- with readers working within the Business & Consumer Services industries
A survey of foreign investors in Malta has reported a substantial rebound in investor confidence, with 79% of respondents now viewing Malta as an attractive location for FDI, up from 54% last year. This level takes Malta back to the results not seen for the past six years.
The survey said that two of the risks highlighted in previous editions – reputation and tax reform – were played down considerably this year, resulting in the rebound. Reputation concerns fell from 42% to 27%, while concerns over global tax reforms dropped to 48%.
In his foreword to the 21st edition of the EY Attractiveness Survey, EU Malta and Cyprus Manager and EY Europe Central Risk Management Leader Ronald Attard noted that in the 2024 edition, investors had expressed cautious optimism, part of which was due to uncertainties in the global sphere. With regard to Malta, in spite of its stability and potential, investors were still concerned about the challenges ahead.
"Together, we must harness the momentum generated by this renewed confidence and work collaboratively to enhance Malta's attractiveness. This requires a concerted effort to address the challenges identified in the survey, while capitalising on the opportunities that lie ahead. We must also remember and learn from the past to avoid falling into pitfalls such as the previous greylisting," Attard said in the foreword.
This year's edition reflected their belief that Malta's size was part of its appeal, in addition to its readiness to embrace the digital age, and a favourable corporate tax regime. In fact, corporate taxation (78%) was ranked as the top attraction, followed by the stability of the social climate (70%) and the telecommunications infrastructure (68%).
An important part of the survey are the risks identified by the 120 respondents, which were skills shortages, cost competitiveness, and infrastructure challenges. In fact, skills shortages overtook tax reform as the greatest risk to FDI.
The survey also looks ahead and identified tax competitiveness (55%) as the most important factor in choosing the location in the next 10 years, followed by workforce availability and quality (52%), the regulatory environment (41%) and labour cost and input costs (39%).
With regard to future economic growth, there was also a shift from 'better and more' towards 'better and less' – the latter now being the view of 36%, up from just 24% last year.
When it came to the top priorities if Malta were to stay competitive, the top was education and skills (17%), followed by infrastructure, transportation and planning (14%), with developing new sectors and the ease of doing business in joint third place (13%).
Regarding the sectors that would lead to long-term economic growth, payments and FinTech (48%) came in third after tourism (70%) and gaming (58%). Payments and FinTech had represented only 37% in the 2024 survey.
According to the National Statistics Office, the stock position of FDI in Malta reached €466.1 billion by June 2024, with financial services and insurance activities accounting for the greatest proportion (in December 2023) at 98.2%
The NSO also reported that, in 2024, FDI flows were estimated at €13.1 billion. As in previous years, financial and insurance activities made the largest contribution, representing 97.5% of these FDI flows.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
