Malta Told To Supervise International Insurance Businesses By EC

The European Commission has issued its 2017 country-specific recommendations setting out its economic policy guidance for individual countries for the next 12 to 18 months.

The financial system in Malta is characterised by a significant number of foreign institutions attracted, among other factors, by the favourable tax environment.

Malta is the only EU Member State utilising the full imputation system of company taxation and it offers a refundable tax credit scheme. It has an extensive network of double taxation treaties, and it has an attractive tax residency status for individuals.

The supervision of international banks and insurers is challenging. The sector carries out most of its activities outside Malta.

The ability of a relatively small supervisory authority to oversee a large system in the insurance sector is under pressure.

The Malta Financial Services Authority has recently requested the withdrawal of the banking licence of a small online banking provider that mostly collects deposits outside Malta.

Hundreds of insurance insurers have a presence in the Mediterranean state.

Ian Youngman, author of Brexit and Insurance says, "The EC is concerned that Malta is becoming a tax haven but without the ability to properly supervise insurers that have access to all of the EU."

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