For those readers unfamiliar with Malta, it's a tiny island in the middle of the Mediterranean Sea with a population of approximately 400,000 people. Malta has been a member of the European Union since 2004 and has been actively regulating iGaming since.
Malta - A Global iGaming Player and Proactive Regulator
Over the years, Malta has taken important and substantial steps to establish itself as a global player in the iGaming industry and this is mostly due to the unique combination of a multi-lingual workforce, a strong legal system, a strong business development mindset, a stable government and most importantly a proactive regulator. The Malta Gaming Authority (MGA) has over the past years successfully established itself as a leading and serious EU regulator where till the end of 2015, more than 300 companies holding over 400 licenses opted to be regulated by the Malta Gaming Authority.
iGaming operators generate around 10% of Malta's GDP
Today, Malta hosts some of the largest iGaming operators on the market which together generate around 10% of Malta's GDP. The success of Malta's thriving industry over the past few years is primarily due to sound regulation, however, its recent exponential growth also boils down to the services that now surround the industry itself. Since Malta is becoming ever more reliant on financial services, a trained and ever-increasing workforce in the sector is pushing more growth. This growth is being witnessed across the whole spectrum including the setting up of funds on the island, licensing of electronic money institutions, iGaming licensing, yacht and aircraft registration as well as different residency schemes. In any business one operates in, we agree that it is people that make the difference and Malta is no different. People are therefore one key element to the island's eco-system.
Highly-Qualified Tax Scheme for the Gaming Industry
The importance of a well-trained and educated workforce is paramount and both the government and the Malta Gaming Authority have introduced various schemes to both attract foreign highly-qualified people to the island but also to train locals. The Malta Gaming Authority has also recently established the Malta Gaming Academy with the aim of offering local and foreign students the opportunity to develop the necessary skills for a career in the iGaming industry. The plan is to create an independent educational institution as a public private partnership to provide increased opportunities for local and foreign individuals to enter the industry by offering tailor-made courses in line with the gaming industry's needs.
This increase in human resources has also driven growth in the Maltese real estate industry increasing demand for quality rental properties. Big names in the international Real Estate Market, namely, Sotheby's International Realty, Coldwell Banker, Engel & Volkers and Remax have established themselves well in a thriving market fuelled by an incredible demand and appetite for quality projects. The real estate operators are therefore also important to the eco-system on the island and do form an important part of it.
Operators setting up in Malta are always quite impressed with the level of technology the island can deliver. The island has a solid and sound infrastructure and is extremely well connected to the Internet via a number of resilient submarine cables. These multiple fiber routes enable a 24/7, 365 day operation for some of the largest players in the iGaming industry. The iGaming industry is the major market for data centres on Malta and the majority of these employ highly-trained, talented people.
A Competitive Tax System and Other Reasons to Opt for Malta
On the corporate side of things, Maltese corporate service providers have also played a crucial role in the growth of the iGaming industry in Malta. Setting up business or setting up a company in Malta provides an effective, EU-based solution. Malta's competitive tax system, extensive network of Double Taxation Agreements (DTAs), and its English-speaking educated workforce make it an increasingly popular business vehicle for companies from all over the world to register a company in Malta. Whether one is in need for a Malta holding company (to be used as part of an effective asset-holding structure), a Malta trading company, a ship-owning company, an investment vehicle or a captive insurance company, Malta provides several solutions to accommodate such requirements. Maltese CSP's also carry out many functions for iGaming operators including MGA iGaming license applications, payroll, accountancy work, VAT and tax returns, directorship services, secretarial services and also tax advice on the structuring of client business across the globe. Mergers and acquisitions across the industry have also affected many Maltese structures with legal and financial due diligence being carried out by local legal counsel too. Corporate services providers (CSP's) are also very instrumental in the setting-up of licensees banking requirements and this also is a feather in Malta's cap. Over the years, the growth of the financial srvices industry has likewise seen the growth in banking options on the island. Although the due diligence process might take some time, Maltese banks are entertaining iGaming business too.
The 'Freedom of Establishment' Principle
An important EU development over recent years was the introduction of EU national licencing regimes. Initially seen as a threat to Malta's lucrative iGaming industry, it has actually turned out to be quite the opposite as many operators are now using Malta as their operational base servicing multiple jurisdictions. The 'freedom of establishment principle' has also helped in allowing Maltese corporate vehicles to apply for other EU licensces. It's true that the days where one licence fits all are over, however, the ancillary services that an operator needs in the EU are the same as those it has on Malta. Maltese licencees are hence locating their global headquarters on the island.
Other key players in Malta's eco-system are of course the various groups and councils set-up to represent operators. In order to also offer a voice to operators, the Malta Remote Gaming Council was set-up in 2005 under an initiative of the gaming authority. The Council consists of all stakeholders in the remote gaming industry including licensed operators, data carriers, internet service providers, lawyers and professional services providers with its main objective being to serve as an ongoing discussion forum. Recently, the Malta Chamber of Commerce also set-up its iGaming council and they also represent some large operators.
Enhancing the Regulatory Framework
Since the iGaming industry is very much technology and product driven, the challenge that now faces Malta is its ability to adapt to new market conditions. Regulations enacted in 2004 have served the industry well; however, technology has advanced in leaps and bounds. The current authority chairman has taken a serious pro-active approach to this; undergoing consultations with industry stakeholders to gain recommendations and opinions in order to further improve the regulatory framework. Innovation here is key and Malta seems to have this in abundance. Malta has become the default choice for operators looking to establish themselves in a serious regulated environment, however, in reality Malta's success stems from the different members of its eco-system which give it the right environment to thrive.
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