Malta growing as an offshore destination for funds, trusts, insurance and banks

News - Funds

Written by Ray Clancy

Wednesday, 10 February 2010 09:34

A growing number of fund managers, banks and investment trusts are looking to Malta as an option for new low or no tax bases offshore, it is claimed.

Malta is quietly gaining momentum as a financial hub, host to dozens of banks, hundreds of hedge funds and a bustling centre for insurance, trusts and sectors such as ship finance. The country joined the European Union in 2004, making it an onshore centre and bringing it under the governance of the EU regulatory regime.

Malta’s EU membership, convenient time zone, just an hour in front of London, English language and UK-influenced legal code, make it an attractive wealth management centre in many respects.

Responding to demand the Malta Financial Services Authority has published guidelines on how to re-domicile offshore funds to its jurisdiction. It provides a simple, one stop procedure to be followed by funds intending to re-domicile to the Mediterranean island.

According to the MFSA firms are attracted to Malta because of the simplicity and flexibility of its rules. The threat of new fund taxes in other jurisdictions is also thought to be a strong driver for demand, as fund managers seek new low or no tax bases which access the European market.

Interest from insurance and securities firms to re-domicile to Malta has grown since its re-domiciliation legislation came into force in 2002, said the MFSA. The laws are particularly popular because they allow transferring companies to retain the same legal personality.

Another attraction is that the regime allows firms to have external administrators and custodians, in contrast to some other offshore fund jurisdictions which require local service providers to be used.

Banking group Butterfield has launched a new service following the formation of a Corporate Services branch in Malta.

New corporate services manager Michelle Sant said that the firm intends to build on its established presence in the jurisdiction and to broaden its reach to target European and international markets.

Chief executive Malcolm Becker said it had decided to boost its operations in Malta because there had been an increased interest in the region due to its EU membership as well as its tax regime and ‘robust, flexible and approachable regulation’.

Butterfield has been establishing and administering trusts for wealthy customers since the advent of offshore trust legislation more than 70 years ago.