Category: Regulation

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MFSA published a Circular to the VFA Issuers

Categories Financial Services, ICOs, Legal Notice, Regulation, Financial Institutions, MFSA, VFA

MFSA published a Circular to the VFA Issuers

On the 15th of January 2019, the MFSA (Malta Financial Services Authority) published a Circular addressed to VFA (Virtual Financial Assets) Issuers that are either availing themselves of the transitory period under Article 62(1)(a) of the VFA Act or that fall within the scope of the exemption under Regulation 3 of the VFA Regulations but will continue their offering after the 31st January 2019. Such VFA Issuers are to submit a compliant Whitepaper with the MFSA by no later than the 31st of January 2019.

The Circular aims to clarify the process of registering the Whitepaper through the online Registration Form for Whitepapers under the Act, which is to be filled in by the Issuer’s VFA Agent.   The Circular also announced the publication of the final version of the Financial Instrument Test as well as an updated version of the Glossary of Terms, with specific emphasis to the definition of the terms ‘offer to virtual financial assets to the public’, ‘admission to trading on a DLT exchange’ and ‘Systems Auditor’ especially in relevance to the Whitepaper Registration Form.

Publication of an updated Guidance Note to the Financial Instrument Test is expected in the coming days.

If you would like further details about our services please contact us by sending an email to [email protected] or call us on +356 2010 3020

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Circular addressed to Credit Institutions authorised in terms of the Banking Act

Categories Financial Services, Legal Notice, Regulation, Financial Institutions, MFSA

Circular addressed to Credit Institutions authorised in terms of the Banking Act

On the 3rd of January 2019, the Malta Financial Services Authority (MFSA)  has issued Circular addressed to Credit Institutions authorised in terms of the Banking Act, 1994.  

This circular is aimed at bringing to the attention of Credit Institutions the update of the Circular on the Imposition of Negative Interest Rates on Euro denominated Deposits.

Following the feedback received on the above Circular, the MFSA reconsidered the criteria established on the charge of maintenance fees on deposits held by credit institutions and decided that the deposit threshold (originally set at EURO 2.0 million) is being reduced to EURO 1.5 million. Any other criteria established in the previous Circular still apply.

The document, which may be downloaded by clicking here, is also available on the MFSA’s website.

Contact E&S team on +356 20103020 or by mail at [email protected] to find out more. 

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The Employee’s “Personal Data” Boundaries

Categories Employment, GDPR, E&S Group, Regulation, Data Protection

The Employee’s “Personal Data” Boundaries

The case of the former CEO of the European Union Programmes Agency, Doreen Camilleri, set a precedent that confirmed that a corporate email address with an individual’s name should be considered as “personal data”.

After her job was terminated, the agency requested a password change for her corporate email address, however Ms Camilleri was not informed of this and she was blocked out of her account. A few days later, Ms Camilleri found out that her e-mail address was still in use, but she could not access it herself. The concern that the emails could still be sent on her behalf was a reason to file a complaint.

In reaching this decision, the Court of Appeal held that the legal basis for processing personal data must be carefully determined (by data controllers) and it must adhere to the law and circumstances.

The password communicated to the user must be changed immediately upon receipt. In default of such action, the user assumes liability for all activity logged with the unchanged password once this notice is communicated, without prejudice to any other liability incurred by the user for activity logged on the account from the time the password is changed.

In the employment context, any computer hardware and access to any electronic communication and networking service, including but not limited to electronic mail, internet, internal servers and archive folders are considered to be the property of the employer who regulates their use for the ultimate legitimate interest of the business and administrative activity.

Even though the email account of the employee is his property, the IT manager might have access to it for a short period of time. This does not necessarily mean that every time the inbox is checked, processing of personal data of said employee had taken place.

If one must use some logic, the employee is to be cordially asked to give a handover, which in turn would initiate the process of archiving of emails that are on the former employee`s account.

While business continuity is a crucial aspect when dealing with handovers, employees’ rights should not be breached in the process.

 

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Jurisdictions with a different legal outlook towards Coin Offerings

Categories Blockchain, Cryptocurrency, ICOs, Malta, Law, DLT Regulation, Regulation

Jurisdictions with a different legal outlook towards Coin Offerings

The year 2018 was marked with technology advancements and new trends. The DLT industry started to get widely recognised in many jurisdictions around the world, making way to a new digital economy. Most financial service providers are using technology to their advantage, utilising blockchain wisely to store in data, or creating complex mathematical algorithms to create an easy way to digitally facilitate, verify, or enforce agreements by means of smart contracts. Moreover, the FinTech industry is also growing substantially, with many financial institutions opting to become part of this industry.

Countries implementing different ICO Laws

This year has marked a record-high for new ICO ventures launching their crowdfunding platforms. Many companies are now opting to design tokens to be exchanged for services offered to their clients. Various countries have taken different regulatory approaches towards this growing industry, with some regulating the space and others opting for non-regulation. Certain countries decided to implement strict legislation by banning people from owning cryptocurrencies or investing in ICOs altogether, while others have built well-structured progressive legal frameworks that provide legal certainty.

Stringent laws taken by the SEC in the US towards ICOs

Meanwhile in the US, ICOs are not formally regulated across the country, however, various administrative agencies, such as the Commodities Futures Trading Commission (CFTC), the Financial Crimes Task Force (FinCen), the Department of Justice (DOJ) and the Securities Exchange Commission (SEC) have taken measures to regulate this market. The most notable administrative agency overseeing ICOs is the SEC. The SEC’s purpose is to investigate and regulate all securities issued by companies, while “protecting investors, maintaining fair, orderly and efficient markets, and facilitating capital formation.

Although no concrete legislation regarding ICOs is in place, the SEC has jurisdiction over any securities related matter from the power granted to it by the Securities Act of 1933 and 1934. Guidance is also given regarding to what constitutes a security by the 1946 Supreme Court Case commonly known as Howey. Howey set forth a test used to determine whether an asset being offered constitutes the sale of a security. This test is applicable to all ICO issuances implicating the United States. The Howey Test is a financial instrument test which states that, if the asset meets all the elements, then it will be treated as a security. The elements of the test are as follows: 1) an investment in a common enterprise, 2) with the expectation of profits, 3) primarily derived from the entrepreneurial efforts of others.

Companies in the US launching their ICO have been commonly identifying their tokens as utility tokens in hope of circumventing registration with the SEC. However, utility tokens are not a legally recognised concept in the US and instead, the SEC looks at the economic realities of the transaction.

Although the US has stringent ICO Laws, companies are still risking to set up and open their ICO venture, due to the United States entities receiving the highest amount of crowdfunding.

In the past year, a number of celebrities and other public figures have endorsed ICOs, encouraging their fans to invest their money. However, recently, the SEC issued a warning to investors in various tokens stating that they are subject to have violated anti-touting laws along with anti-fraud provisions. In this case however, the SEC failed to clarify how these endorsements were paid, either directly or by indirect payment. Moreover, the SEC stated that celebrities marketing such ICOs “…may be unlawful if they do not disclose the nature, source, and amount of any compensation paid, directly or indirectly, by the company in exchange for the endorsement. The SEC’s Enforcement Division and Office of Compliance Inspections and Examinations encourage investors to be wary of investment opportunities that sound too good to be true.  We encourage investors to research potential investments rather than rely on paid endorsements from artists, sports figures, or other icons.”  Hence, these promoters might be held liable on the basis of ‘acting as unregistered brokers’ as well as taking part in transactions of securities which have not yet registered by the SEC.

What about the Asian market?

Asian countries have taken various stances with regards to ICOs; some have imposed strict laws banning ICOs altogether, while others take a lenient and progressive approach towards ICO tokens and treat them on a case by case basis. For example, the Monitory Authority of Singapore (MAS) does not regulate the issuance of utility or payment tokens, but only security tokens. With this positive approach many ICOs – who typically issue utility tokens -have launched their ICO in Singapore, making it one of the most popular jurisdictions in Asia.

On the other hand, the People’s Republic of China (PRC) took a firm stance against all ICOs, banning citizens from launching them altogether. In addition, any coin offering including exchanges used to trade virtual coins have also been banned. This approach was set in motion when China stated that all ICOs are bound to hurt the market since they are prone to deception and fraud. For this reason, the PRC is encouraging ICOs issuing their currency to follow laws which protect investors rights while trading on a platform.

European Diversity

In Europe, many countries have enacted favourable ICO Laws, attracting Asian companies to shift their operations to Europe, which in turn resulted in a healthy growth for the sector. Three proactive and progressive jurisdictions in Europe that have received praise from many fronts are Estonia, Switzerland and Malta. Many large crypto-exchanges set up shop on the territory of these three countries, especially in Malta.

Estonia with its already set and business-friendly laws is attracting many ICOs and crypto companies to register their operations on its territory.

In the “crypto-valley” of Switzerland and the technological city of Zug, there are many ICOs operating. The Swiss Financial Market Supervisory Authority (FINMA), has implemented forward-looking ICO Laws, and many investors and issuers see Switzerland as a “go to” country due to its favourable taxation laws.

Meanwhile the Maltese Parliament has provided a firm progressive stance with regards to Blockchain, ICOs and crypto exchanges. This has motivated many big companies such as OKEx and Binance to move their operations to the island. On the 1st of November, three regulating acts came into force, which will enable more businesses working in this industry to benefit from these innovative laws. The Malta Financial Services Authority (MFSA), will be the primary institution regulating this sector. Moreover, Malta’s tax rate to foreign companies is that of 35%, but by implementing effective tax planning it can go down to as low as 5%.

Malta is gaining a lot of traction within the tech industry, with many companies opting to set up shop on the Island. Malta will continue to strive and compete with other countries who are looking to follow the “Blockchain island” regulating framework of this industry.

Many legal companies sought out the opportunity to delve into this industry. One of the companies to stand out in the industry is surely E&S Group, a legal and corporate firm based in Malta, offering tailor made services to ICOs, crypto exchanges and Tokenomics to clients. So far E&S Group has successfully advised over 90 ICOs. E&S Group is being sought after by several ICOs wishing to launch their ICO project in Malta. Apart from that, said ICOs would also need to incorporate their company in Malta before getting started with their crowdfunding their project.

If you would like to know more about what we offer, send us an email on [email protected]. Our professional team of lawyers and accountants are there to make sure that your ICO will happen.

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G20 to Regulate “Crypto-Assets”

Categories Regulation, Digital Economy, G20, Financial system, World politics

G20 to Regulate “Crypto-Assets”

World leaders concluded the G20 Summit in Buenos Aires with a pledge to regulate “crypto-assets”. Representatives of the G20 member countries published the declaration entitled “Building consensus for fair and sustainable development” on the development of a unified legal system of a digital market regulation. In this document member nations of the G20 committed to building “an open and resilient financial system,” which mentions that it “is crucial to support sustainable growth.”

It is not the first attempt to create a unified regulatory framework within the international body. The European Union launched the General Data Protection Plan or GDPR in May, which codified the rights of citizens in the EU by the implementation of data protection and ‘know your customer’ protocols. The G20 document is less robust than the GDPR. However, the agreement highlighted some of the common concerns over crypto currencies, namely; money laundering and the financing of terrorism. The document also states that member nations will begin exploring the potential benefits of applying technology to the financial sector. The participants agreed on specific proposals on legislative support for the turnover of digital assets, taxation of business, and crypto assets, as well as on the inclusion of certain measures to counter money laundering in the system. These points will be discussed during the next G20 meeting although the final documents are planned to be adopted in 2020.

Could this be the next step in creating a global framework for cryptocurrencies?

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Nordics Blockchain Summit returns to Estonia

Categories iGaming, Blockchain, Cryptocurrency, E&S Group, Regulation, Conference, Moontec18

Nordics Blockchain Summit returns to Estonia

Moontec is an internationally recognised Nordic event, devoted to blockchain technology and its implementation in various industries and is proudly hosted in Tallinn every year.

When Estonia started building its information society about two decades ago, there was no digital data being collected about its citizens. The general population did not have internet access or even devices with which to use it. For this reason, it took great courage to invest in IT solutions and take the information technology route within that scenario.

Since this decision was taken in 1997, the best step-by-step implemented e-solutions have made Estonia one of the world’s most developed digital societies. With the application of e-Governance, e-Tax, X-Road, Digital ID, I-Voting and e-Residence this Nordic country is moving towards real-time economy and industry 4.0.

At the end of October, ‘WePower’ the Estonia based energy company announced the successful delivery of a landmark; a nationwide pilot project in conjunction with transmission system operator, TSO Elering.

Representing a significant step forward in the digital energy sector, the initiate will convert energy consumption and production data onto the blockchain on a national scale. This is the first research and development project that aims to eventually enable consumers to purchase green energy directly from producers, with all relevant information stored on the blockchain.

Estonia benefits from 100% countrywide smart meter coverage and a data sharing platform called Estfeed, which allows customers to download and share their data with whoever they choose. This made the country the ideal location for such a pilot, as it already had much of the required infrastructure in place and fully functioning.

The interest towards blockchain in Estonia has never been higher. The momentum is shifting from a focus on learning and exploring the potential of the technology, to identifying and building practical business applications. Today, many tech companies started investing in blockchain Research and Development, yet they have no clear guidelines on its effectiveness.

This year’s Moontec, held between the 26th and 27th November, is dedicated to finding answers to the biggest challenges faced by blockchain nowadays, such as regulation, application in real-world practice and market adoption.

E&S Group team is attending the event to talk about the use of blockchain technology in the legal, iGaming and logistics industries. In order to make the system work on a European scale, the representatives of the Blockchain Island community should connect with the specialists from the Digital Nation, allowing the blocks to build an effective network.

Meet us in Tallinn on between the 26th and the 28th November. Please send an email to [email protected] to arrange an appointment or contact our team members directly: Yuliya Khrenova and Rick Goddard.

 

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Lithuania is looking to regulate Token Generating Events

Categories ICOs, Law, Technology, Trading, Cryptocurrency Exchange, Bitcoin, Regulation

Lithuania is looking to regulate Token Generating Events

Last October Lithuanian authorities were invited to attend a seminar that was seeking to examine the threats and potential benefits of the ICO sector, particularly with regards to the country’s economy. Whilst reports from BitMEX last week found that ICOs had so far managed to break even in terms of profit and loss in 2018, trends have shown a bit of a slump in the popularity of the market. Alongside the falling value of Ether and Bitcoin, it seems that fewer ICO projects were launched in 2018 when compared to the first half of the year.

All things considered, it does seem that it is good news and a positive sign that the market managed to break even, despite poor conditions.

Fraught with bad press

This does not mean that ICOs are not without their lack of other issues. Their issuance is fraught with lack of regulation and bad press, and research conducted at the beginning of the year found that almost 80% of ICO projects that were launched in 2017 could be classified as “scams”.

As a result, Lithuanian authorities have come together to voice their concerns over the ICO market, something that is becoming commonplace in a number of jurisdictions. Politicians in the country, as well as a representative from the central bank, came to the conclusion that cryptocurrency and digital assets have created a substantial market in the country that yields a huge turnover.

“Virtual currency has huge cash flows, but (there are) worries about converting them into dollars and euros as quickly as possible, (and) leaving virtual currencies as quickly as possible.”

Creation of a regulatory body

Whilst there is a concern over the cryptocurrency cash flow and the lawless style of the ICO market, Lithuania has vowed to create its own regulatory body that will oversee the developing industry. The newly created body will be responsible for supervision and enforcement, but it will also be on the lookout for possible benefits that could emerge from blockchain and crypto.

This development will see the country follow in the footsteps of Malta which introduced its own blockchain, cryptocurrency and ICO legislation on the 1st of November 2018. To find out more about launching an ICO in Malta, please contact E&S Group by sending us an email on [email protected].

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5 things that need to happen before we can see widespread blockchain adoption

Categories Blockchain, Technology, Regulation, Performance, Collaboration

5 things that need to happen before we can see widespread blockchain adoption

Blockchain is undoubtedly one of the biggest buzzwords of today and many believe that it is set to revolutionise the way that we do everything from finance, to healthcare. The fact that it is decentralised, immutable, and secure means that it has significant advantages over other types of technology.

Use cases that have been presented so far cover industries from law to real estate and it seems that this new technology could remove the need to paper trails and outdated legacy technology. The problem is that slow transactions speeds and regulatory issues are putting something of a dampener on the sector and are threatening to stunt blockchain’s growth.

What are the five main hurdles that blockchain technology has to overcome in order to see widespread adoption?

Better performance

Blockchain works like an accounting ledger except it has the ability to record transactions across a vast network, is completely decentralised, and requires no authority to supervise it. This makes it particularly suited to tracking financial transactions and other kinds of data, but there is a problem.

Blockchain can be slow and as it grows in popularity transaction speeds are set to get even slower. Some legacy transaction systems are capable of processing tens of thousands of transactions every second, whereas Bitcoin can only handle between 3-7 in the same amount of time. Because of this relatively low performance, at the moment blockchain lacks the scalability that is needed for it to be viable for large-scale applications.

The solution is to create “proof-of-stake” systems where a crypto-miner is required to have a certain stake in the asset in order to participate in it. It is hoped that this will speed up transaction times by weeding out those who are not full-time users.

Interoperability

With more and more stakeholders partaking in an ever-expanding industry, some people are concerned that such a number of different networks will result in a situation where no standard exists that will allow them to interact.

This level of standardisation is called ‘interoperability’ within the industry, and the lack of it means that blockchain coders and developers have freedom, but IT departments get headaches. Discovering that two platforms are unable to communicate means a lot of additional coding and behind-the-scenes work that may or may not produce a result.

On GitHub alone, there are more than 6500 active blockchain projects that use a range of different platforms, languages, protocols, and consensus measures. Whilst this level of innovation is good, some level of standardisation needs to be developed that will facilitate interconnectivity, cross-blockchain transactions and of course, standardisation.

Reduced complexity

One of the other main concerns about the Bitcoin blockchain network is the fact that it requires huge amounts of intensive computing power and electricity to run. In order to mine, miners must use enormous, highly complex rigs with many servers just to keep the network ticking over – this does not come cheap.

Several studies have put the price of mining just one Bitcoin at over $26,000 which is more than one Bitcoin is currently valued at. Whilst miners do get paid for their efforts, having that amount of capital available up front could be problematic for some. To be able to be truly accessible to all, transaction and mining costs need to be lower.

Firms such as Amazon, IBM and Microsoft are currently working on ways of improving the cost and complexity that is involved in blockchain technology through using the cloud. It is hoped that these could lower the barriers to developing and operating blockchain networks as well as automating the set up of basic blockchain structures.

Supportive, not restrictive regulation

As the price of cryptocurrency rocketed towards the end of 2017, regulators became uneasy and concerned about the speculative nature of this new market. With the popularity of the ICO came strict bans in South Korea and China, as well as the SEC in the US is taking legal action against individuals for fraudulent behavior.

But it is not just the ICO that suffers from a lack of regulatory clarity, smart contracts are also shrouded in uncertainty which could inhibit investment in technology that uses them.

However this does appear to be changing as a total of 17 US States have made legislatures that either mull over, or pass bills regarding blockchain adoption. Furthermore, the island of Malta  introduced three new acts that came into force in November to provide legal and regulatory certainty for ICOs, blockchain, and cryptocurrency related businesses.

Increased collaboration

Last but not least, firms in the sector need to work together more so that the technology can promote both education and development within the sphere. Several groups have been formed that seek to increase collaboration and standardization, and these include R3, RiskBlock Alliance, the Enterprise Ethereum Alliance, and Hyperledger.

Whilst not all of these consortiums are building applications, they are at least beginning to work together for the good of the industry as a whole.

 

Interested in ICOs Legislation in Malta? Contact us directly on +356 20103020 or by email at [email protected] to find out more.

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It’s official, Malta has welcomed the VFAA and ITAS today!

Categories Blockchain, Malta, The Blockchain Island, DLT Regulation, E&S Group, Technology, Regulation, VFA Act, DLT

It’s official, Malta has welcomed the VFAA and ITAS today!

The long wait is over, Malta has set to become a world leader and a pioneer in regulating the world of Distributed Ledger Technology (DLT), Initial Coin Offering (ICOs), crypto exchanges, Artificial Intelligence (AI) and FinTech. Its progressive laws have already made waves around the world with many companies transferring their offices to the island.

This phenomenon has started to provide many opportunities within the industry, so that many Maltese companies have also started to delve into this sector, creating blockchain platforms to sell to companies, launching ICOs and investing in cryptocurrencies. Through this technological ecosystem, many industries got involved in this new sector of digital economy.

Today 1st November, the Maltese government has successfully enacted the two remaining bills to secure the DLT journey on the island. These laws are the Virtual Financial Assets Act, and the Innovation Technology Arrangements and Services Act respectively. While on the 5th of October during the Delta Summit, the Hon. Silvio Schembri launched the Malta Digital Innovation Authority Act.

This rollercoaster ride started in March 2018, when the Junior Minister for Financial Services, Digital Economy and Innovation declared that the Maltese government was looking into ways to regulate the DLT space. A public consultation was organised inviting and appointing prominent key stakeholders in the industry, aiding the government to draft the three laws for further clarifications. E&S Group along with other legal companies participated in this consultation pushing toward a friendly, clear and well-regulated digital industry.

On the 24th of April 2018, Hon. Silvio Schembri presented the 1st reading of the 3 bills in parliament for further amendments. The outcome was successful, as both sides of the house approved and supported this new legislation.

The Virtual Financial Assets Act was published on the 22nd of May 2018. This Act brought further clarifications as to where Malta is set to move with its regulations of ICOs, crypto exchanges and how the appointed authority has to act in order to help regulate this sphere.

During the launching of the Delta Summit on May 22nd, the Maltese Parliament published the three final DLT laws online, indicating what is expected to be regulated. This brought about a lot of noise around the world. Many crypto exchange companies started to move their offices to Malta. Moreover, the Maltese public transport took a stance to partner with Omnitude, a blockchain company to start a partnership agreement to develop a blockchain-based middleware technology for the Malta Public Transport Service.

The Maltese government unanimously passed the third reading of the 3 DLT regulations on the 4th of July. On that same day, the MFSA published their consultation paper to regulate the Virtual Financial Assets Act (VFAA). These laws caused interest from many legal firms wanting to know more on how to help their clients pass their regulating test and become licensed to operate in Malta. The MFSA created the Virtual Financial Agent as presented in the VFA law. All licensed agents are required to assist ICOs and crypto exchanges to become licensed by the authority.

Through this wave of clear DLT legislation technology, Maltese companies such as E&S Group have found a perfect opportunity to do something different. In March 2018, E&S Group became the first legal and corporate firm to tokenise its services. This gave clients the opportunity to pay for legal and corporate services with ESTS tokens, created by E&S Group.

Malta has taken a big leap of faith in the industry becoming the first to provide friendly yet well-structured laws to regulate the technology. This will provide a better opportunity for enterprises to trust in the “Blockchain Island”, thus becoming a hub for ICOs, Blockchain, Fintech and other innovative economy sectors.

If you would like to know more about the benefits Maltese legislation offers in the sector of digital economy, please contact us on [email protected]. Our professional and dedicated team will help you better understand the Blockchain industry in Malta. E&S Group will ‘make things happen.’

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A brief overview of Malta’s Budget 2019 

Categories Blockchain, Cryptocurrency, Malta, Regulation, Artificial Intelligence, Know Your Customer, Anti Money Laundering, DLT, Budget

A brief overview of Malta’s Budget 2019

The Maltese Budget for 2019 is set to be announced on Monday 22nd of October, but what can we expect? Following the 2018 budget, 79% of the measures introduced within it were fulfilled during 2018, bringing to over 1,250 implemented measures over the last five years in total.

Entitled “Fostering a Quality Culture”, the Pre-Budget 2019 Document has given us some key points that we are expecting to be addressed in Monday’s reading.

Infrastructure

Investing in the country’s infrastructure, including public transport is expected to be a priority for the government, directly referencing the authority’s pledge to upgrade the national infrastructure over the next seven years. Other means of alternative transport are also expected to be announced as well as conceptual designs for the Malta-Gozo tunnel. Other areas expected to receive additional investment include maritime, aviation, and the digitization of The Lands Authority. The well-developed infrastructure can boost the real-estate growth and attract more foreign entrepreneurs and businessmen to the island on a permanent basis.

Regulatory Authorities

Following the implementation of the 4th AML Directive, the government is expected to announce further dedication towards addressing fiscal evasion as well as giving the Malta Customs greater investment towards non-invasive tools. The report also mentioned work that needs to be done at the stock exchange and the Malta Development Bank which focuses on SMEs and infrastructure projects supporting regional development.

New frameworks to be introduced will limit unnecessary expenditure, reduce inefficiencies, and create the Public Sector Performance and Evaluation Directorate. An extensive training programme, financed partially by the Structural Reform Support Programme, will improve human resources capacity. However, the competition on the labour market is not likely to decline due to the foreign companies entering the market with their employees on board.

Social Matters

The document addresses issues around housing and distribution of income and suggests that issues such as minimum wage, pensions, and tax refunds will be addressed.

The Environment

Waste management will be consolidated at Magħtab to provide a “national waste management nucleus” and to avoid unnecessary movement of vehicles. The government is expected to focus on a greener economy by announcing initiatives that will reduce the amount of waste and single-use plastic. Further work is expected on the Malta strategy to transition to a low-carbon economy.

The document also makes reference to conserving natural assets and taking necessary action, as well as simplifying the legal framework for agricultural operators, and reforming open vegetable markets. The government is also expected to continue its efforts to promote animal welfare, the sustainability of fish stocks, and the competitiveness of fishermen.

Let us hope that the solid part of the budget is dedicated to environmental improvement and conservation needs because the rapid development of the infrastructure is able to shake the balance between nature and technology.

Energy and Water

Water Services Corporation will continue to expand its distribution of new water as well as upgrading several reverse osmosis plants. The money will be invested in identifying significant flood risk areas and improving them, both across Malta and Gozo. Attention will also be given to decarbonising of the energy system and introducing further incentives to invest in renewable energy sources and increasing energy efficiency awareness.

Digital Innovation

A new legislation regarding online gaming is expected to be enforced, including new niches such as fantasy sports.

Blockchain is also expected to have a significant investment, as well as artificial intelligence, and the Internet of Things – all of which will be given significant support over the coming years.

Fintech and Regtech will be further developed as well as Islamic finance, and the MFSA will adopt a more modern structure making it more proactive. The international companies are waiting for the three regulatory acts to come into force to consider Malta as their new base.

Sustainability

Malta Enterprise will continue to support businesses by reducing costs and encouraging investment in research and development. Intellectual Property services will be restructured and a new trademark act will be created as well.

Malta Industrial Parks (MIP) will integrate business parks to accommodate clusters of industries in the same location whilst considering vertical or horizontal expansion. MIP will also consider private-public partnerships and a comprehensive master plan for the Luqa area.

Furthermore, student visas will be simplified for non-EU Students and the Malta Residency and Visa Programme will suggest changes to the law to make it more attractive, as well as exploring a visa action plan for foreign workers.

 

If you would like to know more about Malta’s budget plan this year and its influence on your industry, drop us a line by sending us an email on [email protected]

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