Equinox Advisory was established in 2008 as a business focussed on providing a range of inter-related services, and has provided consultancy in economics, infrastructure, policy and regulations to governments and in legal matters, redomiciliation, management, corporate and tax to private sector organisations. Bernard Mallia, the firm’s CEO, has played an instrumental role in Malta’s development into the vibrant, future-facing jurisdiction it is today, thanks to the input he has provided both to local bodies such as various government ministries and departments, as well as to international bodies like the Commonwealth Secretariat and the European Commission. He explained the services Equinox Advisory can provide to the growing number of businesses and international investors who are doing business either with or in the country.
The Report Company: What has been the evolution of Equinox Advisory since it started operations in 2008?
Bernard Mallia: We started off in 2008 as an economics consultancy firm. Back then, we were exclusively focussed on economics studies, mostly on those that needed to be conducted for large projects in the private sector and those that needed to be conducted in order for the Maltese government to be able to apply for EU funding through the European Regional Development Fund, the Cohesion Fund and the European Social Fund. At that time, Malta was still getting used to the novelty of having to apply for funding from the EU, to a new EU programming period, and all the processes that are involved in that, so EU funding was a relatively new area. There was a learning curve between 2004 and 2007, and we started seeing that there were other ancillary areas that we needed to become experts in if we were to be able to offer a comprehensive service to our clients.
The first area that we had to go into in order to meet this objective was the legal area. In 2010, Equinox Legal was established to that end. The Commonwealth Secretariat became one of our major clients at that time and we were contracted on the drafting of national legislative texts, compliance and multi-million-euro court cases that needed complex economic quantifications and solid legal arguments to back them up. Then, in late 2012, we saw that there was a wave of new work that was coming in from the corporate side, so we decided to work in concert with other firms to provide services to these clients. This culminated in the Finance Monthly Law award for Commercial Law Firm of the Year 2014, an award which was based on feedback from a wide base of corporate clients. Today, we are in a situation where we can offer a comprehensive one-stop shop for companies coming from the rest of the world who want to set up shop in Malta.
Then there was also another initiative, where we were offering corporate services which were not of a legal nature, such as HR outsourcing solutions, in which we have been taking away some of the administrative burden from our clients. We also offer office services, where clients can rent managed or unmanaged office space.
In May 2013, we have started going into the area of technology. Within this sphere, we are specifically focussing on three main areas plus a new one: the first area was photocatalytic water decontamination and solar desalination. The second is in waste management, particularly microbiological treatment, and the third is in renewable energy and energy conservation. We are working on some very interesting projects that we are going to be proposing for an EU project when it comes to wind energy and static energy harvesting. These are very exciting areas and ones for which we will be trying to tap some EU funding over the next year. We have also gone into web development and graphic design. This area is still in its incipiency and we are still developing its long-term business model.
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Lastly, in 2014, we launched Equinox Academy, our training services arm that capitalises on our experience in consultancy to be able to offer educational services geared towards practical skills. Equinox Academy has obtained a license for the provision of educational services issued by the Maltese National Commission for Higher Education. Most of our courses are now accredited, which means that they benefit from easier EU-wide recognition under the Bologna process and the European Qualifications Framework. We have had clients from all over Southern and Northern Africa, from EU countries and the Middle East.
TRC: Who are you partnering with in these technology projects?
BM: In waste, we have worked closely with the Maltese government and its waste-handling arm Wasteserv to put together a study to be able to better understand and to tackle the problem of waste in Malta. We have also worked closely with private sector entities in appraising smaller-scale investments. In the other areas within technology, we have projects that we are developing on our own steam. We are looking at the possibility of obtaining some patents that we can commercialise and to pitch to investors from various parts of the world and we are also dealing with clients on a one-to-one basis to help them deliver successful electronic commerce solutions.
TRC: What proportion of your client base is international?
BM: Back in 2008, there was no proportion; it was 100 percent local work. Now we are at a stage where about 75 percent of our revenues come from foreign work.
TRC: In what ways can Equinox be a partner for international businesses coming to Malta?
BM: The answer depends on which sector the business is working in. We have a considerable number of sectors in which we are now experts, and I think that we can guide such clients very comprehensively. We can take care of all the administrative setup, tax optimisation and the recurrent reporting requirements if they want to set up shop physically in Malta, and we can also act as, or find, strategic partners if they do not want to go into the administrative burden of setting up a structure in Malta and the area is of commercial interest to us or our commercial contacts.
TRC: What would you highlight as the advantages of Malta as a destination for investment?
BM: The first thing that comes to mind is that Malta is very business-friendly and strategically-positioned. The Maltese have historically always been very business-oriented and that tradition is still alive today.
Malta offers a tax regime that, with a five percent effective corporate tax rate, is without any doubt the best in the whole of the EU, and it has a strong international reputation. Moreover, it is an EU destination, so anything that goes on in Malta is compliant with EU laws because Malta transposes all of the EU regulations, decisions and directives and has consistently, over the past years, outperformed most of the other countries in the EU when it comes to economic growth. While Malta is still a heavyweight in tourism, where it has built capacity over more than three decades, it is now also a jurisdiction of choice for high-net-worth economic activities like pension funds, patents and trademarks, financial services, educational services, software development, audio-visual production, online casinos, entertainment, maritime activities, and the production of medicines.
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Malta boasts a very skilled workforce, which comes at a lower cost than it does in other countries because the cost of living here is lower and the income tax rate is very competitive, as well as a citizenship by investment programme that allows for the naturalisation of people that can translate into a rights-based foothold in the European Union. Policy-makers are also easily accessible and always a phone call away.
We then have a very favourable infrastructure, especially when it comes to telecoms, which is one of the most important drivers for any business that wants to operate internationally, especially those whose core business is predominantly online.
Moreover, Malta boasts a very good port infrastructure and the biggest shipping fleet among all of the EU Member States, meaning that the Maltese flag, with all the advantages it brings about, is a flag of choice for the maritime industry. We have an airport that is linked with all the major destinations in Europe and throughout the world, and we are connected with all the major international hubs. The national aircraft register is also considerable and growing. Healthcare services are also state-of-the-art. Unfortunately, the road infrastructure remains a blot on our otherwise impeccable reputation, but there are a number of initiatives underway that are in the process of addressing this issue through both local and EU funds.
TRC: How do you promote your services to the public and private sectors?
BM: Most of our promotion is based on word-of-mouth advertising and are backed up by our extensive and informative website. We have delivered a number of key projects that have been successful in the past, and people speak to one another, so what happens is that when there are projects to which we can contribute, our reputation precedes us and we are asked to provide proposals.
Our approach to working with governments is always one where we are adamant about not transposing what we have done in other countries, but rather insist on working with them and trying to understand the situation in the country before actually going forward. Our underlying philosophy is that unless you understand the political and institutional setup within which things need to be done, you will not manage to deliver a successful project.
TRC: How does your approach differ when dealing with the public sector as compared to the private sector?
BM: When you work with government, although the fundamental aspect of client satisfaction is always paramount, the approach that you need to take is very different from the approach that you need to take when you are working with the private sector.
When you work with the private sector, it’s usually enough for someone with decision-making powers to be convinced that something you are proposing is going to help with cutting costs or increasing revenues.
On the other hand, when you need to get work from the public sector, there needs to either be a call for expressions of interest or tenders and a public procurement process. You are then essentially competing with your competitors for projects that you would have proposed yourself in the first place. Needless to say, because of this, many brilliant ideas never get to fruition stage as firms and investors are usually loathe to take the risk of investing time and effort into proposing something that might ultimately go to their competitors. However, some governments do have different systems that try to incentivise such ideas to be put forward and implemented by the entities proposing them.
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Mostly, what we do for governments is to provide advice on projects and initiatives that are either being planned or are actually ongoing. In such instances, the government will be setting a national strategy, implementing a project or identifying the best solution for a given issue, they would lack the required expertise to be able to do so themselves or would need an independent, unbiased opinion about it, and they therefore come to us for assistance. We also provide independent post-implementation evaluation.
For the private sector, the services we see more of include budgeting and forecasting, investment appraisals, business advisory, market profiling, the provision of legal advice, drafting of contracts, management board services, training and upskilling, HR outsourcing solutions and tax advice, as well as the other administratively complex work that relates to corporate services.
TRC: What is the corporate philosophy of Equinox and what values are you trying to instil in the organisation?
BM: Our core philosophy has always been that of going the extra mile to ensure the success of our clients, and this is what really matters to us. It’s useless trying to focus just on your own success as a company, because inasmuch as your own success can only be determined by the success that you can make other companies achieve through your advice, seeking exclusively your own success is a strategy that cannot work in the long run.
Our corporate philosophy therefore revolves around the view that our clients are our partners and in this sense is tersely encapsulated in the Equinox Advisory logo tagline which reads that we are perfectly aligned with our clients’ needs.
TRC: How do you align yourself with your clients’ needs?
BM: Let me be very frank about this. If the client doesn’t have a problem to solve or an opportunity to capitalise on, they don’t come to us. When they come to us, and try to give us an indication of what the problem or the opportunity is, the first thing that we do is to take note of what the client is saying, but not to take this as an absolute given. The reason for adopting this stance is that sometimes the client will be seeing things from an internal perspective. They will be caught up in what’s actually happening in the day-to-day running of the organisation, and at times, in order to formulate a great solution, what you need to do is to take a step back to get a clear picture.
On the basis of this picture, we then start building our own thoughts about the situation at hand, the concepts to utilise and ideas of what needs to be done in order for the problem to solved or the opportunity to be capitalised on, and if there are significant divergences from the picture given to us by the client, we discuss our view of things and identify the root cause of these divergences. Thereafter, we proceed to implement a solution based on the point-of-view that has been agreed to.
When you work the way we do, you often get satisfied clients because you are actually working with the client in finding a solution to their problem. Therefore, when I say that we are perfectly aligned with our clients’ needs, what we are saying in actual fact is that we are going to understand what their requirements are and then we are going to advise them or to implement a solution for them to resolve the problems or to capitalise on the opportunities that they have.