping centre, and is regarded as an efficient jurisdiction in which to establish ship management operations. The island provides a convenient base for shipping companies that take advantage of the low costs involved in operations from Malta, and from the beneficial tax regime that exists and is able to provide a wide variety of quality financial and corporate services.

The development of the shipping register has encouraged the establishment of several Malta based international ship management and ship owning companies, which activity is supported by numerous shipping related service providers, including marine lawyers, accountants and banks offering comprehensive services to the owners and operators of ships world-wide.

Malta’s shipping industry now ranks among the world’s best.

Ship and yacht owners and operators around the world have recognised that the island is an economic and efficient centre for the ownership and management of their vessels. n Privatisation of state-run marinas In July 2008 the government announced it would seek to privatise the remaining three state-run marinas, those located in Msida, Ta ‘Xbiex and Mgarr, Gozo. In this case, the government is offering the marinas on 25-year lease, and, following the success of the Grand Harbour Marina (operated by Camper and Nicholsons Marina Investments ltd), interest in the offer is expected to be high. The Maltese government also intends to begin building new marinas over the next couple of years, though the location and extent of these new developments is yet to be decided. Malta fully intends to maintain and expand its significance within this vital area of industry. Offering extensive and modern ship and yacht repair facilities in combination with extensive on-going investment, the Maltese have created a dynamic international maritime service centre for the twenty-first century.

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HUB FOR

GLOBAL LOGISTICS

Anchored mid-way between Europe and North Africa, Malta’s strategic position, international connections and broad range of top-end facilities give it the leading edge as a regional maritime and logistics centre

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he European Union’s southern-most member state poised between Europe and North Africa, Malta is ideally located to take advantage of the opportunities that increased trade between Europe, Africa and the rest of the world brings.

Recognising the potential this brings, the island has invested heavily in the sector and today Malta’s solid shipping industry, flourishing Freeport and excellent airport cargo handling facilities present businesses with efficient and convenient multimode sea and air logistic solutions as the sector continues to grow at a healthy rate, both in size and significance.

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Transhipment – Freeport Malta’s geographical position in the centre of the Mediterranean has always played a pivotal role as a hub for business and commerce in the region and today Malta Freeport has become an important container transhipment hub. Many companies use Malta as a stepping-stone for trading, regional storage, distributing and marketing for international operations in Southern Europe and North Africa.

Since it was established in 1988, the Malta Freeport has become one of the key players in the region. Now one of the

container traffic, Ro-Ro and conventional cargo. The container traffic is transhipment business as it focuses on the ‘hub’ concept whereby cargo is discharged from large mother vessels and relayed to a network of regional ports by regular and frequent feeder vessels. Malta’s strategic location in the centre of the Mediterranean astride one of the major shipping highways in the world is proving an attractive draw card for the major shipping lines. Servicing shipping lines from all four corners of the globe, the island is now connected to practically every major port in the Far East, Europe, North America and North Africa.

The Oil Terminal, which is the largest oil bunkering facility in the Mediterranean with a storage capability of 360,000 cubic metres is operational round the clock and has an annual handling capacity of around two million metric tonnes of products.

Products handled include gasoline, jet fuel, feedstocks, industrial alcohols, heavy fuels, crude oil and other products. The Oil Terminal’s principle activity is tank rental but it also provides other services such as blending, storage, butanizing, circulation, ship-to-ship transfer, leading and injecting of additives or dyes.

Malta Freeport

largest transhipment and logistics centre in the Mediterranean handling close to 3 million TEU per annum, the Freeport is the focus for containerised transhipment traffic. The terminal management was privatised in 2004, and is now handled by Terminal Link, after CMA CGM, a French line was awarded a 65-year concession on the port. Connected to 60 Mediterranean and Black Sea ports and 125 ports worldwide, only 5 per cent to 8 per cent of the Freeport’s traffic is cargo originating in or destined for Malta.

The Freeport can handle various types of cargo, including

Airport logistics Goods may travel by sea. People, and time-sensitive deliveries, use air transport. Malta International Airport (MIA) is connected by direct flights to most major European and regional cities with the majority of destinations less than three hours flying time away.

Leveraging off the success of the Freeport, MIA believes it can repeat that same success in using Malta’s strategic location as a hub for cargo traffic especially between North and West Africa to Europe via Malta. In addition, the vicinity of the airport to the ports means that a multimode distribution is within easy access. Goods can be shipped in by sea, possibly finished and then forwarded on to the final destination by air.

Located just 6 km from the Freeport, the development of a specialised freight village at the airport where timesensitive exports – flowers and fish for example, and batches of semiconductors – can be shipped fast and with ease coupled with the warehousing facilities at the Freeport open up excellent opportunities to exploit multimode sea and air logistic solutions.

The island’s excellent air cargo links provided by Air Malta, Lufthansa and Emirates, well developed airfreight handling capability and smooth customs clearance offer clients trading in time-sensitive cargo a productive and cost-effective route to market. The policy to zero in on opportunity goes a long way towards achieving MIA’s objective of becoming a leading regional cargo hub.

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Shipping and general transport are heavily dependant on oil and thus the price of oil has a substantial impact on the costs of operations in these sectors.

What Government can do and is doing is structural and long term, namely ensuring the country’s finances are sustainable by continuing the drive to reform services and direct subsidies away from unsustainable enterprises; driving progressive policies in transport; offering incentives to business who invest and ensuring Government services are effective and their relative costs restrained.

Austin Gatt - Minister for Infrastructure, Transport and Communications

Strategically positioned at the heart of the Mediterranean basin, Malta is a natural gateway to Europe and Northern Africa. The optimum sea, air, land facilities present on the island together with a sound ICT infrastructure and a highly skilled English speaking workforce offer an opportunity and give flexible and competitive solutions to operators working in the Mediterranean region.

Robert Aquilina, Chairman - Salvo Grima Group Since Malta is strategically located on the main trade routes in the Mediterranean vessels can call at Malta with a minimal deviation of just six nautical miles between Gibraltar and the Suez Canal. This results in drastic reductions in the duration of the delivery of goods, cost savings in the distribution system, and better customer satisfaction.

Uwe Malezki, CEO - Malta Freeport Terminals Limited Malta’s geographic position at the centre of the Mediterranean has long been attributed as one of the country’s greatest assets facilitating international transportation within the Mediterranean basin.

Throughout the ages, and to this day, Malta continues to assist and promote trade and communication between the diverse yet complimentary cultures of the Mediterranean and beyond.

Joe Cappello, Chief Executive - Air Malta

Valletta Port The Port of Valletta, or Grand Harbour as it is also known, is also experiencing a reversal of fortune. Management of the Port of Valletta has been in private hands since June 2006, when Valletta Gateway Terminals (VGT), a joint undertaking between Portek International of Singapore and the Maltese Tumas Group, was established. Here again, a programme of investment plus an overhaul of procedures and work practices have begun to bear fruit. The VGT team have also started to actively market the Port of Valletta, and their efforts are already beginning to pay off.

Traffic through the port is increasing, and regional transhipment is beginning to pick up. This is in line with current trends, replacing road traffic with short sea shipping routes.

Ro-Ro operations, general cargo and a small proportion of unitised cargo, mostly directed to the local market, are handled through Malta’s historic Grand Harbour. VGT is also managing to attract car transhipments, a sector that had until now eluded Malta, with over 11,000 vehicles being transhipped via Malta between 2006 and 2007. Malta Motorways of the Sea, a Maltese company set up by the Grimaldi Group Naples and Sullivan Maritime, also increased the frequency of their services, with a total of nine weekly sailings to Italy, making it more feasible for cargo to be brought to Malta by road, rather than in containers by sea.

The Kordin Grain Terminal located in the Port of Valletta offers modern handling, storage and transhipment of all types of free flowing grains such as wheat, maize and barley. Substantial investment in Kordin Grain Terminal has also been undertaken in recent years in a bid to exploit fully the island’s potential for storage and transhipment of commodity goods. Capable of accommodating Panamax vessels in excess of 60,000 DWT the grain terminal is keen to exploit its natural advantages and develop the facilities into the premier commodity storage and transhipment hub for the Mediterranean.

Supplementing Malta’s Connectivity Malta also has its own dedicated shipping lines, Malta Motorways of the Sea, a Maltese company set up in 1995 by the Grimaldi Group Naples, which operates a vital passenger ferry and Ro-Ro services to mainland Italy through which all cargo trailers leave the island for delivery by road to mainland Europe and providing modern and efficient sea transportation services linking the Maltese islands to the Italian mainland and the rest of the Mediterranean.

Virtu Ferries, providing high-speed car and passenger ferries on the Sicily-Malta route, is a 100 per cent owned and managed Maltese shipping company. The company has, since 1988, been operating a scheduled, day return, high-speed passenger ferry service between Malta and Sicily. This service was expanded to a high-speed car/ passenger ferry service in 1999.

Global Logistics Centre Capitalising on the success of the Freeport and the island’s unique location as a strategic gateway to both North Africa and Europe on the main trade routes in the Mediterranean between Gibraltar and the Suez Canal, the Freeport’s distripark facilities represent

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a crucial link in Malta’s ambition to become a key player in the global warehousing and logistics chain. Malta lies along the main shipping routes linking three continents: Europe, North Africa and Asia, and the island sees the opportunity to further expand on its current success and offer the most efficient and costeffective solutions for companies looking for a single entry point to European and North Africa markets.

Serving regional oil and gas operations Malta’s excellent geographical location, its modern infrastructure and its status as an EU member allows it to offer numerous advantages as a location for regional oil and gas operations.

A fundamental component of the success of an offshore operation is the efficiency of its onshore base and Malta, located at the centre of the Mediterranean, at the heart of all offshore oil and gas activity in the region, lies within short sailing distances to the major offshore platforms in the area and the main ports in Algeria, Tunisia, Libya and Egypt.

Malta has long served as the base for major oil operators, pipe laying and drilling contractors in and offshore North Africa, particularly Libya and the island offers a state-of-the-art transhipment terminal and distripark facilities within a free zone environment; storage and warehousing facilities including an oil terminal; expertise in manufacture, repair and conversion of ships as well as rigs. As the most significant offshore base for the central Mediterranean, Malta offers a number of key advantages; its longstanding experience in servicing the oil and gas industry, positive deep-rooted ties with its Mediterranean neighbours and through the island’s long history as an important trading base, the Maltese have acquired the cross-cultural skills and capabilities that bridge the diverse cultures in the region. The island is internationally recognized as a safe and secure place to do business. It boasts a highly qualified and flexible workforce and relatively low operation costs.

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Opportunity Over the past couple of decades Malta has emerged as one of the major players in the Mediterranean providing a gateway to North Africa and Europe for third party country goods, especially those from the Far East and North America. The island’s logistics providers offer a full suite of regular and customised services that range from simple duty-free storage of products to facilitating custom cleared just-in-time ordering in European markets. In particular the island’s service providers are targeting companies who require added-value services such as storage of cargo or equipment, stock monitoring, re-labelling and re-packing, consolidation break bulk and distribution documentation services, international clearing and forwarding, light assembly and repairs, inspection of goods and verification of purchase order requirements.

As an example, a pharmaceutical company based in Australia can ship bulk quantities of their product to Malta and store it in a safe and secure duty-free environment. The product can then be broken down into smaller quantities, re-packed and labelled according to the requirements of the countries it is being dispatched to and delivered direct to the customer. This provides companies with the flexibility to distribute varying product quantities as and when required without the need to pay all the duty together. In addition the Maltese service provider will deal with all required documentation, product and material reordering and keep the client informed on a daily basis as to the status of their products. Malta also offers a number of other advantages; considerable time and efficiency gains can be achieved by using Malta for customs clearance into the EU compared to other locations; once goods are cleared they are free for circulation in the EU while by using Malta companies can reduce transit times and be more competitive.

Motorways of the Sea Dovetailing neatly with Malta’s ambitions to expand its business as a Mediterranean shipping hub, the island is strongly promoting the EU-proposed Motorways of the Sea concept.

Lying as it does between two of the major motorways, Malta sees itself as uniquely placed to serve as an intra-European logistics hub where mother vessels from Asia or crossing the Atlantic are able to make one stop in Malta, at the Freeport, to drop their full load and pick up cargo from Europe bound for Asia. The incoming cargo is then transferred onto smaller feeder vessels for distribution through Europe.

Malta’s long-term vision is to develop marketable and highly innovative global logistics solutions that are flexible enough to meet the challenges of the future. Building on the island’s rich maritime history and advanced infrastructure Malta is determined to remain not just relevant but the partner of choice in the global logistic chain. n

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NEW TRAVEL TRENDS BOOST

DESTINATION MALTA

Strong performances in 2007 have continued into 2008, revitalising this key industry. Increasing numbers of arrivals are being recorded, while investment in the sector continues to rise

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alta’s tourism industry is experiencing a much-welcome revival after hitting a low point in 2006. National Statistics Office, Malta figures for 2007 show an 11 per cent increase in arrivals, while the first months of 2008 are already showing significant year-on-year growth of 16.5 per cent in the first five months alone. This upswing in the fortunes of the tourism industry looks set to continue, as bookings for 2008 from Malta’s core European markets appear to confirm the ongoing upward trend.

The tourism sector is Malta’s leading services activity in terms of output as well as employment and foreign-exchange earnings.

Emerging from the difficult period of transition and changing market dynamics such as independent travel over package holidays, the advent of low-cost airlines and the consequent increase in flights, connections and available seats has given the sector a much needed boost.

Indeed, tourism continues to be the mainstay of the Maltese economy. With over 1.2 million visitors annually the sector accounts for 25 per cent of GDP and directly employs 30 per cent of the population. Add the multiplier effect and estimates rise, crediting tourism with accounting for more than 50 per cent of Malta’s economic activity.

Key Economic Generator Tourism has been recognised as a key industry in Malta for the last 40 years, helping to diversify the economy through increased employment, investment and foreign currency earnings. It has also acted as a spur to progress bringing about visible benefits to the island, from a modern airport, to the new sea passenger terminal.

Not surprisingly, given the close relationship between Malta and Britain over the past 200 years, the UK is the most important market, followed by Germany, Italy, France and the Netherlands.

In recent years an effort has been made to reduce the industry’s dependence on the British market and significant progress has been made in attracting tourists from Russia, Scandinavia and North Africa. North American and Japanese markets have remained as yet mostly untapped, although efforts have been stepped up.

Grand Harbour © Alan Carville

Cruise Industry Over the past few years the cruise industry in Malta has been making substantial progress. Malta’s Grand Harbour has become one of the most important ports in Europe for the cruise industry, becoming the sixth most visited in Europe in 2006, up from seventh place in 2005. Through investment in the infrastructure and the building of a dedicated cruise terminal, Malta has managed to build modern cruise line facilities that are attracting a large segment of Europe’s cruise passengers, hosting more than 478,000 passengers in 2007. This year, 2008, is set to be a record year when cruise passenger arrivals will hit the half million mark for the first time.

However, the Maltese tourism industry is under pressure from both internal and external factors. Despite the dramatic improvements of 2007, 2008 has brought fears of recession to the UK and other western economies that could have resulted CountryPr●filerMALTA

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in cutting back on holiday travel. In addition, Malta faces heavy competition across the Mediterranean region, especially from cheaper countries such as Tunisia, though the booking situation for Malta reported across the local and international media in July 2008 appears to be encouraging.

Seasonality, however, still remains a problem: the majority of tourists visit the island between April and October, and in the summer months of July to September alone, hotels have occupancy levels of over 90 per cent. Malta must attain a more even distribution of visitor arrivals and earnings, to ensure sustainable levels of tourism.

Adapting to Independent Travel Trends The Maltese tourism industry is still somewhat dependent on tour operators. The same operators who made the country accessible to the mass market in the first place, are creating a new set of problems. Tour operators have lost their pre-eminent status in the European travel market. Independent travel is very much the growing trend now, and tour operators are feeling the squeeze and becoming even more price driven than ever before which is having a strong impact on the viability of the two and three-star hotel sector in particular.

The last few years have seen Maltese hoteliers becoming more pro-active in adopting e-business strategies, seeking more innovative ways to utilise online distribution channels to drive bookings. Hoteliers have been investing in developing more userfriendly websites complete with e-booking facilities and tapping into the potential major internet hotel booking sites have to offer.

The strategy is proving successful and the industry is beginning to wean itself off the long-standing dependence on tour operators.

Low-Cost Carriers While Malta’s national airline, Air Malta, has consistently remained the key provider of tourism to Malta since it was set up in 1974, many other airlines, including Europe’s leading flag carriers also serve the island. In addition, in an attempt to revive tourism in Malta following disappointing results in the early 2000s, in 2006 the Malta Government announced a set of incentives to attract low-cost carriers to Malta. These initiatives have attracted airlines such as Ryanair, Easyjet, Germanwings, Vueling, Clickair and Volare and others. Together these low cost carriers now carry about 20 per cent of total traffic to Malta.

Marketing Malta Internationally Malta recognises that repositioning and diversification must take place, alongside the upgrading that is already underway. Niche and specialised markets are being promoted - such as conference and incentive travel, cultural tours, medical tourism, language schools and sports holidays - which are less influenced by major tour operators. This is part of a long-term goal to move away from price-sensitive market segments to the higher spending yearround tourists that can generate more foreign exchange earnings.

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charged with delivering a sustainable industry for the future. The MTA identified specific goals, such as upgrading the core product, making opening hours more accessible, improving the quality of service and the seasonal pattern, and growing niche markets like conference and incentive travel as its first priorities.

Whereas Malta had been successfully competing on price up to some years ago, it now has to compete on value. The MTA suggests a more holistic strategy, focusing on core elements such as customer satisfaction, the country’s unique value proposition, and an improvement in quality standards. More effort is being made to promote Malta’s 7000-year history and its Latin and European culture, heritage and architecture.

Crucially, the MTA points out that the Malta product is not just another resort with self-contained towns and complexes, but an entire nation. Due to Malta’s size, tourists circulate freely and come into contact with the whole country. Their experience is not that of a single hotel, resort or restaurant, but to acquire an insight into the local community and culture. The MTA has also attempted to raise awareness amongst the local population with a number of advisory campaigns, including behaviour on beaches, cleanliness and noise pollution.

Since 2005 the islands have undergone an intensive re-branding process, which is set to continue for the foreseeable future. The process should see a complete change in the traditional marketing focus for the islands from a strictly ’sun and sea’ summer destination to one that offers a variety of cultural, sporting and historical, as well as social experiences to tourists. These experiences have

Mediterranean Conference Centre, Valletta © MTA

Occupancy Levels By far the biggest success story in the Maltese tourist industry has been that of five-star hotels. The average occupancy ratios were higher in the superior categories of hotels, with five and four-star categories registering the highest occupancy levels, while the three star and below categories experiencing the lowest occupancy levels, reflecting the change in the class of tourist arriving in Malta.

treated in any hospital within the EU has accelerated the demand for a location like Malta.

As a result of significant investment, the Maltese government last year (2007) completed the largest healthcare related infrastructure project in Europe; a new state-of-the-art acute hospital. Mater Dei Hospital, incorporates all medical and surgical specialties and is expected will ensure Malta’s position as a prime health-care destination. Malta is just three hours from most European cities and offers state-of-the-art hospital facilities, both state run and private, and the opportunity to recuperate in a pleasant and totally safe environment. Surgeons are internationally recognised as among the best in the world and are UK-trained and English-speaking. Private hospitals on the island are already seeing a steady influx of overseas patients who take up their health tourism packages and the industry is optimistic that Malta can become a key player.

Medical Tourism Medical tourism, which sees people travelling overseas to procure medical and surgical care, is a rapidly growing segment of the tourist industry worldwide. Malta is considered to offer one of the best health services in the world; it ranked in the top five of a recent WHO study. Known as the ‘Nurse of the Mediterranean’ during the First World War, Malta is keen to secure a substantial share of this trade and develop Malta into a regional centre of excellence for health services. Recent EU legislation giving patients on EU member states’ health service waiting lists the right to request to be

Meeting, Incentives, Conferences and Events (MICE) The above-mentioned increase in five-star occupancy levels is largely due to the rapid growth in the conference and incentive travel market. Key factors enabling this expansion include on-going private sector investment in 5-star hotels and other venues equipped with state-of-the-art meeting facilities, government investment in infrastructure and in the upgrading of the destination as a whole and the agreement between fivestar hotels to jointly host participants, and the conference and

formed part of the tourism mix for a number of years, but new advertising and marketing campaigns are giving greater exposure to the wide choice of activities available to visitors. Ensuring that the message reaches its target audience, the MTA has stepped up advertising campaigns in its core markets over the last year and industry observers credit this increased promotional activity, together with low-cost airlines and increased flight capacity, with driving the tourism revival of 2007 and 2008.

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SECTOR PROFILE / TOURISM The Tourism industry in Malta is vibrant, active and forward looking. We have a small and compact destination, which manages to grow in spite of competing with larger, cheaper neighbours. In achieving this, we are doubtlessly assisted by the rich and diverse history, culture and heritage resulting from our millenary tradition. This mix of a versatile destination and an innovative, forward-looking tourism industry guided by an industry-friendly government are the main ingredients for success.

Mario de Marco - Parliamentary Secretary for Tourism We will be gearing Mater Dei to be a major provider in the health tourism sector and we can see this service being delivered from both private and public hospitals We are very proficient in certain sectors (e.g. heart surgery) and will be equipping ourselves with new oncology facilities which will also give us the possibility to be a high level service provider in this field. I am hopeful that Malta will be very successful in this area.

Properly managed, we can be a high level provider of medical services for the Mediterranean region.

John Dalli - Minister for Social Policy

Undoubtedly Malta has plenty to offer any discerning traveller, much more than potential visitors can truly imagine. The combination of our Heritage, Hospitality and Diversity, which forms the basis of our product offer, is unique and unrivalled, and not just in the Mediterranean basin. Our task is, basically, to make our product offer better known, especially in our core markets. Malta is the ideal destination for short breaks, and that is the direction towards which we’re heading.

The short breaks market is huge across Europe, and we have the potential to fully exploit this trend.

Sam Mifsud, Malta Tourism Authority The sun-drenched Maltese Islands are becoming an increasingly important destination in the centre of the Mediterranean. Just over three hours flight from the UK and less from other major European hubs, Malta’s position, outstanding accommodation and facilities, history, culture and fine-dining make the islands the perfect all year-round destination.

Joe Cappello, Chief Executive - Air Malta Malta’s unique selling point is its size and variety of activities on offer. Where in the world can you be within 15 minutes of pre-historic temples, Valletta (a UNESCO world heritage site), the Mediterranean Sea, scuba diving, yachting and trendy restaurants and cafes in fantastic locations. Furthermore we offer a good product in terms of hotels & conference facilities at competitive rates, particularly when compared to other EU destinations. The biggest opportunities in the near future will be relating to the corporate and conference segment.

Angela Saliba, General Manager - Le Meridien Gozo as a destination is somewhat different from Malta, offering its visitors an island of culture and heritage, coupled with the tranquillity and peacefulness of the island that few other places can offer. Gozo can easily sell itself as the place where time stood still, and where life is still enjoyable. Malta’s positioning of an interesting Mediterranean country easily reachable from any European destination is enhanced by our culture, heritage, serenity, warmth of the people and the fact there is no language barrier.

Noel Attard, Resident Manager Kempinski Hotel San Lawrenz, Gozo

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incentive segment now accounts for almost 5 per cent of total visitor inflow, or about 61,000 arrivals each year. This segment is enabling hoteliers to reduce the impact of the seasonality pattern, and further establish Malta as a year-round destination. As a direct result of this, the highest occupancy ratio in five-star hotels was registered in the month of April.

Business tourism is another growth market in Malta for participants in five and four-star hotels. The island has 22 non hotel-based conference venues, including the Sacra Infermeria, originally the hospital of the Knights of St. John and built 430 years ago. Delegates can combine historical sites and cities with bars, nightclubs, a casino, theme nights, evening sailing trips or even medieval banquets.

The MTA’s MICE Segment Team participates in a number of leading international MICE fairs, fora and workshops in order to promote Malta as a destination for conference and incentive events. In addition, the MTA’s team also runs joint-marketing campaigns with members of the trade, including advertising and familiarisation trips for international media and industry representatives.

Malta knows it has the climate, the history and the tradition of hospitality to continue attracting conference and incentive business, and has already hosted conferences for the Commonwealth Heads of Government, the European Parliament, General Electric, Vodafone, Coca Cola, Microsoft, IBM, Toshiba, Symantec, Novartis, AXA Insurance of France, Givenchy, Johnson and Johnson, Bosch, Opel, Shell Norway and a multitude of others.

Moving Ahead Tourism is still Malta’s most important single industry, generating both revenue and employment, and the country’s progress is inextricably tied to developments in this sector. Malta’s adoption of the euro in January 2008 brought more good news to tourism operators, eliminating most foreign exchange problems, at least for visitors from within the eurozone. Yet Malta knows that for sustainable levels of growth, a shift must take place from resort to historical and cultural nation; from seasonal to year-round arrivals; from a late booking decision to a destination of choice.

Both the MTA and the private sector are working hard and exploring new methods of marketing: the process may take time, but as the industry rallies after its recent slump, all indications are that it’s moving in the right direction.n

SECTOR PROFILE / AGRIBUSINESS & FOOD Maltese countryside © Alan Carville

THE VALUE OF

QUALITY

Malta’s small but important agricultural and food sector is looking for ways to develop into specialist production of niche, up market goods. As a Mediterranean island with a reputation for quality produce, the advent of new technologies and increased funding are bolstering the sector’s ambitions to remain significant.

O

n an island of just 312 square kilometres in area and with only13,000 hectares of cultivable land, the Maltese agroindustry is tiny in comparison to its European neighbours. But while mass markets for Maltese agroindustry exports are firmly out of reach, the island’s small but vibrant micro producers are focusing on high value added niche markets for selling their boutique artisan products in Europe, the Middle East and North America.

Although agricultural production and fisheries account for a little less than three per cent of Malta’s GDP and employ only two per cent of the workforce, with almost 75 per cent of the island’s food requirements being imported, it is still considered an important sector of the economy. Malta’s agriculture is skewed towards meat and dairy farming, resulting in high rates of selfsufficiency in these areas. Traditional crops include early potatoes, wheat and grains, olives for the production of oil and preserves, grapes for the production of wine, table fruit and dried fruit, 126

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vegetables, both in the fields and under greenhouses, for seasonal and out of season fresh produce, preserves and prepared sauces, and citrus fruits such as lemons, limes and oranges. Greenhouse cultivated cut flowers and potted plants also add a small but growing sub industry in the sector, while fishing remains an important activity.

The sector is beset by inherent problems such as land fragmentation and scarcity of water for irrigation purposes. The land is divided into numerous small holdings, and is worked by small farmers, four-fifths of whom are on holdings of less than five hectares. Cultivable land in Malta accounts only for a third of the country’s total area and 80 per cent of the total cultivable area is worked by dry farming methods. This means that fields are planted only during the rainy winter months and only one harvest in the year is possible. During the dry summer months the fields remain uncultivated. Only 8 per cent of cultivable land can be irrigated, but produces three good harvests a year.

Agriculture Despite great difficulties, Maltese agriculture has experienced modest but steady growth over the past few years. Incomes and turnover have increased in recent years, due to both increasing efficiency and government assistance. The Ministry for Rural Affairs & the Environment has devised several strategies to promote growth and innovation to support farm incomes. Policies have focused on managing the sector in a way to assure social and environmental quality and a viable agricultural sector is still seen as essential to the preservation of the rural landscape as well as an integral part of the economy.

Fisheries Although Malta is surrounded by the sea, fishing plays a very minor role in its economy. There are only about 1000 registered fishermen, the majority of whom are part timers. Fishing methods are antiquated with only a tiny percentage of the fleet capable of spending any significant time at sea. This leaves a considerable shortfall as far as local consumption is concerned and up to 50 per cent of the island’s needs are imported. Over the past few years fish farming and tuna penning have been introduced, with the produce being exported mainly to Italy and Japan. This new activity has met with significant success and is responsible for a marked increase in volumes of fish exports. Annual production from fish farms has grown enormously and in 2007 alone Malta exported 6.8 million kilograms of tuna ranched and harvested in Malta. The island’s main fish exports are blue fin tuna, sea bream, and sea bass. In order to prevent the further depletion of stocks and protect the domestic fishing industry, Malta has secured a derogation from EU rules, which will allow it to maintain a fisheries conservation zone of 25 nautical miles.

Food and Beverage Malta’s food preparation and beverage production sectors are limited to numerous small producers marketing exclusively to the domestic market, and a handful of large companies producing mainly or partially for export. The goods produced for the domestic market include local cheeses, traditional foodstuffs, ready pasta and meat sauces, frozen pizzas, pasta dishes and prepared meals.

Goods produced for the export market range from soft drinks and juices to pasta sauces and cake mixes. Companies engaged in producing for export include Foster Clarks, exporting food preparations such as cake mixes, dessert preparations, jellies and a host of other products; Magro Brothers, exporting processed tomato products, pasta sauces, jellies and fruit preparations; Consolidated Biscuit Company, exporting biscuits and cakes under various brand names; and Farsons Group of Companies, exporting a range of beverages from bottled water and juices to the company’s flagship products: beer and a bitter-sweet soft drink called Kinnie.

Food exports (excluding beverages) in 2007 amounted to €106 million, down from €127.2 million in 2006. 2008 figures to date seem to indicate the slide was temporary: figures for the period January to June 2008 record food exports of €44.8 million, up from €35.2 million in the same period in 2007.

Malta’s ancient wine industry, though still relatively unknown outside the island, is beginning to attract international attention

Wine Production Malta’s ancient wine industry, though still relatively unknown outside the island, is beginning to attract international attention. Maltese vintages are holding their own at international competition, winning several accolades in France, Italy and further afield. Malta’s wine industry is undergoing radical change as more vineyards are being planted to be able to satisfy the demand for Maltese quality wine production in line with EU standards. Blessed with a land that was suitable to growing vines and a climate that was near perfect, the only drawback for Maltese winemakers was that very little land was available. Indeed, the wine industry currently imports almost 70 per cent of its grapes for wines produced. However, the efforts of the past couple of decades are already paying off and several brands of Maltese wines are found on UK supermarket shelves, while Northern European markets are just beginning to discover the secret of Maltese wines.

EU Membership EU Membership has had significant implications for the agricultural sector as the removal of protective barriers has exposed the sector to competition from larger producers in the EU. However, while the Maltese farmer stood to benefit very little from the billions of euros handed out under the Unions Common Agricultural Policy as price supports do not exist for most of the farm goods Malta produces, accession negotiations with the EU established that farmers could be compensated by direct subsidies to allow them to compete against imported produce. The government is also providing financial assistance to the sector to help it restructure.

Agriculture in Malta has never faced such a range of challenges as it does today but while Maltese agricultural produce and food products are exported in limited quantities the rising global interest in the alternative food economy offers significant opportunities for Maltese producers to tap new markets, secure a premium for their products and ensure the continued survival and development of the sector n Tourism on the increase is helping Malta to sell its products locally in compensation to the export factor.

The Ministry for Resources and Rural Affairs has recently approved the set up of a committee to promote local produce. Undoubtedly this committee should be an instrument to promote our fresh agricultural products as being ideal Mediterranean diet.

George Pullicino - Minister of Resources and Rural affairs

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ON LOCATION

IN MALTA

Movies featuring Malta as backdrop are on the increase as international directors and producers discover the unique benefits of this Mediterranean island location

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S

teven Spielberg, Ridley Scott and Ron Howard are just a few of the directors who have chosen to use Malta as a film location over the years. Attracted by the versatile location, the unique water tanks at Rinella, the English-speaking workforce and population and the fiscal incentives offered by government, film-makers are increasingly choosing Malta as the Mediterranean location of choice for their productions.

Agora, the largest European film ever made, was shot in Malta in 2008. The producers spent almost €30 million on the production in Malta, making it the first film on such a large scale to shoot entirely in Malta. It was directed by Academy Award-winner Alejandro Amenabar and the production involved and utilised local crew and services at an unprecedented level.

In yet another headliner for Malta, Spielberg’s acclaimed Munich appears to take its audience on a round trip of Mediterranean countries as its protagonists track down the terrorists responsible for the terrible 1972 Munich Olympics tragedy.

The film, based on the true story of the Black September aftermath, takes us to Lebanon, Greece, Italy, Spain, Israel, Cyprus and the West Bank…or so we’re led to think. In fact, all these locations were filmed in Malta, where various different areas were transformed to double as the respective countries…seven in all.

Film Producers’ Choice Indeed, the ability to double up for multiple locations is one of Malta’s greatest strengths in attracting producers to choose Malta as their base. With a list of major productions that includes some of the greatest movies made in the last decade, Malta’s small but highly motivated film-servicing industry has hosted productions such as The Da Vinci Code, Troy, Gladiator, The Count of Monte Cristo, U-571, The League of Extraordinary Gentlemen, Cutthroat Island, and a host of others, including the legendary Midnight Express, Popeye, The Spy Who Loved Me and Orca The Killer Whale. In addition, numerous TV series and commercials have been

FILMS MADE IN MALTA Agora (2008) New Land (2008) U-900 (2007) Man of East (2007) Largo Winch (2007) The Lost Treasures of the Knights Templar III (2007) PARS: Kiraz Operasyonu (2007) Eichmann (2007) The Da Vinci Code (2005) Adrift (2005) Munich (2005) A Previous Engagement (2004) Troy (2003) A Different Loyalty (2003) The League of Extraordinary Gentlemen (2002) Pinocchio (2002) Swept Away (2001) The Count of Monte Cristo (2000) The Emperor’s New Clothes (2000) Gladiator (1999) U-571 (1999)

filmed wholly or partly in Malta over the years, and the numbers keep growing.

Malta is becoming many movie makers’ first choice for various reasons among which are the water tanks at the Mediterranean Film Studios, which have a natural horizon with the sea and remain unique in Europe. Then there is the natural beauty of the islands and their surrounding crystal clear waters; the exquisite and diverse architecture of its towns and villages, castles, palazzos, towers, farmhouses and villas that evoke both the spirit of the southern part of Europe and the atmosphere of the North African and Middle Eastern countries that encircle the Mediterranean.

In addition, the international film community is attracted by the fact that in English-speaking Malta producers and directors will find a host of service suppliers to provide essential support to any production, as well as a state-of-theart communications infrastructure, five-star accommodation and facilities for crew and all the ancillary requirements any production relies on at extremely competitive prices. Financial incentives for productions shooting on location in Malta were introduced in 2005, and have proved instrumental in boosting the industry by attracting a more constant flow of work to the islands. Malta also retains a level of craftsmanship when it comes to the construction of large sets that has all but disappeared in many Western countries, yet remains an important point of interest to the creative decision-makers.

Developing the Industry The film industry in Malta began in the early fifties, when, in 1953, the first pioneering British director came to the island to shoot a few scenes for a low budget production. Others soon followed, and in 1964, in the drive to diversify Malta’s economy from being totally dependent on the military base into a modern, export oriented one, the film industry was targeted as being one of the potential areas for development.

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the island’s economy. Agora spent almost Malta’s Unique Water Tanks €30 million on the shoot in Malta, of which The water tank at the Mediterranean Film €21 million were spent on Maltese crew, Studios at Rinella was built in 1964, offering services and goods,” commented Film producers and directors the possibility Commissioner Luisa Bonello. of shooting water scenes in a controlled The current revenue generation of the environment with an unlimited backdrop sector is already the equivalent of 70,000 of open sea afforded by the unique location tourists, minus the environmental impact of the tank, practically on the edge of the according to the Film Commission, and seashore. The ingenious design of the the revenue does not stop there: it is surface water tank with its natural horizon estimated that every euro of production enables the water, sky and horizon to money spent in a jurisdiction generates appear seamless. The Mediterranean Film €2.3 indirectly within that economy, not Industry Incentives Studios also offer SFX machinery including taking into account the additional interest Incentives for the audiovisual wind and wave machines, tip tanks, water generated, commonly referred to as movie industry include cash rebates, cannons, smoke machines and a 500-mph tourism. Clearly this is a sector government tax credits on investment in jet engine practically bringing the forces of wants to encourage, and for film-makers related infrastructure and nature under the director’s control. this commitment translates to very real investment fund opportunities.

For decades most major productions advantages and benefits.

For information about each of the that chose Malta as their location did so incentives, visit the Malta Film in order to be able to utilise the unique, Encouraging Investment Commission at www.mfc.com.mt horizon level, water tanks that allow Hollywood may be more than seven shooting within a controlled environment thousand miles away, but the Film for all types of sea or ocean scenes.

Commission’s view is that with a regular However, as Malta becomes better known stream of projects not just from the US and for its wealth of other advantages, the tanks, Europe, but from other active industries operated by Mediterranean Film Studios around the world, then the local film(MFS), are no longer the only attraction. servicing sector should attract investment Malta’s ability to double up has seen parts both in its infrastructure and in the level of the island transformed into Ancient of its crew. It is also hoped that a stable film Rome, Troy, Marseilles and a host of other industry could eventually stimulate more places over the years. Fort Ricasoli, the 17th domestic productions or depictions of century fort at the mouth of the Grand Malta itself, rather than just its appearance Harbour, also offers a huge open space as a backdrop. within its walls that lends itself perfectly to Spurred on by the generous financial and fiscal incentives on the construction of epic sets that blend in with the surrounding offer, further required investment in audiovisual infrastructure architecture, and has been home to some of the largest sets ever and human resources training would contribute to the drive to built, including Gladiator, Troy and 2008’s Agora. consolidate an industry just beginning to experience a taste of its full potential. n Incentives for a High Revenue Industry According to the Malta Film Commission, since the introduction of financial incentives for productions that shoot on the island, incentives that offer productions a rebate of up to 20 per cent on all their expenditure in Malta (22 per cent if Malta features as itself), the island has reconfirmed its commitment to expanding this growing industry sector.

So far averaging about 20 weeks of production a year, except in 2007 when for the first time ever Malta had a film in preproduction or production every day of the year, it is estimated that Malta has pocketed close to US$100 million worth of audiovisual production money since the Malta Film Commission’s inception in 1999, and the Film Commission is convinced the industry will continue to grow in strength over the next few years. “This industry has potential to develop further, and its benefits are far-reaching not just within the film-servicing sector in Malta but throughout 130

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Doing Business In Malta 132 Introduction

133 Business Culture & Environment 133 Foreign Investment Incentives 134 Access to Markets

134 Legal and Regulatory Framework 136 Taxation

140 Business Structures

141 Financial Reporting and Audit 142 Business Costs

142 Financial Services

143 Professional Support Services 144 Transport and Logistics

145 ICT and Communications 146 Utilities

147 Human Resources 148 Labour Relations

149 Education and Training (Health) 149 Expat Issues and Immigration

150 Commercial and Residential Property

in association with

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Introduction

A

fully-fledged business centre offering a complete range of business services and facilities, Malta’s international reputation is growing fast.

The island’s business centre is expanding rapidly as continued policies of investment in infrastructure and education give the island a leading edge in areas such as financial services and information and communication technologies. Malta’s business legislation and tax systems are considered among the most favourable in Europe while concurrent nationwide projects to improve the standard of roads and transport and the construction and provision of appropriate commercial property, residential property and factory spaces continue to improve the physical infrastructure of the island. All of which come together in a demonstrable commitment to progress that is today powering every aspect of the island’s thriving economy.

Strategic Eurozone Location Malta’s strategic location at the centre of the Mediterranean, straddling the busiest shipping lanes in the region and connecting Southern Europe and North Africa via regular sea and air links, has always been one of the key advantages of doing business in or from the island. As an EU member state within the Eurozone, Malta offers instant access to both the EU’s massive internal market of over 500 million people and the growing markets of the North African and Middle Eastern countries bordering the Southern coast of the Mediterranean basin.

Productive and Competitive The Maltese government’s rigorous restructuring process over the past decade has given birth to a streamlined, results-orientated public sector and a productivity-focused private sector, raising Malta to the top ranks of international agencies’ most competitive locations lists. Malta’s committed pro-business government has taken a series of decisive steps to enhance Malta’s competitiveness while business costs remain among the lowest in Europe and the island boasts a multilingual, innovative and highly qualified workforce. In addition, the island has developed an extremely favourable tax regime, making the operating environment on the island one of the most advantageous in the world.

Target Sectors Ongoing strategies include specific targeting of knowledge economy sectors including financial services, ICTs, R&D and high end manufacturing as the key components of Malta’s economy, and matching promotional efforts with cross generational educational initiatives aimed not only at developing new young graduates, but also retraining the entire workforce to take on specialist manufacturing and other industry jobs.

Mediterranean Base The policies that have achieved economic and fiscal success for the government are also adding value to businesses based on the island. Internationally recognised as a centre of excellence in financial services, ICTs and international logistics, the island is fast becoming a regional hub for these specialist services, attracting operators across industry sectors with its potential to offer a comprehensive package of services covering all business requirements.

Complete Package Malta offers a strong infrastructure and is capable of supporting considerable international economic activity. The island’s accessibility, comparatively low operational costs, advanced telecommunication systems and well-trained professionals serve to further enhance the Malta’s attraction as an international business centre.

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Business Culture and Environment

Foreign Investment Incentives

A combination of strict work ethics, Mediterranean informality and a deeply entrenched respect for the rule of law characterise the workings of Maltese business. Accustomed to hosting people from around the world, either as welcome visitors or tolerated conquerors, the Maltese have developed a highly international outlook, able to adapt easily to different practices and attitudes, and are as comfortable dealing with major multinational companies as with the local manufacturer around the corner.

Up until 1964 Malta was a British colony, and most find that British culture still underpins the Maltese way of doing business. At the same time, business meetings are much less formal and things tend to get done in a more leisurely manner than in Northern Europe. However, punctuality is expected and appreciated.

An open economy with a long-established history of trade, Malta has always actively sought foreign investment, both in existing companies and in the set up of new entities. In support of this effort, Malta has been proactive in offering incentives to attract investors, a package which has recently been updated to reflect the island’s status as a member of the eurozone. This package is coordinated by Malta Enterprise, the main government agency promoting and facilitating inward investment across a wide range of sectors.

Malta’s recently updated industry incentives are generally aimed at specific sectors, predominantly ICT and other industries the island is keen to promote. Published under the Malta Enterprise Act (ME Act) in early 2008, this set of incentives is aimed at foreign direct investors and local enterprises demonstrating commitment towards growth and increase in value added and employment.

Offering a combination of structured schemes as well as access to EU-funded programmes, Malta Enterprise incentives include: • Tax credits on capital investment and job creation • Grants to assist in the creation and development of innovative start-ups and small and medium-sized enterprises • Low-interest loan financing • Loan guarantees • Loan interest subsidies • Training grants • Research and development grants • Provision of premises finished to the applicant’s requirements at competitive rates of rent

For more details of the incentives offered visit: www.maltaenterprise.com

Language English is one of the country’s two official languages, Maltese being the other. Many Maltese also have a good command of a third language, usually Italian, German or French. Most business correspondence is carried out in English.

Business Hours Office hours are generally 8.30 a.m. – 1 p.m. and 2 p.m. – 5.30 p.m., Monday to Friday. The climate also plays its part, and some government offices still work half days in summer. However, many have adapted to ensure offices are manned throughout normal business hours, and the private sector continues to operate normally throughout the year. Factories usually start at 8 a.m. and run to 5 p.m.

Most banks open from 8 a.m. - 2p.m. Monday to Friday and Saturday until 12 p.m.

Shops open from 9 a.m. to 7 p.m. Monday to Saturday. Most retail and commercial shops are closed on Sunday.

Mosta Technopark

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Access to Markets

Legal and Regulatory Framework

Strategic Eurozone Location Malta’s strategic location at the centre of the Mediterranean, straddling the busiest shipping lanes in the region and connecting Southern Europe and North Africa via regular sea and air links, has always been one of the key advantages of doing business in or from the island. As an EU member state within the eurozone, Malta offers instant access to both the EU’s massive internal market of over 500 million people and the growing markets of the North African and Middle Eastern countries bordering the southern coast of the Mediterranean basin Malta’s geographical position in the centre of the Mediterranean has always played a pivotal role in influencing the country’s destiny and prosperity. Situated between North Africa and Europe, historically Malta has been the link between the two continents. It is this principle of linking and the Maltese ability to reach across the cultural and business divide between North Africa, the Middle East and Europe that is helping pave the way for the country’s future prosperity. The concept is already gaining significant momentum in diverse sectors such as ICT, maritime, financial services and banking.

Malta’s information and communications infrastructure is among the most enabled in the European Union, giving the island excellent virtual communications. And at only two to three hours’ flying time from most major European cities, Malta has direct, scheduled flights throughout Europe and the island is well connected for onward, long-haul destinations. Thanks to growth in its tourism source markets, Malta now also has a growing number of air links to Europe’s second cities and the newer EU accession states.

Malta’s leading trading partners for exports are the other 26 EU countries, which account for over 50 per cent of the country’s total exports. Exports to the US make up 12 per cent of total exports and those to Asia amount to 23 per cent of the total.

Malta is a jurisdiction with a regulatory environment that is serious, yet accessible and flexible in its approach and the island has received international recognition for its stable and comprehensive regulatory framework in line with EU practice.

In line with EU regulations, The Malta Financial Services Authority (MFSA) is the single regulator for financial services activities in Malta. It regulates and supervises credit and financial institutions, investment, trust and insurance business and also houses the country’s Companies Registry. The single regulator means companies benefit from streamlined procedures and reduced bureaucracy, leading to lower fees and compliance costs and consistent interpretation of the rules.

Malta adheres strictly to EU anti-money laundering, insider dealing and professional secrecy laws and its frameworks are aimed at attracting only international businesses of repute. In fact, Malta has been identified in a Corporation of London Report (Feb 2008) as one of the top three business centres in the world, and the top centre in Europe, which is likely to increase in importance in the next 2 to 3 years. This assessment is reflected in MFSA statistics, which report that Malta is seeing an average of around 230 new company registrations a month (figure as at May 2008), with the number of funds licensed in Legislative framework in Malta topping the 300 mark. line with EU directives While adhering Single, consistent regulator – the robustly to international Malta Financial Services Authority best practice and standards, the country’s approach to Tight supervision: anti-money regulation remains flexible laundering, insider dealing, & professional secrecy laws and versatile. Demanding in its compliance requirements, Accessible, pro-business regulator: the MFSA nonetheless offers flexible & custom approach a pro-business approach. This Government commitment to enables Malta to offer nonsector since early 1990s standard yet robust, valid solutions. Malta’s adoption of Stability of the Eurozone: Malta the euro on January 1st, 2008 adopted the euro 1st January, 2008 has added further stability and ease of doing business across frontiers.

Today, business operates confidently in the knowledge that Malta has an extensive network of double taxation treaties and applies EU regulations. Firms operating in Malta may also benefit from a number of business promotional incentives and other advantages including the EU’s single passport regime and the ability to offer EU-wide accepted products.

Malta the Ideal Launching Pad Malta’s aspirations to become a turnkey business centre for the Mediterranean is proving to be both successful and profitable, as scores of foreign investors in ICT, maritime, tourism and across all other sectors use the island to reach the European, north African and Middle East markets

Why Malta?

Legal framework Malta’s legal system is rooted both in the Anglo Saxon common law tradition and the Continental European Napoleonic/ Justinian code. In many ways, this means Malta benefits from the best of both worlds. Maltese corporate law, however, is very firmly 134

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based on British models. It allows for a variety of structures, giving the investor considerable flexibility within a well-regulated framework. Effective means exist for the resolution of disputes, from arbitration services to the courts. This makes for a smooth business environment.

Regulatory Bodies

Regional & international trade agreements As an EU member, Malta implemented the EU tariff system as part of its adoption of the body of EU law. It therefore falls under Malta Financial Services Authority The Malta Financial Services Authority (‘MFSA’) is the single regulator for the financial services industry. Its area of responsibility spans the banking and investment services sectors, insurance activities, trust services and the financial markets. In addition, the MFSA manages Malta’s Registry of Companies and the Consumer Complaints division. The Authority also houses the International Tax Unit. www.mfsa.com.mt Central Bank The Central Bank of Malta was established in 1968, and has contributed to the country’s financial and economic development, particularly by pursuing policies designed to foster exchange rate and price stability and a sound financial system. With Malta’s accession to the European Union in May 2004, the Bank automatically became a member of the European System of Central Banks (ESCB). www. centralbankmalta.com

The Malta Communications Authority The Malta Communication Authority is responsible for the regulation of the sectors of electronic communications, e-commerce and posts. The MCA is responsible for issuing licences, supervising the sector and monitoring industries operating within it. Their stated aims are those of achieving sustainable competition, enabling customer choice and value for money, coincident with contributing to the development of an environment that is conducive to investment, and continued social and economic growth. www.mca.org.mt The Malta Maritime Authority The Malta Maritime Authority is responsible for the supervision, the organisation and administration of the primary maritime services. The functions of the Authority include the operation of ports and yachting centres, the registration of ships, the preservation of good order in territorial and internal waters in Malta, in the Ports and their land and sea approaches, the prevention and control of pollution of ports, the provision of appropriate safety measures related to Ports and shipping and the overseas promotion of Malta as a maritime centre. www.mma.gov.mt

the EU’s customs union which calls for free trade and the absence of customs duties and quotas on trade among EU members. Malta has adopted the various preferential and non-preferential trading agreements that the EU has with third countries.

Malta is a member of the United Nations, of the Council of Europe, and of the Commonwealth. It is a founder member of the WTO and maintains friendly relations with all countries through a policy on non-alignment.

The Malta Resources Authority The Malta Resources Authority is a public corporate body with regulatory responsibilities relating to water, energy and mineral resources in the Maltese Islands. The MRA is responsible for the regulation of water and energy utilities, industrial enterprises exploiting resources such as oil exploration, quarry operators and private abstractors of groundwater, retailers, operators and tradesmen in the regulated sectors. www.mra.org.mt The Malta Tourism Authority The Malta Tourism Authority is responsible for regulating the tourism industry in Malta and for promoting the island overseas as a tourist destination.

The role of the MTA includes the licensing, monitoring and control of all accommodation and catering establishments in Malta, travel agencies, incoming tourism agencies, destination management companies, excursion operators and tourist guides. www.mta.com

Malta Stock Exchange The Malta Stock Exchange operates as a regulated market for listed securities admitted to the Official List. Trading of securities takes place on the MATS (the Malta Automated Trading System). The Exchange also currently operates a Central Securities Depository (‘CSD’) offering clearing, settlement, registrar and other ancillary securities administration and corporate action services.

The CSD caters for securities portfolio accounts opened in the name of retail investors as well as institutional clients and financial intermediaries. Both the Exchange and the CSD have entered into the European Code of Conduct for Clearing and Settlement for a strong European capital market thereby affording investors the option to trade, clear and settle any European security - whether it is a domestic or a foreign security - within a consistent, coherent and efficient European framework. www.borzamalta.com.mt

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Taxation

Example A: Tax Refund Mechanism

Malta’s tax system, plus its extensive network of double taxation treaties, offers significant fiscal efficiency to investors and companies using the island as a base and has been recognised as one of the main drivers in creating an attractive environment for foreign investors.

Malta has been classified as the fifth most tax-friendly country for companies according to the 2008 Forbes Tax Misery and Reform Index and the most attractive country in the European Union in terms of taxes and social security contributions paid out by companies. The key reason behind this accolade is the island’s full imputation system of taxation, a system in which any income tax paid by a company is credited in full to the shareholder upon a distribution of profits, to avoid any double taxation of corporate profits. This system, which has been in use in Malta since 1948, has been confirmed by the EU Commission to be fully compliant with EU law and ensures that both resident and non-resident shareholders are entitled to a refund of any tax paid by the company when the credit exceeds their tax liability. As a general rule, 6/7ths of tax paid at the company level is refunded to shareholders upon a distribution of dividends, a system which has been described as very advantageous, fair, and providing certainty to international business.

In addition, relief from double taxation is secured in Malta under the credit method on source-by-source and country-bycountry basis. Malta currently has an extensive network of double taxation treaties with 48 countries worldwide, with 12 others awaiting ratification. Moreover, the provision of unilateral relief and the flat rate foreign tax credit ensures that income arising from overseas is not subject to double taxation, even when there is no double taxation agreement in place.

The combination of these systems means that with proper planning and structuring, investors in Malta can maximise their companies’ fiscal efficiency to the highest degree. Add to this the fact that in terms of domestic legislation, no tax is imposed on dividends, interest and royalties paid to a non-resident, as long

as certain conditions are complied with, and no Maltese tax is imposed on gains realised from transfers of corporate securities by a non-resident again as long as the conditions are complied with and that the securities are not held in a company whose assets consist principally of immovable property in Malta.

Corporate Tax All companies resident in Malta are subject to income tax on company profits at a rate of 35 per cent. There is no separate corporation tax, and the companies’ liability to tax arises under the same charge that imposes a tax on individuals. Under Malta’s full imputation system the shareholder will, upon a distribution of dividend, be entitled to a refund of in part or in full of any advance tax levied on the distributing company.

A resident shareholder will be taxable in Malta on the dividend income, including the refund, at personal tax rates.

The amount of the tax refund is set at 6/7ths of the advance corporation tax paid by the company (5/7ths in the case of passive interest and royalties). The refund is reduced to 2/3rds where the distributing company claims double taxation relief. With respect to participating holdings a full (100 per cent) refund applies.

Customs & Excise Duties As an EU member state, Maltese customs regulations follow European Union Customs Procedures. In general, goods from other EU member states are subject to VAT, while goods from outside the EU are subject to Customs and Excise rules. For full information please visit the Malta Customs Portal at http://ces.gov.mt/index.jsp VAT Value-added tax (VAT) applies to supplies of goods and services that take place in Malta, intra-community acquisitions and imports. The standard rate is 18 per cent and a 5 per cent rate applies to the supply of holiday accommodation, electricity, printed matter and confectionery. Zero rating applies to exports

6/7th refund 6/7th refund

5/7th refund

Net Income

800

800

Net foreign passive interest / royalties

800

Grossing up with foreign tax

0

42

Grossing up with foreign tax

0

Chargeable income

800

842

Chargeable income

800

Tax at 35%

280

295

Tax at 35%

280

Credit-double taxation relief

0

(42)

Credit-double taxation relief

0

Malta tax payable

280

253

Malta tax payable

280

Refund on distribution 6/7ths

240

253

Refund on distribution 6/7ths

253

Effective tax paid

40

0

Effective tax paid

80

Effective rate of tax on net income

5%

0%

Effective rate of tax on net income

10%

Shareholder

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Example B; Tax Refund Mechanism for foreign-source income Net Foreign Income before deductions

800

Flat rate foreign tax credit (25%)

200

Gross Income

1000

Deductible expenses

100

Chargeable Income

900

Maltese tax at 35%

315

Less flat rate foreign tax credit

200

Malta tax payable

115

Rate of tax on net income after tax expenses

16.4%

and intra-community supplies, international transport, domestic passenger transport, food, pharmaceuticals, and the supply and repair of ships and aircraft. Exemptions from VAT include the sale and leasing of immovable property, banking and insurance services, health, education and broadcasting. Registration is compulsory for suppliers of goods with annual turnover over €27,952.48 and suppliers of services over €18,634.99.

Social security Malta has a comprehensive so-called ‘cradle to grave’ social security system. This system is financed through social security contributions paid by each employee and employer. All employed and self-employed persons are required to pay Social Security Contributions. The amount of Social Security Contribution (SSC) payable by employees amounts to 10 per cent of the basic wage, subject to a minimum linked to the national minimum wage and a maximum linked to the maximum pensionable income. An equivalent amount is payable by the employer in respect of each employee. The SSC amounts to 10 per cent of the gross salary with a minimum of €14.23 per week and a maximum of €31.56 per week, to be paid by both the employee and the employer. The employer must deduct the employee’s contributions from the wages and must remit the amount due, including the employer’s share, to the Commissioner of Inland Revenue by the end of the

month following the month in which the wages or salaries are paid. Self-employed persons pay contributions at 15 per cent of their profits, subject to a minimum and a maximum. Payments by self-employed persons are made to the Commissioner of Inland Revenue every three months in arrears.

Personal Tax Rates - Married couples The income of a married couple is treated as the income of a single person and is to be declared in one tax return. However, the tax is calculated either on the total income at the married couples’ rates or, if the married couple so elects, and subject to certain conditions, on the income of each spouse separately at the single persons’ rates.

Double Taxation agreements The forms of relief available under Maltese laws are: (a) Double taxation relief (b) Commonwealth income tax relief (c) Unilateral relief (d) Flat rate foreign tax credit Malta’s double taxation treaty network

Albania Barbados Canada Cyprus Egypt France Iceland Korea (Rep. Of) Lebanon Luxembourg Netherlands Poland San Marino Slovenia Sweden Tunisia

Australia Austria Belgium Bulgaria China, P.R. Croatia Czech Republic Denmark Estonia Finland Germany Hungary India Italy Kuwait Latvia Libya Lithuania Malaysia Morocco Norway Pakistan Portugal Romania Singapore Slovakia South Africa Spain Switzerland* Syrian Arab Republic United Kingdom USA

Note: USA: Double Taxation between Malta and the United States agreed – treaty awaiting ratification through a United States Senate for Foreign Relations review *Agreement limited to profits derived from operation of ships or aircraft in international traffic

The income tax bands for individuals and married couples

Single rates

Married rates

Chargeable Income €

%

Deduct

Chargeable Income €

%

0 - 8,150

0

0.00

0 - 11,400

0

0.00

8,151 - 14.000

15

1,222.50

11,401 - 20,500

15

1,710.00

14,001 - 19,000

25

2,622,50

20,501 - 28,000

25

3,760.00

19,001 & over

35

4,522.50

28,001 & over

35

6,560.00

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Deduct

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Other key features of Malta’s corporate tax law In addition to the considerable benefits of the full imputation system and the extensive network of double taxation treaties, Malta offers businesses other key benefits under its tax legislation, including the following aspects: • As an EU member state, entities have access to the Parent-Subsidiary, Interest & Royalties, and Mergers Directives.

• Participation exemptions.

• An exemption from tax on income derived by collective investment schemes • Advance rulings issued by the Maltese Commissioner of Inland Revenue on international transactions that guarantee the tax position for a minimum of five years and may be renewed for a further five year period.

• An absence of ‘thin capitalisation’ rules and no anti-controlled foreign corporation legislation • No capital duty on share issues and exemption from duty on transfers of shares in, by or to companies having the majority of their business interests outside Malta • The possibility for companies to denominate their share capital and their accounts in any convertible currency with the chosen currency then being used for payment of tax and tax refunds (where applicable) thus minimising exchange risks.

• The possibility of migrating companies to and from Malta • Relative ease of incorporation for non-regulated entities • Low registration and maintenance costs • A taxation scheme for groups of companies allowing offset of losses between group companies.

Only EU member state with full imputation system Extensive network of double taxation treaties, plus benefits even when no bilateral treaty in force Refundable tax credit scheme – on revenues as dividends to shareholders, resident & non-resident Ideal tax residency status for individuals

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DOING BUSINESS IN MALTA

Corporate Business Structures

Malta offers investors an EU-compliant yet flexible, tax-efficient domicile for business entities or corporate structures. Business may be conducted in Malta in a variety of forms: a sole proprietorship, a partnership, a limited liability company (private or public), a branch of a foreign company, a trust, a cooperative, an investment company with variable capital (SICAVs) or a Protected Cell Company.

Malta’s proposition to overseas investors is enhanced by its supportive, sophisticated legal structure, its strong institutional framework and the tax efficiency of different types of corporate vehicle. The island also excels in the speed and efficiency with which investors can set up a company: once the Registrar of Companies has all necessary documentation and information in hand, the process may take as little as 24 hours. For Financial Services firms the approval of and licensing by, the Financial Services Authority (MFSA) is required before commencement of operations; this process can typically be concluded within 3 weeks.

Setting up a company The principal legislation covering companies and partnerships is the Companies Act (1995), modelled on the UK Companies Act and European law, and every company registered in Malta must have a registered office on the island.

Companies and other forms of partnerships are required to submit a valid memorandum and articles of association or deed of association normally subscribed by at least two persons. Under certain conditions, it is also possible to register single member companies. Companies and partnerships are registered with the Registry of Companies which is based at the Malta Financial Services Authority, and, if documentation is in place, this process can take as little as 24 hours to complete. A certificate of registration is then issued by the Registrar of Companies.

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Main Types of Corporate Forms Limited Liability Company (private & public) A Limited Liability Company (a company) is formed by means of subscription to capital divided into shares. The liability of the shareholders is limited to the amount, if any, unpaid on the shares held.

The minimum share capital required to set up a private company is €1200 with 20% paid up and subscribed to by at least two persons except in the case of single member companies, with restricted objects. In the case of a public company the minimum share capital requirements is €46,600, with 25 per cent paid up and subscribed for by at least two persons.

SICAV Under Maltese law, Collective Investment Schemes may be set up as SICAVs (Société d’Investissement À Capital Variable) which is a type of open-ended investment vehicle.

The amount of capital in a SICAV varies according to the number of investors. Each individual shareholder is entitled to voting rights and has the right to attend the annual general meetings. A SICAV is formed under the Companies Act (1995), but as a partnership limited by shares (Societe en Commandite Limitee par Actions), and is used by mutual funds. Alternatively Collective Investment Schemes may take the form of a limited liability company with fixed share capital, limited liability partnership or investment trust. Such Schemes may also be set up by private contract.

Malta-domiciled funds are, as a general rule, exempt from Maltese income and capital gains tax. Capital gains made by nonMaltese investors when redeeming or transferring their units in a Collective Investment Scheme are not subject to any withholding tax and are automatically exempt from tax. Schemes are not subject to any duty on the issue of shares. Similarly, share transfers are not subject to any duty.

Branch of an overseas company All bodies corporate constituted or incorporated outside Malta may establish a place of business in Malta. Overseas companies establishing a place of business in Malta should, within one month of the establishment of the place of business, deliver to the Registrar a number of documents. The documents to be submitted to the Registrar include an authentic copy of the charter of the company, a list of the officers of the company, and the names and addresses of one or more individuals resident in Malta authorised to represent the overseas company in Malta. Branches carrying out operations in or from Malta are subject to tax in the same manner as a limited liability company.

Trusts The principal Maltese law on trusts is the Trusts and Trustees Act which opened the Trust concept to residents and non-residents. The Trusts and Trustees Act and the Civil Code (as recently amended) recognises Constructive Trusts, Discretionary Trusts, Fixed Interests Trusts and Purpose Trusts.

In normal circumstances, trusts are considered transparent for tax purposes.

Income attributable to a trust is not charged to tax in the hands of the trustee if it is distributed to a beneficiary. In addition, if all the beneficiaries of a trust are non resident in Malta and when all income attributable to a trust does not arise in Malta, there is no tax impact under Maltese tax law.

Other laws and regulations may have an impact on the taxation treatment of trusts and trustees. Malta is a signatory to a number of Double Tax Treaties that may apply in some circumstances.

Protected Cell Companies Malta’s company framework also allows for the formation of protected cell companies (PCC).

Maltese law introduced regulations which allow the PCC model to be adopted by regular Insurance Companies, Insurance Brokers and Insurance Managers alike. In terms of the PCC regulations a ‘Cell Company’ is a company constituted or converted into a cell company having within itself one or more ‘cells’ for the purposes of segregating and protecting the cellular assets of the company in accordance with the Regulations. A cell company is a single legal person.

A ‘Cell’ is in turn a class of shares within a cell company designated as a cell and created for the purpose of segregating and protecting cellular assets belonging to the company in the manner provided by the Regulations. A cell is not bestowed with separate legal personality.

Financial Reporting Auditing The fiscal year in Malta is the calendar year. Each year of assessment a company has to file a tax return declaring its income for the year ended during the previous calendar year. This return has to be accompanied by an auditor’s certificate. Corporate profits are assessed on the basis of the accounting year immediately proceeding the year of assessment. Companies make three advance payments of tax at four monthly intervals during the accounting period, and must typically file a tax return within nine months from the end of the accounting period. A final tax payment is due by the date the tax return is submitted.

Maltese incorporated companies are required to have their financial accounts audited by a registered auditor

All forms of business setup available – many offer tax-efficient structures Speed & efficiency: registration can take as little as 24 hrs from submission of documents Sophisticated, supportive legal framework

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Business Costs

Financial Services

W

hile Malta is an EU location with a sophisticated professional and business infrastructure, the island remains highly cost effective as a base to do business from. In fact, operational costs in Malta are generally a half to two-thirds of those prevailing in the UK. This applies to salaries as well as general business costs such as office space, service and utilities.

In recent years Malta has seen a surge in high quality office space as a result of the growth of its services sector, and at the top end of the market, commercial space in prestige developments comes in at around €300 - €420 per m2 a year. Mid-market, smart office blocks in the central Malta areas of Sliema, Gzira and Ta’Xbiex cost around €58 - €116 per m2 a year.

Industrial rentals offer very good value for money. Malta Enterprise, the government agency assisting incoming firms, can provide industrial property to prospective investors at highly competitive rates. Malta’s average industrial property rate of €10 per m2 compares favourably relative to the secondary rental markets in Italy, Austria, France, Luxembourg, Ireland and the UK. Malta has among the lowest of all prime industrial property in EU markets and the island has 10 industrial zones offering industrial property at these competitive rates.

Smaller, government-backed parks include Mosta Technopark in the centre of the island. Designed with technology firms in mind, it houses technology investors from Malta, Italy, France, Germany and the UK. In addition, Malta Enterprise operates a Business Incubation Centre (KBIC) for start-ups which offers a portfolio of subsidised services to its clients.

Average Salaries in Malta 2007/08 Position

Salary Range in Euros

General Manager / Managing Director

€71,069

Administration Manager

€25,366

Information Technology Manager

€43,559

Assistant Manager / Executive

€19,753

Analyst / Programmer

€21,942

Clerk

€13,254

Secretary

€13,743

Receptionist

€11,553

Based on MISCO - The Salaries & Benefits Report 2007/08 • Above figures exclude statutory bonuses • Figures exclude all fringe benefits and social security contributions • Remuneration packages of expatriates are not included • The median salary was used in this table

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Banking, Finance and Insurance With five retail banks and more than 20 international commercial and trade banks already operating in or from Malta, and others awaiting their licenses, this sector has become one of the most robust on the island. It is able to provide a full range of personal, commercial and trade services to its clients, who now expect and receive services delivered in the most sophisticated financial markets.

The leading retail banks on the island are HSBC and the Bank of Valletta, which between them cover more than 95 per cent of the market. Three smaller banks APS, Lombard and Volksbank enjoy success with particular niches and help to keep the banking sector competitive and innovative.

While all the banks offer trade finance services, Malta is home to specialists in the area. FIMBank offers word-class services and is, despite its small size, a world leader in trade services linking the Middle East and developing countries into the world trading system and in forfaiting and factoring services. BAWAG, an Austrian bank, uses Malta as a base for project finance services longer term financing than the four months to one year typical in pure trade deals. It is using Malta as a springboard to North African markets – but will and has looked favourably on purely Maltese deals.

Banking, like the rest of the financial services industry in Malta is not standing still. A Portuguese bank, Banif, is in the process of establishing a new retail branch network, a move expected to shake up the market even more. Malta’s insurance industry, too, is developing fast. The five domestic insurers offer a large and developing range of products and services, both local and international. Foreign insurers working through agents extend the scope of services available, and a thriving brokerage network has developed to facilitate access to the most advantageous cover available on the market.

All types of insurance cover, from personal, health, property, auto and travel to any type of business cover are available. And taking advantage of the regulatory framework, the skills available in this mature sector and Malta’s advantages as a business location, a large number of insurance management companies have been established, handling cover for large corporations.

Professional Support Services

M

alta has a long history of excellence in the professions and today the island has a large pool of professional support services to business.

A large number of law firms operate on the island, and all the leading, international firms have a presence in Malta through associate links with local firms of long-standing repute. Many firms specialise in key areas of law that are relevant to Malta’s economy, location and infrastructure.

Similarly, accountancy and related services such as business consultancy are well represented and leading international firms are all present in Malta. The accountancy profession is regulated by the Accountancy Board which oversees all professional conduct and standards and other aspects of practices and individuals operating in the profession. It has close, consultative links with the Ministry of Finance.

Specialist Niches Malta service industry is established and comprehensive, and has always played a significant role in Malta’s economy, serving both local customers and a broad international clientele. Its ever expanding role is now proving essential to the development of Malta’s international business centre and economy as a

whole and Malta has developed a number of specialist niches in which it excels: these include areas such as ship registration and management, M&A, funds, captive insurance, trust and corporate services, wealth management and corporate finance.

International Presence The business community in Malta is strongly supported by a large range of accounting and auditing practitioners ranging from small boutique practices to the global Big Five accountancy firms. Malta’s lawyers are equally world class offering a high degree of specialization and sophistication, and most of the leading, international firms have a presence in Malta through associate links with local firms of long-standing repute.

Value for Money Malta’s professional service providers are generally well-versed in dealing with international issues and customers: the island’s professional services attract clients from across Europe who are drawn to their growing reputation for excellent quality of services and value for money. Professional services such as accountancy, business consultancy and legal service costs are generally more cost effective than in other Western European locations.

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Transport and Logistics Malta is uniquely located on the main east-west trade routes through the Mediterranean from the Suez Canal to Gibraltar.

This is the route chosen by many of the liner services from the Far East to Europe, and makes the island a key player in the global warehousing and logistics chain. Equally well placed between Europe and North Africa, its central location makes it an ideal base for transhipment services around the Mediterranean.

Shipping Malta’s ports are serviced by many of the world’s major shipping lines. Maltese businesses benefit from the large and growing international shipping business building up at the Malta Freeport: any exports or imports can easily be piggybacked onto the large mainline vessels on the intercontinental transshipment services. This has made most destinations around the world easily accessible, as well as bringing freight prices down.

Each line has local representation by one of a number of specialist shipping agencies. For shorter-range shipping needs, the island’s domestic shipping companies provide frequent crossings to Italy, Sicily and North African ports.

Malta Motorways of the Sea, a Maltese company set up by the Grimaldi Group Naples and Sullivan Maritime, has increased the frequency of its services by 64 per cent in 2006, while Virtu Ferries, a 100 per cent owned and managed Maltese shipping company operates a scheduled daily high speed car/passenger and cargo ferry service to Sicily and mainland Italy.

Ports Malta has two main commercial ports: the Port of Valletta, traditionally known as Grand Harbour, and the Malta Freeport, situated at Marsaxlokk Harbour in the south of the island. The latter is one of the largest free ports and transhipment hubs in the Mediterranean Sea, and caters for intercontinental cargo needing distribution throughout the Mediterranean basin. There are regular, passenger and cargo ferries to mainland Italy, France and the North African coast. Domestic travel to Gozo is by passenger and car ferry from the north of the island of Malta, or by a new air service by seaplane from Grand Harbour, Valletta.

The Malta Freeport, the third largest transhipment and logistics centre in the Mediterranean handling 1.5 million TEU per annum, is the focus for containerised transhipment traffic.

The terminal management was privatised in 2004, and is now handled by Terminal Link, after CMA CGM, a French line was awarded a 30-year concession on the port. Connected to 60 Mediterranean and Black Sea ports and 125 ports worldwide, only 5 per cent to 8 per cent of the Freeport’s traffic is cargo originating in or destined for Malta.

A large proportion of domestic cargo is handled by the Port

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of Valletta, also under privatised management since 2005. Valletta Gateway Terminals, a partnership between Singapore’s Portek and the Tumas Group, has undertaken an extensive investment programme, upgrading the facilities and equipment and embarking upon a proactive marketing exercise. This is paying off: traffic through the port is increasing. The port handles Ro-Ro operations and general cargo, with a small but growing volume of unitised cargo. And regional transhipment, shifting road traffic onto short sea shipping routes, is increasing steadily.

Recent reforms in working practices at the ports are bringing costs down, increasing Malta’s attractiveness as a logistics centre.

The reforms, concluded in the second quarter of 2007, affect the Port of Valetta most directly. However, the Freeport and its users also benefit.

Within the Grand Harbour, the cruise liner terminal services a number of ferry services as well as the cruise liner industry itself.

Passenger traffic Most passenger traffic goes through the Malta International Airport (MIA), which is connected by direct flights to most major European and regional cities with the majority of destinations less than three hours flying time away. The airport is served by a number of international airlines and handles up to 2.5 million passengers every year. Malta is connected to most major cities in Europe, North Africa and the Middle East with regular, scheduled routes served by the national carrier. Most European cities can be reached by direct flights from Malta within a three-hour flight and there are excellent long-haul connections. Malta is also increasingly served by low-cost carriers, primarily to second cities and the main, source markets for incoming tourists.

The proximity of the airport to the ports means that multimodal freight services and distribution are easily managed.

MIA has recently inaugurated a new specialised freight village offering excellent air cargo links through Air Malta, Lufthansa and Emirates, well developed airfreight handling capability and smooth customs clearance.

Road Network Malta has a network of some 1,500 kilometres of roads. An intensive programme of road repair and rebuilding, funded largely by EU structural funds, is currently underway. Despite the odd inconvenience, when roadworks may hold traffic up, this is a welcome development. Road journeys in Malta never take more than forty minutes: yet good, new roads mean the journeys are now easier and more comfortable. Daily commuting times within Malta are negligible compared to most similar urban-style areas on continental Europe, giving Malta even greater appeal to professionals relocating to the island.

ICT and Communications Telecommunications & Internet Malta has one of the most sophisticated telecommunications infrastructures in the world, with large bandwidth networks providing high capacity communication to and from the island.

Networks are completely digital and international connections have been significantly expanded through satellite technology and high capacity fibre optic cables linking Malta with Europe.

The three main telecoms service providers are Go, Melita Cable and Vodafone. Fixed telephony services had been dominated by Go until Melita, a cable TV company that moved into data and internet service provision in the late 1990’s, started its own VOIPbased service over its cable network. In Malta, virtually all homes are linked to the fixed-line telephone network while the cable network passes through 98 per cent of all properties with 67 per cent of all businesses and household actually using such service.

Mobile services are provided by Go Mobile, a Go subsidiary, and Vodafone Malta. Both mobile providers have introduced 3G services besides their GSM service. Mobile penetration rates stand at 86.6 per cent of the population.

Vodafone has also rolled out a wireless broadband access service, targeting small businesses and homes and selling access in a bundle with both fixed VOIP telephony and internet access. This is the first nationwide WiMAX rollout in Europe, and Vodafone still has the market to itself, as neither of the other licence holders, Go and Cellcom, have launched their services yet.

The advent of VOIP services has slashed the cost of international communications and there are around a dozen VOIP providers, including Go and Melita who each have their own low cost VOIP services.

M

alta has seen huge public and private sector investment in ICT over the past 15 years and today the island boasts a truly modern infrastructure with one of the highest broadband access rates in EU; around 66 per cent of all connections are broadband enabled. Mobile phone usage stands at 84.9 per cent of the population. As the infrastructure has opened up to market forces, access rates have increased and tariffs have lowered.

Since the early 1990s, government policy has emphasised the development of IT in Malta and has encouraged extensive investment in Malta’s telecommunications infrastructure, making it one of the best in Europe.

At the end of March 2007, the World Economic Forum (WEF) ranked the Maltese Government as the second most successful administration in the world in promoting the use of information and communications technologies. The European Commission ranked Malta second in its latest assessment of the sophistication of eGovernment Services. Similarly the Economist Intelligence Unit placed Malta as 23rd on its most recent eReadiness Index.

Malta’s size works in its favour in this respect by making it easier for government to implement the required policies and strategies within a short timeframe.

International Connectivity & bandwidth Internationally, Malta is connected through two satellite stations (one to the Atlantic Ocean region and the other to the Indian Ocean region) and two submarine fibre-optic links to mainland Europe while a third submarine fibre-optic cable, which will dramatically increase the bandwidth available to Malta, is expected to be completed by end 2008. Currently, Malta is served by: • Vodafone: Capacity of 2.5 Gbps, STM-4 (622Mbps).

Initially 40 Mbps for voice and 90 Mbps for data • GO’ Capacity of 2.5 Gbps, STM-4 (622 Mbps) (voice, international private leased circuits over SDH, data) • New submarine cable to be completed by end 2008 GO’: Capacity 20 Gbps. The cable will have 4 pairs, of which only 1 will be lit initially. This pair will be equipped with terminal equipment supporting 2 wavelengths at 10 Gbps each.

Postal & Courier Services Postal services on the island are provided by Maltapost Plc, the former state provider, now privatised. Letter delivery is efficient and reliable with a three-day service to most mainland European cities.

Maltapost operates an Expedited Malta Service (EMS Datapost) with guaranteed delivery times. All the main, international courier services are represented on the Islands.

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Utilities The energy and water requirements of the islands are catered for by the local, public-sector power-generating company, Enemalta, and the Water Services Corporation respectively. The country’s dependence on reverse osmosis plants for its water needs means the Water Services Corporation is Enemalta’s largest client, consuming 4 per cent of total electricity generated by Malta’s two power stations. Huge investment in this area over the past 20 years means that supplies are stable and regular, and though costs have been rising dramatically due to increases in international oil prices they still remain below the EU average.

Energy Malta has no natural, domestic energy sources and depends totally on oil imports. Oil is so far the only type of energy used for electricity generation in Malta.

All electrical energy required is generated in Malta by Enemalta Corporation, the national provider of oil, gas and petroleum. At present, Enemalta operates two power stations, which supply all the electrical power needs of the islands of Malta and Gozo. The supply is at 240V, and is steady.

On account of the size of the market and lack of any interconnection with other countries, there is currently no competition in the Maltese electricity market.

There is, however, a move towards alternative sources of energy. People and companies installing photovoltaic cells or micro-wind generators can feed their excess production back into the national grid, and get paid for every unit.

In addition, the Government has begun to look at the possibility of linking Malta to the European electricity grid via a submarine cable to Sicily. This includes looking at how the connection would be managed, with participation from the private sector. Among other things, this would introduce an element of competition to the Maltese power supply market, satisfying EU guidelines.

The Government is also looking at developing at least one offshore wind farm. On a long-term basis, Malta is hoping to partner with Scottish Enterprise on a research project to take wind turbines beyond their current limit of 40 metres to depths of 50 or 60 metres, though it would be at least 6 years before the project yields any concrete results. In the meantime, government is looking at situating a windfarm some two to three kilometres off the coast of Malta where the sea is between 16 and 24 metres deep, in a site large enough to provide 10 per cent of Malta’s electricity needs. This project, if completed, would fit neatly with Malta’s EU obligations and would generate enough electricity to supply the entire island of Gozo.

Fuel Enemalta has been the sole importer of petroleum and natural gas, though this situation is changing. Petrol, diesel, kerosene and LPG are all widely available. Malta has a network of independent petrol stations for transport fuels, but other fuels – LPG, kerosene and light fuel oil – are delivered to the end user by licensed distributors.

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One Maltese company, an edible oil refining company, has begun processing used cooking oil into biodiesel, solving two problems in one stroke. The company collects used oil from households and commercial kitchens, taking it out of the waste stream, and supplies a fuel that does not contribute to carbon dioxide emissions since it essentially returns carbon extracted by plants from the atmosphere in the first place.

Use of biodiesel is increasing in Malta, with one caveat: there is a limit to the potential supply within the model the company is following, dictated by the volume of cooking oil used on the island.

Water Malta’s Water Services Corporation produces and distributes potable water in the Maltese Islands. It is responsible for the whole water cycle from its production to its safe disposal. Some thirtyone million cubic meters of good quality water are produced annually to cater for the needs of Malta’s 400,000 inhabitants as well as around the one million tourists who visit each year. Just over half the water is produced at the Corporation’s three reverse osmosis plants with the remainder coming from groundwater sources such as boreholes and pumping stations.

Waste management Refuse collection is regular, and waste is disposed of at engineered landfills, with a waste separation at source system about to be introduced to facilitate recycling. Collection, run by the local councils through a number of contractors, happens on a daily basis – except on Sundays – in most areas.

Some classes of hazardous waste are now being incinerated in state-of-the-art facilities, and interestingly this process produces enough energy to allow the generation of electricity. By a similar token, the heat and gas generated by the landfills are being tapped to provide yet another source of power.

Human Resources Diligent, enthusiastic and quick to learn, the Maltese workforce is the island’s greatest strength and most valuable asset. Highly educated, most Maltese speak at least three languages, Maltese, English and Italian or French. The exceptional quality, flexibility and work ethic of the Maltese have attracted numerous international companies to Malta not only to provide support for overseas bases, but also as fully-fledged companies with their own operations.

Malta boasts the oldest university in the Commonwealth outside the UK and has a tradition of academic excellence and research. Some 60 per cent of students (18-24 year olds) continue in education to tertiary level in some 85 or more institutes.

The nation’s cosmopolitan feel is a result of centuries of openness to foreign trade and its many years as a tourist destination.

History has bequeathed Malta the distinct advantage of a people intuitively equipped to exploit the island’s strategic location, which straddles cultures and continents.

Malta is becoming a knowledge economy satellite in the Mediterranean on account of its IT-literate workforce, a result of significant public investment in ICT education and training over the past decade. Today Malta has a strong IT workforce boosted

by IT centres of excellence including regional training centres for CISCO, Microsoft and Oracle.

Malta is also attracting overseas personnel to train in Malta as the island offers a strong competitive base, especially in the provision of IT training services. For example, it has been known for companies to send people from Hamburg to train in Malta rather than to Frankfurt on account of the island’s cost effectiveness.

Malta’s cost-effective, skilled, and English-speaking labour force has contributed to its growing reputation as an ideal nearsourcing centre. Accommodation and labour costs are around half to a one-third lower than those of those of the original EU of 12 countries. However, for personnel, the island’s lifestyle and lower cost of living are seen as important factors mitigating reduced earnings. Purchasing power is around 73 per cent of the EU average; more or less at par with that of Portugal.

Traditionally, Malta has always had a large pool of professional support services covering accountancy, law, and financial and management consultancy. Many firms are affiliated to international organisations and therefore have a worldwide network of resources to draw upon if required. Most legal firms have specific expertise in sectors such as financial services, commercial law, corporate tax, maritime law, property and insurance.

• Highly-educated, skilled people • 60% of students continue to tertiary level • Flexible & motivated workforce • English-speaking nation: English an official language • Excellent work ethic • Low wage costs: around 40-50% of original EU of 12 states • Stable employee-employer relations • Relaxed living, professional outlook • Education & training focused on ICT & services • An open, cosmopolitan culture

Labour While Malta cannot claim the highest productivity nor the lowest cost, analysis shows that balancing various costs, such as productivity with working hours, Malta ranks very favourably as a value-for-money location in which to do business. In particular, Malta’s value added/hourly labour cost ranks Malta ahead of the UK, Ireland, France and Italy and ahead of all of the established EU economies. It has low minimum wage and compensation costs relative to the EU-15 and provides the best value for money compared to other EU countries when productivity is compared to labour costs incurred.

Salary costs in Malta are 40 – 50 per cent of those in Ireland, the UK, France, Belgium, the Netherlands and Luxembourg.

When social security costs and other employment taxes are factored in, Malta’s total labour costs are also competitive when compared to the newer EU member states and significantly lower than other established members of the European Union.

Employment market: key statistics The total number of people employed in Malta is just over 152,000, while the unemployment rate is around five per cent of the labour supply. More than two-thirds of the labour force is male. Female participation in the labour force is very low in comparison to other EU states, standing at just under 32 per cent, however, it is rising as a result of family-friendly policies and training initiatives.

About 65 per cent of Malta’s workforce is unionised. Foreign workers are treated the same as Maltese with regard to labour legislation and collective agreements.

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Labour Relations Employment relations are governed by the Employment & Industrial Relations Act (Act 22 of 2002). Some 230 collective agreements regulate the conditions of employment of around 25,000 employees in the Maltese private sector - around a third of the total gainful employment in this sector. Most of these agreements are enterprise specific.

Collective bargaining is common and agreements reached between employers and unions are binding at law. Collective agreements are normally drawn up for a period of three years.

Employment in professional and managerial grades is usually regulated by individual contracts of service. Trade disputes can be referred to the Arbitration Tribunal.

Employer/employee relations The Employment and Industrial Relations Act deals with conditions of employment, termination of contracts of service and the organisation of workers and employers. A basic feature of this law is that it prohibits discrimination, whether on sexual, social or other considerations, in connection with recruitment, pay, or dismissal.

The Occupational Health and Safety Authority Act places obligations on employers to grant protection against risks and accidents at work and its provisions are deemed to form part of the conditions of services of all employees. Other laws may apply to certain categories of workers, such as port workers and seamen.

The Employment and Training Services Act regulates training schemes and apprenticeship.

Employers’ organisations Employers are organised into employers’ associations, the most important being the Association of General Retailers and Traders Union (GRTU), the Employers’ Association and the Union of Self-Employed. The Federation of Industries (FOI) plays an important role in bringing managements together. Malta has a Chamber of Commerce with a large, active membership.

Unions Two major trade unions dominate the Maltese union landscape, alongside a number of smaller sector-specific unions. The General Workers Union, closely associated with the Malta Labour Party since the early 1970s, is the island’s largest, with the UHM (Union of Maltese Workers, more closely aligned to the politics of the Nationalist Party) a close second.

The Malta Union of Bank Employees and the Malta Union of Teachers have a significant following. Many other sectoral or company specific house unions have fewer members, yet represent the bulk of workers in their areas and as such have made significant contribution to Malta’s labour laws over the years.

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Employment of foreign nationals Citizens of the EU have a right to enter, remain and reside in Malta, seek and take up employment or self-employment therein.

Subject to limitations justified on grounds of public policy, public security or public health, an EU citizen has the right to enter and exit simply upon furnishing a valid identification document and to move freely within Malta for a period of three months, commencing on the date of entry, or such other period as may be prescribed. Where such citizen intends to reside for a longer period, he must apply for a residence permit.

EU citizens may reside in Malta but where such residence is to exceed 3 months extendable to 6 months, or when, during such six-month period, such citizen takes up employment, he must apply for a permit. Residence permits are valid for 5 years.

Where an EU citizen wishes to take up employment, no such employment can be undertaken unless, in addition to a residence permit, a license has been issued.

Third country nationals require a special visa to stay in Malta for longer than three months and also require work permits to work in Malta. For more information and application processes visit www.etc.gov.mt.

Education and Training

Expat issues and immigration

Schools Education is provided by a number of government and private schools in Malta and school attendance is compulsory up to the age of 16. Over 60 percent of secondary school leavers continue with their education to tertiary level at the University of Malta and in a range of technical and vocational institutes. At present, more than 10,000 students attend the University of Malta, including some 750 international students from 80 different countries.

Although Malta became a member of the EU in 2004, the government successfully negotiated a seven-year period during which restrictions can be imposed on the rights of other EU nationals to work in Malta. EU nationals still have to obtain an employment licence before they can work in Malta. Salaries in Malta are low by EU standards, at around a half to two thirds of the UK average , but are gradually increasing, and all employees are given an annual pay rise based on the cost of living.

English Language Teaching Sector Malta is a major centre of the teaching of English, with over 40 registered schools operating in the sector. The island’s advantages of cost, location and English, also make Malta an ideal base for companies to site regional training centres targeting students from North Africa, Europe and the Middle East.

Visas As an EU country, Malta’s requirements on visas fall in line with EU policy and Malta joined the Schengen area in January 2008.

For people from outside the EU, details of visa-exempt countries and visa application procedures are available on the Ministry of Justice and Home Affairs website at www.mjha.gov.mt.

Tertiary Education Malta’s long-standing educational system includes free education up to tertiary level and provides for a number of vocational and training schemes. There is close partnership between industry, the university and training colleges on Malta, which helps to ensure that the workforce is equipped with the required skills. Malta is also home to some 85 local and international commercial schools and tuition centres covering areas such as fire and safety training, ICT, engineering, insurance, commercial activities, aviation, language, and the arts.

Residency The Maltese government is keen to attract foreign nationals to settle in Malta, provided they meet certain financial criteria. Malta has operated expatriate immigration schemes for many years and people who settle in Malta under such schemes are allowed to remain indefinitely, and benefit from a range of fiscal advantages.

Employment & Training Services agency Malta’s public employment and training service, the Employment and Training Corporation (ETC), is primarily responsible for providing a public employment service, managing state-financed vocational training schemes and maintaining labour market information, though it is also responsible for the processing of work permits issued to foreigners.

Training incentives There are various training incentives available to established companies and new-start ups on the island and sources of funding for various aspects of training, such as life-long learning and the development of key skills, come on stream continually, many as a result of initiatives sponsored by EU funds. The Employment and Training Corporation is responsible for the administration of many training incentives aimed at encouraging employers to train, retrain, and actively engage various categories of personnel within the labour force. Employers may benefit from financial assistance to: • provide training for new employees as well as those that aim to update the skills of those currently employed as per labour market needs; • promote the re-training of employees whose skills no longer fit the requirements of the enterprise they are currently employed in; and • promote the ideology of Life Long Learning (LLL) within the workplace.

For full details visit www.etc.gov.mt

Health All EU nationals resident in Malta are eligible to receive free medical treatment at government-funded hospitals and clinics.

The Maltese Ministry of Health, however, still advises all foreign residents to take out private medical insurance. The main general hospital is the newly opened state-of-the-art Mater Dei Hospital, and all towns and villages have their own medical clinics.

A number of private hospitals and clinics provide a range of medical services, from very simple care to more complex surgical attention. In fact, medial tourism to Malta – people visiting the country specifically for medical attention – is a fastgrowing business. With medical professionals trained within a long-standing tradition of high standards, health care services are among the best in the world. And foreign residents have the comfort of knowing that, since English is widely spoken, they should have few problems communicating their problems.

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Commercial and Residential property Despite the limited land area available, Malta offers a wide range of commercial and residential property. Office space is available in purpose-built office blocks, in converted houses, flats or within some of the new, large mixed-use developments. Malta offers a diverse range of properties, available for rent or outright purchase.

One of the advantages of Malta’s small size is that commuting times between Malta International Airport and an office is rarely greater than 20 minutes, and journeys are seldom longer than 40 minutes. This means there are few restrictions on where a business setting up in Malta can choose to establish its operations. In effect, the final choice will depend upon preferences and relative cost related to the quality and suitability of the property concerned.

Commercial Real Estate Malta offers exceptionally good value in terms of its commercial real estate in comparison to similar urban areas in the EU. It also offers enviable locations with sea views and marinas as well as prestigious landmark office complexes within easy commuting of residential areas. Overall, rentals are around two-thirds to half of those charged for comparable commercial spaces on continental Europe.

At the top end of the market, commercial space in prestige developments comes in at around €300 - €420 per m2 a year. Midmarket, smart office blocks in the central Malta areas of Sliema, Gzira and Ta’Xbiex are around €58 - €116 per m2 a year.

Industrial rentals are exceptionally good value for money.

Malta Enterprise, the government agency assisting incoming firms, can provide industrial property to prospective investors at highly competitive rates. Malta’s average industrial property rate of €10/m2 compares favourably relative to the secondary rental markets in Italy, Austria, France, Luxembourg, Ireland and the UK. Malta has among the lowest of all prime industrial property in EU markets and has ten industrial zones offering industrial property at these competitive rates.

Smaller, government-backed parks include Mosta Technopark in the centre of the island. Designed with technology firms in mind, it houses technology investors from Malta, Italy, France, Germany and the UK. In addition, Malta Enterprise operates a Business Incubation Centre (KBIC) for start-ups, which offers a portfolio of subsidized services to its clients. n

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Office Average rents and occupancy costs Rent - local Currency / Measure

current per local measure % change 12 months

Athens

€384 per m2 per annum

10.3

Brussels

2

€300 per m per annum

0.00

Dublin

€673 per m2 per annum

0.00

London

€818 per m2 per annum

1.70

Paris

€789 per m2 per annum

7.80

Frankfurt

2

€468 per m per annum

13.0

Rome

€400 per m per annum

17.6

Gibraltar

€269 per m per annum

not available

Switzerland

€594 per m per annum

11.80

Malta

€114 per m per annum

6.83

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MALTA LIFE / visiting malta

VISITING MALTA

Business meetings in Malta offer the chance to explore some of the island’s most beautiful treasures and experience the charms of a truly Mediterranean lifestyle

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oted the best climate in the world by International Living, Malta’s balmy weather and sparkling blue seas make for a holiday or business environment that is virtually second to none. With delightful natural scenery, magnificent architecture, warm and friendly people and a Mediterranean cuisine bursting with natural sun-ripened flavours, Malta’s charms work their magic on everyone who comes to visit: business people on a two day meeting, tourists on a two week vacation and expats relocating their home to the island.

Mediterranean Island The Maltese islands consist of Malta, Gozo and Comino (all inhabited) and the uninhabited islets of Cominotto and Filfla.

Anchored in the crystal clear waters of the central Mediterranean, the Maltese archipelago is situated just 93 km south of Sicily and 290 km north of Africa.

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Malta’s strategic position midway between Europe and Africa made it a key possession for the many different conquering nations that ruled it throughout its 7000 years of history: from Neolithic man to the Ancient Romans, the Byzantines, the Moors, the Normans, the Knights of St John, the French and the British, all of whom have left a wealth of architectural and cultural treasures.

Easy Accessibility Popular for decades with European tourists from across the continent, Malta’s proximity to the mainland means it has always been relatively easy to get to the island. With the advent of low-cost airlines a few years ago, improving both pricing and seat availability, getting to Malta is now as easy as catching a train into town. Just an hour away from Rome and three hours from London or Frankfurt, the island offers northern Europeans the chance to experience a few days of balmy sunshine in the middle of a dull grey winter.

Grand Harbour © Alan Carville

Sight-seeing Between Meetings For those coming on business trips, Malta’s main business and financial centres are located in Valletta, Floriana, St Julians and Sliema, and most meetings will be concentrated in or around those areas. The city of Valletta, built in the 1560s by the Knights of St John, is situated on the tip of Mount Sciberras peninsula, a stretch of land that extends into the heart of the Grand Harbour, embraced on either side by the Three Cities and Sliema respectively.

The views from any vantage point in the city are spectacular: sparkling blue sea shimmering towards the horizon, framed by the indented coastline of the surrounding land. Ships, tug boats, yachts, sailing boats and fishing vessels keep both sides of the harbour busy with activity, and high on the skyline above the Three Cities and Marsa further inland the cranes and structures of the Dockyards and shipyards reinforce the maritime atmosphere that pervades this unique city.

Valletta Within Valletta itself, a protected UNESCO World Heritage site, you’ll be seduced by the stunning Baroque architecture of the palaces, mansions and town-houses that fill its hilly streets. Valletta is one of Europe’s most beautiful cities, replete with museums, churches, galleries, shops, open-air markets and an atmosphere all of its own. At its centre lies the remarkable St John’s CoCathedral (its floors are paved with the marble-inlaid tombstones of long-dead Knights), home to Caravaggio’s beheading of St John the Baptist. Go to the 400 year old Casa Rocca Piccola in Republic Street, one of the very few, lovingly maintained, ancestral homes in Malta that are open to the public, where you can also visit the Museum of Costume that it houses.

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© Paolo Meitre Liberatini, MTA

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Prehistoric Temples If you have time to explore further afield between meetings try to visit at least one example of remains from each of Malta’s most important historical periods. 7000 years of history has left an abundant legacy of historically important sites and monuments on the island, including archaeological sites that pre-date the Egyptian pyramids and Stoneghenge.

The Megalithic temples in Malta and Gozo, which are the oldest freestanding stone structures in the world, and the Hal Saflieni Hypogeum are all inscribed on the UNESCO World heritage list as having special universal value.

The Silent City The old capital Mdina is another popular attraction. Dubbed Malta’s ‘Silent City’ this magnificent and totally unspoiled walled town quietly evokes the grandeur of a bygone era, especially in the evening when its cobbled streets are almost deserted. Visit the Cathedral in Mdina; the Cathedral Museum, which, among many other things boasts an extensive collection of Duhrer woodcuts; and Palazzo Falzon, built in 1233, for a glimpse at what Medieval Maltese life was like.

Outdoor Activities If you’re the active type or simply want to blow off steam, you might want to try one of the myriad of sporting activities available on Malta: from golf and tennis, to skydiving, rock-climbing, scuba diving, horse riding, walking or bird-watching, there’s plenty to do for anyone seeking an adrenaline rush or a blast of fresh air. Keen ramblers will discover the charm of the Maltese rural landscape; a patchwork tapestry of terraced fields, olive trees and honeycoloured stone walls.

Vibrant Nightlife Whatever you choose to fill your free time with, eating out and evening entertainment will put the final touches to your days. Malta offers a great choice of restaurants, bars, jazz clubs, nightclubs, discos and casinos and the island’s vibrant nightlife draws crowds from across Europe every weekend and throughout the summer. Dine by the sea on fresh-caught fish, sipping a glass of ice-cold local chardonnay and gazing up into the starry night sky for an unforgettable evening. And if you’re visiting Malta between June and September, find out where the nearest village festa is being held and round off your evening by sharing in the lively celebrations, fireworks and fun commemorating the village patron saint.

Shopping Around Shopping in Valletta, Sliema or St Julians is excellent, and apart from all the high-street brands from the UK, Italy and France, you will also find boutiques selling designer wear at incredibly low prices. If you’re shopping for traditional arts and crafts to take home with you, look out for the renowned Malta lace, delicate silver and gold filigree or the colourful and creative Malta handblown glass. n

© Maysun Abu-khdeir Granados, MTA

Island Hopping Gozo – Get a ferry across the Gozo channel to Malta’s sister island of Gozo. This tiny, rural island, swirling with myth and romance has a legendary charm that enchants any visitor. Beautiful landscapes of gentle hills and undulating valleys, with a rocky coastline punctuated with occasional sandy beaches and deep sheltered bays, cliffs and bluffs, Gozo is a genuine island delight. Far less developed than Malta, Gozo’s rural communities and coastal fishing villages slumber under the Mediterranean sun in picturesque somnolence. Places to visit include the Citadel, the tiny walled city at the heart of the capital, Rabat (Victoria), Dwejra (the Inland Sea) and Ramla il-Hamra, one of the most beautiful sandy beaches on the islands.

Ggantija Temples are absolutely fascinating and not to be missed, and while you’re there, take a look at Marsalforn, the busiest summer resort on the island, and Xlendi Bay, an erstwhile tiny fishing village sitting astride a deep narrow fjord-like bay that’s become very fashionable as a summer resort in the last few years.

Getting There: Gozo Ferry from Cirkewwa runs frequent services, increasing on particularly busy days to cope with demand.

For a timetable visit www.gozochannel.com

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© Alan Carville

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LEADING HOTELS IN MALTA & GOZO

Corinthia Palace Hotel HHHHH De Paule Avenue, San Anton, Malta T: (+356) 2144 0301 F: (+356) 2146 5713 Email: palace@corinthia.com www.corinthiahotels.com At the centre of the Island, opposite the Presidential Palace and San Anton Botanical Gardens, Malta’s premier five star hotel, offers the best in accommodation, comfort and facilities. Set in it`s own mature and landscaped gardens, the Corinthia Palace Hotel & SPA, is the perfect base from where to explore the island as it is only 4km away from the Walled City of Mdina, 6km away from the Capital Valletta and 7km from the resort of St Julians, yet far enough to offer a world of tranquility and relaxation.

Kempinski Hotel San Lawrenz HHHHH Triq ir-Rokon, San Lawrenz, SLZ 1040, Gozo - Malta T: (+356) 2211 0000 • F: (+356) 2211 6372 Email: reservations.sanlawrenz@ kempinski.com Website: www.kempinski-gozo.com The Kempinski Hotel San Lawrenz is more than just an exclusive hideaway resort with all the comforts 5 stars can offer.

Surrounded by 30,000 sqm of gardens, it has been built to blend into the yellow limestone in a traditional style. The entire resort creates an elegantly rustic atmosphere in the lobby with natural stone floors, palm trees, flower beds, local woods and Mediterranean colours - add to that the award-winning Spa & Ayurveda Centre, and you have the ideal surroundings to relax body and mind. Its 122 airy rooms, 48 of which are Suites, are tastefully decorated in traditional Maltese style. Four meeting rooms with all state-of-the art facilities accommodate up to 300 delegates.

Corinthia San Gorg Hotel HHHHH St George’s Bay, St Julian’s, Malta T: (+356) 2137 4114 • F: (+356) 2137 4039 Email: sangorg@cbr.corinthia.com www.corinthiahotels.com

Hilton Malta HHHHH Portomaso, PTM01, Malta T: (+356) 2138 3383 F: (+356)2138 6386 www.hilton.com

InterContinental Malta HHHHH St. George’s Bay, St. Julians STJ3310 - Malta Tel: (+356) 2137 7600 • Fax: (+356) 2137 2222 Email: info@intercontinental.com.mt Website: www.malta.intercontinental.com

This elegant hotel is splendidly located at the entrance to St George`s Bay, St. Julians.

Virtually surrounded by the Mediterranean, and designed around cascading pools that lead down to a Lido, where locals and other foreign guests are welcome.

The Hotel offers unparalleled luxury and comfort. The Executive Club suites on the top floors have separate facilities while the self contained Conference and Business Centre offers total flexibility for a wide range of meetings and conferences.

Forming part of the prestigious Portomaso development, Hilton Malta offers an unparalleled combination of an ideal location and outstanding facilities. The hotel has a total of 294 deluxe rooms and a wide range of facilities and restaurants to suit different moods. State-of-the-art meeting facilities, including 9 meeting rooms in-house and the Hilton Malta Conference Centre, offering the combination of a Mediterranean setting and the very latest equipment.

InterContinental Malta redefines the meaning of elegance with its contemporary design and modern ambience. All designerled rooms are superbly furnished combining stylish materials and tasteful bright colours.

The hotel’s top three floors house Club InterContinental rooms and suites, with the Club Lounge offering a range of exclusive services for the most discerning business traveler. The hotel offers total connectivity (WIFI and broadband) and boasts over 5,000 sqm of meeting, banqueting and exhibition space, including 22 separate meeting rooms.

Facilities also include 7 restaurants and 3 bars, with InterContinental Beach Club being an extension of the hotel’s amenities.

Le Meridien St Julians Hotel + Spa HHHHH 39 Main Street, Balluta Bay, St Julians STJ1017, Malta T: (+356) 2311 0000 • F: (+356) 2311 0001 Email: infolmsj@lemeridien.com Website: www.lemeridienmalta.com

Radisson SAS Bay Point Resort HHHHH St. George’s Bay, St. Julians STJ02 T: (+356) 2137 4894 • F: (+356) 2137 4895 Email: info@radisson.com.mt www.radisson.com.mt

The Xara Palace Relais & Chateaux HHHHH Misrah il-Kunsill, Mdina MDN 1050 - Malta T: (+356) 2145 0560 • F: (+356) 2145 2612 Email: info@xarapalace.com.mt Website: www.xarapalace.com.mt

The five star Radisson SAS Bay Point Resort Malta is situated in St. George’s Bay on the island’s north coast, directly overlooking the clear blue waters of the Mediterranean and with views stretching from the historic Grand Harbour in the East to the sister island of Gozo in the West. This location provides the best of both worlds. St. George’s Bay is a quiet area, ideal for getting away from it all.

The Xara Palace Relais & Chateaux is Malta’s finest, privately owned, luxury boutique hotel offering 17 individually designed suites.

Here one can discover and savour the past whilst enjoying every amenity and comfort of the present. Situated in the medieval town of Mdina this unique 17th century palazzo offers the highest standard of service, accommodation and cuisine. Mdina is a short drive away from the Island’s major attractions. The award winning ‘de Mondion restaurant’ enjoys spectacular panoramic views and offers the best of Modern cuisine prepared by our award winning Executive Chef, Kevin Bonello and his Brigade.

Le Meridien St.Julians Hotel + Spa is situated on the grounds of a 19th century Maltese villa on the sea front of picturesque Ballutta Bay. A combination of innovative and contemporary design awaits. Located on the St.Julians promenade, the area is a Mecca for restaurants, cafes and shopping.

Incorporating 276 rooms + suites, inspiring cuisine, meeting facilities and reviving spa.

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HEALTH TOURISM Excellent hospitals, top quality specialists, services and facilities plus a holiday in the sun. Thousands of overseas patients are choosing to have their medical treatment in Malta and it’s not difficult to work out why

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ith a reputation for excellent health care that is almost 500 years old, Malta, the ‘Nurse of the Med’, is raising the standard again, offering patients from across the world the opportunity to secure top quality, timely treatment in state-of-the-art hospitals and clinics on one of Europe’s favourite holiday islands.

Situated in the centre of the Mediterranean, with a welldeveloped and flourishing tourist industry already geared up to welcoming visitors with the most diverse of exigencies, Malta knows that it enjoys specific advantages as a medical and health tourism destination, and the island’s hospitals, clinics and hoteliers are joining forces to offer patients and their families the perfect solution to the waiting list woes that plague so many major European countries.

Top of Malta’s list of natural advantages is the international reputation of its health service and medical professionals. One of the most highly respected and successful heath services in the world, ranked in the top five in the world in a recent World Health Organisation (WHO) study, it is manned by UK or EU trained surgeons, consultants and specialists, whose familiarity with British and European systems adds a dimension of familiarity and comfort to the overseas patients’ experience.

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Malta’s medical and health facilities include the recently opened state-of-the- art Mater Dei Hospital, several private hospitals such as St James Hospital and St Philip’s Hospital, and various Spa hotels, such as the Fortina Hotel, a purpose-built five star spa hotel that is ideal for post-operative recovery. A large number of hospitals, clinics and health centres in Malta are equipped to carry out everything from basic blood tests to cardiac surgery using the latest equipment and most advanced techniques.

Already the island is seeing a steady influx of overseas patients choosing to have treatment or surgery abroad for all types of operations and interventions: from cardiology and ophthalmology to knee and hip replacement operations, kidney transplants and dentistry to name but a few, as well as cosmetic surgery such as breast reduction or augmentation, face lifts and lipo-suction.

For British patients and their families, Malta is about to become even more attractive as an alternative to their local hospitals. Besides Malta’s historical links to the UK, the common usage of English and the short traveling time required that have long made the island a natural choice for British people seeking private medical treatment overseas, recent ECJ rulings suggesting that EU patients facing ‘undue delays’ at home are entitled to seek treatment elsewhere in the EU at the expense of their home country means that NHS patients too could soon be opting to have their timely treatment in Malta financed by their own health service.

Malta’s leading medical and health tourism operators are fully aware of the opportunity this development opens up for the island, and together with the Malta Tourism Authority, have appointed a consultant in the UK to present Malta’s proposals to various UK Healthcare Trusts. With costs in Malta typically 30% cheaper than in the UK and no compromise on quality, it is expected that numbers of overseas patients receiving treatment in Malta could go up by 100,000 patients annually.

For private patients or for operations not covered by either the NHS or private insurance, such as cosmetic surgery, Malta has introduced a Health Card: an innovative finance plan that allows patients to repay the costs of any procedure including fights, accommodation and recovery time, over a number of years, making top quality, timely treatment fully available to anyone, whatever his or her circumstances. n

Meeting place in the med Warm sun, sparkling sea and welcoming smiles make Malta an ever popular travel destination with visitors, while excellent conference facilities and convenient international connections make the island ever more attractive as a meeting place for business

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ot many destinations have thousands of years’ experience as a meeting place but Malta has played host to everyone from St Paul to latter-day presidents, and to gatherings ranging from EU conferences to small groups. Companies and organizations such as the EU, the Commonwealth, WHO, UNDP, Microsoft, IBM, Bayer, Roche, Cable & Wireless, Cadbury, Sony, Dell Computers, Eriksson, UPS, Opel, Deutsche Telecom and many others have already chosen Malta as their meeting place and the reason is not difficult to discern: whatever the size, formality or informality of your event, Malta has the expertise, the venues and the track record to ensure an unforgettable experience for all. Excellent facilities, year round good weather and convenient connections to all Europe’s major airports are only a few of Malta’s attractions as a Meetings, Incentives, Conferences and Events (MICE) destination. And Malta’s tourism operators are doing their best to maximise the natural advantages of the island in order to attract this highly competitive market. Millions of euro have been invested in improving and extending the facilities and services offered, and the last few years have seen five-star hotels banding together to promote Malta and collectively offer a truly advantageous package to conference organisers.

Room for All Small though Malta is, its tourism industry has invested heavily in creating the right environment and facilities for the MICE market.

Within the last decade alone a significant number of five-star hotels have been built, all within walking distance of each other. The area in which they are located, between St Julian’s Bay and St George’s Bay, has been designated the ‘Golden Mile’ and each of these hotels houses large conference areas able to accommodate hundreds of delegates, as well as state-of-the-art equipment and facilities. Four and five-star hotels in other areas are similarly equipped, offering conference organizers the facility of accommodating delegates in city, countryside or seaside locations. The short distances between localities also means that delegates can be accommodated in different hotels, as travel times between towns rarely exceed 15 minutes.

Venues An impressive selection of function venues are available, any of which would be sufficient alone to turn the occasion into a memorable event. From the 16th Century Mediterranean

Conference Centre in Valletta, to magnificent castles, stunning palazzos and impressive forts, adding a historical accent to the function is easy in Malta, where such venues abound. For a more contemporary note, available venues include theme parks, village squares, luxury yachts and exclusive sea front properties among others.

Entertainment Malta’s small size, rich heritage and glorious Mediterranean scenery have been key to the island’s success at attracting traditional tourism, and are proving to be equally important drivers in the lucrative MICE sector. Conference delegates are able to enjoy a host of diverse experiences, ranging from historical tours to one of Malta’s several World Heritage Sites, including 7000-year-old temples and burial sites, diving in the crystalline waters surrounding the island or taking a nature ramble across the delightful patchwork scenery of Malta’s countryside. A host of sporting activities are available, ranging from tennis and golf to skydiving and rock climbing, while those with gentler tastes could opt for a traditional horse and carriage ride through the ancient walled city of Mdina.

Flying South Frequent connections between Malta and all major European cities mean comfort and convenience for the delegates participating in the conference or enjoying an incentive break. Travel times vary from three hours (from London) to just one hour (from Rome).

Malta International Airport offers excellent facilities, and is located less than 30 minutes away from most hotels.

Professional Services The Malta Tourism Authority offers a variety of services designed to help events organisers, both through its MICE Division and through its website, www.visitmalta.com, provides specific information on hotels, facilities, service providers and venues, as well as contact details for destination management companies, audio visual companies, exhibition stand designers and events organisers.

Perfect Combination Excellent conference facilities and an abundance of extra curricular attractions in addition to its glorious Mediterranean climate make Malta the must-visit destination for thousands of conference delegates every year: With great food, shopping, cultural and musical events, historical sites and sports of all types all within a few minutes distance of each other adding extra value to every conference or incentive package, Malta is rapidly taking the lead over competitors in this lucrative sector of the tourism market.

With its European heritage and tradition for both professionalism and hospitality, the island remains one of the most interesting and charming MICE destinations available today. n CountryPr●filerMALTA

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MALTA LIFE

EXCELLENT

QUALITY OF LIFE

Life on the Mediterranean island of Malta can be totally satisfying, providing the possibility of a work/leisure balance that few other locations can offer

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L

iving in Malta is a unique experience, especially for those used to hectic city environments and long commutes between work and home. The island’s small size and wealth of entertainment options means that in Malta, it is possible to have it all: work hard, play hard and relax by the sea, all in one day.

Measuring quality of life can be tricky and universal yardsticks don’t often work but one thing that most people agree on is that a balanced life makes for a happy life. The proverbial eight hours work, eight hours play and eight hours sleep aren’t easy to achieve in a big city environment where long commutes and even longer traffic jams eat away at dwindling leisure time and frayed tempers in equal measure.

Living on a tiny island, however, changes all that, and most expats in Malta cite the comfortable, relaxed lifestyle as one of the main reasons for their move. Malta is small: nowhere is more than 30 minutes away from wherever you are and the sea, the cafes, the restaurants, cinemas, theatres, sports clubs or gyms are almost always within walking distance of your office or home.

A recent EU survey on happiness in the EU found that Maltese people, despite earning less than their northern European neighbours are among the happiest people in the Union. Life by the sea, where precious time can be used for work, pleasure and essential sleep in satisfactory chunks goes a long way towards creating happiness.

But it’s not only time issues that give Malta its edge over other European locations. The Maltese character is imbued with the British legacy of strong work ethic and powerful ambition, softened by the natural southern Mediterranean temperament. Doing business in Malta is both

USEFUL NUMBERS The following is a list of useful telephone numbers when you are visiting the Maltese Islands: Ambulance 196 Consumer Protection 21250221 Direct Dialling Code (Malta) 356 Directory Enquiries 1182 Directory Enquiries (Go Mobile) 1187 Directory Enquiries (Vodafone) 1189 Emergency 112 Emergency Rescue by Helicopter 21244371 Emergency Rescue by Patrol Boat 21238797 Fire Brigade 199 Flight Enquiries 21249600 Government Information Service 153

St. Julian’s © AirMalta

Gozo Channel Co. Ltd 21556114 Hospital – Gozo 21561600

satisfying and pleasant because the same balance that adds value in terms of time is also present in the nature of the people you’re working with. Add to that the fact that the Maltese health service is one of the best in the world, the postal service works at a high level of efficiency, the infrastructure is robust and continually being upgraded and schools, colleges and universities are among the best in Europe, and an already pretty picture becomes even more attractive.

Your Maltese neighbours will speak three languages fluently: Maltese, English and Italian, and will probably have at least a working knowledge of French or German. The cost of living remains one of the lowest in Europe, yet banking, taxation, insurance, social security, utilities and communications services are sophisticated, professional and reliable, often surpassing those offered in many European nations. All of this, of course, under a Mediterranean sun that sparkles on the cleanest and clearest water in the region, and that gives the island hot, dry summers, short, mild winters and gloriously warm spring and autumn weather.

Does it get any better? Well yes, actually. The Maltese cuisine, a Mediterranean diet based on fresh seasonal ingredients, is one of the healthiest and tastiest in the region, crime is almost nonexistent, making Malta one of the safest places in the world, and the population’s strong Catholic tradition, evident in the hundreds of beautiful churches and chapels to be seen in every town, village or hamlet, bursts into joyous street celebrations with every feast day marked by processions, spectacular fireworks displays, band marches and general feasting.

Malta offers residents and expats the unique opportunity to live every aspect of life to the full, with warm sunshine and sparkling seas providing an enchanting backdrop to a pleasant Mediterranean lifestyle. n

Hospital – Malta 21241251 International Code 00 Lost Property 21224781 Overseas Operator 1152 Passport Office – Gozo 21560770 Passport Office – Malta 21222286 Police 191 Time Check 195 Weather Forecast 50043848

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BUYING PROPERTY IN MALTA

A HOME IN THE SUN

Real estate has long been one of the most valuable asset classes in Malta with development and construction consistently a top performing sector of the Maltese economy. The island’s first recorded building boom took place in the 17th Century when the Knights of St John embarked on an extensive building programme during which much of the stunning architecture the island enjoys today was constructed. Its modern day equivalent, begun in the 1960s, has been gathering momentum ever since.

A

ttracted by the island’s climate and excellent quality of life, foreign buyers looking for a second home in the sun are increasingly turning to Malta as the location of their choice. Fast becoming one of the most popular locations in Europe, Malta’s position in the centre of the Mediterranean, with most European capitals no more than three hours flight away, means foreigners owning property on the island are able to travel to and from their home with ease and minimum loss of time. Investors have also been richly rewarded for their efforts: the property market has enjoyed steady growth for the past 40 years and on average property prices have increased by circa 8 per cent per year, rising to 12 to 15 per cent in 2005 and 2006.

In 2007 to 2008 price growth appears to be levelling out, but

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the small size of the island and limited available land means property demand continues to be strong.

With a history that includes over 6,000 years of civilisation, Malta and Gozo are blessed with a wealth of fascinating cultural, artistic and natural treasures, including a series of stunning archaeological sites and Neolithic temples pre-dating Stonehenge and the Egyptian Pyramids. Sun-drenched and nestling in the clearest waters of the Mediterranean, Malta offers a mosaic of sport and leisure activities ranging from sailing, rock climbing and scuba diving to a simple amble through the countryside. As an island at the very heart of the Mediterranean, Malta was always considered to be a safe haven for sailors and that tradition continues to this day. Crime is very low providing a secure environment in which

Tigné Point

to live and work. The hospitality and charm of the local people is legendary, and Malta itself is a feast for the senses. Its delicious local cuisine and wines, busy open-air markets, great shopping and Italian influence give it a café culture and Mediterranean-type lifestyle that charms most visitors and residents within days. While English and Maltese are the official languages, Italian, French and German are widely spoken.

Becoming a Resident of Malta Europeans looking for permanent homes, holiday properties or investors seeking a good return on their capital have increasingly been choosing Malta over more high-profile destinations.

International expatriates and retirees are attracted by the ease

with which permanent residency can be achieved and the attractive nature of the island’s residency benefits.

Applying for residency is an option that is open to all foreign nationals and there is no minimum residency stay required.

Maltese residents have no tax levied on their worldwide income or wealth and they are subject to a flat income tax of 15 per cent, which is exceptionally low when compared with other EU countries. Retirees benefit from favourable pension legislation and tax system. Add to this beautiful weather, stunning scenery, a rich cultural heritage, stunning sandy beaches, crystal clear water and a high standard of living with excellent healthcare and education systems, it quickly becomes apparent why so many people are choosing Malta. Thanks to the island’s thriving

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international financial centre, securing mortgages is a relatively easy and painless task. The island enjoys a lower cost of living than many EU countries and this, coupled with the island’s political stability and membership of the European Union, has only added to the attractiveness of the island for property buyers to invest.

Metropolis Plaza, Gzira

Purchasing a Property The legal system in Malta is one of the safest and most undemanding systems in Europe. Property transfers are deemed to be unbreakable and security of title is guaranteed.

Since Malta joined the European Union in 2004 many of the previous restrictions have been abolished for EU citizens. When an EU national buys a home for holiday purposes they only pay tax on income generated in Malta through letting of the property. The only restrictions regarding foreign buyers centres around the cost and number of properties they can buy. When buying a holiday home, a foreign buyer may only purchase one property and pay not less than €69,990 for an apartment and €116,500 for a house. There is one exception to this rule, if you buy a property in a ‘special designated area’ such as Tigné Point, Portomaso, Metropolis, Pendergardens or Fort Cambridge then these restrictions do not apply. Buying property in a ‘special designated area’ means that foreign purchasers buy under the same conditions as Maltese Nationals i.e. one may let out the property; buy in the name of individuals or company; and one may purchase more than one unit.

The Best Addresses Malta offers up a treasure trove of attractive locations and places to live. Sliema and St Julian’s are perhaps the most popular places to live. Waterfront and marina developments such as Tigné Point, Portomaso and Cottonera have proven to be very desirable locations for foreign buyers. Apartments in

Malta is situated on the southern-most border of the European Union yet within easy reach of the European continental mainland, making it easy to access from anywhere in Europe. The year-round excellent climate, Mediterranean lifestyle and Western European living standards make Malta a very desirable place to re-locate to or to own a second home.

Ben Muscat, CEO - MIDI plc/Tigne Point Small in size huge in personality” that’s Malta with its over 5000 years of history, the central Mediterranean location and a mild climate all year round. Forming part of the European Union, the Euro Zone, the Schengen Zone and offering special tax rates to non-residents establishing their residence on the island, further enhance the high standard of living Malta offers.

The size of the island helps in having a practically crime free environment and all commodities (incl. airport) are only minutes away from your door step Paul Muscat, Director - GAP Holdings Ltd

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these prestigious developments range in price from €186,000 to €1.6 million. Malta’s newest editions to the property montage include Pendergardens, Metropolis, Fort Cambridge and Villa Michel are among the five-star development projects expected to be completed in the next months. In addition to the largescale developments listed above, a number of developers such as AXT offer a mix of properties to suit all tastes including upmarket apartment blocks, innovatively designed villas, expertly renovated farmhouses and houses of character. Other areas include St Paul’s Bay, Bugibba and Qawra. Gozo, Malta’s sister island, has proven popular with retired buyers – most of whom are seeking traditional farmhouse property complete with pool. Farmhouses range in price from €198,000 to €1.1 million.

Waterfront apartments are the most sought after properties and naturally offer the ideal investment for those seeking to buy for the purpose of letting. A rental return of between 4 per cent and 5 per cent per year is expected. The rental market can be year round due to favourable weather conditions and the popularity

Fort Cambridge, Sliema

Portomaso, St Julians

of the islands with retired couples, and gives an approximate rental period of about 25 weeks per rental season.

Pendergardens, St Julians

Long-Term Value Historically the Maltese property market has enjoyed a growth rate of 8 per cent per year, however during 2005 and 2006, increasing demand saw growth rates of between 12 and 15 per cent annually. As an investment, property in Malta does offer some excellent opportunities. The limited size of the island and strong demand from both the local and international buyers could well ensure investors will enjoy good returns for the foreseeable future. Malta is regarded as an excellent investment especially for those seeking to buy for commercial reasons such as letting. Besides appreciating in intrinsic value, it is an ideal rental investment with rental returns of 5 per cent per annum, in a destination with history, culture, and sunshine in abundance.

If the past is a reflection of the future, then the Maltese property market has a very bright future. n CountryPrâ—?filerMALTA

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COMPANY PROFILES

Business profiles directory

Accounting & Auditing Fact Group

IS Audit & Security 171

Banking Services

Kyte Consultants Ltd

173

Legal Services

Bank of Valletta plc

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Chetcuti Cauchi Advocates

170

BAWAG Malta Bank Ltd.

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Ellul Mifsud & Debono Advocates (EMD)

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Finansbank (Malta) Ltd.

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Mamo TCV Advocates

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HSBC Bank Malta p.l.c.

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WH Law

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Sparkasse Bank Malta p.l.c.

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Corporate Services

Manufacturing Bavarian Technology Systems

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Sigma Coatings Malta Ltd.

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Butterfield Trust (Malta) Ltd

170

Claris Trustees & Fiduciaries Ltd

170

Credence Corporate and Advisory Services

170

Maritime

CSB Group

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Palmali Shipmanagement Ltd.

Fenlex Corporate Services Ltd

171

Fund Management & Administration

175

Real Estate Gap Developments plc

172

Apex Fund Services (Malta) Ltd

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MIDI plc

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Fexco Financial Services (Malta) Ltd

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Proinvest Ltd

175

Regus

175

Institutions & Public Corporations FinanceMalta

171

Software & IT Solutions

Lotteries and Gaming Authority

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Crimsonwing PLC

170

Malta Enterprise

173

Megabyte Ltd

174

Malta Financial Services Authority

173

RS2 Software p.l.c.

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Malta Maritime Authority

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Systec Limited

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Malta Remote Gaming Council

174

Malta Stock Exchange

174

Telecom & Internet

Malta Tourism Authority

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BMIT Ltd.

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GO p.l.c.

172

Vodafone Malta Limited

176

Insurance Services GasanMamo Insurance Ltd

172

Middlesea Group

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Salvo Grima Group

Investment Services HSBC Securities Services (Malta) Ltd

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Transport & Logistics

173

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Travel Services Air Malta p.l.c.

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Fraser Eagle Malta

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Mediterranean Conference Centre

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Air Malta is Malta’s national airline. The airline offers customers a selection of around 45 scheduled destinations to Europe, North Africa and the Eastern Mediterranean. Air Malta has a fleet of 12 new Airbus aircraft configured in business and economy with an average age of 2.7 years. This year the airline is celebrating its 35th anniversary.

Head Office, Luqa LQA 05 - Malta T: (+356) 2299 9385 • F: (+356) 2169 2861 Contact Person: Mr Brian Bartolo General Manager Marketing & Product Email: Brian.Bartolo@airmalta.com Website: www.airmalta.com

Air Malta plc Mr Lawrence Zammit Chairman

Apex Fund Services (Malta) Ltd Mr Anthony O’ Driscoll Managing Director

BANK OF VALLETTA Mr Tonio Depasquale CEO

Bavarian Technology Systems Mr Simon Alden General Manager

Apex Fund Services (Malta) Ltd is part of a privately owned global hedge fund administration Group with its head office in Bermuda. The group has offices globally located in Bahrain, Bermuda, China, Cyprus, Dubai, Hong Kong, Ireland, Isle of Man, Malta, Mauritius, Singapore and USA and provides bespoke solutions to Hedge Funds and Private Equity funds including fund accounting, transfer agency and corporate secretarial services. Apex has well-established operating systems and a SAS 70-Type II approved control framework in operation.

The BOV Group is a leading financial services provider in Malta, licensed by the Malta Financial Services Authority. BOV offers a wide range of Deposit Accounts, Debit and Credit Cards, Home Loans, Personal Loans, Internet Banking, Trade Finance Service and Corporate Finance. In addition the BOV Group offers Fund Management, Bancassurance, Investment Banking, Private Banking, Wealth Management, Trustee and Stockbroking Services. BOV has a national network of 46 branches and agencies, a Corporate Centre, 5 Business Centres and a Wealth Management arm. BOV also offers a well-developed worldwide network of correspondent banks and representative offices in Australia, Canada, Italy, Tunisia, Libya and Egypt.

BTS is a leading Electronics Manufacturing Services (EMS) provider based in Malta having s a portfolio of blue-chip clients coming from the industrial as well as automotive sectors. Current clients include amongst others: Mercedes-Benz, Bosch, Hetronic, Methode Electronics, Alfa Romeo, Land Rover and Volvo. BTS has positioned itself on the European market as a high quality, reliable manufacturer providing a best value for money solution when cost, flexibility and fast lead times are an issue but where quality cannot be compromised. We are based in a modern 2500sqm facility at Malta’s best industrial address, the Mosta Technopark. We assemble a mix of low to medium volume higher complexity boards as well as high volume lower complexity boards. We are ISO9001 certified. BTS is a sister company to Dumps Electronic, a company with 25 years experience in this sector employing over 100 persons in in Bavaria, Germany.

BAWAG Malta Bank Ltd. is a 100% subsidiary of the Austrian-American Banking Group BAWAG P.S.K. Located in the heart of Sliema, it is the springboard of the group to the Mediterranean with a special focus to North Africa. In the domestic Maltese market, it is specialized in traditional commercial banking in the upper market and in project finance. With its strong capital base of 500 mn Euros it is also a partner for syndications and structured finance transactions.

BAWAG MALTA BANK LTD. Dr Otto Karasek Managing Director

6th Floor, Airways House, Gaiety Lane, Sliema SLM 1549, Malta T: (+356) 2131 1330 • F: (+356) 2131 2880 Contact Person: Mr Anthony O’ Driscoll Managing Director Email: Anthony@apexfunds.com.mt Website: www.apexfundservices.com

Canon Road Santa Venera SVR 9030 Malta T: (+356) 2131 2020 • F: (+356) 2275 3713 Contact Person: Mr Charles Borg - Chief Officer Financial Markets & Investments Email: customercare@bov.com Website: www.bov.com

F16-F18 Tuebingen Centre, Mosta Tehnopark, Mosta MST 3000 T: (+356) 2339 9000 • F: (+356) 2142 2227 Contact Person: Mr Simon Alden General Manager Email: info@btsmalta.com Website: www.bts-malta.com

Level 6, Strand Towers, 36, The Strand, Sliema, Malta T: (+356) 2328 6000 • F: (+356) 2131 5147 Contact Person: Dr. Otto Karasek Managing Director Email: info@bawag.com.mt Website: www.bawag.com

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COMPANY PROFILES BMIT Limited (formerly know as BellMed) have been in business since 1995 and have since grown as a leading European co-location service provider dedicated to remote gaming, resulting in offering our services to over 70 top i-gaming operators. In the last quarter of 2007, BMIT invested over €2.5Million to upgrade its facilities which are now in its 2nd phase adding another 140 racks, to cater for the specific needs and future requirements of the remote gaming industry. The company’s new state-of-the art facilities now provide several unique solutions and options for co-location including an in-house studio casino for web-casting of live table games, payment gateway services and dDOS upstream mitigation.

BMIT is the only service provider in Malta able to offer a full disaster recovery services.

BMIT LTD Mr Ian Curtis CEO

BUTTERFIELD TRUST (MALTA) LTD. Mr Malcolm Becker CEO

Chetcuti Cauchi Advocates Dr Jean-Philippe Chetcuti Partner

Claris Trustees & Fiduciaries Ltd Dr Maria Chetcuti Cauchi Partner

Credence Corporate and Advisory Services Ltd. Dr James Muscat Azzopardi Partner

Crimsonwing PLC Mr James Bonello Managing Director, Malta

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The Bank of N. T. Butterfield was established in Bermuda in 1858 and trust has been a hallmark of the relationships we have with our clients. Butterfield Trust (Malta) Limited (formerly Bentley Trust Limited) is part of the Butterfield Group. Our specific services include acting as trustees of trusts and managers of companies; incorporating Maltese companies and companies from many international jurisdictions; ensuring that the ongoing legal and regulatory requirements of trusts and companies are satisfied; maintaining complete records for trusts and companies and prepare annual accounts; provision of directors services, corporate secretarial services and regular asset and activity reports.

Chetcuti Cauchi Advocates has established itself in the fields of financial services, tax and company law, trusts, estate planning, residence and property law, ICT and intellectual property law. CCA’s multi-disciplinary set up comprises lawyers, tax advisors, accountants, company administrators and relocation advisors providing all-round support to your company set-up in Malta. CCA provides personalised services to private clients and companies worldwide as well as to consultants, professional firms and foreign companies operating in the commercial, ICT and financial services sectors.

While maintaining its independence, the firm collaborates on international projects with foreign law firms acting in major financial and commercial centres worldwide.

Claris is an independent and privately-owned family office and is one of Malta’s foremost professional trust and corporate services providers. Claris enjoys an excellent track record in delivering and managing effective trust and corporate structures for wealthy individuals and families and their corporate entities worldwide. The Claris management team is composed of lawyers, accountants, financial advisors and a notary public. Operating under a full trust licence from the MFSA, Claris brings together the strategic mix of skills and experience necessary for the running of a high-calibre and discreet trust management operation, thereby providing Clarity you can Trust.

Credence is a leading team of lawyers, accountants and tax advisers offering corporate and advisory services to an international clientele. Our sister company, Credence Holdings Limited, is a licensed trustee and also provides fiduciary services.

Our areas of specialization include Company registration, redomiciliation and administration, International tax advice, Trustees and fiduciary services, VAT and tax issues relating to maritime vessels and aircraft, Ship and aircraft registration, Online gaming solutions - licensing and administration, Virtual office solutions.

See how we can help your business - contact us today for a no-obligation discussion of your requirements.

Crimsonwing is an award-winning IT services company that delivers high quality business solutions. It has been serving clients for over 10 years and with an excellent base of blue-chip clients enjoys a high level of ongoing repeat business. With offices in the UK, the Netherlands, the USA and a solutions centre in Malta, Crimsonwing offers its clients the full range of solutions including e-Business, Custom Development and Microsoft Dynamics Ax, CRM and NAV offerings together with programmes of outsourced application development. Crimsonwing offers clients a proven, professional approach to projects coupled with the cost-effectiveness of near-shore resources. A flexible approach and a commitment to quality management ensures the repeated success of projects.

10, Triq ic-Cawsli, Qormi QRM3906 , Malta T: (+356) 2147 2592 • F: (+356) 2144 1878 Contact Person: Mr Ian Curtis - CEO Email: ian.curtis@bmit.com.mt Website: www.bmit.com.mt

Level 7, Portomaso Business Tower, St Julians PTM 01, Malta T: (+356) 2137 8828 • F: (+356) 2137 8383 Contact Person: Mr Malcolm Becker Chief Executive Officer Email: admin@butterfieldgroup.com.mt Website: www.butterfieldgroup.com.mt

Britannia House, Melita Street, Valletta VLT 1122, Malta T: (+356) 2205 6200 • F: (+356) 2205 5201 Contact Person: Dr Jean-Philippe Chetcuti - Partner Dr Maria Chetcuti Cauchi - Partner Email: info@cc-advocates.com Website: www.cc-advocates.com

120, St Ursula Street, Valletta, Malta T: (+356) 2205 6250 • F: (+356) 2205 5251 Contact Person: Dr Jean-Philippe Chetcuti - Managing Director Email: info@claristrustees.com Website: www.claristrustees.com

5/1, Merchants Street, Valletta - Malta 7, The Firs, Borg Olivier Street, Sliema - Malta T: (+356) 2123 4495 • F: (+356) 2125 2895 Contact Person: Mr Andrew Cefai - Partner Email: info@credence.com.mt Website: www.credence.com.mt

Crimsonwing PLC, Lignum House, Aldo Moro Road, Marsa MRS9065, Malta T: (+356) 2124 2121 • F: (+356) 2593 3997/8 Contact Person: Mr. James Bonello Managing Director, Malta Email: Email: jbonello@crimsonwing.com Website: Website: www.crimsonwing.com

CSB Group Mr Michael J. Zammit Group CEO

ELLUL MIFSUD & DEBONO ADVOCATES (EMD) Dr Tonio Ellul Partner

FACT GROUP Mr Jesmond Pace Managing Director

Fenlex Corporate Services Limited (FCS) Dr Tonio Fenech Managing Director

CSB Group (est. 1987) is an inter-disciplinary provider of an array of commercial support services including assisting clients with the incorporation of Maltese and Foreign companies; obtaining of investment services and other financial services licences from the Malta Financial Services Authority; obtaining remote gaming licenses from the Lotteries and Gaming Authority in Malta; yacht and ship registration under the Malta flag and mortgages registered thereon; business consultancy; company management services; trustee and fiduciary services; back office support and administration; bank account opening; accounting and payroll services; relocation assistance; residence- and work- permit applications; and recruitment services.

EMD is a multidisciplinary organization which provides a comprehensive range of professional support services to cater for our clients’ business requirements. Our team of experienced professionals ensures that our clients’ needs are not only met but exceeded in the most efficient and cost effective manner. The firm’s main practice areas include financial services (licensing and compliance), remote gaming (licensing and compliance), ship and yacht registration, media and entertainment, residence and property conveyance, and employment. Services include company formation, management and administration; local and international taxation; book-keeping and accounting; payroll; work permits; recruitment.

FACT Group is committed to provide you with a factual and informative service on issues related to Finance, Accounting, Corporate and Tax - undoubtedly considered as the fundamental considerations of any business venture. No business can be successful without planning its financial capabilities and being aware of its constraints. The trust in our team of young, dynamic, experienced and dedicated professionals has one main goal - the common concern to deliver a high quality service adhering to the firm’s philosophy that dictates a priority to a high degree of integrity, upholding of sound business practices, absolute confidentiality and loyalty to clients in whatever it does.

FCS is a leading Corporate Services provider in Malta and offers management and a full range of back office services that include tax planning, company incorporation and maintenance, accountancy services as well as operational assistance. FCS has grown exponentially over the years and today services a very large international client base with varied requirements in very different fields of activities. FCS is part of the Fenlex Group of Companies that include a Licensed Trust Company and a Ship Registration Company. The Fenlex Group is closely associated with Fenech and Fenech Advocates, a leading local law firm.

Vincenti Buildings, 14/19 Strait Street, Valletta VLT 1432, MALTA T: (+356) 2122 5800 • F: (+356) 2123 0520 Contact Person: Mr Michael J. Zammit Group CEO Email: michael.zammit@csbgroup.com Website: www.csbgroup.com

Vaults 13 - 15, Valletta Waterfront, FRN 1913, Malta T: (+356) 2123 0058 F: (+356) 2123 7277 Contact Person: Dr Tonio Ellul - Partner Email: legal@emd.com.mt Website: www.emd.com.mt

Cornerline, Dun Karm Street, Birkirkara BKR 9039 - Malta T: (+356) 2142 2564 • F: (+356) 2142 2560 Contact Person: Mr Jesmond Pace Managing Director Email: info@fact-group.com Website: www.fact-group.com

“Fenlex House” 85 St. John Street, Valletta VLT 1165, Malta T: (+356) 2124 1817 • F: (+356) 2599 0643 Contact person: Dr Tonio Fenech Managing Director Email: info@fenlex.com Website: www.fenlex.com

FEXCO Financial Services (Malta) Ltd. For the past 13 years, FEXCO powers niche in financial products and services through market leading partnerships, and excellent customer service. FEXCO are agents for Western Union, and also operate the Gift Voucher Shop in Malta.

Fexco Financial Services (Malta) Ltd. Mr Anthony Zahra Chief Executive Officer

FinanceMalta Mr Joseph Zammit Tabona Chairman

SGGG Fexco Fund Services (Malta) Limited is your administrative partner bringing together the experience of SGGG Fund Services Inc. having over 200 alternative strategy funds under administration worldwide and Fexco Financial Services, a main player in the financial services industry with established servicing platforms.

FinanceMalta, a non-profit public-private initiative, was set up as an autonomous Foundation with the scope of promoting Malta as a financial services centre, both within, as well as outside, its shores. It brings together, and harnesses the resources of the industry and Government to ensure that Malta maintains a modern and effective legal, regulatory and fiscal framework in which the financial services sector can continue to grow and prosper. The founding associations are: the Malta Investment Funds Association, the Malta Association of Fund Managers and Administrators, the College of Stockbrokers, the Malta Bankers’ Association, the Malta Insurance Association, the Association of Insurance Brokers, and the Institute of Financial Services Practitioners.

Alpine House, Naxxar Road, San Gwann, SGN 9032, Malta T: (+356) 2576 2576 • F: (+356) 2138 3296 Contact Person: Mr Tony Zahra - CEO Email: Tony.zahra@alpinemalta.com Website: www.fexcomalta.com

Garrison Chapel, Castille Place, Valletta, VLT 1063, Malta T: (+356) 2122 4525 • F: (+356) 2144 9212 Contact Person: Dr Bernice Gauci Administration Manager Email: bernice.gauci@financemalta.org Website: www.financemalta.org

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COMPANY PROFILES

FINANSBANK (MALTA) LTD Mr Cenk Kahraman Managing director

FRASER EAGLE GROUP Mr Kevin Dean Group Managing Director

GAP DEVELOPMENTS PLC. Mr George Muscat Chairman

GASAn MAMO INSURANCE LTD. Mr Albert P. Mamo CEO/Chairman

Finansbank was established in 2005. Since then its assets reached up to 2 billion Euros. Finansbank makes part of National Bank of Greece group, which operates in Greece, Turkey, Albania, Australia, Bulgaria, Cyprus, Egypt, Macedonia, Romania, Serbia, South Africa and UK, having total assets of up to 94,541 billion Euros. The NBG group employs over 30,000 people who work in the 1,710 branches world wide.

Finansbank has a customer base consisting of large corporate, SME’s and high network individuals, offering them financial solutions from its marketing office in Sliema.

Fraser Eagle Group has now been present in Malta for over 3 years, initially with a call centre in Mosta and more recently with the launch of Allevents, the Destination & Events Management Company. Allevents (www.alleventsmalta.com) has already attracted international interest, particularly after their successful involvement with the Maltacup, a leading international snooker tournament, held earlier this year. Allevents are the Official Travel Partners for this prestigious tournament in the calendar of World Snooker. In Malta Fraser Eagle Group is also experiencing growth in its Call Centre Operations, Transport Management, Corporate Travel and Multimedia Services and is in advanced stages of preparation for the launching of Business Centre Services, which will further compliment its exciting portfolio, servicing the island and beyond.

Gap Developments plc. is a subsidiary company of Gap Holdings Ltd, which is a successful property development business which brings together the long experience of chairman George Muscat with the dynamic enthusiasm of his son Adrian and his son-in-law Paul Attard. Gap has built up a considerable portfolio of residential and commercial developments, at prices which service all sectors of the market.

Gap relies on the benefits of top quality in finishes and specifications, using the services of the best people in the field for architectural design and consultancy. Gap`s success is built on giving people what they want and need, rather than expecting them to fit in with what is available. Keen research of the market makes us aware of what is required and this leads to being one of the leading developers on the Island.

GasanMamo Insurance was formed in October 1999 but traces its roots to 1947. For several years GasanMamo Insurance Agency Ltd. was the Malta agent for the CGU Insurance plc. During 2003 GasanMamo Insurance commenced operations as a fully fledged indigenous insurance company. A full suite of General Insurance products is available including the GasanMamo brand of Private Medical Insurance - Sana Healthcare.

Commercial Insurance: A team of professionally qualified underwriters provide support across a wide spectrum of commercial risks these include: Industrial All Risks; Business Interruption; Employers’ and Public Liability; Group Personal Accident; Money; Cargo / Marine; Motor Fleet Personal Lines Insurance: GasanMamo Insurance Ltd underwrites Motor, Home, Boat and Travel policies and is amongst market leaders in all these areas.

At GO, we are proud to be Malta’s first and only quadruple play operator, a truly converged telecommunications company with a wide range of services. GO offers fixed line telephony, mobile telephony, broadband Internet, digital television, data networking solutions, business IP services and co-location facilities. GO has three brand descriptors - GO Business, GO Mobile and GO Plus. GO Business includes fixed line, broadband and digital TV as well hosting and co-location services. GO Mobile handles both business and personal mobile services while GO Plus is all about the home with fixed line, broadband and digital TV. GO services over 400,000 connections in Malta and Gozo.

GO Mr David Kay CEO

Strand Towers, 2nd Flr no 36 The Strand, Sliema, SLM 1022 T: (+356) 2131 8969 • F: (+356) 2132 0991 Contact Person: Mr. Cenk Kahraman Managing Director Email: info@finansbank.com.mt Website: www.finansbank.com.mt

No. 1 Villa Zimmermann, Ta’ Xbiex Terrace, Ta’ Xbiex XBX1035, Malta T: (+356) 2133 0818 • F: (+356) 2133 0818 Contact Person: Ms Ruth Vella Operations Director, Malta Email: Ruth.Vella@frasereagle.co.uk Website: www.frasereagle.com www.alleventsmalta.com

Gap Holdings Head Office Censu Scerri Street, Tigne, Sliema SLM 3060 T: (+356) 2327 1000 • F: (+356) 2327 1210 Contact Person: Mr Chris Gauci Sales & Marketing Manager Email: sales@gap.com.mt Website: www.fortcambridge.com www.gap.com.mt

Head Office, Msida Road, Gzira GZR 1405 Malta T: (+356) 2134 5123 • F: (+356) 2134 5377 Contact Person: Mr Julian J Mamo Email: jjmamo@gasanmamo.com Website: www.gasanmamo.com

Head Office, Spencer Hill, Marsa, Malta T: (+356) 2121 0210 • F: (+356) 2594 5895 Contact Person: Mr Franco Aloisio - Head Corporate Communications & Public Affairs Email: info@go.com.mt Website: Website: www.go.com.mt

HSBC Bank Malta p.l.c. is one of Malta’s leading financial services organisations, committed to meet the expanding requirements of its large client base of personal, corporate and institutional customers. Through a global network linked by advanced technology, HSBC Bank Malta provides a comprehensive range of financial services through a network of branches and specialised offices across the Maltese islands HSBC Bank Malta p.l.c.

Mr Alan Richards CEO HSBC Bank Malta p.l.c., HSBC Fund Management (Malta) Ltd and HSBC Securities Services (Malta) Ltd are licensed by the MFSA to conduct investment services business. HSBC Bank Malta p.l.c. is enrolled as a tied insurance intermediary of HSBC Life Assurance (Malta) Ltd under the Insurance Intermediaries Act 2006.

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233, Republic Street, Valletta VLT 1116 T: (+356) 2380 2380 • F: (+356) 2597 2499 Contact Person: Mr Josef Camilleri Head of Public Affairs & Corporate Social Responsibility Email: infomalta@hsbc.com Website: www.hsbc.com.mt

HSBC Securities Services (Malta) Ltd Mr Charles Azzopordi Managing Director

HSBC Securities Services (Malta) Ltd provides a full range of administration services to investment funds. We have significant experience, knowledge and understanding of the industry and we can therefore provide a high quality service to investment funds, leveraging on the HSBC Group scale and capabilities where this is necessary. We hold fund administration mandates across most asset classes (bonds, equities, property, etc) and strategies (long, absolute returns etc) and our offering consists of: fund set up and launch; fund accounting; investor services; and corporate management services.

HSBC Bank Malta p.l.c., HSBC Fund Management (Malta) Ltd and HSBC Securities Services (Malta) Ltd are licensed by the MFSA to conduct investment services business. HSBC Bank Malta p.l.c. is enrolled as a tied insurance intermediary of HSBC Life Assurance (Malta) Ltd under the Insurance Intermediaries Act 2006.

kyte consultants ltd Mr Alan Alden Director

LOTTERIES AN D GAMING AUTHORITY (LGA) Mr Mario Galea Chief Executive Officer

Malta Enterprise Corporation Mr Alan Camilleri Chairman

MALTA FINANCIAL SERVICES AUTHORITY Prof. Joe Bannister Chairman

MALTA MARITIME AUTHORITY Mr Lino Vassallo Executive Director Merchant Shipping Directorate

Kyte is the only company in Malta totally dedicated to information systems audits and information security matters. Kyte became the first and only company in Malta to be validated as a Qualified Security Assessor by the Payment Card Industry Security Standards Council.

The directors of Kyte were also the first persons to be accredited by the Lotteries and Gaming Authority to carry out certification reviews of remote gaming operators on its behalf. With their experience and knowledge Kyte can assist you throughout the remote gaming licensing process and thereafter. Kyte has some of the biggest gaming companies as their clients.

The LGA was constituted in July, 2002 as the regulator that oversees all gaming activities in Malta. Since then LGA has been executing its brief to regulate, control and monitor all gaming operations. Accordingly the LGA is responsible for the operation of Amusement Machines, Broadcasting Media games, Casinos, Commercial Bingo Halls, Commercial Communication games, Horse racing, the National lottery, Non-Profit games, Remote Gaming and Video Lottery Terminals. The LGA aims to protect minors and vulnerable players, safeguards players’ rights, promotes responsible gaming in a safe environment, ensures the integrity of games and gaming devices and keeps gaming free from criminal activities.

Malta Enterprise is government’s exclusive agency focused on attracting inward investment and supporting enterprise in Malta. Its role is to act as a point of contact for all enterprise support and to provide cohesion to government policies and efforts relating to enterprise in Malta. Malta Enterprise provides a comprehensive incentives package of assistance to local and international companies and investors considering operations in Malta; including pre-investment advice and support, start-up assistance as well as post investment services and aftercare facilities. Malta Enterprise also offers trade promotion services aimed at introducing foreign companies to suitable manufacturers, service providers, suppliers and potential strategic partners in Malta.

The Malta Financial Services Authority (MFSA) is the single licensing and supervisory authority for all financial services activity. The Authority is an autonomous public institution set up by law. The sector overseen by MFSA includes banks, investment firms, insurance companies and financial intermediaries who provide a wide range of products and services on the domestic and international markets. The regulation of the Malta Stock Exchange also falls under the responsibility of the MFSA. The MFSA is further responsible for consumer education and consumer protection in the financial services sector. It also manages the Malta’s Registry of Companies.

The Malta Maritime Authority was established by law in 1991 as a Government Agency and so vested with detailed regulatory powers. The Malta Maritime Authority’s principal role is to create a climate that further enhances Malta’s maritime standing and associated business activities. The Authority’s aim is to develop and promote Malta as a maritime centre of international repute that is capable of providing a comprehensive package that offers a wide range of maritime services. The Authority is composed of three main Directorates: Yachting Centres, Ports and Merchant Shipping. This set-up allows the management of these maritime services to operate distinctively but within a centralised framework.

116, Archbishop Street.

Valletta VLT 1444 - Malta T: (+356) 2597 5100 • F: (+356) 2597 5190 Contact Person: Mr Charles Azzopordi Managing Director Email: charlesazzopardi@hsbc.com Website: www.hsbc.com.mt

Suite 21, Charles Court, St. Luke’s Road, Pieta PTA 1027 T: (+356) 2759 5982/3 • F: (+356) 2759 5984 Contact Person: Mr Alan Alden - Director Email: info@kyteconsultants.com Website: www.kyteconsultants.com

‘La Concorde’, Abate Rigord Street, Ta’ Xbiex - MSD 12 T: (+356) 2131 6590 • F: (+356) 2131 6599 Contact Person: Ms Kristy Spiteri Manager Information Analysis Unit Email: kristy.spiteri@lga.org.mt Website: www.lga.org.mt

Enterprise Centre , Industrial Estate, San Gwann SGN 3000 T: (+356) 2542 0000 • F: (+356) 2542 3401 Contact Person: Mr Mario Galea Chief Officer - Business Development Email: info@maltaenterprise.com Website: www.maltaenterprise.com

Notabile Road, Attard BKR 14, Malta T: (+356) 21441155 • F: (+356) 21441189 Contact Person: Mr Michael Xuereb Director Business Development Email: communications@mfsa.com.mt Website: www.mfsa.com.mt

Maritime Trade Centre, Marsa MRS 1917 - Malta T: (+356) 2122 2203 • F: (+356) 2125 0365 Contact Person: Mr Charles Axisa Marketing & Communications Manager Email: info@mma.gov.mt Website: www.mma.gov.mt

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MALTA REMOTE GAMING COUNCIL Ms Daniela Grioli Chairperson

MALTA STOCK EXCHANGE Mr Joseph Zammit Tabona Chairman

MALTA TOURISM AUTHORITY Mr Josef Formosa Gauci CEO

MAMO TCV ADVOCATES Dr David Tonna Managing Partner

MEDITERRANEAN CONFERENCE CENTRE Dr Peter Fenech CEO

MEGABYTE LTD. Mr Karm Galea Founder-Director

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The Malta Remote Gaming Council is an initiative of the Lotteries and Gaming Authority as part of its strategic plan to create a dynamic regulatory environment for Remote Gaming. The Council was launched in March 2005. The MRGC Council is made up of all stakeholders in the remote gaming industry including licensed operators, data carriers, Internet service providers, lawyers and professional services providers. The Council’s main objective is to serve as an ongoing discussion forum giving valuable feedback to the Authority and other relevant organizations, so that they are able to keep abreast with the latest developments in the industry.

Malta Stock Exchange plc has carved out a niche for itself in the local financial sector and remains committed to Malta’s drive to become a major international financial centre. Malta Stock Exchange plc operates a regulated market and a dematerialized central securities depository in accordance with internationally recognised standards. It has undertaken to increase the range of services it provides to market participants. In particular the Exchange has focused its strategy to attract more issuers both local and overseas, to the market, to increase the range of financial instruments available for trading on its recognised lists.

MTA commenced operations in September 1999 taking over the functions and responsibilities of the National Tourism Organisation of Malta (NTOM). The MTA is currently headed by a Chairman supported by a Chief Executive Officer and has four main areas of responsibilities (i) Marketing Support and Development (ii) Product Development (iii) Regulatory (iv) Corporate Services The MTA has overseas offices in Italy (Rome), Germany (Frankfurt) and the UK (London) and overseas representations in Russia, France, Belgium, Sweden, Spain, Austria, Poland, Hungary, Switzerland and the Czech Republic.

Mamo TCV Advocates is one of the leading law firms operating on the Maltese Islands today. The areas of specialisation of the firm include most of the various fields of commercial law such as corporate, banking and financial services, trusts and tax law, insurance, privatisations including due diligence assignments, property, intellectual property and information technology law, shipping, employment law, general commercial practice, general civil and commercial litigation and tax advice.

The firm has seen a growth in various areas in which it offers its legal services, amongst which are the setting up of collective investment schemes, particularly hedge funds and other professional investor funds, investing in a wide spectrum of underlying investments, traditional private equity and real estate funds to the more innovative funds, which have attracted fund promoters from the UK, Spain, Italy, Switzerland and Turkey.

Located on the periphery of the historical city of Valletta and overlooking the Grand Harbour, the Mediterranean Conference Centre is a 16th Century building formerly known as the ‘Sacra Infermeria’ of the Order of St. John. The MCC, the largest Conference Centre on the Island of Malta, boasts a total of 10 halls and 9 syndicate rooms over an area of 7,000 sq. metres with a capacity ranging from 15 to 1,400. No matter what the size of the event being organised - from a small presentation to a large conference, a product launch or an exhibition, a convention or even a theatrical performance - the Mediterranean Conference Centre can cater for all your requirements.

Megabyte Ltd. is a leading Information Technology Solutions company focused on empowering businesses and public entities with world class technology and quality service. It was established in 1979 and since then Megabyte can boast a long track record of achievements. These include applications for the hospitality, airline and financial industries, while ebusiness, Business Intelligence and human resources systems have been rolled out over the Private and Public sectors alike.

Megabyte uses the best talent to design and integrate world-class business computer solutions comprising, bespoke software projects, highly adaptable infrastructure and storage solutions, ERP implementations, hospitality industry applications, data warehousing and business intelligence solutions.

c/o PO Box 87, Birkirkara.

T: (+356) 2759 5982/3 • F: (+356) 2759 5984 Contact Person: Mr Alan Alden General Secretary Email: info@mrgc.org.mt Website: www.mrgc.org.mt

Garrison Chapel, Castille Place, Valletta VLT 1063 - Malta T: (+356) 2124 4051 • F: (+356) 2569 6316 Contact Person: Ms Eileen V Muscat General Manager Email: evmuscat@borzamalta.com.mt Website: www.borzamalta.com.mt

280, Auberge d’Italie, Merchants Street, Valletta VLT 1170, Malta T: (+356) 2122 4444 Contact Person : Mr Kevin Drake Director Communications and PR Email: Kevin.drake@visitmalta.com Website: www.visitmalta.com www.mta.com.mt

Palazzo Pietro Stiges, 90 Strait Street, Valletta VLT 1436 T: (+356) 2123 1345 • F: (+356) 2124 4291 Contact Person: Dr David Tonna Email: info@mamotcv.com Website: www.mamotcv.com

Mediterranean Street Valletta VLT 1645 - Malta T: (+356) 2559 5215 • F: (+356) 2124 5900 Contact Person: Ms Rosette Micallef, Head of Sales and Marketing Email: rosettemicallef@mcc.com.mt Website: www.mcc.com.mt

F4 The Technopark, Mosta, MST3000, Malta T: (+356) 2142 1600 • F: (+356) 2142 1590 Contact Person: David Galea Sales and Marketing Manager Email: David.galea@megabyte.net Website: www.megabyte.net

MIDDLESEA GROUP Mr Mario C. Grech Executive Chairman & CEO

MIDI plc Mr Ben Muscat CEO

Palmali SHIPMANAGEMENT Ltd Ms Nigar Aliyeva Director

PROINVEST LIMITED Mr Mark Micallef Projects Director

Middlesea Group comprises Middlesea Insurance plc the holding company (MSI), Middlesea Valletta Life (MSV), International Insurance Management Services Limited (IIMS) and Progress Assicurazioni S.p.A. (Progress) MSI underwrites a substantial share of the highly competitive general insurance market in Malta and is seeking further expansion in the EuroMediterranean region with the right strategic partners.

MSV is Malta’s leading life assurance with total assets over Euro 831 million.

Progress Assicurazioni SpA, is the Group’s Italian subsidiary underwriting general insurance business in Italy.

IIMS provides insurance management services to insurance and reinsurance companies including Captive Companies.

All companies are licensed by their respective regulatory Authorities. COM 090708B

Midi plc is the developer of Tigné Point and Manoel Island. This €450 million development includes the construction of 850 upmarket residential units, retail spaces, catering establishments, a waterfront casino, a 420 berth yacht marina, breakwater, a 280 room five-star hotel, over 3,000 public parking spaces and state-of-the-art leisure and sport facilities. Tigné Point’s office block, operational in 2010, will be Malta’s largest and most technologically advanced office offer.

The project also includes the €30 million rehabilitation of Fort Tigné, Fort Manoel, the Lazzaretto and other historical monuments. SIS Ltd is Midi’s joint venture with Siemens Italia in telecommunications and building technologies.

Palmali Shipmanagement Ltd established operations in Malta in 2006 to provide financial, technical, administrative and strategic services to oaur parent company and third party ship owners. Palmali Shipmanagement has been established to be a leading provider of shipmanagement and related services to the shipping industry. Our primary objective as a service company is to add value to our clients by delivering quality services in a transparent, cost effective and consistent way. We pride ourselves on offering a flexible and customized approach to our ship management clients seeking global solutions for all vessel segment.

We are about Mediterranean living, about particular life styles and we’re here to make your life easier. We shape our solutions around you, turning your space into a home or commercial outlet. We work with you to create solutions that fit your budget and lifestyle. If you have a design dilemma, we will find the perfect solution.

Whether it’s an investment property or one you live in, we design solutions for any size and type of space. The space is yours, the solution’s ours. We have developed commercial and domestic design projects for over 22 years, working with clients from Europe and the USA. We work directly with clients to understand their expectations, ideas and needs, and will deliver customised solutions to fit your lifestyle, time and budget.

Middle Sea House, Floriana FRN1442 T: (+356) 2124 6262 • F: (+356) 2124 8195 Contact Person: Ms Ana Zammit Munro Senior Executive Manager Email: Anaz@middlesea.com Website: www.middlesea.com

North Shore, Manoel Island, Malta T: (+356) 2065 5500 • Fax: (+356) 2065 5501 Contact Person: Mr Ben Muscat - CEO Email: info@midimalta.com Website: www.midimalta.com

Palmali Shipmanagement Ltd Portomaso Business Tower, Level 12, St Julians, Malta T: (+356) 2138 8344/5/6 • F (+356) 2138 8347 Email: secretary@palmalimalta.com Website: palmali.com.tr

5, Sunvalley Buildings, Msida Valley Road, Birkirkara BKR13, Malta T: (+356) 2149 7461/2/3 • F: (+356) 2749 7461 Contact Person: Mr Mark Micallef Projects Director Email: proinvest@waldonet.net.mt Website: www.proinvest.com.mt

The Regus Group is the world leading provider of outsourced workplaces solutions.

With its unique network of 950 business centres in 400 cities and 70 countries, Regus allows companies of any size to work when, where and how they want to.

REGUS Mr Olivier de Lavalette, Regional General Manager South Europe

RS2 Software p.l.c.

Mr Mario Schembri CEO

Regus large range of products and services includes: fully equipped offices; professional meeting rooms; virtual offices; business lounges; the largest network of videoconferencing studios; administrative and IT supports The Regus solutions, based on flexibility and mobility, give opportunities to companies to run their businesses in booming, dynamic and attractive markets around the world.

RS2 Software p.l.c., is a global provider of Card Management Systems software, IT consultancy and related services to international and domestic banks, service providers, and other financial organisations. RS2’s solutions are focused on the bankWORKS(r) suite of application modules. bankWORKS(r) is a powerful modular high-end card management system designed to meet current and future requirements in the international payment card industry. The system meets processing requirements defined by banks, service providers, as well as other organisations participating in diverse card businesses. The system’s modules include Card Issuing, Merchant Acquiring, Transaction Processing, Clearing, Settlement, Reporting, Dispute Management and Internet Services.

2nd floor Tower Business Centre, Tower Street, Swatar , Malta T: (+356) 8007 2213 Contact Person: Mr Olivier de Lavalette Regional General Manager South Europe Website: www.regus.com

120/6, The Strand, Gzira GZR 1027 T: (+356) 2134 5857 • F: (+356) 2134 3001 Contact Person: Mr Mario Schembri - CEO Email: mschembri@rs2group.com Website: www.rs2.com

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Salvo Grima Group Mr Robert C. Aquilina Chairman and CEO

SIGMA COATINGS (MALTA) LTD. Mr Anthony V. Critien Managing Director

SPARKASSE BANK MALTA PLC Mr Paul Mifsud Managing Director

SYSTEC LIMITED Ing. Raphael Micallef Trigona Managing Director

Vodafone Malta Limited Mr Iñaki Berroeta CEO, Malta

The Salvo Grima Group, finds its roots in the ship supply business set up 148 years ago. As a forward looking organisation the Group has expanded and diversified its operations and activities both in Malta and in Northern Africa, particularly in Libya.

Through its various companies the Group is involved in many complementary activities including Ship Supplies, Duty Free Services, Travel Retail, Freeport Warehousing, International Freight Forwarding and in providing an extensive range of oilfield services.

The Salvo Grima Group has also increased its business activities by forming strategic alliances and joint ventures in related business fields specialising in bringing together expertise and finance to tap an ever-increasing range of opportunities present both in Malta and in the Northern African Market.

In 1982, Sigma Coatings (Malta) Ltd. started manufacturing and selling Sigma decorative, marine and industrial coatings in Malta, under licence of Dutch Sigmakalon B.V. Since then, the Company has grown into one of the largest domestic paint companies. In January 2008, US paint giant PPG Industries took over Sigmakalon; and therefore the local Sigma business can now rely on the technical expertise of one of the world’s largest paint businesses. In Malta, Sigma Coatings has strong brand recognition; it enjoys an excellent reputation for quality with its customers; and its products are widely available all over the Island.

Sparkasse Bank Malta plc forms part of a larger European Banking network. The ‘Sparkasse’ Brand is known to be one of Central Europe’s foremost Savings and Financial Services Group. Our Goal Is to deliver highly personalised banking and innovative investment solutions backed by experience, competence and robust support services. We have earned our reputation on understanding the needs of individuals as well as those of our institutional partners, developing relationships and responding to them effectively and discreetly. Our core services : PRIVATE & CORPORATE BANKING / WEALTH MANAGEMENT / CUSTODIAN SERVICES / BROKER SUPPORT SERVICES / INTERNATIONAL PAYMENT SOLUTIONS

Systec Limited, is a leading IT solutions provider in Malta. Systec is the HP Authorised Enterprise Distributor to Malta, and is also an HP Authorised Service Delivery Partner for the complete range of HP IT solutions. Systec’s Enterprise Team has further expanded its core expertise to Virtualization technologies by investing significantly in training and certification on VMware, Vizioncore, Provision Networks, LeoStream and PlateSpin technologies. Systec’s further accreditation as an HP BladeSystem Solution Builder, means that it has successfully implemented many corporate HP BladeSystem and Enterprise Storage Arrays.

Systec has placed a great focus on active, strategic partnerships, by virtue of which it is uniquely positioned to build complete Virtualization eco-systems.

Vodafone Malta Limited is owned fully by Vodafone Group Plc. Vodafone Group Plc is the world’s leading Telecommunications Company. Vodafone Group Plc is a significant presence in Europe, the Middle East, Africa, Asia Pacific and the United States through the Company’s subsidiary undertakings, joint ventures, associated undertakings and investments.

Vodafone Malta Limited is proud to be the local provider of choice for mobile services, IP transit and the international leased lines, offering its customers superior quality network, excellent customer service and the best value available on the market. Vodafone Malta was the first overseas subsidiary of Vodafone Group Plc., and has long been at the forefront of technical developments in Malta.

WH Law is a Malta-based multi-disciplinary niche firm focusing on assisting technology rich businesses. Our services include licensing, regulatory advice, company formation and maintenance, corporate structuring, deal structuring and negotiation, e-commerce and i-gaming compliance, mergers and acquisitions, advice on tax and cross-border matters, intellectual property protection, software licensing, business consultancy, as well as technical support services. We offer a holistic, competent and individual service.

WH Law Dr. Olga Finkel Managing Director

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187, Pinto House, Wine Pressers Wharf, Marsa. MRS 1912 T: (+356) 2560 7553 • F: (+356) 2560 7196 Contact Person: Mr Joe Peregin Email: info@salvogrima.com.mt Website: www.salvogrima.com

KW24, Kordin Industrial Estate, Paola PLA3000 - Malta T: (+356) 2166 8053 • F: (+356) 2166 8112 Contact Person: Mr Anthony V. Critien Managing Director Email: tony.critien@sigmamalta.com

64 Regent House, BisazzaStreet, Sliema SLM1641 - Malta T: (+356) 2133 5705 • F: (+356) 2133 5710 Contact Person: Mr Paul Mifsud Managing Director Email: info@sparkasse-bank-malta.com Website: www.sparkasse-bank-malta.com

Regional Business Centre, Achille Ferris Street, Msida, MSD 1671, Malta T: (+356) 2347 5000 • F: (+356) 2134 4010 Contact Person: Ing. Raphael Micallef Trigona - Managing Director Email: rtrigona@systec.com.mt Website: www.systec.com.mt

Vodafone House, Msida Road, B’Kara BKR9024, Malta T: (+356) 9211 1401 • F: (+356) 9211 1683 Contact Person: Mr Malcolm Azzopardi Bandwidth Business Executive Email: malcolm.azzopardi@vodafone.com Website: www.vodafone.com.mt

Suite A, Dolphin Court A, Embassy Way, Ta’ Xbiex, XBX 1071 Malta T: (+356) 2133 2653 / 657 F: (+356) 2133 2490 Contact Person: Dr. Olga Finkel Managing Principal Email: info@whlawgroup.eu Website: www.whlaw.eu www.whlawgroup.eu