Island of Innovation – The European Magazine
Investor protection, business ethics and a stable economic framework underline Malta’s approach to emerging technologies. Intent on enabling rather than stifling innovation, Malta was among the first to introduce regulation for funds to invest in digital assets, and the first to enact robust, forward-thinking laws regulating digital ledgers and upcoming technologies. ‘Blockchain Island’, as it has become known, Malta appeals to developers and investors alike for its accessible regulators, economic growth, an increasingly sophisticated workforce and a supportive ecosystem.
The Maltese government has prioritised the technology sector and is actively developing an environment within which technology and innovation are encouraged to thrive. In addition to issuing guidelines for the alignment of the existing tax framework with assets and transactions prevalent in digital ledger technologies, local authorities have laid out a solid and progressive foundation consisting of three bodies of law, namely the Virtual Financial Assets Act (VFAA), the Malta Digital Innovation Authority Act (MDIAA) and the Innovative Technology Arrangements and Services Act (ITASA).
The Maltese government are encouraging tech innovation in a bid to encourage innovation in the sector.
The VFAA creates regulatory stability for activities involving digital assets that are intrinsically dependent on, or utilise distributed ledger technology. By strictly regulating the gatekeepers in the industry, the Malta Financial Services Authority is supported by a structure that prioritises compliance and responsible business ethic, including the prevention of market abuse. The MDIAA and the ITASA promote the development of technological innovation.
The MDIAA provides for the establishment of the MDIA, the ad-hoc authority regulating innovative technologies. The MDIA is responsible for promoting Malta as a centre of excellence in the field, while setting and enforcing standards that ensure compliance with international obligations, with the goal of protecting and supporting all users.
The ITASA assesses innovative technology arrangements such as software used in digital ledger technology, smart contracts and decentralised autonomous organisations to ensure that those obtaining certification meet standards of legality, integrity, transparency, compliance and accountability. Certification may be obtained for the arrangement’s features, attributes or performance and requires compliance with anti-money laundering law and data protection law amongst others.
Forward-thinking strategies
Virgin territory is being explored, and Malta has already set up an artificial intelligence taskforce in its determination to create a fertile environment for artificial intelligence, the Internet of Things and innovative technologies. The government considers technology as an indispensable pillar for the advancement of the local economy. Malta was previously at the centre of navigable routes in the Mediterranean and beyond, but nowadays it is the hub for the borderless, emerging tech industry. The Digital Malta Strategy has earned Malta top marks in the proliferation of ICT throughout society and this trend continues in the expected introduction of distributed ledger technologies in the provision of e-Government services.
Aligned with this drive, KPMG in Malta boasts a cross-functional team, which has not only supported national initiatives, but has also been at the forefront in providing entrepreneurs and investors alike with assistance in regulation, corporate matters, taxation, accounting, financial statements audits, and last but not least with software development. One of the very first to be appointed systems auditor by the MDIA, KPMG relies on the expert knowledge and experience of its local staff. The team works seamlessly to deliver holistic solutions to its clients in conjunction with specialist colleagues across the globe, and provides assistance in going beyond borders, akin to the very nature of the sector.
Recognising that economic growth requires forward-thinking, Malta continues to welcome disruptive technologies by adopting laws and adapting skills to meet the speed of innovation in the 21st century. KPMG in Malta champions the emerging tech industry, cherishing its transformative and innovative elements as keys to value creation.