Author: Mel Chamber

Malta Business Bureau and MHRA believe the rules are a step closer to a fair level playing-field in the tourist accommodation sector.

On the 7th of November 2022, the European Commission adopted a proposal for a Regulation for new rules on short-term accommodation rentals (STR). The rules aim to create more transparency in the short-term private rental accommodation sector. Having risen in popularity in Malta and across the EU, alternative private short-term rentals brought huge benefits to hosts and tourists, but the new model also raised several new challenges to other accommodation operators and local communities. For instance, short-term rentals contributed to increased demand for real estate development with a consequential impact on housing prices and the environment.

The Malta Business Bureau welcomed the proposal for an STR regulation given that this economic activity remains generally unregulated or without sufficient enforcement, to the detriment of legitimate businesses.

MBB President Alison Mizzi stated that, “having a Europe-wide level-playing field through clear and simple rules for the registration and compliance of short-term rentals is essential and everybody stands to gain. Tourists will continue benefiting from a wide range of accommodation choices, traditional accommodation providers can compete on a fair level playing-field, and public authorities will have a more robust legal backing in gaining access to data, which will contribute to a more sustainable tourism ecosystem.”

MHRA President Tony Zahra outlined that, “Hotels and other accommodation providers must adhere to strict regulations to be compliant and in accordance with existing laws and regulations which ensure the safety and wellbeing of guests. MHRA has been vocal over the years at the rampant disregard of these strict rules and regulations by non-licensed and non-compliant accommodation owners who not only fail to abide by these regulations but also fail to pay Vat, Income tax, and Eco-tax on earnings. This has the effect of possibly having substandard accommodation which affects the quality of the Maltese product and a great loss to the exchequer.”

Mr. Zahra added that, “A recent report compiled by Deloitte entitled Carrying Capacity Study of Tourism in the Maltese Islands found that if all the beds available today and those applied for are approved, Malta would need 4.7 million tourists staying an average of 7 nights to achieve an 80 per cent occupancy throughout the year. If one adds the unlicensed and unregulated, then the number of tourists that is required is increased proportionately.”

Mr. Zahra concluded that “It is the Government’s job to ensure that all accommodation providers are compliant with the laws and regulations in force and to take immediate action to ensure a level playing field for all providers of accommodation.”

The STR regulation aims to create a framework which enables public authorities to receive accurate data from online intermediary platforms on users listing short-term accommodation rentals, the number of rented nights, and of guests. This will enable them to use this information to draft and implement better and more effective policies.

The STR regulation is also proposing for the setting up or updating of existent local registration systems that will generate a unique registration number per property. This will need to be displayed on online platforms and verified.

The Malta Business Bureau will be following the EU negotiations in the coming months as well as analyse the proposed regulation in more detail in ensuring that it is aligned with the Maltese businesses’ interests.

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.”

“Thanks to active dialogue with The Malta Chamber, we look forward to leaving lasting and tangible benefit to all members as a result of our collaboration.”

The Malta Chamber of Commerce, Enterprise and Industry signed an Alliance Agreement with Finance Incorporated Ltd. Finance Incorporated Ltd offers eAccounts to corporate and private clients and provide the full range of transaction infrastructure services including card issuing services.

“A digital-first approach towards business is key in today’s fast-changing world and digital solutions are the new way for future generation financial services. It enhances competitiveness by facilitating a more customer-centric approach whilst ensuring better commercial performance and future proof operations. As a matter of fact, we are constantly pushing policy which facilitates take-up of digital services and digitalization whilst embracing innovation,” said Dr Marthese Portelli, The Malta Chamber CEO, ahead of the signing.

“Today marks an important milestone in the story of Finance Incorporated Limited and our operation in Malta. We are proud to be members of The Malta Chamber and view this collaboration as the start of a long and fruitful relationship. We think in terms of what we can bring to the table and, as one of Malta’s largest financial institutions, we have a responsibility towards the nation’s commerce. Thanks to active dialogue with The Malta Chamber, we look forward to leaving lasting and tangible benefits to all members as a result of our collaboration. Of course, we also stand to gain from being an active member of such a vibrant community of business in Malta and extend an invitation to explore new possibilities to all The Malta Chamber’s members,” said Cenk Kahraman, CEO of Finance Incorporated Ltd.

The agreement was signed by The Malta Chamber CEO, Dr Marthese Portelli, and Cenk Kahraman, CEO of Finance Incorporated Ltd.

The aim of the signing is that of driving discussion within policy areas which are relevant to digital payment solutions.

The Malta Chamber of Commerce, Enterprise and Industry have signed a bronze collaboration agreement with Convera with the aim of driving discussion within policy areas which are relevant to digital payment solutions.

Marisa Xuereb, The Malta Chamber President said that, “with technology being one of our five main pillars, The Malta Chamber is proud to be partnering with digitalisation champions such as Convera to push digital payments as a true enabler which drives the industry forward.”

She explained that The Malta Chamber will now be better equipped to take a more prominent and proactive role within the business sphere by promoting areas of safe, secure and reliable online business trading.

Mr Mark Anthony Camilleri, Malta Country Head at Convera, said “Our aim is to help companies navigate global payments so that they can focus on growing their business with confidence. Formerly known as Western Union Business Solutions, Convera is pleased to once again partner with The Malta Chamber to serve and support the preparedness of local businesses to grow internationally.”

The Bronze Collaboration Agreement was signed by Marisa Xuereb and Christopher Vassallo Cesareo as President and Deputy President of The Malta Chamber, respectively, and Mark Anthony Camilleri, Country Manager and Executive Director at Convera.

“It is clear that every effort must be made to ensure that we protect and enhance the competitiveness of our economy and such a check will indeed assist in this effort”.

The EESC Employers’ Group, BusinessEurope, SMEunited and SGI Europe welcomed the decision of Commission President Ursula von der Leyen to introduce a competitiveness check in all future EU policies and legislative proposals. The introduction of a competitiveness check was announced by the Commission President on Wednesday 19 October in the European Parliament and the Tripartite Social Summit.

The Employers’ organisations have been calling for such an instrument for the past two years, notably in the context of the Conference on the Future of Europe. In fact, the idea was included in the CoFoE final report as one of the measures on proposal 12 on Enhancing EU’s competitiveness and further deepening the Single Market, which states “New EU policy initiatives should undergo a “competitiveness check” to analyse their impact on companies and their business environment.”

At a time of considerable preoccupation regarding the future growth prospects of the European Economy, European enterprises are facing very difficult times, with high inflation rates coupled by high energy costs. This is putting into jeopardy the very survival of thousands of enterprises across the EU.

Stefano Mallia, President of the EESC Employers’ Group said:
“It is clear that every effort must be made to ensure that we protect and enhance the competitiveness of our economy and such a check will indeed assist in this effort”.

Moreover, Markus Beyrer, Director General at BusinessEurope said:
“We are convinced that to maintain and enhance the competitiveness of EU big and small enterprises we must always assess the impact of all EU initiatives on companies and their business environment”.

Valeria Ronzitti, SGI Europe General Secretary, was keen to emphasise that:
“If well-designed, such an instrument will in no way undermine the protection of human, social and workers’ rights nor environmental and consumer protection standards, rather it would boost growth prospects and prosperity, eliminating obstacles and administrative burden”.

Veronique Willems, SMEunited Secretary General, said:
“We must do everything possible to allow our SMEs to increase their competitiveness in the Single Market and globally, therefore this should be a key consideration whenever we decide to introduce new legislation”.

The Employers’ organisations concluded by saying that they look forward to engaging with the European Commission in the development and implementation of the proposed Competitiveness check.