Ink Global interviews CSB Group CEO Michael J Zammit

Would you be able to give us an overview of the strategic priorities you set up for the group when taking over from Mr Tony Zammit, and what have been the milestones and achievements of CSB Group since then?

I cannot say that when I took over that my priorities were the same as they are today. I was of a much younger age. But my idea was to build a business that can support clients and cater for all their needs from A to Z. Originally, when my dad started and I joined at a younger age, we were focusing on a number of services, and corporate services was and is still our backbone – the setting up of companies for tax planning purposes and corporate structuring. Today, and at that time, the whole idea was to offer a one-stop shop. Other than the setting up of a company, we can also support and see to our clients’ needs when it comes to their actual accounting, their actual tax work, their tax administration, their tax returns, their payroll.We can also support clients with all their legal and regulatory work. We have our own law firm and we can see to those needs. Besides this, we can also assist with recruitment. That was one of the original services my father had commenced with when he set up CSB in 1987. We extended our service offering from the purely professional corporate services work to go beyond that by also offering serviced office space through Regus. And most recently, even the real estate through Malta Sotheby’s International Realty. Today we are a team of 60 people and are able to see to our clients’ needs from A to Z. CSB Group possesses such a diversified group with an array of services from real estate. It normally starts off from a company, or a licence. It could be an online betting or gaming licence. It could be a hedge find. It could be an investment services licence. So they would engage us to help put an application together to submit to the MFSA or the gaming authority, and once they get the principle approved they would move on to the company. They need to recruit staff, they need to find office space, they will need us to do employment contracts and lease agreement…one thing leads to another.

What would you say are the relative contributions of each business units and how do you see that evolving?

The main driver remains the setting up of Maltese companies, which are used for various reasons; primarily with an interest in tax legislation that offers an attractive or interesting tax refund system. Companies then generate their own spin-offs. So if clients are not necessarily applying for the licence, they could still need an office here and still be employing people for customer support, marketing, design or a number of different reasons. The need of companies will then spin off possibly to real estate and the recruitment of staff. The idea is to retain them within our family, within our group, and extend to see what other services we could be offering.

CSB Group caters for many key sectors such as iGaming, Aviation, Maritime or Financial services, etc. What would you say is really your area of expertise and where is CSB definitely the top-notch leader?

We tend to position ourselves at the forefront when there is new legislation coming out and take advantage of the new opportunities by marketing them internationally and getting the message across to our associates, partners and offices we work with overseas – as we did way back in 2003 when Malta came out with the betting regulations and then converted them to remote gaming regulations. At that time, Malta was the only EU jurisdiction that had regulations in place for online gaming and we took advantage of that opportunity by travelling extensively and building partners overseas to get the message across and then eventually be able to support requests that come in. Being there at the forefront and taking advantage of such opportunities allows us to be among the leaders in our area of specialisation and focus. It’s the same in maritime and the shipping and yachting companies. Malta’s the fifth-largest ship register in the world, if I’m not mistaken, and a large number of super-yachts are flying the Maltese flag. Our history and the fact that we have been involved in the shipping industry going back so many years keeps putting Malta on the map. More recently, we’re in aviation but we are more focused on the hedge fund and financial services industry, such as companies setting up FX companies to be able to sell forex over the internet. We were the first company to get approval for a company to be able to offer buying and selling of foreign exchange over the internet, in Malta. And we were also the first company in Malta to register an electronic money institution so companies can buy goods and services by exchanging virtual money that is regulated by the MFSA.We’re a young management team – although not as young as we were – and we like technology and the internet, as that’s what offers opportunities. It’s about being creative and adapting those opportunities in the legislation to then come up with solutions to see to clients’ needs and demands.

What would you say are CSB Group’s key competitive advantages compared to other Maltese advisory firms?

I would say our core competitive advantage is that we have specialised teams in their relative areas of expertise. Our teams of professionals can see to clients’ needs depending on what they are. We’re a very multidisciplinary organisation. We have a team of lawyers, a team of accountants and a team of tax professionals. And a team for business development who see to clients’ needs in the initial phases to first understand what it is they are after and what it is what they need. Once we establish that, we can start seeing which team within CSB Group will handle those needs. Something else that we’re focusing on is the residency where clients are relocating to Malta to take advantage of the various tax products we have relating to an individual. There is the high net worth individuals programme (HNWI). There’s the Global Residence Programme(GRP). Now there is the Malta individual investors programme (IIP) as well as the Residence Programme Rules (TRP). So we can assist clients with the actual application to obtain residency, and such residency programs then also require that the client rents or purchases a property – and we can also see to that. So going back to the core competitive advantages. One is that we have a team of professionals all specialising in an area of specialisation. So we are well geared up to be able to handle increased and varied client needs.

CSB caters to Maltese businesses and entrepreneurs, but also to an international clientele. How significant is this international business for CSB Group, and how do you see this evolving?

Our client base is 95% international. So we are dependent on the international market. As I mentioned previously, by presenting to them the opportunities as part of our marketing and business development program, the idea is to talk with clients, bring them to Malta and then take care of their local needs.

Which is the main market?

It’s mostly European with a focus on the UK, but also Switzerland, Germany, Scandinavia, and even the Middle East and now Hong Kong, China, Canada and the US. But predominantly, it's the European market. CSB Group represents a "one stop shop" for companies seeking to establish an eBusiness operation in Malta, being one of the founders of eBusinessMalta.com consortium. What does it mean for the group and how does the CSB Group position itself in the European competitive landscape? The idea originated from what we originally had from our involvement in the iGaming industry. We wanted to replicate that to other industries whereby we can offer a one-stop shop platform to any companies who want to take their company online. We can bring together the various components and companies one would need to go online – such as a legal team to ensure you are complying with the regulatory requirements, data protection, consumer rights and licensing requirements, which can be very complex so one must keep very well abreast of the developments. On the other hand, we can actually assist clients with the setting up of a payment gate and payment methods. You need a platform that can take, besides the euro, other currencies that will serve the countries you are planning to penetrate. And we can also assist clients with the actual implementation of websites and web development; the concept and design for such companies that are going online from an offline business. Again, the idea was to offer a one-stop shop, but under a different brand, to show the world outside that Malta would be a well-positioned island to have your domicile and head office for such operations.

According to your experience, what are the main benefits of setting up a business in Malta compared to neighbouring nations such as Cyprus?

I think there are a number of different factors. One of them is our legislation related to tax and fiscal incentives. The second, I would say, is our strong banking infrastructure, which, to date, has not been affected like our neighbouring islands. I think we have a workforce that is on one side very hard working and talented, and on the other, the salaries are still very attractive in terms of the actual packages that you find internationally. And also, fourthly, are the general running costs.

Utility rates are very high, for manufacturers, for instance?

I can’t say I’m well versed on manufacturing but, if I’m not mistaken, I think Malta Enterprise are offering some incentives and rebates depending on what investments you’re planning to put in and how many people you’re planning to employ. They are offering land concessions and factories or office space within the various parks we have around the island. If one has an interesting proposition, it will be given the relative attention to go live with that project. I think, overall, the Maltese have a can-do attitude. The fact we are on an island means we have always been survivors. I think all these components – and the fact we speak English – come together for a good recipe in attracting international companies to the island.

How would you rate the main Government incentives for foreign investors and where do you see room for improvements?

There is always room for improvement across the board, from the government to the local companies who are involved. The most important thing is that if someone is promising and presenting incentives, that they are adhered to, especially from a timings perspective. You are raising hopes of clients when you say that, “within a month or two months, we can give you approval on this or a concession for this.” The most important thing is that whatever timeframe is given, that it is adhered to and if for any reason it cannot be, that you advise clients in advance to preempt expectations on when the original deadline was perceived to be – to be transparent.

Is the government reactive?

Not reactive… it's not even the government, I think, it’s more the various departments. We businessmen - all we need is an answer at the end of the day. Is it “yes”? Is it “no”? And if it’s “no”, tell me why not and tell me what I need for it to be “yes”. Don’t tell me at the very last minute, when I am planning to go live with a project and had I known about these things before I would have maybe been able to put the necessary investments in place or have more resources on my team. I think it’s about being more proactive in support and dialogue.

Do they help you out in getting international business?

Whenever we needed support, the support is given. The most important thing is that when one qualifies the prospect or the lead, you make sure you are taking somebody that has the necessary credentials, investment know-how, track record and presents such investors that actually satisfy the criteria of what is being sought – and not have governmental bodies do that homework themselves when it could be done by people like us, who could get to the point at a much faster rate. That is something we like to do ourselves. By doing that homework in advance ourselves, we do not present an application that didn’t have a good indication that this should go through, and is a time-waster.

If I am not mistaken, you have also been heading the operations of Malta Sotheby’s International Realty (Real Estate) for the past five or six months?

Yes, from earlier this year.

How is the offering for Malta in terms of luxury properties?

This is something that I always wanted to do from a young age. If my father hadn’t started CSB, my plan was to go and work at a real estate associate, so I am glad I have been given this opportunity now. It’s something I enjoy doing. I like to get involved in a project when it’s in its infancy.

When was Malta Sotheby’s International Realty introduced?

We attracted the brand last year. We officially launched the brand in June and we opened our first outlet in Sliema in September. The prospects are looking very interesting. Real estate on the island, compared to other international markets, has still got a good investment opportunity as long as your property is within the right location, or has that feature or particular surrounding or view to make it keep appreciating. Generally, the appreciation could be anywhere between six and 10% per annum if you are investing or buying a property that is positioned in the right location. We are seeing that through our various service offerings and international marketing efforts, and especially through the various Sotheby’s offices around the globe. There are more than 700 offices now. Sotheby’s International Realty this year, is focusing specifically on the European market, to grow its presence in Europe. That’s what attracted them to invest in our island and partner with us. So we are supported by a very good brand, which has international exposure and is able to get itself in the Financial Times, in Bloomberg, the Daily Telegraph and the Sunday Times UK, so they are a brand that everyone wants to associate with and this is giving us opportunities across various fronts from a marketing perspective and even an international client perspective. Clients who are familiar with the brand want to remain with the brand when they go beyond their shores, and have that Sotheby’s office in a particular country take care of their needs. Clients who are dealing with Sotheby’s are generally very discerning clients, so they are expecting to see that level of service they are accustomed to in whatever country they may be.

Looking at the future, where do you see the new areas of development for the group?

At this stage it is more a matter of consolidation. We’ll keep strengthening our current team and investing in our current team through continuous training programmes, which we either do in-house or externally. On the other hand, we’re growing our client base even more. There are some other related business opportunities that we are looking at the moment and considering. We have to keep on extending our service offering, within the financial service industry and also possibly within in the real estate industry. It’s still premature days, but opportunities start from ideas, and you need to be highly motivated and challenged to make them happen, because things don’t happen on their own. And you need a good team around you. A team that supports you; a team that understands you and the vision, philosophy and mentality of the group. Most importantly, what it boils down to is the rapport one has with the clients, partners and associates that you are working with, because that is where you will get a good recommendation. It’s also about attracting and retaining the best of the best in real estate, in recruitment, in lawyers and in finance.

How do you manage to recruit and retain the best talent on the island?

I would tend to say we have a good reputation outside. We tend to be very selective on our recruitment – we do not recruit anyone unless we are confident that he or she falls within our culture. Although qualifications are important, I think the most important thing is experience, because unfortunately today we see many graduates are coming our of university and have very high expectations from a salary standpoint but have no experience at all and don’t know how to analyse or adapt to certain situations or relationships. Although you have studied, you need to be put into the real world, develop those skills and work your way up. We only promise what we can deliver. We like to grow our team whereby those that have been with us the longest move up and progress. When we recruit, we tend to recruit at a lower level to give opportunities to people to grow with the company and take on more responsibility, and to make everyone’s role more interesting and challenging. At the end of the day, I tell everybody that they must enjoy what they are doing. I work because I enjoy the challenge. Money’s important but that is secondary. Getting out of bed and saying, “I have to go to work,” when you are not enjoying it means you must move on and find something else. So you have to make work interesting, and if you make work interesting, you get more ideas and things happen at a faster pace.

Talking about the core values of the group, what would you say they are? And when branding CSB Group on a European scale, how would you like it to be thought of?

We are professional. We are productive. And at the same time, or even more importantly, we are discreet in the way we handle client affairs. And in all this, our core competitive advantage is that we treat our clients’ needs as though they were our own needs. So we have a business drive in what we do – to try to reach our clients’ expectations and make them happen. So we are not passive in what we do.

Where would you like to take CSB in the next two to three years?

We’re going to consolidate, focusing on training our team, securing more clients - because without our clients, we are not here – and focusing on the two projects I mentioned before related to financial services and real estate.

This interview was carried out by Beatrice Collet - Director, Special Projects Ink Global.