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flag Malta Malta: Investing

In this page: FDI in Figures | Why You Should Choose to Invest in Malta | Procedures Relative to Foreign Investment | Investment Opportunities

 

FDI in Figures

In a context where global foreign investment increased by 10.9% in 2013, in particular in Europe (+25.2%) and in Latin America (+17.5%), FDI flows to developing economies reached a new high of US$759 billion. However macroeconomic fragility and policy uncertainties are driving investors to caution.

Malta is well positioned  in terms of direct foreign investment appeal. The country offers a certain amount of advantages to foreign investors: the country is an EU member; the competitive cost of a highly-skilled English-speaking labor force; its geographical position of the country which gives a privileged access to the Mediterranean and North African markets; the country has developed a niche economy, especially in the area of pharmaceuticals. The government has established a global pro-investment policy.

However, FDI flow has decreased due to the international economic crisis of 2008-9. Under the effect of the war in Libya and the decline in tourism, FDI are registering poor results since 2011. In 2013, FDI reached a total of only 160 million USD.

Information on the 2013 FDI influx in this region can be accessed in the Global Investment Trade Monitor published in January 2014 by the United Nations Conference on Trade and Development (UNCTAD).

 

Country Comparison For the Protection of Investors

  Malta OECD United States Germany
Index of Transaction Transparency* 3.0 5.0 7.0 5.0
Index of Manager’s Responsibility** 6.0 5.0 9.0 5.0
Index of Shareholders’ Power*** 7.0 9.0 5.0
Index of Investor Protection**** 5.7 6.1 8.3 5.0

Source: Doing Business - Last Available Data.

Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action. **** The Greater the Index, the Higher the Level of Investor Protection.

 
Foreign Direct Investment 201120122013
FDI Inward Flow (million USD) 2764-2,100
FDI Stock (million USD) 15,45816,30314,859
Performance Index*, Ranking on 181 Economies 46--
Potential Index**, Ranking on 177 Economies 124--
Number of Greenfield Investments*** 131210
FDI Inwards (in % of GFCF****) 20.20.3-147.8
FDI Stock (in % of GDP) 167.8185.8155.7

Source: UNCTAD - Last Available Data.

Note: * The UNCTAD Inward FDI Performance Index is Based on a Ratio of the Country's Share in Global FDI Inflows and its Share in Global GDP. ** The UNCTAD Inward FDI Potential Index is Based on 12 Economic and Structural Variables Such as GDP, Foreign Trade, FDI, Infrastructures, Energy Use, R&D, Education, Country Risk. *** Green Field Investments Are a Form of Foreign Direct Investment Where a Parent Company Starts a New Venture in a Foreign Country By Constructing New Operational Facilities From the Ground Up. **** Gross Fixed Capital Formation (GFCF) Measures the Value of Additions to Fixed Assets Purchased By Business, Government and Households Less Disposals of Fixed Assets Sold Off or Scrapped.

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Why You Should Choose to Invest in Malta

Strong Points
Malta is a member of the European Union and the Euro zone since January 1st, 2008 and has interesting strong points for foreign investors, like for example its geographical location (making it a natural "hub" for companies seeking to do business with the southern part of Europe and Northern Africa), a stable political environment, competitive labor costs (compared to other European Union countries), fiscal and investment incentives, a modern infrastructure (Malta Freeport services 115 ports worldwide, the international airport has direct flights to 37 major cities in the world) and telecommunications system (wireless internet connections, VOIP, Wimax). In a recent report, the United Nations listed Malta as a "frontrunner" in the high foreign direct investment potential category. Over the past 5 years, foreign direct investment in-flow has generally followed an upward trend, reaching 10% of the GDP.
Weak Points
Malta main weak points are:
- A small domestic market;
- The population's relatively limited purchasing power;
- An economy with no natural resources and dependent on certain sectors like tourism or e-trade.
Government Measures to Motivate or Restrict FDI
Malta provides incentives in many sectors, to attract foreign direct investment mainly in manufacturing, transshipment and servicing industries, in particular the manufacturing of generic pharmaceuticals, information technology and financial services. The government offers generous tax incentives for investments in industrial projects:
- Preferential taxation rates (5% instead of 35%);
- Tax credit on investments (up to 50% of the amount invested or 50% of the first two years' salary of new jobs created);
- Reduced tax on reinvested profits;
- Incentives for job creation;
- Soft loans for promoters of industrial projects; and
- Indefinite work permits for shareholders with more than 40% share.
Additionally, Malta has a customs-free zone, Malta Freeport, which offers companies operating within it, reduced taxation and investment tax credits.

The country also benefits from structural EU funds for the period of 2007-2013, which will allow it to sustain its economic development, improve its competitiveness and thus attract new foreign investors.

In 2014, Malta has introduced a citizenship program, entitled the “Individual Investor Program” (the “Citizenship Program”), which is targeted to non – European Union nationals. The Citizenship Program permits the granting of Maltese citizenship by a certificate of naturalization to foreign individuals and families who contribute to the economic development of Malta.

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Procedures Relative to Foreign Investment

Freedom of Establishment
Freedom of establishment is guaranteed.
Acquisition of Holdings
The acquisition of holding is possible in Maltese law.
Obligation to Declare
Licenses should be obtained when dealing with investment services. For more information please visit http://www.qubeservices.com/04investment.asp
Competent Organization For the Declaration
Malta Financial Services Authority
Requests For Specific Authorizations
All fields of the economy are virtually open to investment. Certain sectors dominated by the State, are currently being liberalized because of EU requirements and therefore energy distribution still remains at the hand of a parastatal company.

Learn more about Foreign Investment in Malta on Globaltrade.net, the Directory for International Trade Service Providers.

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Investment Opportunities

Investment Aid Agency
Invest in Malta
Tenders, Projects and Public Procurement
Tenders Info, Tenders in Malta
Ted - Tenders Electronic daily, Business opportunities in EU 27
Globaltenders, Tenders & Projects from Malta
DgMarket, Tenders Worldwide
Other Useful Resources
World Bank Group services website
 
 

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Learn more about Investing in Malta on Globaltrade.net, the Directory for International Trade Service Providers.

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Last Updates: October 2014