Malta's financial services sector is thriving. Bolstered by the island's strategic Mediterranean location, its coveted EU membership, and an agile, well-regulated, and business-friendly environment, the industry has grown to the point that it accounts for more than 8% of the country's GDP.
In a recent feature published by The Intelligent Investorin partnership with TIME, Kenneth Farrugia, CEO of the Malta Financial Services Authority (MFSA) and Chairman of the Financial Intelligence Analysis Unit (FIAU), outlined how the jurisdiction has managed to strike a balance between maintaining an effective supervisory control framework and nurturing an innovative and competitive business climate.
A Jurisdiction That Means Business
"Malta is not tax avoidance and sunbathing," says Farrugia. "On the contrary, Malta is agile, approachable, innovative, tax competitive — but above all a place whereby effective supervision is sustainably cultured."
Under Farrugia's leadership, the MFSA has adopted a risk-based approach to supervision, pairing efficiency with effectiveness. A $20 million investment in technology is being implemented to radically streamline the MFSA's regulatory systems and digital infrastructure.
Scaling Up for the Future
The MFSA is also scaling up its workforce to 550, with plans to recruit an additional 150 specialists in areas including supervisory enforcement, data management, cybersecurity, technology, project management, and research.
Malta was among the first countries to implement a comprehensive licensing framework for virtual financial assets service providers (VASPs) in 2018 — effectively a precursor to the EU Markets in Crypto-Assets (MiCA) regime. The MFSA also established its own Financial Supervisors Academy and works closely with the University of Malta to ensure both regulators and industry have access to the expertise needed for emerging developments.
Looking Ahead
With AI reshaping fintech at breakneck speed, Farrugia is focused on expanding the capacity of Malta's financial services sector into promising but still underdeveloped segments, including Islamic bonds.
"We are a small island, but we are talented and hardworking, and we are looking to attract quality rather than quantity," he says. "For the MFSA's part, we need to continue to be leaders in innovation and efficient in all our processes — because speed to market is crucial, and we have every intention of staying ahead of the curve."
Source: Time Magazine
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