Malta has come a long way from being a strategic landmark to a strategic location in today’s globalized business community. When it obtained its independence from Great Britain in 1964, Malta had to transform its economy from one based on military spending by foreign powers in Malta to a peace-time economy. Manufacturing and tourism were the first industries to emerge, but today the Maltese Islands are exploiting their strategic presence in the center of the Mediterranean with the concept of being a hub for sectors such as tourism, financial services, transport, and telecommunications.
In the early 1990s, Malta moved from being offshore to an international jurisdiction. The island nation has completed a program of reforming its finance sector legislation in line with international best practice and was one of the first six countries in the world to reach an advanced accord on fiscal matters with the Organisation for Economic Co-operation and Development (OECD). As a result of this agreement, Malta is not considered as a tax haven and is actively involved with the EU, the OECD and the Commonwealth in modeling global regulatory policy.
Malta’s finance industry has significantly benefited from the country’s national policy of moving to the mainstream. Financial services are the fastest growing sector of the Maltese economy and one of the most important employers of trained professional staff, who are multilingual, with Maltese and English being the primary languages but German, Italian and Spanish also being widely spoken. Malta has been assessed and promoted as a quality financial center based on a number of factors such as the attractiveness, competitiveness, reliability and consistency when customers do business in Malta.
Today, Malta has gained international recognition as a brand denoting excellence in financial services. With attributes based on cost, tax and human resource effectiveness, it provides financial services operators with an EU-compliant, yet flexible domicile.
During the past four decades, Malta has notched up an impressive record in attracting foreign investors as it can offer exceptional advantages in various sectors, which include: financial services, ICT, electronics, knowledge centre/back Office services, generic pharmaceuticals, oil and gas, maritime, training and education, gaming, aviation and the film industry.
Maltese tax law provides an interesting tax regime for the conduct of international business activities from Malta. While all Maltese companies are taxable at the rate of 35% at a corporate level, the operation of a full imputation system of tax refunds to shareholders provides the possibility of an effective low/nil Maltese tax burden for shareholders receiving distributions of profits from such activities from Maltese companies.
The Maltese workforce is highly educated, motivated, flexible and multilingual. The link between education and industry is vital for the country’s competitiveness. The strength in the local education system and ongoing training in all sectors is a competitive element for choosing Malta as an investment destination. Malta boasts a high level of business service professionals in all areas, including accountancy, law, management, finance, ICT, and medicine.
The University of Malta dates back to 1592 and is one of the oldest universities in Europe. Malta provides education up to secondary level free of charge in state schools, while private schools or foundations are on a fee basis. Tertiary education provided by the University of Malta is also free of charge. This guarantees a steady flow of professionals within the accountancy, legal and financial management, and consultancy sectors.
The Employment and Training Corporation (ETC) is the governmental employment agency. The Maltese Government provides a number of financial and social incentives in order to encourage female labour market participation. Employment legislation in Malta is modeled on EU directives. The first six months of employment are a probationary period. The Maltese law provides for twenty-four days paid annual leave, apart from maternity, paternity and bereavement leave. Employers must pay an annual statutory bonus to full-time employees, while part-timers are entitled to a pro-rata payment. Social security contributions are payable according to the salary and salary tax is calculated using the Final Settlement System, influenced by factors such as marital status and applicable tax rates. Third Country Nationals require a work permit prior to commencing employment in Malta. EU nationals [except citizens of Croatia], EEA and Swiss nationals do not require an employment license to work in Malta.