A number of hedge fund managers established in London are currently transferring their operations to Malta. This is mainly due to the rising taxes and costs of doing business in the UK. Having said that, this is not the only reason. Most of these businesses find the Malta Financial Services Authority as being very serious yet flexible in its approach to regulated entities. In fact, the MFSA is very open and welcoming to new businesses wishing to establish themselves in Malta and it is normally possible to organise a face-to-face meeting with senior personnel at the MFSA on short notice. Moreover, Malta’s tax regime makes the country very attractive to entities wishing to establish themselves over here. Furthermore, running an office from Malta is significantly cheaper than in other parts of Europe. This because while the local work-force is highly educated, the salaries of employees are very competitive.
David Butler, founder of the consultancy Kinetic Partners, which advises hedge funds on their domicile and tax arrangements, is reported to have said that said: “It’s dozens, rather than hundreds, that are moving there at the moment, but opening an office there gives managers flexibility. [They] are sitting in London, saying: ‘I have too much country risk here – the tax rate is through the roof, the regulations are too intrusive’.”
Among the businesses that have made the move, there is Clive Capital, one of the largest commodity hedge fund managers around the world. This firm has opened up an office on the island and has moved about a quarter of its hundred employees to Malta. Other businesses that have established a presence in Malta along the same lines include Vector Commodity Management, a hedge fund launched last year by Gilbert Saiz, Duet Asset Management, Finisterre Capital and Belay Partners. Moreover, BlueGold Capital, one of the world’s biggest energy hedge funds has re-domiciled its parent company on Malta in 2008.
