Id dt malta feature 2010

malta WWW.IMAGEDIPLOMACY.COM

AN INDEPENDENT FEATURE BY IMAGE DIPLOMACY DISTRIBUTED BY THE DAILY TELEGRAPH - 16 JUNE 2010

1

Centre of Excellence in the Mediterranean

capturing making custom the heart & mind the right moves made solutions 02 Tourism 04 Lifestyle 06 Finance The Maltese Flag

a strategic choice & location 08 FDI

Cruising to Success

was adopted in 1964 after gaining its independence from British rule.

It is unique in bearing a decoration from another country, in this case the George Cross from the UK. In 1942, the “Island Fortress of Malta” became the first and only nation to be awarded the George Cross by King George VI, for its heroic role in WW2 and devotion shown by the Maltese people.

Malta – Facts & Figures

3 inhabited islands – Malta, Gozo & Comino – 150+ miles of coastline - 58 miles south of Sicily - 121 sq miles of landmass - 413,609 inhabitants - 1.2m tourists yearly - 35% are UK tourists - 8.5 nights average stay – 12 hours of sunshine in the summer – 5.5 hours in winter (average) - 365 churches & chapels

Delve into Malta’s glorious past and you start to appreciate the importance of its promising future.

Royally Welcome

Gary Neville’s Passion for Malta

J

T

oseph Zammit Tabona, Malta’s High Commissioner in London since 27 April 2009, presented his letter of credence to the Queen on 10 June 2009. “I think Queen Elizabeth has a great affection for Malta,” he recounts, “Actually Prince Philip was a naval officer there between 1949 and 1951.” Malta is the only country outside the UK where the Queen has lived. The royal couple has returned many times since, on both official and personal business. In 1992, Her Majesty inaugurated the Siege Bell Memorial in Valletta, to honour the lives of those lost in the “Siege of Malta” (1940-1943) while 2007 saw them celebrate their Diamond Wedding Anniversary in Malta, perhaps reminiscing about happy days spent there as a young married couple.

here is something intrinsically fascinating about Malta. It is hard to pinpoint exactly what it is for there are so many qualities jostling for space and affection; not least the warmth of the Maltese people, the temperate climate, the stunning natural beauty with pristine waters and rocky outcrops. Likewise, a wealth of cultural heritage with its eclectic, evocative mix of architecture and history awaits discovery. Gary Neville affectionately calls Malta, “An uncut diamond” – the facets of which are so appealing, he has returned every year for the last 18 years. For the world famous footballer it is a destination for business as well as pleasure.

Read more about the exciting developments he holds a passion for - on Page 8

by Ernst & Young London, and had the good fortune to be introduced to Cor Vrieswijk, Operations Director of easyJet. Within three weeks of that dinner, the commercially minded Zammit Tabona had easyJet’s directors visiting Malta to explore what the country had to offer. Subsequent to that visit, easyJet asked the CEO of SR Technics, the maintenance company that services their planes, to take a

BY SORCHA HELLYER & GABRIELE VILLA ³ Malta’s historical journey has been exotic, eventful trip to discover Malta’s competitive advantages. As James Stewart, CEO of SR Technics explains, “So and long. Its history is bound up in a myriad of different battles with various nations and cultures. Over far all our facilities were in Western Europe, and they all had a very high cost base. We needed to get the years, these rulers and their occupations left their imprint and legacies, which make up the rich a better mix. We looked at many different locations in Europe or on the fringe of Europe, and decided fabric of Malta’s cultural heritage. Freedom from foreign rule finally came in 1964 when the British that Malta was the right place to be.” granted Independence after their 150-year colonial stay. Full sovereignty was realised in 1974 when As was the case with the directors at easyJet and SR Technics, the moment investors and visitors Malta was finally declared a Republic. arrive in Malta they are pleasantly surprised. Zammit Tabona is adamant that Malta has to be seen Civilisations from the Ancient Greeks in 700 BC to the Phoenicians, Romans and successive to be believed. He says, “I ask investors to give me 36 hours of their time and I organise meetings powers have all recognised and leveraged Malta’s strategic geographic position at the crossroads for them in Malta with all the vital entities including accountants, lawyers, bankers and the regulator of the Mediterranean and North Africa. For a country scarce in natural resources, save its famous etc. Depending on the size and type of investment I then arrange for them to meet up with the Prime limestone, Malta has shown itself to be incredibly resilient and forward thinking.

Minister or the Minister of Finance.” Charmingly modest he points out, “It’s useless Despite only being a democracy for less than half a century, Malta acceded to the me just telling people what a great place Malta is. You have to see it for yourself. Go EU in 2004 and implemented a smooth adoption of the Euro in 2008. Today, it is there and taste it, touch it and feel it. To really appreciate Malta, you have to eat, considered one of the world’s most successful small island states. Indeed, with just sleep and breathe it. Experience it all. The people who do that love it.”

122 square miles of land mass, Malta is the smallest country in the European Union Alluding as much to the warm, temperate climate enjoyed in the islands and and certainly punches above its weight. This may largely be because of the dynamism the welcome of the Maltese people, as to the excellent business climate, Zammit of its people.

Tabona certainly has a point. A trip to Malta is a must – whether it is for business or A population of some 413,000 inhabitants may seem tiny but Malta is actually pleasure. Efficiently run with excellent education and healthcare systems, a buoyant the third mostly densely populated country in the world (behind only Monaco and real estate and job market and a safe, virtually crime free environment, it is a great Singapore) and has a tradition of competiveness. Malta’s Prime Minister, Dr Lawrence place to reside. No matter how dynamic or how efficient Malta is (part of the British Gonzi confirms this, saying, “I think the reason this island nation has advanced over legacy is a strong work ethic), it has retained a certain Mediterranean charm; the thousands of years with no resources whatsoever is because of its entrepreneurial most important aspect of which is an appreciation of the importance of lifestyle. spirit.” Speaking in more topical terms, the Prime Minister points out that in As Prime Minister Gonzi puts it, “Quality of life is one of our strong points in Malta. business, “Being small gives Malta a big advantage because we are quick and we are Coming here, whatever sector you are in, quality of life is a fundamental issue.” The flexible. We can react more ably as we are closer to people so we can intervene when High Commissioner confirms this sentiment saying, “There are quite a number of required. The government gets to know its people and you can only really do this in a British people who have relocated to Malta just for the lifestyle. I even know some small country. This is what helped us to weather the global economic recession.” This who reside in Malta but they work, from Monday to Thursday in London and return Dr Lawrence Gonzi, sentiment about escaping the full effects of the downturn is echoed by comments to Malta for the weekend.”

Prime Minister of Malta from the private sector like that of Uwe Malezki who declared, “I always ask myself Sadly, according to Zammit Tabona, the majority of people he meets in the UK whether the recession was ever really here in Malta. At least that’s my feeling as have never even been to Malta. As he explains, “It’s just not on their radar screens.

Managing Director of the Freeport.”

There is also a misperception that Malta is dull and boring or only for the older generation which is That said, Gonzi’s re-elected Nationalist government is not resting on its laurels. It has had a simply not true. Others think that Malta is a 5-hour flight from the UK so earlier this year there was strategy for the country’s future economic development since 2007. Named Vision 2015+, it essentially an advert in Piccadilly Circus announcing that Malta is actually less than 3 hours away. It is important identifies six sectors for expansion and excellence. They are financial services, ICT, manufacturing to get these messages across. That way people will begin to understand how accessible Malta is and and related services, health, education and perhaps most importantly tourism. The aim is to develop that it makes an ideal weekend break. Many do not realise how rich in culture the country is. We are these six pillars of the economy. They are complemented by a seventh distinct target which is special known as a sun and sea destination and while it’s true that ours is a sunny island nation - surrounded designation for Malta’s sister island of Gozo. The intention, Gonzi effuses is to, “Work on Gozo in order by pristine sea with 300 days of sunshine a year – we have so much more to offer.” to retain its natural beauty but also make it an ecological economy so that it can move forward.”

Indeed, Malta has all the ingredients for short breaks, during which visitors can sample biteMalta’s High Commissioner in London, Joseph Zammit Tabona certainly takes these targets very sized morsels of the impressive cultural and natural heritage that has been bestowed upon the seriously and believes that, “Malta is a place of great opportunity for quite a few sectors today.” He islands. Given the fact that it boasts over seven millennia of history, Malta has plenty to keep certainly has proof of his statement given that he was instrumental in the country’s recent success visitors’ appetites whetted. Furthermore, because of its geographic location the islands also make in landing the business of another aircraft maintenance company. The avionics sector was, up until an ideal base for multi-destination vacations. The country offers, in Gonzi’s own words, “A unique Lufthansa Technik’s major investment in Malta in 2003, a completely new and hitherto unexplored opportunity. You can holiday in Malta and then cruise round the Mediterranean.” So what are you business opportunity. At the start of his tenure, the High Commissioner was attending a dinner hosted waiting for? X

“Quality of life is one of our strong points in Malta”

A glorious past. A promising future With a multi-national legacy and a historic tapestry of events and achievements Malta has evolved to become a unique nation possessing an impressive track record and a robust ambition for the future.

Vision 2015+ sets out Government’s plans for Malta to become a centre of excellence in the Mediterranean in seven core areas: financial services, ICT, manufacturing, tourism, health, education and establishing Gozo as an eco island.

malta

2

MALTA FEATURE - 16 JUNE 2010

WWW.IMAGEDIPLOMACY.COM

TOURISM

A World of Treasures Waiting to be Discovered HOTELS IN MALTA

Corinthia: welcome to an exceptional world of hospitality

CORINTHIA HOTEL ST. GEORGE’S BAY Capturing the magic and mystery of the Mediterranean sea, the Corinthia Hotel St. George’s Bay is a destination that dreams are made of. The astounding views of the sea, as seen from the grand windows in the lobby and the vast majority of rooms, together with the scent of summer breezes, bring a sense of openness to the travelling spirit.

Five-star amenities, a fantastic selection of restaurants with a focus on Mediterranean cuisine and its close proximity to the centre of Malta’s vibrant nightlife, make the hotel a perfect destination for an animated stay. Every room has a generous terrace where you can relax and unwind while enjoying the beautiful views. Or choose to have dinner by the pool to the sound of lapping waves.

CORINTHIA PALACE HOTEL & SPA Set in the beautifully landscaped gardens of a 19th century restored villa, this elegant hotel offers superior service and amenities, making it one of the leading hotels on the Island. Spend a day being pampered and nurtured in the Athenaeum Spa, with over 50 different treatments to relax the mind and body, or choose to lounge by the outdoor pool while enjoying a light lunch at the open air terrace restaurant. Across the road from the Presidential Palace and botanical gardens, this centrally located hotel is also in close proximity to the capital city, Valletta and the ancient walled city, Mdina. With warm and welcoming staff to greet you and excellent restaurants to dine in, your visit, whether for work or play, will be met by unrivalled tranquility.

www.corinthia.com

Think culture. Think heritage. Think history. What country are you thinking of? The UK, France, Italy or maybe even further afield, Egypt? Now think Malta.

M

alta is infused with over 7,000 years of recorded history and is home to monuments that pre-date Egypt’s pyramids. As Joseph Said, Chairman of Heritage Malta, points out, “Though our country may not have been blessed with valuable natural resources it most certainly made up for this in terms of historical and cultural heritage as is borne out by the fact that it ranks foremost in the UNESCO World Heritage sites of ‘Outstanding Value to Humanity’.”

The islands of Malta, Gozo and Comino have always held an abundance of pleasures; a blissful Mediterranean climate - to nourish grapes and olives - and their seas are rich with seafood. This tiny archipelago sits strategically at the apex of the ancient worlds – at the nexus of the East-West world’s trade routes. Successive waves of civilizations from Phoenicians, Romans, Arabs and Europeans have found and then coveted the islands. It was long said that whoever controls Malta controls the Mediterranean.

The legacy of this exotic and heterogeneous history could be termed as “an embarrassment of riches” that have left the islands groaning with attractions of breathtaking historical fascination.

Most venerably the megalithic temples, including Gjantija situated on the island of Gozo, widely thought to be the oldest freestanding building in the world dating back as far as 4100 BC. To walk amongst the Roman temples, Christian catacombs, cathedrals, ramparts, bastions of harbour defences and the forts of Britannia is to experience nothing less than history flowing through vivid honey-coloured limestone. The rock quarried, hewn and imagined into a sweeping architectural expression from medieval, Baroque to British Colonial.

It was after 1530 when the islands were given to the Crusading Knights of St John, to create a homeland that most of what we see today - largely unchanged - was built. Legend has it that Charles V of Spain granted the archipelago to the Order, in exchange for the annual “fee” of one Maltese falcon. After their gradual retreat from Jerusalem to Acre, Cyprus and then Rhodes the Crusading Knights of St John settled and became the Knights of Malta. For a period of two and a half centuries this proto multinational religious corporation underwrote the security which enabled the flourishing trade that financed a courtly paradise of Baroque palaces, gardens and the refined settings for entertainment that remain to this day.

It is this emphasis, on the astonishing cultural and historical importance of Malta’s towns, cities and settlements, that the government is now seeking to promote. As Dr de Marco, the Parliamentary Secretary for Tourism elucidates, “Unfortunately in the past we promoted the sun and sea far too much and not our wonderful heritage. Now we need to get the balance right; we need to position ourselves as a great heritage, historical and cultural centre.”

You need only step into “Citta Umillisima”, the island’s fortress capital of Valletta to see why this makes sense. Constructed to deter the Ottomans as it did so famously in the Great Siege of 1565, it is named in honour of the city’s founder Grand Master Jean Parisot de la Valette. The city is bordered on three sides by the Mediterranean and shielded by impregnable walls. It is one of Europe’s finest historical attractions boasting sumptuous palaces, theatres, gardens and numerous churches.

The Knights drawn from all over Europe; Castille and Leon, Aragon, Italy, France, Provence, Auvergne, Germany and England built their redoubt on the arid rock of the Mount Sceberras peninsula. Designed by the architect Francesco Laparelli it has one of the earliest examples of a gridiron street plan. The city has grown lavish with time and this is embodied in the homes and places of worship of the Knights.

Little has altered since their expulsion by the invading Napoleonic forces in 1798 that left the Knights officially stateless.

Malta’s capital is now one of the world’s best-conserved cities.

Granted World Heritage status by UNESCO in 1980, the visiting British Prime Minister Benjamin Disraeli marvelled in 1830, “Valletta equals in its noble architecture, if it does not excel, any capital in Europe.”

A living, working city - Valletta is also the administrative and commercial heart of the islands. The cultural wonders are copious with highlights such as St John’s Cathedral, an apogee of opulent magnificence completed in 1578. It houses some of the country’s priceless treasures such as two works of art by Caravaggio, including his masterpiece – “The Beheading of St John the Baptist”.

The Grand Master’s Palace, which was home to all of the grand masters from 1574 until 1798, now hosts to the President of Malta, Dr George Abela, and the House of Representatives. Meanwhile, the majestic Manoel Theatre, opened in 1731, has played a central role in the country’s cultural history ever since.

Across the harbour from Valletta lie Senglea, Cospicua and Vittoriosa. Charming in their own right, “The Three Cities” are often left unvisited and yet they can lay claim to being the cradle of Maltese history. The islands boast acres of architecture and natural beauty that has, until now, rarely been fully appreciated. The reason for this may lie in past marketing drives that sought to attract visitors to the shores for the sunny climes. Historically many British and Northern European tourists flocked to Malta to enjoy the temperate weather and not to marvel at its cultural heritage.

However, as the Chief Executive of the Maltese Tourism Authority (MTA), Joseph Formosa Gauci stressed to us, “We are no longer promoting ourselves as a pure beach destination. Frankly if somebody just wants to go and sit on a beach, Malta is not the ideal destination.” In many ways, it would be a waste to go to Malta simply for the sun and sea – as there is so much more to enjoy.

Despite its apparent distance from Northern Europe, Malta is a mere two to three hours by air from most European cities. Moreover the island nation is hugely accessible. There are frequent and direct flights from London, Rome, Paris, Frankfurt, Brussels, Geneva, Athens, Amsterdam, Madrid, Munich and Vienna amongst others. As an EU country, Malta’s visa requirements fall in line with EU policy and Malta also forms part of the Schengen travel area.

The government has been working proactively to improve the air connections as Dr de Marco

confirms. “This year we have managed to increase significantly our air connectivity with various new routes to and from Scandinavia, Copenhagen, Krakow, Oslo, Belund and we also have a number of new routes from Spain which is a growing market. This coupled with new routes from the UK and more frequency, is certainly something we have concentrated on.” The UK unquestioningly remains a core market for the Maltese tourism sector however, the MTA is eager to appeal to a more discerning traveller. Equally it is keen to promote Malta as the ideal destination for MICE travel, that quirky travel industry acronym denoting Meetings, Incentives, Conferences and Exhibitions. In this regard, Malta has an abundance to offer and the timelessness of the place is echoed in Malta’s principle dedicated convention centre that was originally constructed in 1574. Dating back to the time of the Knights, the Mediterranean Conference Centre was originally a hospital used to treat the wounded crusaders returning from The Holy Land. Its former hospital ward is now Europe’s longest banqueting hall with a vast state-of-the-art auditorium. Its facilities equal those anywhere else in Europe.

There are also a great many historic buildings, castles and villas that can be used for corporate events throughout the islands. Moreover, the island lends itself perfectly to business tourism because of excellent accessibility in every aspect. On arrival at Malta International Airport – as Alfred Pisani, Chairman of Corinthia Hotels succinctly puts it, “In the space of 7 minutes, you have landed, gone through the attractive, well-organised terminal, collected your luggage and you are off in your car travelling.” Coming from a seasoned business traveller like Pisani this means a lot.

There certainly is a concerted effort to appeal to a different breed of visitor, from the business traveller, who can take advantage of the country’s excellent conference and meetings facilities to the culture buff who is seeking to enjoy a long weekend away.

Aiming at a more upscale clientele that will appreciate the cultural heritage offerings is crucial, as is highlighting previously underpromoted gems such as the city of Mdina.

This city’s history can be traced back more than 4,000 years.

It was here that in AD60 the Apostle St Paul is said to have lived in the grotto “Fuori le Mura” after being shipwrecked off the island.

The city has an ageless atmosphere and again heaves with cultural and religious treasures. Impressive palaces line its narrow shady streets. Lamp-lit by night you understand why Mdina is known as the “Silent City”. It is justly recognised as one of Europe’s finest examples of an ancient walled city and extraordinary in its mix of medieval and Baroque architecture. The Palazzo Falson is one of the oldest medieval buildings in Mdina and is unmissable. Formerly known as the Norman House it is home to an extraordinarily rich collection of antiques.

An example of the opulence Malta offers its guests is found in Mdina at the painstakingly restored hilltop palazzo of “The Xara Palace Relais & Chateaux”. Originally home to a noble family it was requisitioned by the British during the First World War and, after a period of decline, reopened in 1999 having been meticulously renovated into an exclusive boutique hotel. With 17 individually designed luxurious rooms, the hotel has stunning panoramic views of the Maltese countryside that stretch all the way to the sea.

The hotel’s Director, Nicola Paris, was justly effusive in her praise of the islands, “Malta is the ideal destination for a short break especially for those interested in history. Malta is a place where one can fall in love with the warmth of the Maltese people and the richness of our culture”. Certainly, the Maltese seem to have hospitality in their blood. As Nicola puts it, “We, at The Xara Palace, pride ourselves in welcoming all our guests to our beautiful ‘home’, where one can enjoy the unique charm, character and courtesy of the Maltese people in breathtaking surroundings.”

For a country steeped in maritime history since Phoenician times, the Grand Harbour’s reputation as one of the safest natural harbours in the Mediterranean is also a magnificent port and a living display of Malta’s heritage of marine archaeology.

Surrounded by the crystalline Mediterranean Sea, the Maltese archipelago has established itself as an attractive yachting centre with plenty of facilities for sailing enthusiasts. The central location, year round climate coupled with the north-easterly Mistral and the more humid southerly Sirocco winds make it an excellent base for a sailing holiday. The Msida Marina off Grand Harbour in Valletta has almost 300 berths, whilst the construction of a new marina is almost complete in Vittoriosa.

The pinnacle of the yachting calendar is the glamorous Rolex Middle Sea Race in October. It is a 606-nautical mile course, sailed anti-clockwise. Starting in Valletta’s Grand Harbour, the fleet heads north towards the eastern coast of Sicily up towards the straits of Messina, past the Aeolian Islands, the Egadi Islands, the islands of Pantelleria and Lampedusa and then through the South Comino channel to the finish line at the Marsamxett Harbour in Malta.

Avid yachting enthusiast Ted Turner, CEO of CNN International, reportedly said that this race, “Must be the most beautiful race course in the world.” The race was originally conceived in the early 1950s by British servicemen stationed in Malta. Since 2002, when Rolex SA came on board as the title sponsor, the event has seen an amazing growth in both the quality and number of entries. It is now firmly established on the yachting calendar attracting over 70 entries each year. Incidentally, if you fancy your chances, the course record has remained unbeaten for seven years at 64 hours, 49 minutes and 57 seconds.

The sister island of Gozo is a far more rustic alternative with its spectacular coastline bristling with tiny coves, red sand beaches and turquoise bays, traversed by stretches of limestone that crisscross the tiny saltpans. It is as far from the madding crowd as it is possible to imagine. The island has a policy of pursuing sustainable eco-tourism as Joseph Formosa Gauci of the MTA explained, “The way we promote Gozo is not for mass tourism or the large operators - we are going for the niche markets.”

Historically the island has been quite distinct from mainland Malta. It has a markedly different topography and its traditions are rooted in its rural ethos. Greener and far smaller, here life’s rhythms are dictated by the seasons, fishing and agriculture. Thought to be the legendary Calypso’s isle of Homer’s odyssey, Gozo is a peaceful almost mystical backwater where again Baroque churches and quaint old stone farmhouses dot the countryside. The rugged barren landscape and spectacular coastline await exploration concealing some the Mediterranean’s best dive sites.

In short, the Maltese archipelago may seem like any other small island nation in the middle of the Mediterranean but is in fact a treasure trove of abundance just waiting to be discovered. So think again when you think of Malta. X

Small in size, big in reach Malta offers foreign investors the security and ease of operating with EU borders yet within easy reach of emerging markets in North Africa and the Middle East.

With over 50 double taxation agreements in place, a fully-fledged trans-shipment facility and an excellent communications infrastructure, Malta is the ideal business hub in the cross winds of the Mediterranean.

malta

WWW.IMAGEDIPLOMACY.COM

MALTA FEATURE - 16 JUNE 2010

3

HOSPITALITY

Corinthia to Fly Flag in London In classical Greek architecture, proportion was the defining characteristic of the Corinthian order: the “coherent integration of dimensions and ratios in accordance with the principles of symmetry”. With his all consuming passion and attention to detail in his hotels, the prominent Maltese hotelier Alfred Pisani, founder and Chairman of the Corinthia Group, could be described as a living embodiment of these aesthetic principles, especially with regard to the manner in which he has sought to grow his business from inception.

With four distinct operating divisions the Corinthia Group is comprised of: Q International Hotel Investments (IHI), a public investment and development company that was set up and promoted by the Corinthia Group, itself a longstanding investor. Following a successful IPO in April 2000, the company’s shares were listed on the Malta Stock Exchange and work is underway to consider a listing on a major stock exchange in Europe. IHI, which has annual revenues of around €128 million is now the largest non-banking institution listed in Malta.

Q A hotel management arm - CHI Hotels & Resorts, a multi-brand hotel operator licensed to manage hotels under the Corinthia Brand, as well as the Wyndham and Ramada Plaza brands in Europe, Africa and the Middle East, with hotels in the United Kingdom, Czech Republic, Hungary, Libya, Malta, Portugal, Russia, the UAE, Italy, Tunisia and Turkey.

Q Quality Project Management, the largest international project management organisation in Malta, with a track record of forty projects valued at over €1bn.

B

orn into a traditional Maltese family, Pisani constructed his own home aged just 17. Then with the flair that has come to define his life coupled with the fearlessness of youth aged only 23, after learning that he could qualify for a soft government loan from the departing British Colonial government he upped the scale of his ambitions to a 150-room hotel.

Having charmed and cajoled bankers (as much with his energy and vision, as with his hastily conceived architectural drawings), his proto business plan was approved and he was provided with a USD $1.2 million loan giving him the fortuitously early means to create his first business venture. The Corinthia Palace, Malta’s first luxury hotel was born; opened by none other than HRH the Duke of Edinburgh in 1968.

Pisani was, he says, always animated by the desire to set new standards of excellence and to redefine his guests’ expectations for luxury, exclusivity and hospitality. “With a lot of commitment, a tremendous amount of commitment, miracles can happen.” It is this belief that continues to drive his company today. Since its incorporation, the Corinthia Group has been driven by growth. The group invested in more hotels and other assets in Malta and then during the 1980s began acquisition abroad.

Pisani, with his inimitable vision, emphasizes that this was necessitated by the fact that Malta has such a small domestic market, “We had to look for countries which were developing quickly, where established international hotel chains were not yet ready to go because of political uncertainties. We had no choice so we went. It could have gone wrong but it went well, it was the limited size of Malta that forced us to go.”

So from these beginnings as a nascent family business, Corinthia Group has flourished into a vibrant and dynamic collection of exceptional luxury hotels each renowned for their uniqueness of character. The underlying strategy of the Corinthia Group has always been to procure target acquisitions of hotels that are, or have the potential to become, the top five-star properties in their respective locations. As well as an international investor, developer and operator of upscale resorts in Europe and Africa, the Group also boasts partners such as the Libyan Foreign Investment Company, Istithmar of Dubai, Wyndham Hotels Group and a leading private family fund from Kuwait.

Alfred Pisani is justly proud of his meticulous eye for detail reflected in his hotels exacting aesthetics. He takes a fanatical personal interest in his hotels appearances and specifications, “We have created or refurbished beautiful buildings. If you go and see our hotels in St Petersburg or Budapest or even Tripoli they are unique by any standard. The amount of effort and attention to detail is simply incredible and we aim to achieve this by keeping firm control and maintaining a common thread between our various properties.”

He is equally adamant that the human aspect of operations is even more important in providing a first class hospitality product, “We pay a lot of attention to developing our staff. In any acquisition

Q An industrial catering division, with the establishment of Corinthia in-flight Services in 1974. It caters to the international airlines operating in and out of Europe such as Lufthansa and Emirates Airlines.

“With a lot of commitment, a tremendous amount of commitment, miracles can happen”

to explain to staff who they are or new venture, we introduce joining forces with – it’s rather our new employees to our like getting married when you culture. This is vital in educating go into business partnerships, our people in who we are and you need to know who your what we are striving to achieve partner is because if you at Corinthia, we set out to create don’t like our culture then you a sense of family – they need to shouldn’t stay in the marriage.” understand what our standards A world traveller himself, and principles are.” In addition, Pisani remains an avid admirer he goes on to insist that, Alfred Pisani, Chairman of Corinthia Hotels of the charm and uniqueness of “Corinthia Hotels has remained a family-inspired organisation where vision, hard work and people Malta as a year round destination for a more cerebral and cultured clientele. “Malta is special in many ways, in cultural terms, in the are at the core of the company’s values.”

His efforts have certainly been recognised and rewarded. sense of the prehistoric, the period of the Knights that left so Corinthia Group’s hotels have received a clutch of prestigious much on the island, ‘The Three Cities’, the UNESCO World Heritage awards. “The Grand Lady” of Malta’s luxury hotels, the Corinthia Capital City of Valletta, all of our fortifications for St Elmo. We have Palace Hotel & Spa, recently won “Malta’s Leading Hotel” at the something phenomenal you don’t find anywhere else in the world”, World Travel Awards. These prestigious prizes are highly coveted he proudly declares.

What is surprising is not only how rich in culture and history and have been described by the Wall Street Journal as the “Oscars” of the global travel and tourism industry. Winning hotels are this European microstate, teetering on the Mediterranean rim, is selected through the casting of votes by travel professionals from but also how vibrant. As Pisani points out, “The unique attraction 183,000 travel agencies, tour and transport companies and tourism in Malta is that you can come at any time of the year because the island doesn’t shut down. If you go to some other islands in the organizations in over 160 countries worldwide.

To this day Alfred Pisani remains undeniably passionate about, Mediterranean, they only really cater for tourists in the summer and rightly proud of, the projects he has undertaken. At his personal months and then they close down come mid-October. In other such initiative, a painstaking and faithful reconstruction of the 110-year- island destinations, the restaurants start to shut down because they old Grand Hotel Royal resulted in the restored building being are very much focused on seasonal tourism. Here in Malta, life is crowned the Corinthia Grand Hotel Royal in Budapest Hungary. different. We are alive in all aspects and all seasons.”

After more than 50 years in the industry, 2011 will bring Alfred Soon after opening in 2003, it immediately won Europe’s “Best Hotel Architecture Award” and later the international “Five-Star Diamond Pisani’s most audacious gamble to date, when the Corinthia Hotel Award”. Since then it has garnered several others, including; “Best London, opens its doors. Pisani claims that, “Entering the UK Luxury Hotel in Budapest”, the “Best Service Europe Top 20” and market has been a target for us for many years.” With a projected in the “Travellers’ Choice™ 2010 Hotel Awards” by TripAdvisor® opening date early next year, London will shortly have what is being it was ranked among the Top 25 Hotels in Europe and in the Top hailed as its first grand new hotel to be built in the capital for over 25 European Destinations chosen by Europeans. TripAdvisor’s a century. The £270 million acquisition and development of what awards are considered to be the only honours representing the was the original Metropole Hotel from the 1880s and subsequently unbiased opinions of millions of travellers. In our age of consumer- part of the Ministry of Defence, aims to become one of London’s driven recognition, these kinds of reviews and awards often speak most exceptional luxury hotels. It will boast 300 bedrooms with room sizes averaging 45 square metres, as well as larger multi-level volumes.

Characteristically Pisani is a very hands on Chairman, “I dedicate penthouses, suites and terraces affording spectacular views of the myself personally and with passion to each property, it is important River Thames, Trafalgar Square and Whitehall. The property will also have a large central courtyard foyer, two clusters of restaurants, a destination bar, a ballroom restored to its original splendour and board-meeting facilities.

The adjoining 10 Whitehall Place property is being redeveloped to include a 3,200-square metre luxury spa operated by ESPA, as well as a suite of 12 exclusive residences ranging from 250 square metres up to over 1000 square metres. Corinthia London is located just minutes away from a host of top attractions including the iconic Nelson’s Column, The National Gallery, St James’s Park, Big Ben, The Houses of Parliament, Buckingham Palace and major theatres. The highly desirable location of Corinthia’s new property means that this new hotel is ideally placed for both business and leisure travellers seeking the ultimate guest experience in London.

As the company’s first UK investment, The Metropole Building and 10 Whitehall Place were acquired from The Crown Estate in 2008 by a consortium led by Corinthia. Pisani is passionate about the sympathetic restoration of these historic premises and asserts that the importance of this property was evidenced by the fact that The Crown Estate chose Corinthia to develop this important site.

The Corinthia Hotel project in London is being talked about as becoming one of the London’s most exceptional luxury hotels. Early tastemakers and influential visitors have been invited to tour the project site and absorb the scale, magnitude and opulence of the massive project underway. As Pisani says, “Work on the 40,000square metre site is progressing well and, when it does open its Corinthia Hotel London - Bedroom doors, the Corinthia London is set to become one of the most

Corinthia Hotel Budapest

Corinthia Hotel Budapest - Grand Ballroom

Corinthia Hotel St Petersburg - Lobby

Corinthia Hotel St Petersburg prestigious hotels in this most cosmopolitan of cities.”

In developing the project, Corinthia secured a £135 million loan from a syndicate of banks. Given the difficult operating environment in 2009, this loan in itself is a sign of confidence in the Corinthia Group as developers, the calibre and track record of their management team, the project and the UK luxury hotel market more generally. The bank loan matched the £135 million invested as equity by Corinthia and its co-investors, setting a 50:50 loan to equity ratio on the project.

This redevelopment project will be one of London’s iconic hotels and reap tangible immediate and long-term rewards not only by virtue of the investment itself, but also in widening the appeal of Corinthia Hotels brand into a major world capital. As Paul says in Corinthians 1, 14:40, “Let all things be done decently and in order.”

This is certainly a maxim that Alfred Pisani seems to have lived by. X

A determination for success If you want to do business, you want to do it fast. Market ideas do not grow on trees and before you know it someone else might do it.

With a single point of contact for all businesses, fast decision making, readily available human resources and an efficient tax and incentive regime, Malta is poised to be nimble.

Doing business in Malta gives you an edge as it can be done faster and at lower cost.

malta

4

Custom House launches the Melita International Retirement Scheme, a QROPS

MALTA FEATURE - 16 JUNE 2010

WWW.IMAGEDIPLOMACY.COM

PROPERTY

Life in a Less Taxing Environment

A

“QROPS” is not, as was once suggested, a mythical creature from another planet dreamed up by Terry Pratchet. It is much more prosaic. QROPS means “Qualifying Recognised Overseas Pension Scheme” and was introduced by the UK tax authorities (HMRC) four years ago. It is HMRC who determines whether any prospective QROPS scheme in fact qualifies for QROPS status.

Last April Custom House Global Fund Services Limited (CHGFS), which is authorised by the MFSA (Malta Financial Services Authority) as a Trustee and is registered as a Retirement Scheme Administrator under the Special Funds Act, launched the Melita International Retirement Scheme (MIRS), which at time of writing, is the first Maltese based retirement scheme to be accepted by HMRC as a QROPS and to Dermot Butler, be registered and regulated International

by MFSA. Expert in Financial MIRS has been designed Services, sheds light as a flexible and financially on the significance attractive solution for UK of QROPS for UK ‘ex-pats’ looking to move retirees wishing to their UK pensions overseas. move to Malta Being Maltese based, MIRS also benefits from Malta’s full membership of the EU, a strong regulatory environment and over 50 double taxation agreements, which clearly demonstrates that Malta is an internationally accepted onshore financial centre.

We at CHGFS, as the registered retirement scheme administrator, and Panthera IPS Ltd* as the UK marketing agent for the MIRS, both strongly recommend that everyone considering this should take their own professional, legal and tax advice. We recommend this because the QROPS is not always the perfect answer to all UK ex-pats pension requirements.

However for those UK ex-pats, who do not plan to return to the UK and who are able to benefit from the product, there are several advantages, including, inter alia: low fees (0.5% set up plus 0.5% annual management subject to €2500 minimum and € 10000 maximum); no requirement to purchase an annuity or ASP; potential to leave funds to heirs; no UK tax liability as pension income; considerable investment freedom. * www.panthera.com

Traditional Farmhouse

Malta is an amazing little country.

Bursting at the seams with culture and history, the attractions of the archipelago are certainly a big tourism draw attracting approximately 1.2 million tourists annually – which is 3 times the number of its citizens. Majestic forts, bastions and fabulous churches abound, yet what has always attracted foreigners to Malta has always been the gorgeous weather, clear seas and the warmth of the Maltese people. All of these elements together make for a very enticing package for home ownership.

T

he variety of properties available in Malta and Gozo ranges from 300-year old converted farmhouses to modern penthouses and luxury villas. The selection is vast and hence caters to a wide spectrum of budgets. From the popular coastal resorts to the beautiful old villages that are found in the interior of the islands – the diversity of real estate is astounding. Full of charm, traditional old “Houses of Character” make the most incredible homes as do bungalows and purpose-built flats. These make a great rental investment and are also a haven in retirement age. Moreover, the spirit bound up in the village life gives a real sense of belonging that permeates Maltese communities.

The other major attraction in Malta is the tax regime offered to foreigners who take up residence on the islands. There are

State-of-the-Art Villa huge tax savings to be made especially compared to the 40% or more paid on income at home in the UK. This factor alone is n excellent incentive to move to Malta. Moreover, there are neither inheritance taxes, nor property or council taxes and no capital gains tax is payable on a principal residence providing the property is not sold prior to three years of ownership. In addition, there is no minimum or maximum stay required for residency.

Purchasing property in Malta is also eminently simple and safe with the convenium written in English. For those seeking a real estate agent specializing in property conveyance, foreigners need look no further than award-winning Frank Salt Real Estate Ltd. Having operated in the market since 1969, their extensive knowledge and consultancy approach make them an excellent point of contact in the property market.

According to the statistics, the property market is extremely buoyant with an average annual appreciation that has consistently been 8-10% over the last 30 years. In fact, Malta has had a very steady increase in real estate value every year since 1965. Although prices in Malta may appear higher than some other European countries, there is a benefit to purchasing property in a healthy property market and one that has an excellent track record. In these times of global economic uncertainty, investment in real estate in Malta also appears to make great business sense. Given the high level of repeat tourism, investing in property as a holiday home is a wise choice. The average rental return in Malta on long lets is 4-5% and there are plenty of diverse properties to choose from including new developments. As Alan Richards, CEO of HSBC Malta confirms, “There are a number of high quality builds in Malta under development.

Talking to the developers the target market is both domestic and international and demand has held up remarkably well.”

One such development is Fort Cambridge in Tigné Peninsula, Sliema. On the 28,000-square metre site, there are two historical buildings dating back to 1880.

Erected by the British during

www.fortcambridge.com their colonial stay in Malta, there is Fort Cambridge (after which the development is named) and a barracks building. Both are to be restored as part of the project. The development offers sea views and is very strategically placed with Valletta, the state-ofthe-art national hospital, the airport, the seaport, yacht marinas and the golf course being only 20 minutes away by car.

In total there will be 350 apartments varying from one to four bedrooms, which will occupy only 17% of the whole site area as the rest will be covered by the historical buildings and beautiful landscaped gardens. All the apartments will have wide terraces which are part and parcel of everyday life in Malta as, due to the mild climate, the balconies can be enjoyed for 8 months of the year. Prices of apartments at Fort Cambridge vary from €245,000 up to €1,900,000 according to size (from 100-500 square metres), location and view. Great attention has been paid to the sustainability of this development, so much so that it was awarded Gold in the best eco-development category at the Russian “Home Overseas” property awards.

Malta, with its excellent air connections to all major European and North African destinations, adds up to a pretty compelling package. Indeed, sometimes the appeal of the islands is so strong that professionals who go there on secondments do not want to leave. As Richards explained, “We have a problem in Malta actually because we have some very talented people at HSBC who we like to move around internationally. However once they are here they find it difficult to leave - the quality of life is so good in Malta.” X

MEDICAL TOURISM

Treat yourself to a First Class Service Malta may not seem an obvious choice when considering going abroad for medical treatment but the island was, in fact, home to the earliest known hospital in Christendom. It was established by the Knights Hospitalier in the capital Valletta to treat the returning crusaders injured in the holy land and it was there that many of the early western surgical procedures were pioneered. Thus, as a nation, the Maltese are justifiably proud of their long history of medical excellence, and for centuries Maltese hospitals have provided world-leading care to their citizens and foreigners alike.

T

he island’s central role in caring for warwounded, earned Malta the sobriquet, “The Nurse of the Mediterranean”. During the First World War, the island’s geographic position meant that it was designated a hospital and the climate aided the convalescence of the allied troops. Malta has continued to build on this long tradition and now boasts world-class facilities and expertise. In fact, a study launched by The World Health Organisation that examined healthcare systems and achievements on an international scale, ranked Malta second in the world.

With great vision and a desire to satisfy the growing foreign and domestic demand for medical expertise in Malta, Dr Muscat founded the St James Hospital Group in 1984. A polymath, eminent surgeon, politician, entrepreneur, visionary and passionate fundraiser, Dr Muscat’s group of hospitals now represent one of the top private healthcare organisations in Malta, offering state-of-the-art facilities and manned by internationally-experienced surgeons.

Dr Muscat is clearly proud of his achievements saying, “We were always ahead of the times; we had the first MRI available in Malta, laser surgery, IVF/ICSI and we were pioneering in cataract surgery. We opened a specially dedicated eye clinic and a cosmetic clinic. I think that our success has stemmed from the fact that we were always avant-garde in investing in new and modern equipment.”

In Malta, the St James Hospital Group boasts UK-trained doctors, competitive prices, and provides a holistic approach to the health tourism experience. It presently owns and runs an 80-bed hospital in Sliema with a specialist eye clinic, a 17-bed hospital in Zabbar, a dedicated cosmetic dermatology clinic under the name of Transforma in Attard and an outpatient clinic in Mosta. All of

Martha Greenwood – Mini Face Lift “I was surprised and very pleased at the number of extensive tests I had to undergo before my surgery for a mini face lift, thus ensuring I was a suitable candidate for surgery. The health care in Malta is first class. The care and attention I received from Saint James Hospital was second to none. From arrival at the airport to departure from the airport 12 days later, Saint James Hospital staff organised and arranged everything for me and I felt completely safe and well looked after. I was given a mobile phone from the hospital to ensure I had constant and immediate communication with my personal facilitator, should I require anything at all. My personal facilitator at Saint James Hospital could not have done more for me and although I was on my own in Malta, I was made to feel safe and reassured at all times. I was always made to feel important by the staff and would not hesitate to recommend them. The package was very good value for money and everything was taken care of to a very high standard.” these private healthcare facilities are, of course, MRSA-free.

Explaining the benefits of health tourism to Malta, Dr Muscat points out, “Our services are five-star and each patient is assigned a ‘Personal Relationship Manager’. We are just a short flight away from the UK. Why go further afield, to a country outside the EU, when you can come to a first class destination like Malta? Obviously all our staff speaks English, which makes people feel comfortable and safe. The majority of our doctors trained in UK and yet our prices are about half of what you would pay in the UK – whether it is for a hip or knee replacement or cosmetic surgery. Our medical tourists come mostly from UK and we take great care of them. They are welcomed at the airport, looked after conscientiously all the way through the procedure, and of course after surgery. But best of all we are cost effective.” X

James Miller – Total Knee Replacement “Although

Daily Telegraph readers who present this article will receive a reduction of 10% on the quoted prices.

Please contact us at: +356.23.29.16.26 or send us an email: healthtourism@stjameshospital.com

major surgery is never pleasant, our stay at Saint James Hospital and the aftercare was superb. Everyone without exception was kind to us and helped to reassure us. Thank you so much.” www.stjameshospital.com

A bedrock of stability Investment is like building your house on rock. Stability secures investment yields over time at minimal risk. And when you go back home from work, you can go to bed serenely.

Since Independence in 1964, Malta has enjoyed political, economic and social stability.

Fully integrated in the European single market, it has been rated by the European Commission a top-performer in its management of the economic and financial crisis.

malta

WWW.IMAGEDIPLOMACY.COM

MALTA FEATURE - 16 JUNE 2010

5

FINANCE

A Safe Harbour for Financial Services As punitive tax regimes begin to bite in the larger economies like the US and those in Europe driving some financial companies away and, with political pressure impacting on traditional tax havens such as the Cayman Islands, Bermuda and the Channel Islands; Malta has begun to look ever more attractive to banks, hedge funds and other financial service companies that are flocking to the island like never before.

W

ith a proactive government in place determined to increase the sectors contribution to the GDP from 12% to 25% by 2015, Malta is showing itself to be an increasingly punchy little contender. Prime Minister Lawrence Gonzi told the annual FinanceMalta conference recently, “Our strength as a financial services centre is based on innovation and on our will to provide a top-notch operating environment for business.�

The ongoing global economic turmoil has also given Malta an opportunity to present itself as a hub and a haven as savvy finance firms seek domiciles with a strong financial record of accomplishment and a stable economy. Malta has certainly weathered the global financial crisis enviably. As the Minister of Finance, the Economy & Investment, Tonio Fenech explains, “This was borne of several factors, firstly the diversity of our economy, secondly the regulatory framework within our financial sector and thirdly and most importantly the political project we had embarked upon with our European Union membership and subsequent adoption of the Euro.�

Accession to the EU in 2004 certainly contributed to the burgeoning growth of the financial services sector. It gave Malta the boost that propelled it to becoming one of the most dynamic and fastest growing financial centres in Europe. As a result, Malta is enjoying a hugely enhanced credibility that has placed it firmly on the radar screen of international finance. Equally, becoming part of the Eurozone in January 2008 provided not simply a change in the national currency but also culminated in the transformation of Maltese business culture. Indeed, adoption of the Euro was arguably the key underlying driver in the growth of interest in Malta as a domicile for financial service businesses.

As Kenneth Farrugia of FinanceMalta puts it, “With the onset of joining the EU, the huge increase in business potential changed our mindset, practitioners started to realise that the market had become suddenly vastly bigger and this encouraged many to travel outside our shores and begin to promote Malta as a serious financial destination.�

Certainly many major So having avoided players in Malta’s financial and the worst of the global economic landscape feel that banking crisis, Malta is now they escaped comparatively aggressively positioning unscathed from the economic itself as a regional financial downturn.

Indeed, The centre, oering significant World Economic Forum’s tax eďŹƒciencies and crucially Competitive Index has also all within an EU compliant highlighted the soundness regulatory regime. Malta has and resilience of the Maltese certainly worked diligently to banking sector for 2008-2009 improve the credibility of its by ranking Malta’s banking financial regulatory system. system as the 10th soundest The MFSA was set up in 1988 in the world. as a unified regulator with a Other key factors behind remit to modernize Malta’s Malta’s recent success are regulatory framework and to clear; the MFSA has been meet or exceed best practices universally praised as of countries within the EU. business friendly and industry As a tiny nation fine-tuned orientated. The adherence to to industry trends, Malta has EU regulatory standards, an been adroit at adjusting to internationally accepted EUeconomic realities. This gives recognized tax regime with the country a competitive an unmatched network of 50 advantage when responding bilateral tax treaties and a to market opportunities and unique legal framework which an ability to adjust the rules is based on a combination of and regulations quickly in English common law and the response to circumstances in Napoleonic code, make Malta the markets. Indeed, flexibility an appealing destination. and nimbleness have been Legislation in Malta is defining benefits of the pragmatic and regulations are economy and resulted in the speedily implemented. The country being able to “dodge Tonio Fenech, Minister of Finance MFSA’S supervisory council the bulletâ€? of the financial met 34 times last year and crisis. granted a total of 168 new The Chairman of the MFSA (Malta Financial Services Authority), Professor Joe Bannister, licenses, one of which was to Deutsche Bank – another big declares, “We are always being asked what eect the crisis has name that is looking to ride the wave and will certainly further had on us and we always say – ‘What crisis?’ Obviously this does place Malta on the map.

To underline the respectability that the country has worked not mean we are not vigilant - we have to be very vigilant - but in reality nothing happened.� Meanwhile Farrugia asserts that, hard to win, Malta is now actively involved with the OECD, “At no point was there a lack of trust by the general public in the the EU and the Commonwealth in modelling global regulatory banking system and the banking system did not lose trust in the policy. Moreover, the government has been vocal in arguing Malta’s case to have an important role to play in the G20’s economy.�

Dr Arthur Galea Salamone, Chairman of the Malta Stock plan to reform the world’s economic and financial system, Exchange, echoes this point saying, “We’ve got high investor with the ruling Nationalist party outspoken in their support protection standards. Locally, operators embrace core values of of open markets and free trade. Interestingly, a recent City of integrity, transparency, fairness and reasonableness and these London study of financial centres worldwide rated Malta as core values are reflected in the regulatory stance we take in being the only Western finance centre expected to “become our approach towards investors.â€? He firmly believes that the more significant over the next two to three yearsâ€? while placing global financial crisis was also a crisis of values and trust. Malta it in the company of the usual high growth centres of Dubai, was fortunate not to suer a lack of confidence. However, in Shanghai and Singapore.

The financial services sector is now a major pillar of the his opinion, it was not coincidental but rather by design. While Malta may be an open-market economy, as vulnerable as any to economy, averaging an impressive annual growth rate of 30% the upheaval (if not more so given its lack of natural resources), over the last three years, with a number of leading international the belief is that their traditional, and relatively conservative, financial institutions setting up shop on the island. These include banks, (with assets more than doubling in this period to over attitude has stood them in good stead.

“Financial services are very much perceived as a growing sector.�

₏45 billion), asset management firms, collective investment schemes and, the insurance sector alone, trebling in size over the past three years - mainly through increased international and captive insurance business. Currently employing around 7,000 people and accounting for 12% of Malta’s GDP, the figures certainly support the government’s rhetoric.

As Minister Fenech stressed, “This is having a multiplier eect on the whole economy and financial services are very much perceived as a growing sector, Malta is now being perceived very positively and we are seeing lots of funds being administered here, so we are certainly looking at growth in a number of financial service sectors.â€? Therefore, a well-developed, vibrant financial services sector is now of critical importance to sustaining the continued growth and development of Malta’s economy. What will be critical in achieving this is the continued development of “Brand Maltaâ€? and ensuring the hallmarks of that are solid foundations of confidence and trust.

FinanceMalta, takes this task very seriously because, as the Chairman Kenneth Farrugia says, “We are trying to build a name for the island and build a strong reputation because then business will flow by itself. I think our strategy is working and this is reflected in the extent of business that is coming our way.â€? He was also frank in his assessment of what sets Malta apart from traditional domiciles such as Dublin and Luxembourg, “The market has become increasingly homogenous and dierentiating yourself from other jurisdictions is not easy, but being eďŹƒcient, being eective and making sure legislation is up to scratch as well as fast tracking important deals and changing legislation quickly, being a small country gives us a great chance to be nimble.â€?

Whilst Malta is still undoubtedly developing as a financial centre, the country has certainly made great strides in creating the circumstances necessary to emerge as an excellent base for financial service firms of all types. Recording yet another year of growth, Professor Bannister of the MFSA was unambiguous, “Given the turmoil that followed the worldwide financial crisis, the performance of Malta’s financial services sector can be described as extremely good.� X

7 reasons why international financial institutions are dropping anchor in Malta English as an oďŹƒcial language Cost competitive skilled workforce EU member with euro as its currency Consistently highly ranked quality of life Meticulous yet accessible single regulator Robust yet flexible legal and regulatory framework Q Secure and stable business environment and a world class IT infrastructure Q Q Q Q Q Q

Source: www.financemalta.org

BANKING SERVICES

Taking Malta Forward As Malta’s oldest bank and one of its largest domestic operations, the Bank of Valetta group (BOV) is the leading financial services provider in Malta, oering a full range of financial services including; retail & corporate banking, investment banking, private banking, fund management, bancassurance and stock broking.

T “BOV has an enormous responsibility to be part of the continuing economic development and evolution of Malta’s financial services.�

heir domestic operations are extensive, including a national network of 41 branches, a corporate centre, five business centres, and a wealth management arm. In addition to this, BOV is well represented overseas with a network of correspondent banks and representative oďŹƒces in Australia, Canada, Italy, Tunisia Libya and Egypt providing Malta with the reach necessary to service customers in international banking and trade transactions.

Privatised in 1995, with the Maltese government maintaining a 25% stake, BOV maintains deliberately prudent funding, asset quality, liquidity and capital ratio policies. These stood it in good stead throughout the recent global financial crisis that witnessed some of the most brutal conditions experienced in the history of modern banking. During this period however, BOV was able to continue to provide credit and liquidity to local businesses.

While Malta’s wide-open economy has not been immune to the global recession, the impact has been more gradual and relatively mild when compared with other developed economies as Roderick Chalmers, BOV’s Chairman, explained, “Malta got through the recession very well. Inevitably, there was a downturn, but it was modest and Maltese business showed its resilience. Throughout the downturn the bank’s deposit base has continued to increase in a robust manner, and we believe that Malta is well placed to get into the upturn quickly.�

Dubbed the “local local bank�, Chalmers explains BOV’s role in Malta’s economic landscape, “We are directly involved with 45% of Malta’s economy. We therefore have a great duty to not only service our customers to the best of our ability, but also, because of our very significant presence in the economy, we feel that as an organisation

we have an enormous responsibility to be part of Malta’s continuing economic development and evolution – particularly in the financial services sector.�

Virtually every sector is a significant customer of BOV, using the bank’s wide array of services. Chalmers is convinced of the vital role that BOV plays in Malta’s economic well-being, and is passionate about supporting the repositioning of the “brand� of Malta. This is in part because BOV, with its very loyal customer base, remains close to clients. As such, it hears (and listens to) the voice of business and the people. Moreover, with a 45% market share, “BOV is a vital cog in the future of the financial services sector in Malta,� asserts Chalmers, who is Maltese-born but with Scottish parentage.

Indeed, for the first time in its history, BOV now has total assets significantly exceeding ₏6 billion and customer deposits have also continued to show satisfactory growth with deposits increasing by ₏245 million or 5.2% since September 2009. With the bank continuing to manage its balance sheet in a deliberate and conservative manner, its liquidity position remains strong, as does its capital base, with a Tier 1 capital of 10%, and with a total capital ratio position of 14.4%. The bank’s credit quality remains solid, with non-performing loans amounting to just 4.1% of gross advances.

Chalmers has been a steady hand on the tiller and, along with senior management, is strong-willed about the principles that have seen the bank through such a wrenching period. “We stuck to old-fashioned yardsticks of banking - which is where you have to balance what you have borrowed with what you lend. We didn’t take undue risk in what was clearly an overheated environment.�

The bank recently announced pre-tax profits for the first six months of the financial year 2010 that amount to â‚Ź47.5 million, a stark improvement on the â‚Ź6.3 million for the equivalent period ending in March last year. Results, Chalmers characteristically described as, “Solid, satisfactory and encouraging.â€? X

0 + #((#(! +# ( &#( ,,

' , .,-)' )., ,- ( &# (- +/# C F # ( 2 +) ,,#)( &#,' ( +# ( &#( ,,D J , + -" " &&' +%, ) &# (, +/# - .,-)' )., 4 ( -" , G ( 0"2 -" $. ! , ) -"

, & - .,-)' )., )/ && )-" +, ,

BEST ADMINISTRATOR - CLIENT SERVICE

5 5 5 5 5

#( 9A@A .,-)' )., " , .#&- ( #(- !+ - !&) & .( '#(#,-+ -#)( , +/# )( * +,)( & )''#-' (- ( + & -#)(,"#*, )(,# +

&# (-, + + )!(#, , #( #/# . &, ()- ).(- (.' +,

&# (-, %()0 -" 2 ( #+ -&2 && (2)( #( , (#)+ ' ( ! ' (- #( &. #(! -" +).*

( +).* " #+' (

.,-)' )., 6, , .+ ., + +# ( &2 0 + *)+-#(! *& - )+' 4 4 " , ( 0 && + #/ 2 &# (-, 0") ( ,, -" #+ ).(- - #&, - (2 -#' ) -" 2 )+ (#!" .,-)' )., #, )* ( :< = +)' . &#( -) "# !) -) #(! *)+ -" 2 ( / + ( , )+ .,-)' )., )+ #-, &# (-,

.,-)' )., " , ,- H # - -) *+) ,,#)( & ( * +,)( & , +/# 4 -+ ' ( )., ,, - )+ ).+ &# (-, ( ).+ )'* (2 ( )( )+ 0"# " 0 + 1-+ ' &2 !+ - .& ( 0)+& ) !&) &#3 -#)( #(,-#-.-#)( &#3 -#)( ( - "()&)!2 )/ && &,

.,-)' )., #, - 2).+ , +/# E0#-" +# ( &2 &*" "# %-)(! BI ) & , .,#( ,, / &)*' (- I ,# BI I7>= >;8; @;A; )"( #!!#(, BI ) & , .,#( ,, / &)*' (- J ' +# , BI7;9: =8: @;>> /# ++2 B ) & , .,#( ,, / &)*' (- .+)* BI7;=; 9 @?@ 8@8?

000 .,-)'")., !+).* )'

A propensity for talent We have long discovered the secret of tapping human capital. Just like a little sapling, talent is honed with time, patience and the pouring of resources.

As a business person, in Malta you will find affordable, available and malleable human capital and world-class education facilities for your children. It is also the reason why so many investors have made Malta their home for over 30 years.

malta

6

MALTA FEATURE - 16 JUNE 2010

WWW.IMAGEDIPLOMACY.COM

HEDGE FUNDS

Custom House Expands with Malta Malta has made strident efforts in recent years to position itself as a stringently regulated, cost-effective domicile to the alternative investment market, able to compete with the best in the world. With the emphasis on continuing to build a strong and unimpeachable reputation, Malta now has a huge opportunity to develop into a truly global investment fund centre for a host of alternative investment products, catering to an international investor base engaged in a diverse array of strategies. Experience has been rapidly gained in the financial field and Malta is growing increasingly confident of its ability to attract new business.

T

his newfound prestige was strikingly reflected by the recent “Global Financial Centers Index” naming Malta as one of the top three financial centres likely to increase in importance over the next 2 to 3 years; outranked only by Shanghai and Dubai.

Similarly, the World Economic Forum’s Global Competitiveness Index 2009-2010 ranked Malta 13 out of 133 countries for its financial market sophistication.

So what is setting Malta apart from the more traditional domiciles and what does the future hold for the continued success of the island nation as a jurisdiction for the fund management industry?

Dermot Butler, Chairman of the recently Maltese-registered Custom House Global Fund Services, is quick to point out the reasons behind their move to Malta, “We decided to redomicile our holding company to Malta because frankly the regulator in Malta (the MFSA) is more pragmatic, business friendly and helpful than anywhere else - it is actually quite astounding. Today CHGFS is not only the Custom House Group holding company, but also operating as a full service alternative investment fund administrator and licensed Custodian of Funds of Funds.”

Malta’s accession to the EU in 2004 and its adoption of the Euro in 2008 undoubtedly changed the country’s status in many ways. Of course, as an EU member state it has established a comprehensive regulatory framework that is in conformity with all EU legislation. This places it in harmony with all other EU member countries. However, its comparative advantage is in retaining a much lower fees and cost structure.

Vitally, professional investor funds (PIFs) are exempt from Maltese capital gains and income taxes, meaning non-residents are not liable to pay any income tax in Malta whilst benefiting from one of the world’s most extensive double-tax treaty networks. Numbering nearly 50 countries, this network includes all EU states, OECD member states and recently signed treaties with both the United States and China.

Butler is convinced that some fund managers are, “Leaving the UK because of the tax,” and believes that, “There are some managers who are setting up in Malta because it’s a sensible place to have a management company, not just because it’s within the EU but also because it is relatively inexpensive in comparison to setting up in Luxembourg, Dublin or Switzerland.” This may explain why the variety of funds operating in Malta including hedge funds, SICAVs (an acronym for the Spanish, “sociedad de inversión de capital variable which is an open-ended collective investment scheme) and UCIT’s (Undertakings for Collective Investment in Transferable Securities), now constitute the largest single segment within the Maltese financial services industry.

Perhaps the biggest single factor in Malta’s achievements has been the conspicuous impact of the Malta Financial Services Authority (MFSA), the body responsible for the licensing and supervision of all Maltese-based investment funds. The regulator has been widely acclaimed for the manner in which it blends being flexible and accommodating with its adherence to international obligations. Much like the government of Malta capitalises on its diminutive size, which allows it to be flexible and pro-business, the MFSA as a regulator is can-do in its approach and, as a result, has succeeded in attracting important firms like Custom House to its shores.

Strikingly proactive in promoting Malta as a modern and efficient financial services centre, the MFSA has pursued a vigorous round of international conferences highlighting the virtues of Malta’s regulatory framework and the comparative advantages for anyone wishing to re-domicile or set up business in Malta.

The MFSA’s role is to guarantee the country’s adherence

“We decided to re-domicile our holding company to Malta because frankly the regulator in Malta (the MFSA) is more pragmatic, business friendly and helpful than anywhere else - it is actually quite astounding.”

Dermot Butler, Chairman of Custom House Global Fund Services

www.mfsa.com.mt

to international best practices for probity and transparency, whilst encouraging innovation and competition within the sector. Testament to their success has been the sudden spike in professional investor funds locating in Malta, now numbering some 400 funds operating in the jurisdiction; an increase of 44% since 2007 (Source - University of Malta).

Custom House Global Fund Services – one of the top independent administrators specialising in hedge funds and fund of funds has taken full advantage of this climate. The self-described “Specialist Fund Specialist”, recently won the prestigious HFM Award for “Best Administrator - Client Service”.

With approximately US $40 billion in assets under administration, the figures speak for themselves and stand as testament to client satisfaction.

According to Custom House, Malta was a natural choice. Back in 2005, they brought a particular Canadian client to Malta. Butler explains, “There was a lot of quite complex legal structuring necessary, not only because the fund was being structured in Malta and due to the master-feeder structure of the fund we were doing, but also because there was some very delicate tax footwork that needed to be done, which the Maltese lawyers understood and helped achieve.”

Involving over 60 sub-funds, this was a landmark piece of financial engineering, and demonstrated the intellectual expertise and proficiency of Maltese finance professionals operating in the jurisdiction. Structured for The National Bank of Canada, this was designed to combine the security of a fund vehicle with flexibility by a diverse portfolio of managed accounts. The master being a multi-segregated cell fund company with each segregated-cell fund representing a ring-fenced account. Thereby ensuring no cross collateral risk.

As the Chairman of Custom House, Dermot Butler asserts, “This clearly enables the manager to be very flexible: if something changes and the manager decides they don’t want to be in any particular sector, they can get out.

Normally, with a hedge fund you are locked-in to an extent because you have to put in a redemption order, which could take up to eight weeks to process during which time the market could have done a lot of damage. By contrast, with daily dealing NAVs, the manager can get out when he or she wants. There is a lot of flexibility and transparency and that’s worked very well for everyone.”

Indeed, the success of this project was instrumental in Custom House’s decision to uproot and re-domicile its newly merged holding company to Malta. As Executive Director Albert Cilia emphasizes, “Obviously we believe that there is a lot of potential for growth here and we are working with our partners in the UK, Equity Trust. It’s encouraging that we have won some big clients and I think that in the coming months, things will be kicking off here in Malta.” Dermot Butler is equally adamant in his assessment, “I would add that Malta will grow and that it’s come quite a long way in a very short time. They are very pro-business here. Malta has changed dramatically and is now a sophisticated financial services centre.”

Custom House is effectively an independent company operating on its own but it is a member of the Equity Trust Group of Companies, which as Butler proudly states, “Is arguably the largest independent trust company in the world.” Custom House established itself in Malta after its merger with Equity Trust. Prior to the move Custom House had several years of experience in Malta, getting to know the service providers and regulators very well. It now administers some 30% of all Maltese funds and subfunds.

Such is Butler’s belief in the European microstate as a centre of excellence in the financial services sector, that he is often touted as an unofficial lobbyist for Malta. He elaborates by saying,

“Malta has changed dramatically and is now a sophisticated financial services centre”

“I have nothing against the Cayman Islands or other Caribbean centres and I expect them to thrive, probably on business from the BRIC countries. We are expanding the services we provide out of Malta, as our EU hub, not just because it is a nice place, but also because Malta is a lot less expensive than either Dublin or Luxembourg. What few people realise is that Malta is now the third biggest fund administration centre in the world. However, Malta’s great advantage today over the “offshore centres” of the Caribbean, is that it is in the EU, when being in the EU is likely to be critical to any hedge fund or manager wishing to attract EU resident investors.”

In addition to Malta, Custom House has offices in Chicago, Dublin and Singapore, as well as Luxembourg and the Netherlands, and their unique service offering is a full 24/5 “round-the-world & round-the-clock” administration, covering all aspects of day to day operations that uses their PFS-“PAXUS” a fully integrated fund administration system.

Their core offering is their daily dealing NAV (Net Asset Value) for a broad range of funds and sub-funds and the firm’s ability to “roll” the funds books from one regional office to the next and hence circumnavigate the globe seamlessly via one single integrated system. Simply put by Butler, “Malta is an important part of our daily dealing administration machine, which we are able to do because we have an excellent system and because of the positioning of our offices in Dublin, Malta, Singapore and Chicago.”

What is clear is that Malta has been a direct beneficiary of the fallout from the global financial crisis, as hedge funds, alternative investment vehicles and “offshore” tax havens (and really anything perceived as exotic) have increasingly attracted the scorn of both the media and public, and the concomitant ire of their political representatives, and the tax and regulatory authorities.

Most notably, with the soon to be introduced EU AIFM (Alternative Investment Fund Management) Directive for alternative investment funds, no one yet knows what the effect of this legislation will be on the industry as a whole. However, given the zeitgeist for stricter controls it is likely to tighten the

scrutiny of the industry markedly and require an EU presence of some sort to get access to the EU investor market.

Within Europe, this prevailing sentiment was recently exemplified by Angela Merkel’s hastily introduced moratorium on naked short selling. On the other side of the Atlantic, the Obama administration has also signalled its disdain for the industry and the perceived nefarious nature of hedge funds, short sellers (and almost anyone else) operating out of the Caribbean.

Consequently, though an onshore jurisdiction, what Malta now offers the industry is a combination of some of the best advantages of an offshore centre whilst simultaneously being a full member of the European Union with a hard-won reputation for transparency and regulation. Hence, a good many funds have now re-domiciled to Malta to take advantage of this, moving from more exposed jurisdictions. For now Malta continues to register more funds and the close cooperation amongst the markets eco-system here (inter-alia custodians, legal advisors, fund directors, fund administrators and investment managers) and the regulator has given Malta a clear competitive advantage in managing this impact.

As Professor Joe Bannister the MFSA’s Chairman said recently, “The world has experienced the worst economic conditions in the last 70 years, with the finance sector being one of the biggest casualties, yet Malta has seen its finance industry grow and its international reputation remain high. Our continued success is a tribute to the prudent policies of our banks and to our other financial institutions and to the high quality of the people who work in the industry. We have the expertise the world seeks, but more importantly we have established a sound reputation for stability, steadiness and high standards.”

Malta is therefore very likely to benefit from the phenomenon of, “a flight to safety” and the enhanced appreciation amongst alternative investment professionals for more regulated, onshore funds - especially for those funds that are currently in the pipeline and looking for a sanctuary within the European Union. As a result of this sentiment, and in the words of Dermot Butler - Malta may well be, “About to have its day.” X

“What few people realise is that Malta is now the third largest fund administration centre in the world”

As at the 1st of May:

Total employees worldwide 267 Total number of Funds (including sub-funds and managed accounts) under administration over 600 Total Assets Under Administration approximately US$40 billion Total number of Fund Managers or Promoters serviced approximately 200 Total number of daily valuations approximately 200 (30% of all accounts)

A warm and balanced lifestyle Doing business and enjoying it makes you feel so good. It’s like being good at your favourite hobby. After all, business is also about human relationships.

Malta enjoys year-round sunshine, moderate temperatures, and an interesting mix of rural and cosmopolitan feel. It is also a treasure trove to 10,000 years of history. Coupled with this is the warmth and hospitality of the Mediterranean people, full and quick access to decision makers and a European way of life.

malta

WWW.IMAGEDIPLOMACY.COM

MALTA FEATURE - 16 JUNE 2010

7

BANKING SERVICES

Banking on a Bright Future The progenitor of HSBC’s involvement in Malta extends back as far as the 1846 founding of the Anglo-Egyptian Bank and having been through several incarnations, HSBC Bank Malta Plc has emerged as the leading banking and financial services group in the country. “Having an international bank with such a strong reputation helps Malta’s own credentials and this must have been part of the Government’s original thinking when HSBC was encouraged to invest in Malta over a decade ago”, says HSBC Malta’s CEO, Alan Richards.

T

he bank recognises that it has an ongoing and important role to play in the local economy and, as Richards states, “Because of the extensive scale of our operations in Malta this is a responsibility that we take very seriously. The biggest opportunity for HSBC over the next five years will be to support the government-led growth of the financial services sector in Malta. We have all of the components we need to help facilitate that growth which is being led very proactively and ably by the Government of Malta and it is our intention to play an active role in this.” HSBC Bank Malta is certainly financially strong with over €5 billion in assets and a pre-tax profit of €71.2 million reported at the end of 2009 and with a Capital Adequacy Ratio of 11.8%.

HSBC provides banking services to more than half of Malta’s population numbering some 260,000 customers.

Richards continues, “We have such a vital role in partnership with the Government and local business and because of our international credentials we believe we are helpful to Malta’s overall positioning as a serious player in the financial services industry.” With over 1,900 staff and 44 branches and offices spread across Malta and her sister island Gozo, HSBC Malta is certainly omnipresent. The scale of HSBC’S footprint and brand impact is unmatched and they have become an indispensable part of the islands’ commercial and physical landscape. Malta has also become home to a large call centre, now housing over 500 staff, supporting their UK banking operations. This was mainly due to the strong cultural and historical affinity Malta has with the United Kingdom having been a British colony up until 1964.

HSBC Malta provides the full panoply of banking and financial services with a commercial banking arm providing

“I think the most important challenge for Malta is the government-led initiative to create an International Financial Services Centre.”

Alan Richards, CEO of HSBC Malta

services to SME’S and large corporate customers as well as international companies. It boasts a purpose-built 1,800-square metre business banking centre that was designed to cater to the Maltese business community. This facility provides a seamless integration into HSBC’S Global Banking and Markets division, with a comprehensive range of services to corporate clients of all sizes including foreign exchange, money market, fixed income, currency and interest rate derivative products, banknotes, trading in metals and the provision of structured products. The Global Banking and Markets team also offer an investment banking arm that can offer advice on and execute mandates across a wide range of investment and financing products; encompassing M&A advisory, equity and debt capital markets and corporate broking.

However, what really sets HSBC Malta apart is its unrivalled access to the worldwide HSBC Group meaning that all products and services match international best practice and Malta can access HSBC’s presence in 87 other countries. In addition, HSBC Global Asset Management incorporated in 1996 manages a range of domestic and international funds and specialises in the development of structured capital secured investment products and in the provision of bespoke portfolio management services, it currently manages €800 million in assets on behalf of around 30,000 investors.

Speaking about the future Richards says, “We are anticipating changes in the global regulatory environment and I think that Malta will benefit from these. We are, for instance, seeing a greater level of interest from funds and captive insurance. There has been a significant increase in activity. If you look back over the last three years the size of the funds and the number of funds has grown very significantly. However, even though our year

on year growth has been impressive, it is still relatively small compared to the global industry so there is huge potential here.

We’re not quite at a tipping point yet but I don’t think that we are that far away and we are seeing real momentum in the funds sector.”

HSBC Security Services (Malta) Ltd provides a full suite of fund administration services to fund promoters who are looking for administrative support for their managed investment funds.

These include the setting up and launch of investment funds, registrar and transfer agency services, valuation, unit price calculation services and corporate secretarial services. Moreover, HSBC Bank Malta offers custody services with Funds Under Custody of over €5 billion.

Additionally, HSBC has a fully owned subsidiary, HSBC Stockbrokers (Malta) Ltd. Beginning operations in 2001 this is now the leading brokerage firm in Malta. The company is primarily engaged in providing stock broking services to retail and institutional customers; it arranges and supports the listing of stocks and shares on the exchange.

Alan Richards has ambitions for this facet of the Maltese financial architecture, “I think the most important challenge for Malta is the government-led initiative to create an International Financial Services Centre. At HSBC this is an opportunity we are ideally placed to support – and an opportunity we are pushing hard to help deliver.”

HSBC’s retail banking provides the local market with the full range of personal financial services you would expect including current and savings accounts, mortgages, insurance, credit cards and consumer finance. Once again, this draws upon HSBC Group’s global systems with the aim of providing customers with unparalleled convenience, choice and control across multiple

platforms including: mobile services, SMS alerts and internet banking for both personal and corporate customers.

Malta, as a small market economy, depends heavily on exports and imports and has not been immune to the instability in the global financial system having registered five consecutive quarters of negative growth. However, the local economy is now stabilising, has returned to positive growth and is expected to maintain an upward trend for the rest of the year. HSBC itself delivered a strong performance during its most recent accounting period from 1 January to the 11 May 2010. Having taken stringent measures to grow revenue and improve productivity, the bank has also maintained a strong liquidity position. It boasts a stable loans-to-deposits ratio throughout and its capital adequacy is now well above regulatory requirements.

Alan Richards comments, “We are encouraged by the bank’s recent performance, we have made really good progress in the last 12 months and we shall continue to emphasize our competitive advantage as an international bank. We remain well capitalised, liquid and very much open for business.” So in spite of difficult market conditions HSBC Malta has continued to deliver strong results and it is difficult to argue with a return on equity to its shareholders of over 18%.

With HSBC’s global network, group technology systems and unrivalled international franchise, HSBC is in a unique position to help Maltese businesses expand beyond Maltese shores and tap into overseas markets. As Richards points out, “There is a lot to be done in 2010 as this is sure to be another challenging year. However, we are in a position of real strength in Malta and excellently placed to support the local economy. With the professionalism, commitment and hard work of our staff we aim to remain Malta’s leading provider of financial services.” X

ENTERPRISE

Global World Corporate Village The Maltese Government has just launched an expression of interest for the financing, construction, management and marketing of an urban regeneration project estimated to cost €200 Million.

C

orporate Village Malta, as the project is named, intends to achieve the vision of excellence by establishing a nerve centre in the nascent central business district in Malta. Located over a footprint of 35,000m², Corporate Village Malta will provide office, leisure, retail, sports and conferencing facilities in almost 130,000m² of space. It will also serve as Government’s single point of contact for business with the location of the main regulatory and business support agencies and departments.

With Malta envisaged to take over the EU Presidency in 2017, Corporate Village Malta will be the main hub of activity for the EU Presidency Summits and events during its six month shared tenure.

The Corporate Village is to serve as a model of excellence and innovation in architecture, with emphasis being placed on its green architecture credentials. Its presentation is to impart a sense of stability and permanence and be developed as an iconic building in order to further enhance its own attraction as well as that of its premier location.

While Government will keep a control on the design master plan, it will be leasing out the land Alan Camilleri to prospective investors while guaranteeing 30 Chairman of Malta percent occupancy of the office facilities. This Enterprise, the lead sets up government as the anchor tenant – surely agency to assume an attraction for its marketing potential. responsibility to Fund Managers, Investment Banks, property developers and management companies and oversee, co-ordinate institutional investors are being invited to form and facilitate consortia and signal their interest to be considered the execution of for the RFP process which will commence in the project October 2010 with a final adjudication being delivered in December 2010.

Malta Enterprise is the driver behind this project, entrusted by the Government to act as the lead agency and to assume responsibility to oversee, co-ordinate and facilitate the execution of the project. Malta Enterprise spearheads the role of promoting foreign investment and industrial development in Malta. Its mission is to sustain Malta’s overall competitiveness and to create the right environment for successful enterprise. It gives assistance and advice about business and investment opportunities available locally and offers investors the best possible service before, during and after they decide to do business in Malta. X

Louder than words Some tell us that we do not blow our trumpets well enough. Truth is that we are more focused on getting the job done than to proselytize.

Malta is home to 1.2 million tourists per year, 450 i-gaming companies, 200 foreign direct investors and 25 international banks. No need to speak to us… speak to them as they are our best testimonial.

malta

8

MALTA FEATURE - 16 JUNE 2010

WWW.IMAGEDIPLOMACY.COM

FDI

An Entrepreneurial Culture Since Malta gained independence from the UK in 1964, its economy has flourished and undergone many transformations. However, it was after 1979, when the Military Agreement between Malta and the United Kingdom expired leading to the closure of the UKâ&#x20AC;&#x2122;s military base on the island, that the country started to develop its industrial and service sector bases, focusing mainly on manufacturing and tourism. Evidence of early recognition in Maltaâ&#x20AC;&#x2122;s potential is the presence, since 1971, of Germanyâ&#x20AC;&#x2122;s highly successful toy manufacturer, Playmobil.

M

altaâ&#x20AC;&#x2122;s progress, in five short decades of independence, is astonishing and serves as a reminder of how commercially minded the Maltese are. The nation has worked hard and fast to evolve with the times and even envisage future trends. Recognition has come in the form of impressive levels of foreign direct investment (FDI) â&#x20AC;&#x201C; the country now has a highly productive manufacturing sector and is home to more than 200 international manufacturing and distribution companies. A fifth of them underwent further major expansion in the past five years, which bears testament to their continued commitment to, and belief in, Malta. Manufacturing now makes up 17% of Maltaâ&#x20AC;&#x2122;s GDP, a remarkable achievement given that, at the time of independence 46 years ago economic activity was minimal.

Perhaps though it is unsurprising that the islands oďŹ&#x20AC;er such a dynamic setting for business, the Maltese have long fostered an entrepreneurial spirit, rooted in their history as international traders in commerce and industry. Today there are many reasons why Malta is a special place to do business or to invest in. Amongst other things, it boasts a highly attractive incentive package, a stable economic and political environment, a strategic location, excellent air and shipping facilities and a highly educated, multilingual, skilled workforce. This, combined with a pro-business climate, has made Malta a location of choice for FDI and global trade.

To facilitate this success further, Malta continues to invest heavily to enhance international linkages. Undersea cables to the country have tripled, providing first-rate internet and

Top 10 Picks for 2010 25/06/2010 - 30/06/2010 Malta Music Week Various Locations 30/06/2010 Isle of MTV 2010 The Granaries, Floriana 04/07/2010 - 13/07/2010 Shakespeare Revisited A Centenary Tribute Palazzo Parisio, Naxxar 23/07/2010 - 01/08/2010 The Farsons Great Beer Festival Ta Qali Park

Camilleri is candid in his assessment of the countryâ&#x20AC;&#x2122;s choices, â&#x20AC;&#x153;We realise that a country like Malta, with no natural resources, can only grow on the basis of two things: the local investors who continue to believe in their homeland and on the other hand the foreigners who believe that Malta is a good place for them to keep pouring in their resources and investing in infrastructure.

We realise those are the only two options for us to grow and obviously we are aggressive in pursuing both.â&#x20AC;?

A core government strategy is to create niche areas in order to foster â&#x20AC;&#x153;centres of excellenceâ&#x20AC;? whether that is in ICT, remote gaming, financial services or the pharmaceutical industry. Indeed, Malta has been pioneering in a number of key areas and has realised that its status as an island and its distance from northern Europe need not hamper the achievement of its goals. Who would have imagined that Malta would become the â&#x20AC;&#x153;Mediterranean hub for remote gamingâ&#x20AC;?? Yet it has and is flourishing under the watchful eye of Maltaâ&#x20AC;&#x2122;s Lottery and Gaming Authority. Malta was the first EU member state to regulate the remote gaming industry. According to the LGAâ&#x20AC;&#x2122;s CEO, Reuben Portanier, â&#x20AC;&#x153;In 2004 the regulations were all passed through the various stages at EU level. The UK followed in a very similar regulated way within a year.â&#x20AC;?

What is clear is that there are incredible opportunities in a wide range of sectors. Malta Enterprise is leading a number of key developments that will create clusters of associated industries and will enable greater synergies. One example is, Camilleri explains, â&#x20AC;&#x153;An investment of â&#x201A;Ź28 million in a life sciences park which touches on the one side with the new Mater Dei General Hospital and on the other side with the University of Malta.â&#x20AC;? He continues, â&#x20AC;&#x153;That will basically create a whole R&D knowledge village focused on life sciences. We are trying to attract other companies in life sciences from around the world to set up shop here, not only because we are a competitive low-cost location but also because we will be focused on R&D innovation. The aim will be to support the pharmaceutical industry which already exists in Malta.â&#x20AC;?

With developments like this and SmartCity Malta (a joint venture underway between Dubaiâ&#x20AC;&#x2122;s SmartCity and the Government of Malta to create a self-sustained township for the knowledge economy), Dr Gonziâ&#x20AC;&#x2122;s government is aiming to prove to the world that the country, though steeped in tradition, is ready for the future. Likewise, Malta Enterprise is spearheading an exciting new initiative that has just been launched â&#x20AC;&#x201C; the creation of â&#x20AC;&#x153;Corporate Village Maltaâ&#x20AC;?. The government has announced a call for expressions of interest and is looking to woo investment funds, property and construction companies, investment banks, venture capitalists and fund managers to invest in this ambitious urban regeneration project estimated to cost â&#x201A;Ź200 million.

When it comes to business, many may say â&#x20AC;&#x153;size mattersâ&#x20AC;? but try telling that to the Maltese. They have long learned what their strengths are and have capitalised on them. All their eďŹ&#x20AC;orts have begun to pay dividends and the significant levels of FDI that Malta has attracted are a strong indicator both of Maltaâ&#x20AC;&#x2122;s competitiveness and the wisdom of government policy. Indeed, Maltaâ&#x20AC;&#x2122;s size makes it an ideal location for testing scalable energy technologies including smart grid design, wave and tidal power generation and algae fuel production. In brief, opportunities abound. X

Gary Neville,s Passion for Malta CURIOSITY

Events

25/06/2010 - 28/06/2010 Marsovin Wine Festival Hastings Gardens, Valletta

www.maltaenterprise.com telecommunications services. Air transportation has been made a priority making Malta better connected to the rest of the EU than many other member states. The country also enjoys impressive port and transhipment facilities with eďŹ&#x192;ciency levels at the Freeport reaching record highs in 2009. Moreover, continued heavy investment in a 300-metre expansion of the quay will accommodate vessels of even greater capacity.

At the same time, the government has recognised the importance of investing in tertiary training in order to consolidate the connection between industry, education and workforce development. Maltaâ&#x20AC;&#x2122;s future economic advancement rests on the transition to higher value-added opportunities founded on a knowledge-based economy. As such, Malta College of Arts, Science & Technology (MCAST) has been further developed to improve the technical skills of the workforce and now commands a strong reputation in the private sector.

This readiness and responsiveness to market trends adds to the competitive advantages of the countryâ&#x20AC;&#x2122;s business climate.

Lufthansa Technik ostensibly recognized this potential when, back in 2003, it chose Malta as a base for a new venture. In addition, the countryâ&#x20AC;&#x2122;s recent success in landing SR Technics, (another aircraft repair and maintenance company which sealed a deal to service easyJetâ&#x20AC;&#x2122;s fleet in Malta), is testament to the calibre of Malta as a â&#x20AC;&#x153;high skill and high value-addedâ&#x20AC;? commercial proposition. As James Stewart, SR Technicsâ&#x20AC;&#x2122; CEO, puts it, â&#x20AC;&#x153;In todayâ&#x20AC;&#x2122;s market, delivering the highest quality at the most attractive commercial terms is no longer a contradiction: itâ&#x20AC;&#x2122;s a must.â&#x20AC;?

Alan Camilleri, the Chairman of Malta Enterprise â&#x20AC;&#x201C; the government agency responsible for attracting inward investment and supporting enterprise in Malta - explains, â&#x20AC;&#x153;SR Technics wanted to set up at a lower cost location whilst at the same time maintaining the intricate and exacting standards required of the aerospace industry. Malta was picked from over 53 countries.â&#x20AC;?

Cor Vrieswijk, Operations Director of easyJet whose planes will shortly be serviced on the island by SR Technics, echoes this sentiment, â&#x20AC;&#x153;Malta has shown itself to be very competitive in the international market, by the very businesslike and swift approach of the Maltese government, as well as the quality of the workforce. easyJet was impressed with the Maltese education

system that shall be responsible for providing the highly qualified engineers for the maintenance facility.â&#x20AC;? Vrieswijk continues, â&#x20AC;&#x153;From a business point of view I was encouraged by the meetings I had with several business leaders. Without exception, they were positive about the work ethos of the Maltese and the engagement of the government. Now the SRT maintenance facility is a fact, I can fully support these positive opinions.â&#x20AC;?

Referring to the lengths that Malta Enterprise was prepared to go to in order to facilitate SR Technicsâ&#x20AC;&#x2122; investment decision Camilleri was absolute, â&#x20AC;&#x153;Three years ago Malta didnâ&#x20AC;&#x2122;t have an avionics faculty, it didnâ&#x20AC;&#x2122;t even have a college in which to train airline maintenance technicians. Yet in just 36 months, we have managed to produce 500 qualified staďŹ&#x20AC;. This didnâ&#x20AC;&#x2122;t happen by chance. We sat down with the institutions, we supported them by setting up the faculties and we got the strategic partners to be able to certify these faculties for the European and global standards for the airline industry. Then we incentivised students to take up these courses, because these were the requirements by industry and we managed to deliver.â&#x20AC;?

This achievement is typical of the overall approach in Malta, as Camilleri elucidates, â&#x20AC;&#x153;I think that the secret of our success is that we are small so we can listen then act and we do this in a relatively short period of time. Structures are not very vertical; people are encouraged to take decisions. People like the ministers and me are very accessible. We can understand the beat and then we beat the drum!â&#x20AC;?

Further proof of this was the governmentâ&#x20AC;&#x2122;s tailor-made approach to dealing with the fallout of the recent global financial crisis. Instead of implementing blanket measures in the form of general â&#x20AC;&#x153;stimulus packagesâ&#x20AC;? like a number of other sophisticated economies, the government convened with individual institutions that were suďŹ&#x20AC;ering the eďŹ&#x20AC;ects or needed to downsize due to decreased demand. Together, in partnership with businesses (both local and international) the government took a proactive approach to safeguard jobs by providing funds for retraining.

Stainless Steel Products Ltd, a subsidiary in Malta of the Bradford-based Jacuzzi UK, was one such company to benefit from this close collaboration with the government. According to Camilleri, when business then started picking up again, investors appreciated how supportive the government had been and half the companies they had assisted in the past six months have since increased their investments in Malta.

Today the diversity of Maltaâ&#x20AC;&#x2122;s economic activity is impressive, spanning numerous sectors including pharmaceuticals, mechanical engineering, electronics, maritime products, biomedical equipment, rubber, plastics, packaging and security systems. The ever-increasing tertiary sector often takes advantage of the multilingual workforce and Malta has recently become home to several back oďŹ&#x192;ce services and call centre operations for a number of large multinationals.

Malta is also strong when it comes to international trade.

Its competitive edge as a supplier is not merely its proximity to Europe, North Africa and the Middle East, but also its reputation for quality and reliability. Maltese companies tend to be large enough to cope with substantial orders, yet small and flexible enough to care for their clients and respond to their requirements with short lead times and quick deliveries.

24/07/2010 Joseph Calleja in Concert with Claudio Baglioni and Dionne Warwick The Granaries, Floriana 03/08/2010 Rod Stewart Live in Concert The Granaries, Floriana 25/09/2010 Notte Bianca Festival Valletta 08/10/2010 - 10/10/2010 Birgufest Vittoriosa 16/10/2010 - 23/10/2010 The Rolex Middle Sea Race Grand Harbour

For further details or more events go to www.visitmalta.com

Consulting in collaboration with private & public sector entities, Image Diplomacy produces a range of special features.

DISCOVER HOW ID CAN GET YOUR MESSAGE ACROSS Ăş LQIR#LPDJHGLSORPDF\ FRP

Granted an exclusive interview with Gary Neville at Maltaâ&#x20AC;&#x2122;s Radisson Blu Resort, Image Diplomacy discovers why the world-renowned footballer is such a frequent visitor to the islands and why his passion led him to invest in Island Hotels.

Gary you have been coming to Malta for 18 years â&#x20AC;&#x201C; what are your recollections of your first visit?

Originally, I came here with David Beckham, Chris Casper and Ben Thornley because Malta is home to the oldest Manchester United Supporters Club in the world. When I arrived, I just thought Malta was an incredible place - the people were so friendly. Iâ&#x20AC;&#x2122;d never come across such genuine hospitality anywhere else. Back then I wasnâ&#x20AC;&#x2122;t a famous football player, I was just a youth team player and nobody had ever heard of me. However, I was treated the same way as a member of the first team.

On a personal level, I liked the fact that the Maltese people spoke English and that they had some English habits and traits out here. It made me feel comfortable. It was a great experience and since then I have come back every year at least once and even two, three or four times a year when I can.

Many people donâ&#x20AC;&#x2122;t realise that Malta is less than 3 hours away from the UK with regular flights out of most UK airports. I bought property over here and now I come over not only for family holidays, but also for business because I recognise the excellent opportunities that exist in Malta.

I think the Governmentâ&#x20AC;&#x2122;s Vision for 2015 is achievable but itâ&#x20AC;&#x2122;s just 5 years from now. Malta already has incredible traditional buildings with beautiful Roman architecture and a twist of English in there but currently it lacks an iconic development. Making Malta a destination of higher quality tourism builds would probably put the country on the map in the same way the Burj Al Arab did for Dubai.

You obviously love Malta but in a few words how would you currently define the archipelago as a destination?

My view on the island is that it is like an uncut diamond - it just needs polishing around the edges. One development that aims to add shine to the country is Island Hotels Groupâ&#x20AC;&#x2122;s project, â&#x20AC;&#x153;Hal Ferhâ&#x20AC;?. UK architects, Ken Shuttleworth and his team have drawn up concept plans for the 85,000square metre tract of land near the Radisson Blu Resort & Spa in Golden Sands. I sit on the board of Island Hotels and share many of the companyâ&#x20AC;&#x2122;s visions. The CEO, Winston J Zahra intends to create exclusive accommodation in a private oasis thereby setting a new standard of luxury in Maltaâ&#x20AC;&#x2122;s tourism sector. Moreover, in its aim to come as close to carbon neutrality as possible the design will pave the way for environmentally sustainable developments. This is an exciting time for Malta as it becomes a 21st century destination. X

One of those excellent opportunities is presumably Island Hotels. You not only invested in the company but you also sit on the board. What led you to get involved with the Group?

The Zahra family who founded the company were very ambitious. They had great optimism and enthusiasm about their future plans for the Group. After coming to Malta for 18 years, I also felt that the country was under-performing in the tourism sector and I realised that it had so much more to oďŹ&#x20AC;er. Malta is unique â&#x20AC;&#x201C; it is a fantastic location with great weather, history and culture all in one place.

People in the UK probably do not appreciate how many incredible natural attractions there are in the islands of Malta, Gozo and Comino. However, I believe the vision of Malta is to improve perceptions and create a centre of excellence for tourism. I do think there needs to be a change in mentality and I felt that Island Hotels Group was going to assist in the ultimate goal of achieving that. Some of the developments Island Hotels Group plans to undertake in the coming years will definitely enable them to accomplish this mission.

Malta already attracts many super yachts and itâ&#x20AC;&#x2122;s a location with great Mediterranean cuisine that could compete with Monaco or Marbella. Personally, I would choose Malta every time because of the wealth of culture, history and tradition as well as the delicious food and the amazing people. Malta just needs to be open to rising to the challenge by creating more pioneering, quality developments to further cater for the expectations of high-end visitors.

Malta is truly your Mediterranean gateway for business and leisure www.thincmalta.com

The concept design for the Hal-Ferh project

malta