Financial Services Sector in Malta: A Comprehensive Overview
Malta’s Financial Services Sector Shows Robust Growth and Resilience
Malta’s financial services sector has been a key player in the country’s economic success since 1987. The Malta Financial Services Authority (MFSA) Annual Report highlights the sector’s robust growth of 11.8% between 2022 and 2023, contributing significantly to the country’s Gross Value Added (GVA).
The MFSA has been proactive in boosting supervisory interactions by 50% compared to the previous year, adopting a risk-based approach to focus resources on areas of greatest concern. The regulator attributes its success to its team’s expertise and commitment to staying abreast of the latest developments in the sector. With employees receiving 27,400 training hours in 2023, the MFSA’s investment in its people is evident.
The sector generated €1,251m in GVA during the year under review, showcasing its significant contribution to Malta’s economy. The number of people employed in the local financial services sector has also grown by nearly 6,500 people between 2019 and 2023, indicating a positive trend in job creation and economic growth.
FinanceMalta, a Public-Private Partnership funded mainly by the state, plays a crucial role in promoting Malta’s financial services sector. The agency organises and participates in international conferences, seminars, and roadshows to showcase Malta’s financial services industry. Malta Enterprise, another agency responsible for economic development and investment promotion, provides support and incentives to businesses in the financial services sector to encourage investment and growth.
Despite facing challenges such as being placed on the Financial Action Task Force (FATF) Grey List in June 2021, Malta’s financial services sector has demonstrated resilience and growth. The grey-listing raised concerns about Malta’s regulatory and compliance standards, but after solid regulatory reforms, the country was able to get off the list within a year.
The MFSA has been instrumental in supporting the government’s ambition to set up Blockchain and Fintech legislation, introducing frameworks such as the Notified Professional Investor Fund (PIF) and UCITS Funds. Malta offers structures like Real Estate Investment Trusts (REITs) and Special Purpose Vehicles (SPVs) to facilitate tax-attractive cross-border investments.
With a competitive tax regime, over 80 tax treaties with numerous countries, and alignment with EU standards, Malta continues to attract financial services firms looking to operate within the EU. The country’s strategic location, robust regulatory framework, and skilled workforce further enhance its position as a key player in the European financial landscape.
As Malta focuses on enhancing operational efficiency, supporting innovation, and ensuring robust supervision and enforcement, the sector is poised for continued growth and success. By fostering a conducive environment for financial services, Malta aims to strengthen its position as a hub for international businesses and investors, driving further economic growth and prosperity.
