By now, everyone should know that Malta has been placed on the FATF’s naughty list for being associated with one too many financial crimes. This won’t probably have an immediate impact on your life, but it may become a burden in the longer-term.
Until the occurrence of the Covid-19 pandemic Malta maintained high employment, investment and overall strong economic progression. So what might change now that Malta is greylisted?
Best Case Scenario.
Malta Continues to conduct the same level economic activity, simultaneously working on our institutional weaknesses to bring about greater transparency on a business and political level.
If we play our cards right, and there is a big ‘IF’, Malta could see itself back on that white list this October.
Forget our reputation restoring itself over the foreseeable future though. Extra scrutiny will always be incurred when engaging in business dealings. This extra scrutiny comes at a cost, and believe it or not, is translated to higher prices burdened by the average consumer.
Worst Case Scenario — The Domino Effect.
Let’s assume that foreign businesses operating in financial services, or gaming decide that having an establishment in Malta may significantly compromise reputation leading them to pack up their bags and leave the island. What could potentially follow would be and exodus of foreign workers and investment, leaving our beloved property market and pretty much any other industry in unchartered waters.
Property is highly leveraged, meaning people obtain loans to pay off the bulk of their estate. If people working in heavily impacted industries lose their jobs, then they may be unable to pay off their loans, possibly losing their property and even more. This would subsequently send ripple effects throughout our economy.
If big money spenders and investors leave the island, so will the jobs, pushing Malta into a recessionary period over-time.
We obviously hope that we face the better side of the coin, but the seriousness of being grey listed could have significant drawbacks at face value and cannot be taken lightly..
As much as we love our tiny island, it does have its problems that can significantly impact your wealth as an individual in the longer term if we fail to get back on that whitelist, or even so, find ourselves back on the greylist in the future.
Foreign business owners are already faced with enough headaches just trying to open up a bank account in Malta, let’s hope this has not been the final ‘cherry on top of the cake’ for them, giving them every other reason not to consider Malta as a place of domicile for their businesses.
This is a sensitive topic and wish not to enforce our views on our audience, But our informal opinion would be not to limit your investing opportunities to our island and look beyond.
[There are obviously more implications than what has been said in this article, if you’re interested in finding out more check out — https://lovinmalta.com/opinion/how-malta-greylisting-impacts-you/]
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Any views or opinions presented in this article are personal and shouldn’t be taken/used as professional advice as we are not qualified financial advisors.
Any statistics mentioned have all been linked to their respective documents together with their ownership.
Lastly, we would like to note that this article has no tie to our professional jobs and was conducted in our free time.