Malta is pivoting towards Asia in a bid to expand its financial footprint beyond Europe — and it’s delaying a major global tax reform to stay attractive while doing so.

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FinanceMalta, the island’s public-private body tasked with promoting the financial services sector, has made clear its ambitions to court new investment from the East, with Japan emerging as a “key partner” in ongoing outreach efforts. The shift forms part of a wider strategy to position Malta as an agile and innovation-friendly jurisdiction in global markets where competition is intensifying.

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The announcement was made in conjunction with the publication of FinanceMalta’s 2024 Annual Report, in which chairman George Vella described the organisation’s engagement with Asian markets as both “deliberate and strategic.” The push has already begun to bear fruit, with international stakeholders showing growing interest in using Malta as a base for cross-border operations.

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But courting new business also means staying attractive on the regulatory front — and here, Malta has made a notable move. In one of the year’s most consequential decisions, the government, backed by FinanceMalta, opted to defer implementation of the OECD’s Pillar Two rules. These rules are part of a broader global tax agreement that introduces a 15% minimum corporate tax rate for large multinational companies, aiming to curb profit shifting and base erosion.

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For Malta, which has long relied on a tax system that incentivises foreign investment through refunds and effective rate reductions, the new rules pose a clear challenge. Deferring their implementation gives the country time to align with EU state aid rules and develop a more tailored response — but also signals a clear intention to protect its competitive edge for as long as possible.‎

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It’s a calculated gamble. While many EU countries have moved ahead with adopting the OECD framework, Malta is holding back, citing the need for regulatory alignment and investor stability. FinanceMalta argues that the move has helped sustain confidence among international investors during a period of deep global transition.

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“We continued to consolidate the momentum gained in the previous year,” Vella said, pointing to “strong collaboration with our stakeholders, members, and the authorities” as key to maintaining agility and relevance. The message is that Malta isn’t just looking outward — it’s actively reshaping its own positioning in response to shifting global rules.

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At home, FinanceMalta has also ramped up collaboration with the Malta Financial Services Advisory Council, a body tasked with long-term planning for the sector. Together, they’ve been aligning public and private strategies to deliver tangible outcomes, including regulatory proposals, innovation frameworks, and sector-specific initiatives — particularly in fintech, ESG finance, and digital services.

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The goal is not just growth, but future-proofing. With a member base approaching 300 firms, FinanceMalta is betting on a more integrated model — one where jurisdictional appeal isn’t just about low taxes, but also institutional credibility and readiness for new financial paradigms.

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Whether the Asian outreach translates into long-term structural inflows remains to be seen. But Malta’s financial pitch is evolving — and unlike in years past, it is being shaped by global realignment as much as by domestic reform. The decision to delay Pillar Two is a signal to investors that Malta is still playing by its own rules — for now. The question is how long it can continue doing so without falling out of step with the broader regulatory tide.

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