Which Direction Should Malta Take to Keep Attracting Foreign Investment?


The Malta attractiveness survey 2015 conducted by Ernst & Young provided a clear indication of the direction that Malta should take in order to keep attracting foreign investment and distinguish itself as a FDI destination. According to the survey, Malta needs to rethink its positioning strategy in order to target sectors that offer high potential for the future and replicate the success that it achieved within iGaming, asset management and its insurance sector, in new sectors.

The survey identified key areas where Malta should invest and capitalise on, including education, the manufacturing industry, the island’s geographical location as well as the physical and digital infrastructure. As potential investors are increasingly looking for a specialised workforce that meets their complex requirements, Malta should focus on helping its labour market develop these skills. This can be done by investing and supporting educational and training programmes, including internships and apprenticeships. For this to be done, there needs to be closer cooperation between the industry and educational institutions. Malta should also facilitate the movement of talent to the island from the EU and other countries so that the local workforce can benefit from transfer of knowledge, resulting in a ripple effect on the economy.

The manufacturing industry seems to be moving back towards the European region due to global trends and recent developments, implying that Malta has the excellent opportunity to attract this sector from a FDI perspective. For this, the proper framework needs to be put in place by the Government, including the widening of R&D and IP incentives, support of apprenticeships, access to financing schemes as well as incentives to support capital expenditure. Maintaining constant communication with prospective investors is also essential.

Malta’s attractiveness

Along with the manufacturing industry which sustained Malta’s economy for many long years, Malta’s economy has also been driven by the island’s strategic location in the centre of the Mediterranean. By upgrading its key infrastructure and implementing business-friendly measures, Malta could unlock opportunities that remain untapped, particularly as a stable and safe location in an area of political unrest. At the same time, Malta’s size and isolation due to its small island status hinder its attractiveness, yet this can be overcome through the digital economy.

Malta could easily serve as the ideal base from which to remotely service companies overseas. Malta in itself is a beautiful location with an excellent climate and rich culture and history, a skilled workforce, relatively low labour and operational costs as well as a good technological infrastructure. Nevertheless, both the physical and digital infrastructure need to be updated in order to meet the required standards of a fast-moving business environment.

It is also essential that Malta removes other obstacles to business efficiency through cutting red tape, more labour market.