Malta’s financial services sector has come a long way since the financial, legal and regulatory framework was overhauled in 1994. Although numerous countries have seen a decline in the number of finance careers up for grabs, Malta has witnessed modest growth and is today recognised for excellence in financial services.

See also: Finance jobs in Malta

The financial services sector represents a major force in the Maltese economy, contributing 12 percent of GDP and employing 8,900 people. In addition, approximately 400 funds, 108 trustee services companies, 52 insurance operations, 25 banks and numerous outfits support the industry. This success can be clearly attributed to the Malta Financial Services Authority as well as the high level of professionalism of service providers.

Malta’s Financial Services Sector within a global context

Although not considered a tax haven, Malta offers numerous tax incentives. In a 2008, Forbes Tax and Misery report, Malta ranked 1st as the most attractive EU country for taxes and social security contributions paid out by companies. Whilst companies are taxed at a flat rate of 35 percent, the overall tax payable may be substantially reduced - often to as little as 5 percent - by applying to the refundable tax credit system. Malta has also concluded over 50 double taxation agreements with various countries, so firms can obtain substantial tax relief either by applying these treaties or by direct application of Maltese legislative provisions.

Apart from the enticing tax rates, there are a number of other reasons why Malta has proven to be more cost effective when compared to other EU jurisdictions. Company incorporation and maintenance costs, as well as professional fees, are significantly lower, while Malta’s professionals have an excellent international reputation.

Malta has an EU-compliant and tax efficient framework. Today its credentials in the sector extend even beyond the EU’s borders. The World Economic Forum‘s Global Competitiveness Report 2010-11 ranked Malta’s Financial Market Development 11th out of 139 countries, up two places from 2009. It also ranked Malta’s banking system as the 10th soundest, three places up from 2009, which is enviable given the current global financial climate.

Over the last couple of years, the international financial services market has encountered significant challenges and while Malta has not been immune to the ramifications of the global crisis, the impact on the local economy has been fairly moderate. Notwithstanding a dip in numbers between 2008 and 2009, over the past six years there has been stubbornly consistent growth.

Sector Overview

Local players in banking have in the main managed to avoid much of the troubles which hit a large number of players in the EU and US – mostly thanks to the risk averse and collateral centric banking culture. HSBC and Bank of Valletta (BOV) have registered strong growth in their pre-tax profits. With BOV announcing pre-tax profits of €98.9 million, an increase of 21% percent on 2009, one can only expect continued strengthening of the sector. Malta, in terms of foreign representation, now has a total of 25 credit institutions globally, the majority of which are from the EU.

Historically the local banking sector has grown its own talent internally, employing University and MCAST graduates and cultivating their skills through both formal and on-the-job training. New institutions and a buoyant market, have allowed for increased mobility in this sector. Smaller setups usually demand more specialised skills, while recruitment in larger setups seems skewed towards client facing roles and IT skills. The latter being critical in the cost reduction strategies of most banks.

In insurance, the Times of Malta reported in January 2010 that annual gross premiums had risen to over €670 million with 80% of business geared towards the international market. In the area of captive insurance companies establish their own insurance companies with the specific objective of financing risks emanating from their parent groups – basically an in-house insurance company. Although we have seen global multinationals like Vodafone, Nissan, Peugeot, Renault explore this sub-sector there is still potential for further growth.

Career opportunities within the insurance sector tend to be highly specialised, making previous experience and qualifications essential to most employers. Although premium growth has been mainly driven by international business, employment growth has been modest and firms servicing the local market still provide the bulk of employment opportunities. Good talent is very hard to come by in insurance, furthermore the sector tends to have limited visibility for prospective job seekers. This is further accentuated by the fact that the university degree in insurance has only been established recently. With the envisaged growth, more has to be done to attract candidates to consider insurance as a valid career option. Recent campaigns by the Malta Insurance Association need to be sustained and students need to better informed on the opportunities in the sector.

The last 18 months has seen an increase in fund administrators. The skills set required is highly specialised, particularly for senior roles but, fund management firms tend to employ semi-qualified professionals, thus reducing the labour market pressures. This segment has provided a significant number of opportunities for Commerce graduates especially in fund administration.

A skill spanning all sectors is compliance. Following recent upheavals in the financial world, regulators are looking to construct a comprehensive regulatory framework. The implementation of rules and regulations, especially in Anti-Money Laundering, as well as the need for companies to comply with the regulatory complexity of the sector have led to a high demand for compliance professionals. The absence of a solid educational tradition in this area means talent is in very short supply.

Apart from employment created directly by the different sectors in the financial services industry, jobs are also generated indirectly by supporting industries. There is the positive impact on hospitality, but increasing strain has been felt in the accounting, auditing and legal fields leading to a very tight labour market, and making the availability of skills in these professions extremely limited. The exodus of these same skills to higher paid jobs elsewhere in the EU has heightened the pressure.

The way forward

Considering the incentives in place and positive growth signals in the sector, retention of market momentum is key. The lack of talent is however a key risk factor that must be addressed to ensure continued growth. Demand for accounting and legal professionals as well as for roles in company administration and compliance remains consistently high.

Although the key players in the sector recognise this risk more has to be done to entice students to choose Financial Services as their area of expertise. This is especially true when compared to the efforts that have been made locally within the ICT sector. We are in fact constantly faced with school-leavers (and their parents) who believe that IT is the only sector offering excellent opportunities. This is obviously not the case!

In terms of training, the Institute of Financial Services (Malta) and MITC seem to work closely with the Institute of Business and Commerce at MCAST and with the Faculty of Economics, Management and Accountancy (FEMA) at the University of Malta. The MFSA also organises specialised training programmes – that said more training opportunities and training providers are needed.

More has to be done to increase the awareness of alternative qualifications such as AAT and ICSA amongst others. These qualifications provide key specialisation, and although they are not as intensive as an ACCA qualification or a law degree, they provide very relevant skills to players within the industry.

All stakeholders appreciate that lack of talent intensifies the inflationary pressures on salaries, creating unwelcome disparities that in turn weaken other sectors in the economy, as talent moves to higher paid jobs within specific sectors. Malta has experienced inter-sector crowding out within iGaming as people move from traditional sectors like hospitality, manufacturing and other services into better paid jobs in iGaming.

Skills shortages are currently not hampering growth in the sector but certainly could be a risk factor as the sector continues to grow. Although the Malta Financial Services Authority and FinanceMalta have been putting resources, more needs to be done if the island is to reach its objective of becoming one of the top 5 centres where organisations are likely to set up new operations (City of London Report, 2008). We need to ensure people are making the right choices in careers and increase the varied forms of training provided. This is crucial to have sustainable employment within the Financial Services sector.


A summary of this article can be found at