Saturday, 7 January 2012

The Malta FOREX boom

An increasing number of businesses providing services focusing on the foreign exchange asset class are choosing Malta as their domicile. At Chetcuti Cauchi we have experienced this growth first hand, having been engaged by a healthy number of FOREX businesses to handle their licensing and compliance requirements.

What is driving this growth? First of all, Malta has been working for a couple of decades now to create a business friendly environment. FOREX businesses are therefore choosing Malta for much the same reason that hedge funds, gaming operators, investment boutiques, financial institutions and other financial businesses choose the country; approachable regulators, competitive costs, low taxes, quality professionals and Mediterranean lifestyle.

Secondly, and perhaps more importantly, Malta also has certain characteristics which may appear to be of minor importance but can be of great benefit to FOREX businesses. Let's focus first on the question of legal clarity; in some jurisdictions, FOREX businesses exist in a sort of no man's land. Malta FOREX businesses on the other hand are regulated under the Investment Services Act, 1994. This is the same legislation that implements MiFID (the EU Directive on investment services) into Maltese legislation. This can gives rise to various advantages, including passporting opportunities, high regulatory standards as well as the all important peace of mind of knowing which set of rules one is required to adhere to.

In addition, Malta also has flexible rules with respect to leverage ratios. This allows Malta FOREX businesses to cater for a broader array of investor risk appetites.

Feel free to get in touch with us if you are interested in setting up a Malta FOREX business, or would like to know more about what Malta can offer you and your company.

Dr Charles Cassar
Financial Services Lawyer
Chetcuti Cauchi Advocates

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