Evander Borg discusses recent developments in the domicile.
The services sector is increasingly being regarded as the highest future contributor to the economic wellbeing of the Maltese islands. Malta's geographical location, combined with a highly skilled and flexible workforce, has led successive governments to develop further the services sector achieving remarkable results on various fronts, notably in tourism, the freeport and international business activities.
The setting up of the Malta International Business Authority (MIBA) in 1989 was part of the implementation of the government's economic strategy to establish Malta as a reputable financial and trading centre and by 1994 legislation was passed which underscored parliament's commitment to this vision of Malta. The initiatives undertaken to develop a comprehensive and integrated set of laws for the financial services ranged from the enactment of totally new laws to enhancement, amendment and consolidation of existing legislation. The new legislation included the Malta Financial Services Act which saw the setting up of the Malta Financial Services Centre (MFSC). The MSFC had conferred on it the function of the single financial service regulator in Malta for activities in investment services, insurance and international commercial financial activities. The Central Bank remained the regulator for banking activities.
New insurance legislation is presently going through the parliamentary process. Drafted on European standards, it will offer the same attractions as are already available in the other financial service sectors in Malta. Additionally, Malta also has a considerable number of double taxation treaties which complement the taxation system offering a number of opportunities for international companies operating from Malta.
In this scenario International Insurance Management Services Ltd (IIMS) operates, a wholly owned subsidiary within the Middle Sea Group. Established on 31 December 1991, the company was registered as an offshore company under the MIBA. Since establishment, IIMS has conducted a systematic and thorough marketing campaign aimed at creating an international awareness of the company and the services it offers in the management of insurance and reinsurance companies, captive insurance formation and the handling of risk management. The company's access to the experience, expertise and facilities of its parent allow it to undertake feasibility studies, company formation and licensing and company secretarial work besides outsourcing services in this specialised field. Once the new insurance legislation is in place it is likely that IIMS will intensify its efforts to offer management services to affiliated insurers or other insurance companies operating in and/or from Malta. Affiliated insurer is the term which will be used in Malta for what is more commonly called captive insurer.
The offshore regime is being replaced. In fact it has not been possible to register new offshore companies after 31 December 1996. Furthermore, the 10 year guarantee existing offshore companies enjoy will cease to have effect at the latest on 31 March 2004.
IIMS sees a very exciting future beckoning and feels very positive about this. In the words of Mario C. Grech, IIMS chairman: "Introducing another financial centre is no mean feat and will not 'happen' over the span of a few years - time is required. Malta is resolved that it will be considered as a financial centre of international repute. To ward off the mistakes made by others we shall be patient and grow gradually and this is why I feel we are doing things the right way. We have to persuade the right people in the right places in the right industries to come and visit Malta and see first hand what the country is offering and can offer. This is something that has been recognised by various international banks including the Hong Kong Shanghai Bank which set up in Malta through their Midland Bank operation. In collective investments we also find international names like Rothschild, Fidelity, Commercial Union and Barclays. They recognised the potential and saw that it was not just hyperbole that was being projected. They found substance where they were told it exists."
Evander Borg, company secretary, International Insurance Management Services Ltd.