Malta is a Southern European island country, located in an archipelago in the Mediterranean Sea. Malta is a member of the European Union since 2004 and of the Economic Monetary Union (Eurozone) since 2008.
Malta is an advanced economy, possessing favourable geographic location and productive labour force. Malta's main industries are electronics, ship building and repair, construction, food and beverages, pharmaceuticals; key services sectors of the Maltese economy are tourism and aviation services, financial and information technology services.
Malta is establishing itself as an international banking centre and hub for finance in the Mediterranean region. Malta's banking sector has transformed from one having several retail banks serving the local population to a diversified landscape with domestic and foreign-controlled banks, providing a variety of solutions from traditional retail banking products to sofisticated customized private banking, wealth management and corporate banking products.
|Population (2016)||434 403 (+0.01%)|
|EU Status||member since 2004|
|National Currency||EUR (Euro) since 1 January 2008|
|Nominal GDP (2015)||8.8 bln EUR (+0.10%)|
|Nominal GDP per Capita (2015)||20 400 EUR (+0.09%)|
|Real GDP Growth (2015)||6.3 % (2014: 3.5 %)|
|CPI, MoM (Dec 2016)||0.1 % (Nov 2016: -2.2 %)|
|CPI, YoY (Dec 2016)||1.0 % (Nov 2016: 0.8 %)|
|CPI, Year Average (2016)||0.9 % (2015: 1.2 %)|
|Unemployment Rate (2015)||5.4 % (2014: 5.9 %)|
|Government Bond Yield (Dec 2016)||0.82 % (Nov 2016: 0.84 %)|
|Credit Ratings (as of Sep 2016)|
|Fitch||A||high credit quality, outlook positive|
|Moody's||A3||upper medium grade, outlook stable|
|S&P||BBB+||lower medium grade|
|Withholding Tax||0.0 - 15.0%|
|Double Taxation Agreements||72 signed agreements|
|Exchange on Request||5 signed agreements|
|Automatic Exchange||starts in September 2017|
|FATCA||IGA in effect since 16 December 2013, Model 1|
|Financial Market Development||4.4 (max 7.0)||rank: 41st out of 138 countries|
|Banks' Soundness||5.9 (max 7.0)||rank: 16th out of 138 countries|
|Deposit Guarantee Scheme|
|Maximum Protected Amount||100 000 EUR|
|Country Ceiling for Deposits|
|Local Currency (Euro)||Aaa||prime|
|Deposit Rates (Nov 2016, EUR)||0.65 % (Oct 2016: 0.62 %)|
|Banking Sector Structure|
|Number of Banks||29|
|Recent Changes (2016)||new banks: 0, closed banks: 0|
|Consolidated Assets (2015)||47 139.99 mln EUR (-9.16%)|
|Bank of Valletta (BOV)||Mediterranean Bank plc|
|HSBC Bank Malta plc||FIMbank Plc|
|Deutsche Bank (Malta) Ltd||Lombard Bank Malta plc|
|List of Banks in Malta|
Malta joined the Euro Area on 1 January 2008. The preceding national currency, Maltese lira (MTL), was replaced by Euro.
According to Eurostat, nominal GDP of Malta in 2015 was 8.8 bln EUR.
Malta outperforms the European Union in terms of real GDP growth with the average annual differential coming to 1.5% over the past 10 years (2005 - 2015). In 2015 real GDP growth was 6.3% which was above the Euro Area average (1.6%) and above the European Union average (1.9%). Real GDP growth in 2016 - 2021 are IMF's estimates.
In 2015, nominal GDP per capita in Malta was 20 400 EUR.
Malta has a below-average level of wealth in terms of per-capita GDP at purchasing power parity (PPP); this economic welfare indicator has, on average, fell behind that of the European Union by -5.5% over the past 10 years (2005 - 2015). GDP per capita at PPP in 2016 - 2021 are IMF's estimates.
According to Eurostat, inflation rate in Malta in 2016 expressed as annual percentages of average consumer prices was 0.9% which was above the Euro Area average (0.2%) and above the European Union average (0.3%). Inflation rates in 2017 - 2021 are IMF's estimates.
Withholding taxes are imposed at source of income and are often applied to dividends, interest, royalties, rent and similar payments. The rates of withholding tax are often reduced by double taxation agreements.
Withholding tax rates applied on payments of interest and dividends in Malta are shown in Table 1.
|Natural person, resident||15.0||15.0|
|Natural person, non-resident||0.0||0.0|
Double Taxation Agreement (DTA) is an agreement between two or more countries for the avoidance of double taxation.
Malta signed DTAs which already came info force with the following jurisdictions (for agreements which came into force after 01 January 2013 the date of coming into force is given in brackets):
There are also several agreements between Malta and other jurisdictions which were signed but haven't yet come into force (for agreements signed after after 01 January 2013 of signing the agreement is given in brackets):
There are 3 ways for jusrisdictions to exchange information on tax matters:
Spontaneous exchange of information is provision of information that is forseeably relevant to another party without a request being previously sent.
Tax Information Exchange Agreements (TIEAs) enable exchange of information on request relating to a specific tax investigation, either criminal or civil.
Malta signed TIEAs which already came info force with the following jurisdictions (for agreements which came into force after 01 January 2013 the date of coming into force is given in brackets):
There are also several agreements between Malta and other jurisdictions which was signed but haven't yet come into force (for agreements signed after 01 January 2013 of signing the agreement is given in brackets):
Automatic information exchange allows jurisdictions to exchange information automatically, without having a specific tax investigation.
Malta signed the automatic information exchange agreement on 29 October 2014 and committed to start the automatic information exchange in September 2017.
Foreign Account Tax Compliance Act (FATCA) which became law in the United States in March 2010, focuses on reporting made by foreign financial institutions about financial accounts held by US taxpayers or foreign entities in which US taxpayers hold a substantial ownership interest. The FATCA-reporting is facilitated by Intergovernmental Agreements (IGAs).
Malta has FATCA agreement with the U.S. in effect since 16 December 2013 (Intergovernmental Agreement Model 1). Financial institutions operating in Malta are required to identify U.S. taxpayers by January 1, 2017 and to report the information for 2017 and the subsequent years. The agreement is reciprocal: Maltese financial accounts hold in U.S. financial institutions will be reported to Maltese authorities.
FATCA and European countries
According to World Economic Forum's Global Competitiveness Report 2016-2017, financial market development in Malta is scored 4.4 out of maximum 7.0 and ranked 41st out of 138 analysed economies. Soundness of banks is scored 5.9 bringing Malta into the 16th place, trustworthiness and confidence of financial market is scored 4.5 (51st place).
Deposit Guarantee Schemes compensate certain deposits held by depositors of a bank that becomes unable to meet its obligations.
From a depositor's point of view it is important to know:
All these details about deposit guarantee scheme in Malta are summarised in Table 2.
|Scheme Participants||all credit institutions operating in Malta, branches of non-EEA banks, branches of Maltese banks abroad|
|Scheme Exemptions||branches of EEA-banks (covered by their home countries)|
|Covered Accounts||most types of deposit are covered, including current, deposit and savings accounts|
|Maximum Protected Amount||100 000 EUR|
|Paid In Currency||in the same currency as the deposit|
Table 2. Deposit guarantee scheme in Malta.
EEA stands for European Economic Area and consists of all EU member states plus Liechtenstein, Norway and Iceland.
Deposit Guarantee Schemes in Europe
Moody's country ceilings for deposits specify the highest rating that can be assigned to local- or foreign- currency denominated deposit obligations of a bank or other deposit taking institution domiciled within that country.
Local currency (Euro) deposit ceiling for Malta is set to Aaa (prime), foreign currency deposit ceiling is Aaa (prime).
Compare Bank Deposits in Malta
Currently there are 29 credit institutions operating in Malta.
Recent structural changes (2013 - 2016) of the banking sector of Malta are summarised in Table 3.
|Number of Opened Banks||0||3||2||0|
|Number of Closed Banks||0||3||1||0|
Table 3. Recent structural changes in the banking sector of Malta.
All the credit institutions operating in Malta can be classified into several categories. Table 4 summarises the number of banks in each category.
|Category||Number of Banks|
|Branches of foreign banks||3|
The list of the most recently opened banks in Malta is provided in Table 5.
There are 3 branches of foreign banks from 2 different countries in Malta. Table 6 shows the number of branches grouped by the country of origin.
|Country of Origin||Number of Branches|