Malta slips down financial secrecy index

While most other countries have improved their secretive financial systems and made them more transparent, Malta has slipped down the rank because it was among the minority of jurisdictions that increased their secrecy score, bucking the global trend towards greater transparency.

Malta is thus the fourth most secretive EU country according to a global index ranking countries most complicit in helping individuals hide their finances from the law.

The island has creeped up from the 20th most secretive country globally in 2019 to the 18th most secretive in the 2020 index.

Tax Justice Network’s financial secrecy index, which ranks countries on the size and secretiveness of their financial sectors every two years, showed the UK edged closer to the top 10 most secretive financial systems in the world. It ranked 12th out of 133 countries, having shot up from its previous slot at 23rd.

The 2020 index sees the Cayman Islands topping the list of secrecy jurisdictions, followed by the United States and Switzerland.

Luxembourg is the first EU country to feature on the index in sixth place, ahead of the Netherlands in eighth, Germany in 14th and Malta in 18th.

Malta has long been criticised for its tax regime, which benefits foreign corporations and individuals who set up letterbox companies for tax purposes with very little actual physical presence on the island.

The Financial Secrecy Index ranks each country based on how intensely the country’s legal and financial system allows wealthy individuals and criminals to hide and launder money extracted from around the world.