Malta removed from FATF grey list – what does it means for establishing entities in the country?

19 August 2022 - Malta was recently upgraded by the Financial Action Task Force (FATF) after being taken off the list of Jurisdictions under Increased Monitoring, informally known as the ‘grey list’.

Malta was promoted by the FATF, an inter-governmental body tasked with tackling money laundering by highlighting ways to improve working practices, after the country made a series of changes to its approach to corporate governance.

Ending a year-long spell on the list, Malta has acted quickly to fix deficiencies in the fight against tax evasion and the way ultimate beneficiary owners were listed in the country.

Malta praised for 'significant progress' in tackling money laundering

The manner in which Malta is now combating tax evasion, including by collecting information on ultimate beneficial ownership, and sharing this with local and international authorities, are just some of the areas that it has improved over the past year.

In doing so, FATF congratulated Malta for the “significant progress” it has made in addressing the strategic anti-money laundering and counter terrorist financing deficiencies previously identified.

Malta back in the international fold, but what benefits does it offer to companies?

With Malta now off the grey list, the region is attracting attention from countries wishing to establish entities in Europe.

Malta offers a number of advantages over other jurisdictions, such as:

1. Beneficial corporate rates: Malta has the lowest effective corporate taxes in the European Union.
2. Double Taxation Treaties: Malta has signed double taxation treaties with over 70 countries, covering most of the key OECD nations and the world’s high-growth markets. This benefit acts as a tool to promote investments into Malta while ensuring tax payments take place in only one country.
3. Low Costs: Incorporation and annual fees with the Malta Business Registry are very competitive and so is the minimum share capital (€1,165) with only 20% of the issued share capital required to be paid up at incorporation stage. In addition, fees of professional service providers are significantly more attractive than the other EU Financial Services centers.
4. Competitive jurisdiction: setting up a business in Malta gives access to its highly qualified workforce at a comparatively lower expense versus other well-known financial centers across Europe.
5. English Language: English is one of the two official languages of Malta, and predominantly spoken in the Maltese Financial Services sector, making it a truly international hub.
6. Economic and Political Stability: Malta has a stable and resilient economy shown in the current (post-pandemic) global economic uncertainty.

As experts in entity life cycle management, Citco (Malta) Limited pragmatically supports corporate and fund clients in need of Maltese-related services.

To discuss your options and requirements, please contact Nicholas Trapani Galea Feriol, Director, Citco (Malta) Limited, at ntrapanigalea@citco.com