News | Wednesday, 27 January 2010

Malta on the frontline to benefit from managers’ exodus from London taxes

Karl Stagno-Navarra

Malta has managed to establish itself on the frontline to benefit from a reported ‘exodus’ of multi-million Hedge Funds from overtaxed London, while also attracting the interest for relocation of numerous managers.
Financial services operators have confirmed a “surge” in requests for assistance in relocating HedgeFunds to Malta, with a significant number already registering their set-up with the Malta Financial Services Authority (MFSA).
As from January 1, the British government has imposed a 50% top rate on anyone earning more than GBP150,000 (€167,000), as well as limiting tax-friendly pension contributions. Coming on top of changes to tax rules for so-called “non-doms” – generally wealthy individuals who are resident in a country but claim their domicile is overseas – has made Britain boast one of the toughest tax regimes in Europe.
Malta’s High Commissioner in London Joe Zammit Tabona is reportedly handling direct one-to-one meetings with senior managers from reputed financial institutions.
“It’s looking positive, but we still need to work harder and surely even more concertedly in order to secure investment to Malta,” Zammit Tabona said when contacted in London.
He stressed that while the British media is indicating this interest in Malta by City managers, there is still a lot of work to do to attract even further investments.
It is becoming more obvious that while bankers are moving from London to Geneva and Hong Kong, managers are seeking relocation to Malta.
Ian Casolani, President of the Federation of Real Estate Agents told MaltaToday that his members have reported an increase in enquiries for high-end properties, both commercial and residential.
“It is still a little bit early to speak about concluded deals, but I can confirm that we are receiving plenty of enquiries,” Casolani said.
The Maltese government has pledged its full support to all stakeholders in a bid to secure the capital that is apparently flowing out of London, and is expected to announce the setting up of a task-force that will include officials from the MFSA, The Tourism Authority, Malta Enterprise, the Federation of Real Estate Agents and other commercial organizations to give presentations in some of London’s luxury hotels to interested parties.
In this quest, Malta is in direct competition with Switzerland, Monaco and Hong Kong.
Dozens of UK hedge funds have already decamped to Geneva, Zurich and other Swiss cantons in recent months, following a marketing push that has also included presentations in top London hotels.
Half of the world’s top 100 banks have a presence in Britain, as well as 67 per cent of its largest asset managers and 45% of top insurers, according to a recent report by the UK Treasury. London registers foreign exchange turnover of US $1.680bn daily, a 35% global share, along with 40% of the world’s over-the-counter derivatives business, 70% of all eurobond turnover and 55 per cent of international initial public offerings.
Britain is also home to least 80% of Europe’s US $400bn in hedge fund assets and about 60% of its private equity firms, as the second largest alternative investment hub in the world after the US. Meanwhile the latest projections from City economists show the business and financial services sector has grown substantially over the last years to employ almost 1.60 million.
Since the UK supertax on bonuses started to be felt, banks have been trying to work out which parts of their business could be shifted to other countries. Functions that could move without much disruption include asset management, mergers and acquisitions and some parts of debt and equity capital markets, experts have said.



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27 January 2010


Malta Today


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