2,479 new companies were set up ion Malta last year, making it a record year for the establishment of new businesses. The rise represents an 11 per cent increase over 2004 and a remarkable 45 to 50 per cent surge over other previous years.
The figures were revealed by Prime Minister Lawrence Gonzi while inaugurating the new premises of the Malta Financial Services Authority’s Registry of Companies on Friday. The occasion also served for the 19th anniversary of the opening of the MFSA premises. He adds that out of the 2,500-odd companies set up last year, 985 are fully or partly owned by foreign shareholders.
Dr Gonzi also had an upbeat tone for the financial services sector. He explains, “In the finance sector, the signs are also very encouraging. A number of credit and financial institutions have applied for licences to locate some of their European activity in Malta, while others have shown serious intent to do the same in the near future. This year, we have also started with an encouraging number of international insurance managers actively engaged in discussions to start operating here.
“There are currently some 15 foreign companies planning to provide insurance products and services into European markets through a Maltese licensed company in the wake of the EU Insurance Mediation Directive which has just been brought into force.”
Last year also saw a breakthrough in the licensing of professional investment funds, with nine being licensed by the MFSA the course of last year, drawing on services provided by other firms based in Malta, London, Dublin, Frankfurt, Vienna and Switzerland.
“We are also experiencing the smooth repatriation of trust management company operations into our civil legal system, and in the few weeks that the new trusts legislation has been in force, the MFSA has already started to work on nine actual or potential applications for a licence to provide trustee services.
“Above all,” Dr Gonzi elaborates, “it is extremely encouraging to see Maltese entrepreneurs and professionals responding actively to these new opportunities, and a well-prepared workforce that is highly motivated by what is happening around them.”
Moving on to the issue of Malta’s pension system, Gonzi asserts that the thrust of government’s efforts over the coming months will focus on restoring to the pensions system an adequate and sustainable footing, opening up opportunities for ourselves to invest and secure income for our own future.
“The legal framework for the establishment of occupational pension schemes and third pillar pension plans is already in place largely for foreign investors. The White Paper on pensions reform concludes that this Act, the Special Funds Regulations (2002) Act, should be the instrument upon which the Second Pillar Pensions Scheme is also legislated.
“A determination on this matter will be made by the Government following the closure of the discussion process on the White Paper later this year.”
This task, which he described as ‘formidable’, will be carried out “without diverting any energy from ongoing responsibilities and new initiatives, such as increasing access to finance for our SME’s, promoting good corporate governance and developing new tools that can help our financial services sector to continue forging ahead”.
Turning more specifically to the MFSA, Dr Gonzi assets that today through the MFSA Malta enjoys a streamlined and forward-looking regulatory set-up.
“Despite the challenges which had to be faced due to the increased sophistication in the delivery of global financial services, we have succeeded in rendering our regulation a vital driver of economic growth and well-being.
“Much of the success of Malta's financial services sector is credited to its flexibility and service driven nature. People who work in the industry are well rewarded, and have career paths and ever growing opportunities to develop their skills through continuing education and training. In a nutshell, the industry is succeeding by focusing primarily on the needs of customers; a success beneficial to the whole country, translated into increased job opportunities and an added impetus to the economy. It is worth noting, that the financial services sector employs more than 5,500 people, this being considered a skill-intensive, value added industry.”
But the work is ongoing, Gonzi explains, adding that the Single Passport Rules adopted last year have put the seal of approval on Malta’s regulatory standards, and given Maltese firms the right to provide financial services across EU borders. At the same time convergence in regulatory standards has not detracted from Malta’s competitiveness as a financial centre.
“The credit for all this lies in an ongoing effort on the part of the public and private sector to develop niche opportunities relative to Malta’s size and unique characteristics. The most recent example of this is the Trust and Trustees Act recently passed by Parliament after years of research led by the MFSA and months of intensive training in the industry.
“Today’s occasion is another step towards providing the public with a quality all-round service. Yet the significance of the occasion runs even deeper than serving the public in a pleasant environment backed by impressive technology and a welcoming smile. It signifies a national strategy that is not just falling into place but growing beautifully. And we are here to carve out another notch on the crossbeam that upholds it.”