Achieving A Sustainable Regulatory Environment

Second edition of SME Week event held by The Malta Chamber of Commerce, Enterprise and Industry and the Malta Business Registry.

During an event organized by the Malta Business Registry and The Malta Chamber of Commerce, Enterprise and Industry as part of SME Week under the auspices of the Ministry for the Economy, European Funds and Lands, practitioners and businesses emphasized the importance of striking a healthy balance between the operational and the administrative when running a business to keep the same pace achieved post greylisting. This is within the context of exploring new economic niches and adapting to digitalization.

When addressing the conference Minister for the Economy, European Funds and Lands lauded the important work carried out by MBR over the past few months in relation to the FATF’s decision which was crucial in seeing Malta’s removal from the FATF’s grey list.

Minister Schembri also spoke about the hugely upended traditional processes of doing business and the fact that businessmen, practitioners, and CSPs managed to adapt quickly.

He highlighted that the measure for the introduction of a shared system, by means of a due diligence repository to facilitate documentation storage, is also being studied which would see entities and financial institutions refer to this repository, which would effectively end needless inconvenience.

He said that the joint MBR and The Malta Chamber event held today is a true representation of the spirit and objectives of SME Week, an event that serves as an important instrument in providing our SMEs with a unique opportunity to understand business challenges and improve them.

In her speech, Marisa Xuereb, President of The Malta Chamber noted that “when we speak about achieving a sustainable regulatory environment, we must analyze what we mean by sustainable.” She noted that sustainability needs to be considered in relation to three different factors; cost, economic growth, and safeguarding our reputation.

“In a time of economic uncertainty and global labour shortage, it is imperative for us to recognize that regulation must not stifle businesses who are already feeling the pinch, and where possible the regulatory burden must be minimized. We must focus on creating the right environment to foster new economic niches which play to our strengths as a country. We must learn the lessons of the past and ensure that we place good governance and due diligence processes at the forefront of our consideration,” said President Xuereb.

On her part, the MBR’s Chief Executive Officer and Registrar Dr Geraldine Spiteri Lucas said that now it is the time to take on board the lessons learnt from the greylist experience and look ahead to attract new businesses whilst ensuring that everything is in place. ‘Diminishing bureaucratic procedures does not mean neglecting regulatory aspects but rather as an opportunity to set eyes on new ventures’ emphasized Dr Spiteri Lucas. Additionally, Malta has grasped the attention of jurisdictions worldwide particularly due to the work done to get off the grey list in a short span of time. ‘It is indeed of great satisfaction to see other jurisdictions look upon us in relation to the FATF experience and the establishment of the BO Register. In fact, a few weeks ago the MBR hosted the EU Global Facility workshop which brought 12 EU member states to discuss the challenges and means to strengthen the BO Register. Moreover, next year the Malta Business Registry will host the Corporate Register Forum Annual Conference which will bring over 60 registers under one roof discussing the future of registries across the globe’ said Dr Spiteri Lucas.

Moderated by Daniel Cassar, Policy Executive at The Malta Chamber, the first panel discussion focused on post-grey listing and expanding new niches. William Spiteri Bailey, Partner at RSM Malta and chairperson of The Malta Chamber Financial Institutions Business Section emphasized that it is vital to ensure that serious investors look at Malta as an appealing jurisdiction and that forthcoming changes, especially those related to taxation, will register greater efficiency by putting departmental digital interconnectivity at its best use. Natalie Farrugia, Senior Desk Officer within the Registry Unit at MBR said “Sustaining transparency requires persistence in getting accurate information. The next steps need to focus on upgrading skills in order to continuously decrease bureaucracy.” Dr. Chris Mifsud Bonnici, Senior Manager – Legal and Regulatory at PwC Malta noted that we must look beyond the grey listing, and serious discussion needs to take place to ease the process of doing business. He added that “we need the right compliance culture and mindset to protect our reputation on jurisdiction without missing the wood for the trees.” Andrew Schembri, Head of Compliance at MBR, noted that the registrar was assigned more powers and resources and highlighted that supervision should not be interpreted as companies being problematic but rather as a means to enhance risk assessment.

The second panel focused on digitalization. Dr Marthese Portelli, CEO of The Malta Chamber said, “there is a global labour shortage and this will not go away anytime soon. Businesses need to optimize their processes to ensure that resources are utilized correctly, with employees prioritized for those tasks that cannot be automated.” Kurt Izzo, Head of IT at MBR, noted that businesses are keen on implementing digitalization actions. He said that, “there was a significant uptake of online services to the current system and digitization of annual returns saved time for companies.” Simon Montanaro, CTO at Melita, emphasized that having a telecommunications and digital infrastructure is vital. He added that,” customers will not tolerate any company not to be real-time in this day and age. Collaboration and support between the private and public sector are crucial, especially with regards to cyber and information security.” Dr Damian Cassar, Senior Professional Officer within the Legal Department at MBR, stated that “more effort needs to be implemented to counter challenges that are still met with single member companies or non-tech conversant directors, particularly at a mature age.”