For innovative start-ups and tech companies working with blockchain and DLT technology, choosing the right operating site is not easy. Unclear legal frameworks, often sceptical regulatory authorities or inadequate infrastructure can represent significant obstacles to the company’s development and growth.
One country stands out here as a particularly striking positive example: Malta. Known as “Blockchain Island”, blockchain start-ups will find all the necessary conditions here to set up a successful, internationally active company. In the following, we discuss 5 good reasons that speak in favour of locating a company on Blockchain Island Malta.
Reason 1: Malta has the highest economic growth of all EU countries / Malta is the fastest growing economy in the EU.
For several years now, the Maltese economy has been flourishing and boasting the highest economic growth of all EU member states. While the EU-28 grew by a modest 2.1 % on average in 2018, Malta recorded a growth rate of 5.4 %. The EU Commission’s forecast for 2019 is similarly bright: Malta’s economy will grow by 5.1% in 2019 — 3.2% more than the EU-28.
Such a positive economic environment facilitates the establishment of companies and the recruitment of workers. Of course, in addition to the current boom of the Blockchain Island, it attracts highly qualified workers from all over the world.
Malta International Airport also connects passengers to European and international destinations. In fact, there are more European flights to Malta every week than to London Heathrow. In particular, the state-owned Air Malta and RyanAir operate daily flights to Berlin, Düsseldorf, Munich, Leipzig, Frankfurt, Hamburg, Vienna and Zurich.
Reason 2: An innovative, technology-friendly government
Malta has long been known as an innovative and technology-friendly business location. In the early 2000s, a legal framework was adopted to encourage the establishment of online gaming operators. This measure has proved extremely successful over the past decade. More than 300 providers are currently registered in Malta. The industry’s total turnover makes up an impressive 12% of Malta’s GDP. The campaign for the positioning as Blockchain Island of course seeks to create a similar success story.
With the Maltese government, blockchain companies have a supportive partner that is open to the diverse application possibilities of this innovative technology. The government is actively seeking to attract companies to the region, as demonstrated by the co-organisation of the two major congresses Delta Summit and Malta Blockchain Summit in the fourth quarter of 2018. Prime Minister Joseph Muscat, Finance Minister Edward Scicluna and Innovation Minister Silvio Schembri attended personally to speak with participants and promote Malta as a business location.
In contrast to larger economies, Malta, with its almost 450,000 inhabitants, offers a manageable ecosystem in which actors from business and public authorities can get to know each other personally and exchange ideas directly. This also applies to the Malta Digital Innovation Authority, which was founded in 2018. With the support of a licensed VFA agent, the planned DLT model can be analysed in consultation with the regulator and optimised by identifying potential shortcomings and deficiencies. Close consultation and communication in advance ensures that an official DLT license can ultimately also be issued.
Reason 3: A clear legal framework for blockchain and DLT technology
One of Malta’s greatest assets for blockchain companies is the ground-breaking and world’s first clear legal framework for DLT technology. In early 2018, three legislative proposals were drafted for which the Malta Financial Services Authority (MFSA) also sought feedback and advice from industry experts and blockchain start-ups.
Moreover, different types of tokens were defined, so that a company in Malta would find an ideal starting point for issuing security tokens as part of a security token offering. In fact, the Malta Stock Exchange is already working with Binance to set up a security token exchange.
Reason 4: Malta’s dynamic, growing blockchain community
Since the Maltese government dedicated itself to positioning Malta as Blockchain Island, the sunny Mediterranean island has advanced to an absolute Blockchain hub. More and more start-ups and founders from all over the world are settling here in order to profit from the attractive framework conditions. The result is a vibrant, dynamic blockchain community that is second to none worldwide.
Networking, knowledge sharing and mutual testing of prototypes is nowhere easier than here. The demand for office space has become so high that an entire crypto tower is planned. It will be available exclusively to companies in the industry and will provide them with ultra-modern and urgently needed office space. In addition, there are major summits and events at which the biggest names and experts in the industry meet.
Reason 5: Business-friendly tax policy with attractive tax rates
Malta as a business location is also supported by a business-friendly tax policy with favourable tax rates and largely efficient bureaucratic processes. Finance Minister Scicluna sums up the government’s attitude when he says “We hate bureaucracy here. And we respect the private sector and their ideas. And that’s the future. That’s where our future lies.” This is particularly evident in the comparatively low rate of corporate income tax.
Thus, with careful planning and setup, it is possible to reduce the effective corporate income tax rate to only 5%. This of course benefits block-chain companies in particular, which then have more capital available for investment in the further development and growth of the company. As Malta is an EU member state, companies based in Malta can offer their services throughout the EU.
Blockchain companies looking for a favourable location to locate their business must not miss Blockchain Island. With its technology-friendly government, a vibrant Blockchain community, clear legal framework and attractive tax rates, Malta offers the perfect conditions for Blockchain companies from all over the world.
The sunny weather and the pleasant temperatures are just an attractive bonus.
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- 5 Good reasons for locating a business in Malta, Blockchain Island - 14. January 2019
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