Malta’s international payments industry and globally connected finance centre are starting to catch the eye of treasury decision makers who are quickly coming to appreciate the many advantages that Malta offers their companies. The key to Malta’s appeal for treasury operations lies in its ability to provide the robust framework that global corporations need to execute their overseas strategies. Despite being a small island, Malta has one of the most open economies in the world, with a network of some 70 tax treaties, low corporate and income tax rates, and is a melting pot of multilingual talent from around the world. In addition, the island has built up a pool of accounting and legal talent, as well as tech and payment professionals that enable real-time monitoring and management of liquidity.
Hosting Global business
Increased volatility in the global economy and the growing complexity of international markets are driving companies to seek improved control, efficiency and transparency in their cash management. Malta is home to some of the global leaders in iGaming, private jet management, maritime, asset management and insurance, which have all chosen Malta to set up their regional or worldwide operations centres. As a service and export-based economy, Malta has been doing business all over the world. One of its key draws is the understanding of the cultural differences of doing business around the world. The success of these industries has attracted top- tier talent from around the world to relocate to Malta, and today treasury companies can tap into knowledgeable payment professionals as well as experienced accountants, lawyers and consultants, all of which is supported by the Big 4 accountancy firms that have long established practices in the country.
The island’s banks follow an ultra-conservative banking model and, in line with global banking trends, have been pursuing a de-risking strategy. While this is usually considered a weakness, for treasury operations the stability that comes with this approach is quite comforting. At the same time, the banks have substantial deposits and liquidity and are able to assist international corporations with short-term funding needs. While the major European forex brokers may not have an office in Malta, they are all offering their services on the island on the basis of EU passporting rights. Corporate treasurers can also turn to Malta’s thriving payments industry. The island is home to 50 companies offering new and innovative solutions that can help solve treasurers’ payment issues. From an IT supplier perspective, companies find all the big brand names on the island, while international connectivity is ensured via four submarine cables to mainland Europe. Malta’s very competitive cost-base, which is 20% lower than those of other Western European locations, has also opened the door for the island to become a player in the treasury sector.
In most cases, multinationals want a single platform that can offer them an overview of their position, and many of them have come to appreciate the advantages of a Malta company, which can be established to function as Group Treasury for related companies in Malta and abroad. For smaller corporations preferring to outsource treasury functions, Malta’s many accountancy firms offer a full range of financial management and transaction services to their clients. Cash pooling, leasing arrangements, asset management, risk management and payment services can all be procured from the same treasury service, whether the client is a single entity or a group of companies.
Although many believe that the country still has some way to go to establish itself as a world-class treasury centre location, Malta’s location between Europe and North Africa makes it attractive for emerging market multinationals and companies expanding into regions such as North Africa and the Middle East that are seeking a sophisticated, safe and stable financial centre to base their treasury operations.