Malta: Postcard From Malta

Last Updated: 2 October 2018
Article by Finance Malta

The momentum of the Maltese economy shows no signs of abating. The country is well placed to become an important bridge between post-Brexit Britain and the EU, and to keep growing and diversifying. Moreover, it has embraced many of the latest digital sectors, including digital ledger technologies (blockchain) and crypto currencies.

For much of its history, Malta has been a bridge for international trade. When ships were still fuelled by coal, it was the primary refuelling port for those travelling between Europe, India and the Far East. Although its commercial and leisure maritime industries remain important – Malta has the largest shipping register in the EU and a particularly strong super-yacht industry – today, the island nation is more of a financial and digital bridge.

"Malta's financial services have boomed and now serve markets across Europe and beyond."

Since joining the EU in 2004, and adopting the euro in 2008, Malta's financial services and online gaming industries, supported by a strong ICT sector, have boomed and now service markets throughout Europe and beyond. They have been key drivers of Malta's GDP growth over the past five years, which has averaged almost 7 per cent.

Malta is working hard to maintain the momentum of existing industries and attract new ones. But being a small, densely populated group of islands – 450,000 people live in an area roughly 17 miles long by 9 miles wide – comes with constraints. So Malta has a strong focus on those areas of the digital economy that require highly skilled talent, but not in large numbers.

People first

Malta's local population is highly skilled and is complemented by a large pool of 'imported' skills. Locals enjoy free schooling and undergraduate degrees, with many conducting post-graduate studies abroad, mostly in the UK. Some expats qualify for a reduced income tax rate via a Highly Qualified Persons scheme, on top of an already attractive tax system, with no inheritance, wealth, gift, or annual property taxes.

"Malta has a Mediterranean culture with a strong British influence."

And people like working and living in Malta. Career development opportunities are good, in well-paid industries with significant exposure to international business. The lifestyle is also good, in a Mediterranean culture with a strong British influence. Ten years ago, many locals who studied abroad would have stayed abroad to start their career; now, they return after their studies. And many expats working in Malta stay for their retirement.

But existing skills are nearly fully utilised. At 3.5 per cent, Malta has the second lowest unemployment rate in the EU and has a limited pool of human resources.

So businesses need to import even more talent, which is becoming harder to accommodate. There is limited space for new property development and upgrading the existing road infrastructure is a challenge. Property prices have spiked with the influx of foreign talent and also as a result of Malta's citizenship scheme, which requires property to be purchased.

And with over two million tourists every year in addition to an expanding workforce, Malta can become very congested.

Continuing the momentum in financial services

The finance sector now makes up around 13 per cent of GDP and employs more than 10,000 people, with 4,000 of these jobs being added since joining the EU. Banking, insurance, fund management and wealth management are all strong sub-sectors.

Obvious attractions for financial services companies are EU passporting opportunities and an attractive tax regime. These are not unique to Malta, which is often compared to other European financial hubs, such as Dublin and Luxembourg. However, Malta is able to differentiate itself from these centres, and is particularly suited to some UK financial services businesses needing a post-Brexit EU base. In addition to its EU membership, Malta is also a member of the Commonwealth and has strong ties to North Africa and the Middle East. English is used in all business correspondence and law, alongside Maltese. Its business culture, language, and legal system make doing business in Malta relatively easy for UK firms.

"Malta is particularly suited to some UK financial services businesses needing a post-Brexit EU base."

Furthermore, Malta has a stable political and financial environment. It was largely unscathed during the financial crisis and the eurozone debt crisis, with neither its government nor its banks requiring bailouts. The regulator – the Malta Financial Services Authority – is well regarded for being approachable, quick to make decisions, and rigorous. And operating costs for financial services companies are estimated to be 20–30 per cent lower than larger European financial centres.
But Malta is not the location for all businesses . Smaller and medium sized operations, requiring high skills, are most likely to benefit; Malta is not looking to tempt large financial operations, employing thousands of people, to re-locate.

From gaming to blockchain and crypto

In 2004, Malta became the first EU country to regulate online gaming or 'iGaming'. While many countries clamped down on commercial gaming operators, often to protect national monopolies, Malta welcomed them.

Gaming companies gained the credibility that goes with regulatory scrutiny, and the legal framework to compete across Europe.

It was a masterstroke. There are now 275 iGaming companies in Malta, including many industry heavyweights, making up 10 per cent of GDP and employing nearly 6,500 people. And alongside the increasingly technology dependent financial services sector, it has helped to develop an advanced ICT sector.

Malta is now looking to do it all again, this time with blockchain technologies and crypto-currencies.

"Malta is providing a regulatory framework to govern and support blockchain and crypto-currencies."

Once again, it's a contrarian approach. While some countries have shunned these sectors, Malta is providing a regulatory framework to govern and support them in order to help them build credibility and grow. New legislation was approved by the Maltese parliament on the 4th July 2018.

The 'Malta Digital Innovation Authority' (MDIA) is to be established, which will have a mandate to promote and develop innovative technologies. Initially, it will register and license providers of technologies such as distributed ledgers (blockchain) and smart contracts, so they can roll out their services in a regulated environment, removing a barrier to adoption. In the future, the mandate of the MDIA is expected to expand to other new technologies.

There is also new legislation that will govern initial coin offerings (ICOs) and crypto exchanges. Regulatory uncertainty, such as licensing requirements, has dogged this area in many countries. It has sometimes been unclear whether some 'crypto-assets' qualify as formal financial instruments, and need to be governed under existing regulations (such as MiFID II in the EU).

So Malta will now introduce a 'financial instruments test'. This will determine whether a crypto-asset qualifies as a financial instrument and should be governed by existing regulation; or should fall under the scope of new 'virtual financial asset' regulation; or not be regulated at all. Virtual financial asset regulation will govern the operations managing these new crypto assets and introduce consumer protections.

Several companies in these sectors have responded positively to the moves, and have already announced the establishment of new operations in Malta, including Binance, the largest bitcoin exchange.

For now, it's good news coming out of Malta. Speedy moves to welcome new fintech sectors and a differentiated 'bridge-into-the-EU' offering for UK businesses bode well for continued growth.

But it will take continued innovation and effort from the public and private sectors to overcome the constraints on the economy and keep the momentum.

Ramon Bondin - CEO, Dolfin Asset Services

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions