Last week, the Financial Action Task Force (FATF) voted to grey-list Malta. The impact on Malta’s financial services, banking and yachting sectors, as well as its attractiveness to foreign investment, could be serious and make the jurisdiction unappealing. Europa Trust Company reports further.

The decision-making body of the FATF, which consists of 37 member countries and 2 member organisations, voted to grey-list Malta last week. This means that the country became the first EU Member State to be placed on the list.

“Grey-list” is a term which means that a country will be placed under increased monitoring. Once a country is grey listed, it is given an action plan which it must adhere to within a specific timeframe to be taken off its listing.

It has emerged that the UK, the US and Germany wanted Malta to be grey-listed.

In 2019, Iceland was placed on the grey list and later said the economic effect had been “significant.”

Businesses and livelihoods are likely to be severely impacted and disrupted. The question for businesses, investors and yacht owners with vessels registered in Malta is to stay or to leave the jurisdiction. Maltese companies may face increased difficulties in opening bank accounts and Maltese registered vessel may face complications with authorities.

Unsurprisingly, since the announcement of Malta being grey-listed, there has been a steady stream of enquiries to incorporate companies in Gibraltar instead of Malta, or to redomicile companies from Malta to Gibraltar.

Gibraltar is British, part of Europe, and financially and political stable. Gibraltar has been listed as a “White” territory by the OECD since 2009. Fortunately, incorporation of new companies or redomiciliation of companies from Malta to Gibraltar and vessels can be done relatively easily, without too much cost and the Europa Group has already started helping individuals to do so.

While the jurisdiction of Malta now appears to be less appealing, it is comforting to clients that Gibraltar remains rock stable. Should you require assistance with redomiciliation of your company or marine vessel to Gibraltar, talk to one of our Company Administrators today.

Countries on the Financial Action Task Force (FATF) grey-list for increased monitoring are:
Albania, Barbados, Botswana, Burkina Faso, Cambodia, Cayman Islands, Haiti, Jamaica, Malta, Mauritius, Morocco, Myanmar, Nicaragua, Pakistan, Panama, Philippines, Senegal, South Sudan, Syria, Uganda, Yemen, Zimbabwe.