4 July 2001
The rapid development of communication and computer technology is bringing about a revolution in our business and personal lives, while the way in which we work, communicate and spend our leisure time is being continually redefined by technological advances.
The Malta Financial Services Centre has been keen to jump on board and, in fact, just recently published the first marketing brochure in its campaign to position Malta as a first choice location for the electronic management and processing of money.
The day is getting closer when e-money will pay for many daily purchases like newspapers and parking charges and for larger payments like utility bills, flights, car hire, vacations and much more.
The MFSC brochure carries the campaigns enticing marketing proposition: "Malta the worlds first dedicated e-money enterprise zone."
Barely a day goes by without coming across some mention of new developments in "electronic money". In the emerging field of electronic commerce, buzzwords such as smart cards, online banking, digital cash, and electronic checks are being used to converse about money.
Within a decade from now, many of us will spend our money with different tools than those we use today. Cash, checks and credit cards will undoubtedly still be used, but completely new payment mechanisms are expected to evolve.
Electronic money, as it is often referred to, is essentially a payment or transfer of funds which is initiated and processed electronically within current inter-bank payment systems.
Today, given the proliferation of computers, modems and modern telecommunication links, the market for electronic money products has grown immensely. Electronic money is the digital representation of money, or more accurately, the digital representation of currency.
Of course, banks have been able to move currency electronically for decades, only recently has the average consumer had the capability to use electronic transfers in any meaningful way.
The increasing power and decreasing cost of computers, coupled with the advancements in communication technology that make global interaction available at greatly reduced costs, have together made the digital transfer of funds a reality for millions around the world.
The MFSC last week kicked off a three-year e-money drive, intended to attract companies and professionals interested in utilising Malta as a base for its e-money operations.
Among the factors boosting Maltas attractiveness in the sphere, the MFSC cites the countrys multi-lingual and well-educated workforce, its high regulatory standards, e-commerce legislation, tax efficiency, financial incentives and low operating costs.
The e-moneymalta campaign will be officially launched to the world in September, while the next few weeks are expected to see the brochure being mailed to target companies and organisations in the USA and Europe.
The brochure opens with a letter to potential investors from Finance Minister John Dalli, who comments, "It is Maltas aim to make the country a first choice location for e-money operations of all kinds. The universal arrival of electronic money will be good for business and good for consumers. It will widen choice, reduce costs and stimulate competition.
"But it is early days and those who are pioneering e-money systems, processes and services need to be sure that they can identify the right location a location that delivers the best people, the right business and legal climate, the right time zone, tax efficiency and a highly competitive cost base. Malta delivers all those requirements."
A large number of Maltese organisations, including banks, fund managers, software houses and telecommunications businesses have already endorsed the MFSC campaign by providing their corporate logos for use in the brochure.
The MFSC has also launched a special website for the campaign, at www.e-moneymalta.com. The site expands on the basic information contained in the brochure and has a number of links to public and private sector organisations that potential inward investors will find helpful.
"The arrival of the brochure and web site allows us to begin to move into the market and build more contacts, experience and knowledge," explains MFSC Chairman Joe Bannister, adding, "The big push will come in September when we will announce a comprehensive programme of marketing activities and initiatives. In the meantime if any Maltese or overseas business, education or training organisations have ideas about how they can contribute to and benefit from the campaign, wed be delighted to hear from them."
The MFSC explains how in January of this year, Malta passed a comprehensive e-commerce legislation, while all e-money operations offering banking or investment services are to be regulated by the MFSC or the Central Bank.
Such regulation seeks to help financial organisations to respond quickly to market changes and develop new products, while ensuring investor protection measures and the protection of Maltas global reputation.
This particularly affects legislation governing business, the finance sector and e-commerce.
For the e-money sector the Electronic Commerce Act 2001 is perhaps the most important legislation passed in this field to date. Borrowing extensively from the best practices across the world, the Act "provides for the validity of transactions carried out and information submitted through electronic communication."
In other words, the Act provides for electronic contracts, electronic signatures and certification, data protection and responsibilities in the event of suspected or actual criminal activity. Key escrow does not apply, though the Act does make provisions for the disclosure of information necessary in the pursuit of crime.
The misuse of electronic signatures, signature creation devices and certificates, and fraud are criminal offences, as is the unlawful access or use of information and the misuse of computer hardware.
Another attraction to setting up shop here is that Malta has developed
tax and corporate structure regimes that can provide a wide range of
benefits to corporations including: double taxation treaties with 36
countries; relief of double taxation; advanced revenue rulings guaranteed
for five years; aggregation of income from all sources for tax purposes;
tax incentives for software development; digital warehousing and back
office services operations; 200 per cent deductions on building occupancy
costs for first 10 years; and 200 per cent deductions on salaries paid
to Maltese staff for first 10 years.