Returning from a three-day estate planning seminar organised by PKF in North America, I admit to having enjoyed the ambience in San Francisco. The conference was hosted at the Grand Hyatt which is just one block away from Union Square, famed as the central hub of San Francisco’s well heeled crowd. On the second day, I represented Malta on the panel of five, including Britain, Australia, Italy and Portugal.
The topics ranged from the definition of resident, temporary-resident and non-domiciled persons to the taxes charged on high-net worth individuals by the five countries.
Britain turned out to be the least welcoming due to a recent introduction of a GBP £30,000 annual charge for those ‘non-doms’ who are staying beyond their seventh year. Again, in Britain the personal tax rate has now been revised to reach the 50 per cent mark, so definitely other countries such as Portugal and Malta stand out as more friendly places where to settle .
Various taxes were discussed such as the imposition of exit taxes, gift and inheritance taxes and in some countries the imposition of a wealth tax (typically France).
Here, Malta stood out as the most generous in its incentive tax structure aimed to attract settlers.
One may recall what we used to call during the sixties as the “six penny” settlers. They heralded the famous property boom of the late sixties which sparked a tremendous good feel factor and generated so much wealth.
Surely, during the sixties, the national finances were brimming with surpluses. 40 years later, and the island now stands as a favourite candidate to join the club of high heeled financial centres well poised to attract foreign investment.
Now with the imminent signing by the US Senate of the double tax treaty we stand to be better noticed on the North American radar screen. This is a plus factor which hopefully will be fully exploited next year by practitioners.
We have so much to offer and yet there is little awareness out there of our well kept secret which can be better exploited now more so linked to the stability of a euro zone country.
Without appearing to be seen blowing our own trumpet, PKF has over the years promoted the island in the financial services sector by offering free passes to delegates to attend overseas conferences promoting family wealth and estate planning.
Regrettably there is little encouragement from local government agencies and banks to support such initiatives but one must not give up.
Admirably, Finance Malta sponsored as a main partner a world class event covering the topic of Family Wealth Management. This seminar organised by a U.K based Camden conference organiser based in London.
Maltese taxpayers have spared no effort (and cash ) to welcome delegates as part of a three day conference of which one full day was sponsored by Finance Malta.
The venue was impressive. It took place in the Gladstone Library at number 1, Whitehall Place, London. The building was commissioned in 1884 by the National Liberal Club and designed by the famous architect Alfred Waterhouse, President of the Royal Institute of British Architects. This library housed over 30,000 books, which are now kept in trust at Bristol University and have been painstakingly replaced with wooden fascias in the exact location of the original book. Lunch was served in the Reading & Writing Room adjacent to the Library with its stunning views across the River Thames to the London Eye.
Camden offered 15 free passes to local practitioners who wished to attend and participate in promoting the island. This was grand. So I took the offer and was impressed to see a packed programme by a hand-picked coterie of local speakers representing a cross section of the legal, banking, touristic and funds management topics.
Certainly Kenneth Farrugia, chairman of Finance Malta (himself a general manager of a local banking fund management company) made sure the two main banks are well represented.
As a main sponsor Finance Malta which represents the Funds Industry Association, the College of Stockbrokers, The Banking, Insurance Associations ,and the Institute of Financial Services Practitioners is a non-profit public-private initiative set up as an autonomous Foundation.
Its board of governors and chairman are committed to promote the island in the financial services sector. The opening address by the chairman was poignant and highlighted the achievements of the economy over the past years particularly in the funds and banking sectors. More needs to be done to reach the higher levels of other competing financial centres such as Luxembourg, Dublin, Gibraltar and Switzerland but we are on the right track and with help of such seminars the island continues to be showcased to the world as an alternative and well- respected jurisdiction. Speakers that followed Kenneth’s introductory speech highlighted the advantages of investing or settling in the island.
Francis Vassallo representing Mediterranean Bank remarked strongly how during his long experience as a banker and his prestigious four year stint as a Governor of Malta’s central bank he can assure investors that the hospitality of the islanders is second to none. He jokingly referred to a story he heard about an investor visiting the Central Bank for the first time and who was misdirected by the taxi driver to the wrong address in Valletta.
When he stopped a passer-by for directions he was pleasantly surprised by the generosity of the islanders who offered to drive him to their appointment in their own car.
Francis made a point to delegates exhorting them to partake in the lucrative property market. In parenthesis he proudly mentioned how smart he was when he acquired a prestigious property in Valletta for just €233,000 (Lm100,000) enjoying breathtaking views of the Grand Harbour. After conversion, this office now houses all of his 28 staff.
The next speaker Ramona Piscopo representing a Swiss firm of lawyers gave an overview of the tax aspects concerning re-domiciliation to Malta both for individuals and for corporate clients. She was well received by the audience when particularly when she asked to compare the cost of living in Geneva and the sunnier and less expensive style in Malta.
She gave details on how a Malta-based family business can reap the benefits and opportunities. It goes with saying that the audience after listening to her detailed presentation were better informed about how families can benchmark their investment portfolios and discuss future plans to relocate to Malta.
Alan Camilleri as chairman of Malta Enterprise gave a short presentation of this government agency which aims to attract new investment while doing its best to nurture existing firms and help them to survive during a downturn. It is thanks to his zeal and hard working team that new investment is flowing.
Alan gave a number of practical examples how Malta Enterprise helped family business prosper in Malta. These included among others Toly Products, Foster Clarks and Magro Borthers.
Typically all the three started at a micro level and have grown steadily over the years as medium sized operations. The common factor seems to be that they prefer to maintain total control at the expense of limited capital growth and all welcome any help to export and secure new overseas markets. It is here that Malta Enterprise with its workforce of over 200 staff tries to intervene with authorities to speed up the paperwork for grants and assistance with EU funding.
While transgressing from a purely wealth management theme, Alan spoke briefly about the growing family of high tech sectors which now expanded into aviation repairs (Lufthansa Technic) high-end components, pharmaceuticals, medical and healthcare products.
Another growing sector are the knowledge based industries, including education, training and ICT sectors. All this is the culmination of hand-holding support by Malta Enterprise particularly in the nurturing a innovation linked mentality.
Naturally the bankers waxed lyrical on how both Bank of Valletta and HSBC give a personalised service to families and this included the bolstering of the funds industry. With more than 320 retail and PIF’s funds on issue the potential for further expansion is unlimited and one augurs that a positive climate to attract more funds is maintained. The popularity of SICAV’s as a vehicle to house both retail and professional investment funds is partly due to the favourable tax regime and the solid regulatory framework.
This is a smart initiative by Finance Malta and it is putting taxpayers money to good use in attracting new business.
Keep it up.