We are planning a crusade. Non-violent and totally legitimate. We are off to Malta to attract UK facing businesses (which will suffer from a hard Brexit) to relocate to Gibraltar. How does this work? I’ll explain the theory.

Malta has a population of 418,000 (around fifteen times that of Gibraltar) living on a space of 316 sq m (around 50 times bigger). It joined the EU in 2004 and the eurozone in 2008. From 1800 to 1964 Malta was first a protectorate of the British Empire then a Crown Colony. It has been an independent state since 1964. Malta’s GDP is around €10bn (just over five times that of Gibraltar), growth averages 6% and unemployment is c 5%.

No deal is better than a bad deal. That’s UK government policy on Brexit. Which means if there is no deal between the EU and the UK by March 2019 then World Trade Organisation tariffs will most likely apply to trade between the EU and the UK. Hence a business in Malta (as indeed anywhere in the EU) selling a product or service into the UK will more than likely have to pay the UK a tariff on each sale, and vice versa and there are a significant number of businesses established in Malta exclusively or predominantly selling their services in the UK.

Meanwhile, the common market between Gibraltar and the UK is set to remain, so there should be no post Brexit tariffs from businesses here in Gibraltar who sell their services into the UK. Has Gibraltar just got better? Where else can offer low tax rates in a Mediterranean climate with English based law, an existing internationally recognised regulatory regime, a skilled workforce and with single market access to the UK? Gibraltar is the future!

Brexit could, therefore, damage the profitability of those UK facing Maltese companies with Gibraltar the most likely beneficiary. Insurance Business magazine in July 2017 reported that “…insurance providers based in the EU will not be able to keep selling into Britain if the UK loses access to the single market once it leaves the bloc. Gibraltar is proving to be attractive for insurers because it is a British territory.” An application to re-domicile St Julian's (a UK-focused motor insurer currently based in Malta) has been submitted to the Malta Financial Services Authority in order to protect the business and enable the insurer to continue trading with the UK,” said Markerstudy (St Julian’s parent company) in a statement, as reported by Reuters.

Chestertons has three offices in Malta. Following a reconnaissance visit to the island last month, the offices have agreed a reciprocal arrangement to provide advice to individuals and / or companies seeking to establish in the other territory.

Property experts from Malta will be on the Rock on 18th (from 13.00) and 19th October and are available for no obligation private consultations with any individual or company wishing to ask questions on Maltese property related matters, whether residential or commercial, purchase or rental. Information on property taxes, utility costs, best areas to live and work will also be available. No question is too large or too small!

Property experts from Chestertons Gibraltar are due to visit Malta a month later and with a much larger population, economy and number of companies who might suffer from Brexit, we are excited about rolling out the red Gibraltar carpet on foreign soil.

Editor note
If you are interested in speaking with our property experts from Malta, please contact claire.thirkill@chestertons.gi as no obligation appointments are being taken for 18th (pm only) and 19th Octorber.