valletta triton

Thanks to recent efforts to tighten its compliance framework, together with foresighted regulation of emerging fields and a native proficiency in both finance and tech, the Maltese financial sector today finds itself in pole position as a major stakeholder in the sweeping changes affecting the global industry.

From the rise of electronic payment solutions to the sometimes baffling, often rocky, but always fascinating frontiers of crypto, new developments find a warm reception in Malta’s sun-bleached shores.

There is much to attract traditional institutions too, whether that is the potential as a launching pad for investment in Africa’s growing economy or from where non-EU finance companies can penetrate the European market, or as a tax-efficient jurisdiction in which banks can concentrate their activities in areas like trade and project finance.

Many factors contribute to Malta’s continued success in this sector.

Although the world of finance is increasingly digital, geography is not unimportant, and the country’s location in the middle of Mediterranean at the crossroads of the affluent parts of Europe and the Middle East, and the rapidly developing Eastern Europe and North and sub-Saharan Africa make it a convenient springboard for many outfits with an international focus.

As a European Union member state, investors can rest assured of the highest standards of legal protection as well as full access to European markets.

Many of the attractions noted elsewhere, like a stable political environment and economy, pro-market tendencies, and an English-proficient workforce, are just as, if not more, important in the financial sector.

These jurisdictional assets are coupled with a well-developed financial support infrastructure that is ready to assist every kind of investment. Due to the highly regulated landscape, investors in this sector are encouraged to bring on board Maltese service providers to ensure beneficial and fully compliant set-ups. Such service providers typically offer a holistic service, from actuarial services to audit to merger and acquisition advice. Many foreign investors, impressed by the acumen shown by local companies, go on to use their services in other ventures.

Sharp operators were quick to realise and take advantage of the opportunities created by the remarkable economic and population growth experienced in recent years.

The number of commercial banks, for example, has ballooned from just four at the turn of the millennium to some 25 today, along with a host of other licensed credit and payments institutions.

Even with such a rapid influx of financial players, the sector is nowhere near saturation point, with several niches ripe for investment. These include, among many others, custodian banks, project finance, and fintech initiatives, the last of which are bolstered with special regulatory frameworks and dedicated institutions.

Banking on Tradition

Credit for Malta’s position as a financial hub is due in large part to the sound approaches taken by its banks, which are among the safest and most liquid in Europe, allowing them to weather the financial and debt crises of a decade ago and allowing the country to emerge unscathed, cementing its reputation among the safest jurisdictions.

Banking legislation is founded on EU precepts and compliant with the Basel Core Principles, while supervision is conducted by the MFSA (or the European Central Bank in the case of the largest and most structurally important ones).

The liberalisation of the banking sector in the late 20th century resulted in an influx of foreign operations setting up a base in Malta. Attracted by the country’s moderate operating costs, EU passporting rights, and the excellent quality of public and private service offered to the industry, around 25 banks and 50 financial institutions are today located in Malta, with many involved in specialist services supporting their parent banks, such as concentration of activities in areas like trade or project finance, syndicated loans, and investment banking, often holding executive responsibility for specialised areas of their group’s global operations.

Banks have always been at the heart of Malta’s economic development, and there is no shortage of opportunities for banks servicing the domestic market, with some market segments remaining under-served by current offerings, particularly smaller corporate clients and those active in areas deemed to be high-risk. Wealth management, investment services, and maritime and aviation finance are other fields prospective investors will find full of opportunity.

Digital Futures

Investors looking at Malta today see a hotbed of innovation, with a cluster of operations involved in the cutting edge of contemporary developments in digital financial solutions. The islands are home to a rapidly increasing number of enterprises involved in FinTech, RegTech, InsurTech, PayTech, and Distributed Ledger Technology (DLT), better known as blockchain.

These digital-first initiatives are drawn to Malta’s supportive stance towards technologies that have the potential of defining the next generation of finance, perhaps best exemplified with it being the first jurisdiction worldwide to set up a dedicated DLT framework.

The government is also carefully monitoring the evolution of artificial intelligence, the Internet of Things (which has seen a number of significant applications in the domestic market), and quantum technologies, with the aim of identifying policy, regulatory, and fiscal measures to strengthen its appeal as a hub for foreign investment in these emerging sectors.

The country’s value proposition for investors in these fields is further enhanced by the MFSA’s recent launch of a new regulatory sandbox, providing a controlled environment for the testing of innovative technologically-enabled business models, applications, processes, or services.

Malta’s experience in developing a global, tech-based industry and its position as a fast-growing financial centre makes it an attractive base for entrepreneurs seeking a dynamic operational hub in close proximity to contractors and investors.

The islands’ lifestyle offerings provide ample networking opportunities, making it easy for connections and collaborations to spring up. Its small population with a large proportion of expats (around 20 per cent), offering a good representation of customers from around the world, also makes it an ideal testing ground for new products and services before their eventual introduction abroad.

Meanwhile, established companies seeking economical solutions are often willing partners to new entrants, creating exciting opportunities for companies disrupting segments such as payments, insurance, investment, and compliance.

New operations will find a wealth of talent in both tech and finance, while skill gaps can be plugged efficiently through specialised schemes.

Service providers are also familiar and well-attuned to the particular needs of finance- and tech-related operations, ensuring that a vibrant and creative cluster of talent and know-how is in place to help companies manage and grow their operations.


Malta’s pitch to blockchain entrepreneurs includes one of the world’s few dedicated regulatory frameworks for Distributed Ledger Technology (DLT), Initial Coin Offerings (ICO), and virtual currencies, along with a new regulatory authority – the Malta Digital Innovation Authority (MDIA).

Both the legislation and the authority were the first of their kind globally.

The MDIA is tasked with certifying DLT platforms and smart contracts while handling the voluntary registration of technology arrangements. It works hand in hand with the MFSA, which licenses and supervises virtual financial assets exchanges, with the aim of bringing order to a previously unregulated market to ensure consumer protection and market integrity.

These factors have drawn a number of blockchain and cryptocurrency players to set up operations in Malta, from some of the largest and most well-established in search of the legitimacy and protection afforded by a regulated EU jurisdiction, to start-ups looking for an environment conducive to their growth.

This feature was first carried in the Malta Invest 2023 edition. Malta Invest is the first-ever comprehensive international investment guide focusing on Malta as a destination. It is produced by Content House Group.

Featured Image:

Joseph Buhagiar / Unsplash


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