Hey Hedge Funders, Here Are 10 Reasons You Should Move Your Firm To Gorgeous Malta


Photo: Wikimedia Commons

Malta. It’s a small island republic in the middle of the Mediterranean Sea, and it’s slowly becoming a financial hub for hedge funders.Aside from the nice weather and the ocean views, financiers are also attracted to the island’s membership in the EU and lax taxes.

This week, Bloomberg Market Magazine wrote a profile of the island country’s bubbling hedge fund industry.

But it’s obviously more than just attractive laws that are luring hedge funders, so we found other reasons why Malta is awesome.

300 days of sun.

Malta is a Mediterranean island and enjoys a balmy, mild weather. The average temperature in Malta is about 73°F year-round. It gets as cold as 54°F in January and as hot as 93°F in August. The hours of sunshine in Malta add up to about 3,000 hours per year--one of the highest in Europe.

Its island geography allows for hobbies such as sailing, fishing or any other water sport.

Source: CIA Factbook, Wikipedia, Bloomberg Markets

The scenery's not bad either.

Read: very very very low taxes.

Corporate taxes in Malta are 35%, but most foreign corporations only pay 5% after deductions.

In 2010, Malta decreased its personal tax rate to 15% from 35% in order to attract more talented professionals to the island.

Source: Bloomberg Markets

The nightlife scene is pretty lively. In the summer, open-air clubs are popular.

You won't believe which famous family has been seen there recently.

During the summer of 2011, the Jolie-Pitt family was seen out and about in Malta. Brad Pitt was filming on location in Malta, and Angelina was spotted around the island with Maddox, Pax, Zahara, Shiloh, and twins Knox and Vivienne shopping and visiting parks.

Source: People, People 2

For hedgies from the US or UK, it won't be hard getting around because English is one of Malta's official languages.

For over two centuries, Malta was part of the British Empire. Although the country is now independent, the British influence remains in that most Maltese people speak English fluently and the Maltese language--similar to Arabic--is written in the Roman alphabet.

Source: Bloomberg Markets

Feeling lucky? There's 4 casinos in Malta.

There are four casinos across Malta--and keep in mind the island is only 125 square miles. They have varying themes, so you can choose what you like depending on your mood. The casinos range from elegant colonial-style villa to ultra modern hotel complex to a restored 17th century harbor-side palace.

Source: Visit Malta

Malta is way cheaper than other hedge fund hubs like Dublin and Luxembourg.

One hedge fund consultant told Bloomberg Markets that it only takes €20,000 (about $25,000) to set up a fund management company in Malta--about half of what it costs in Luxembourg.

Another hedge funder said he moved his family from London to Malta, and they are now building their own home on the island--something they could never have afforded to do in London.

Source: Bloomberg Markets

Malta is part of the EU, which could make oversea hedge funds based there more attractive to international investors.

It's becoming harder to raise money in the EU for hedge funds that are not based in the area. The EU has even tried to block overseas hedge funds from fundraising in the currency zone. Although the rule didn't go through, it could be beneficial for many hedge funds to set up shop in Malta (which joined the Eurozone in 2004) and get that EU address.

Source: Bloomberg Markets

There's a lot of transparency in hedge fund regulation in Malta, which can be a good thing.

The Malta Financial Services Authority takes its job monitoring hedge funds on Malta very seriously, so the high amount of oversight could be a selling-point for risk-averse investors.

Hedge funders must apply for a licence to operate in Malta, and the MFSA conducts extensive due diligence before issuing such a licence. They've turned funds that appear too risky or make bets on exotic assets such as racehorses or professional athletes.

The government of Malta requires quarterly audits from hedge funds and background checks of all hedge fund owners.

Source: Bloomberg Markets

Don't believe it? The number of hedge funds flocking to Malta basically prove the island's appeal.

The number of hedge funds in Malta has increased almost 30% in 2011, and assets under management have gone up 15%.

As of November, there are about 500 funds in Malta with a total of $10.7 billion in assets under management.

Source: Bloomberg Markets

Other places around the world are also calling for financiers...

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