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Malta is now very much linked to the rest of the business world, and nowhere is this more evident than in the accountancy field. The major firms of auditors are all linked to international networks, and benefit greatly from that.
PKF partner George Mangion established his firm in 1988, and ten years ago joined the PKF International network. In contrast to some of the other majors, PKF is not a unitary organisation. It is an international network of independent firms, with more than 400 offices in 119 countries.
Pannell Kerr Foster was formed in 1969 with just a four-partner firm, one each in the UK, Australia, Canada and the US. The association changed its name to the more compact PKF, a form which works in most languages, and now has more than 14,500 partners worldwide. With a turnover of about USD1.4 billion, the association is anything but small, and new firms continue to join. “PKF’s own assurance and advisory team provides an expert service to many different types of organisations across the world. Our clients range from small owner-managed businesses to listed companies, partnerships, charities and government bodies – and we cover a broad spectrum of industries and sectors. Internationally the name of PKF is recognised and respected, and is associated with independent auditing to the highest standards,” Mangion says.
Mr Mangion and his partners was among the first of Malta’s accountancy, consulting and audit firms to participate in an international network. This brings considerable benefits to clients as well as to the firm itself, especially in an economy like Malta’s in which firms increasingly need to look at business opportunities abroad in their search for growth.
PKF has built up a reputation for work with small and family businesses – an important area given that the vast majority of Malta’s companies fall into one, the other or both categories. Equally important, it has given PKF Malta the platform from which to pursue international business, assisting and advising foreign firms wishing to establish themselves in Malta.
The Maltese partner in the PKF network has established its presence in the captive insurance and iGaming fields, two areas that are growing rapidly. Malta holds many advantages for captive insurers, and Mr Mangion has vigorously presented these to the world participating and organizing conferences on the area.
In 2006, he put Malta’s case to three insurance gatherings: the first in Toronto, Canada in January, then at the May Rendezvous in Luxembourg which discussed the new rules for insurers incorporated in Solvency II, and finally in the RIMS Canada conference in Calgary, Canada. The latter is a national ‘Risk Management’ Canadian event garnering over 1,000 delegates.
Canada is a promising market for Malta, Mr Mangion believes, which is why he is putting so much effort into it. “Traditionally, Canada has used Bardados as its main offshore jurisdiction, along with the Bahamas and Vermont in the US,” he explained.
“I believe strongly that Malta can take at least some of this market. We have advantages, starting with the extensive list of double taxation agreements we have in place. We are also in the Commonwealth – an important factor when dealing with a country like Canada.”
The vast North American country has a very dynamic economy, with a lot of oil especially in and around the state of Alberta. Calgary is now a very fast-growing city, becoming rich as the processes required to extract the oil in its tar sands become cost effective in the light of current oil prices.
“A lot of wealth is being generated, primarily in oil and related industries,” Mr Mangion said. “But not just these: other industries are doing well too.”
The RIMS – Risk and Insurance Management Society – conference in September 2006 recognized that, bringing risk management and insurance professionals from all over Canada to Calgary in the foothills of the Rocky Mountains for a week of discussions on best practice and new trends gathered under the heading “Scaling the summit in risk management”: appropriate, given the location.
The whole world is open to do business with Malta. The advantages Malta offers to insurance management operations – not just to captive insurers as defined in the regulations – are available to companies located anywhere in the world. But an individual firm cannot target the whole world: the job is too large. Mr Mangion has focused on the markets he knows. In risk management, that is Canada.
Malta is, as Mr Mangion puts it in his presentations to the conferences he attends, “a prime captive insurance destination”. The regulations are clear and effective, the regulator approachable and willing to listen, decisions are taken fast. Malta has the skills needed, and the quality of the professional services available are among the best available.
Add to this an attractive tax regime, access to EU markets and – particularly in the case of Canada – membership of the Commonwealth, and the package becomes very attractive, if the message can be put across clearly.
Malta also has very attractive protected cell (PCC) regulations, which in Malta so far only envisage the use of this structure for insurance companies but one hopes that its use will in the future be extended to funds. “PCCs are a very flexible structure,” Mr Mangion explained. “A PCC reduces the cost of setting up a captive, making the advantages available to smaller companies as well as the multinationals which have traditionally been captive insurance clients.”
The regulations are based upon the Guernsey model. In a PCC, so-called cells are established, each with its own name, capital, accounts and ownership. One should expect more over the coming years.
PKF Malta has been doing its bit so far, and intends to continue to do so, Mr Mangion said. PKF Malta will be organizing a conference in Vancouver and Toronto this year to present Malta as a captive jurisdiction to a full group of captive managers. “PKF have offices there,” he explained.
Mr Mangion will also be promoting Malta as a location for funds. Malta’s regulations are very good in this area as well, and a number of dedicated management and services organisations have been set up to service the sector.
“There are huge sums going into funds and we do not need a large proportion of that to feed a very good line of business for Malta,” Mr Mangion says.
PKF Malta has also got a strong business advising iGaming companies relocating to Malta. A subsidiary company GMMBusiness Solutions, offers a one-stop-shop for remote gaming companies, from license application on to the eventual start-up of operations. GMMBusiness Solutions was instrumental to attract the largest Australian sportsbook six years ago when little was known about Malta’s potential for remote gaming. Furthermore GMMBusiness Solutions has for the past six years pioneering international conferences to actively promote Malta as a remote gaming jurisdiction conferences in Europe, South Africa, Costa Rica and the USA. Last year it has organised meetings in Dublin, Munich and London discussing legal issues, including the US bans on transfer of funds to gaming companies. This year will see two international conferences one in London and another in an emerging Italian market at a historical setting in a Villa Erba Como.
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