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Malta and its Opportunities

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Islamic Finance is a sector in the financial market which has been growing exponentially over the last few years, offering increasingly sophisticated and varied financial products that are also attracting interest from non-Muslim investors.

Although Malta is not a Muslim country, it is viewed in favourable light by most Muslim countries and is in proximity to the most attractive potential markets for Islamic Finance (i.e. Turkey, North Africa and EU-based Muslim communities), with which it has excellent relations. Malta is also in an ideal geographical location to service other countries, which is evident from the strong presence of Turkish and Austrian Banks in Malta. This strategic location also enables Malta to offer an EU jurisdiction to Shariah-compliant investments at a cost which is considerably lower than that incurred in London.

Moreover, Malta’s Tax Regime provides advantageous tax efficiency to Islamic Financial Institutions establishing in Malta as opposed to those establishing in other EU member states. This is in part due to the strong network of Double Taxation Agreements, including one with Libya, that mitigate the tax effects of certain legislations on Islamic Finance transactions.

Furthermore, the Conventional Banking sector in Malta is a mature one, having developed over a number of years. Hence, Islamic Banks establishing in Malta will have the opportunity to work in a highly reputable regime within the European Union. An Islamic Bank within such a strict regime will therefore be able to add even more credibility to Islamic Finance Institutions that would like to target Mediterranean countries. Thus, the difficulties encountered in Libya and Italy can be overcome through establishing in Malta.

Apart from this, Malta also offers an efficient cost structure with highly trained multi-lingual professionals in the financial sector. It is even considered by the World Economic Forum as the 10th Safest Country to invest in and can also cater for small funds, which no other EU jurisdiction can. Furthermore, Maltese professionals possess a multi-cultural background since Malta’s history includes both Arab and European presence on the island.

 

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