Malta's Advantages as a Business & Financial CentreMalta has a strong proposal to offer businesses that choose to operate or outsource locally, be they based in Malta, nearshore or offshore. Amongst its strengths are:
Geo-Socio- Political Environment
General Economic Environment
Direct Support & Promotion for Business & Investment
Tax, Regulation & Investment Incentives
Transport & Connectivity
Telecommunications & Information Technology
A Highly Educated, Productive & Multilingual Workforce
Leading Global Companies have made Malta their Home for Years
Malta's is geographically located at the centre of the Mediterranean Sea strategically placing Malta in the heart of the busiest shipping lanes in the region. Enjoying excellent political and economic ties with all its neighbours, Malta is considered to bridge the European and North African continents.
Malta is the smallest member of the European Union that is the largest economic block in the world giving the political and economic stability necessary to develop a sound economic environment. Malta has a well established democratic system of politics supported by strong judicial and public administrative systems.
Malta is thus considered to be a bastion of political, social and economic stability. As demonstrated in the recent crisis in Libya, Malta status as a ‘neutral’ state offers significant advantages to the economic stability and growth potential.
Malta boasts a long and varied history, being held by several ancient cultures including the first human settlers in 5000 BC, followed by the Phoenicians, Carthaginians, Romans, Byzantines, Arabs, Normans, Swabians (Germans), Angevins (French), Aragonese (Spanish), Sicilians, the Order of St. John, French and the British amongst others. All have left their mark on the local; heritage, culture and social fabric.
Today Malta offers an excellent quality of life, and excellent health service (public and private) and social welfare framework and a stable industrial relations environment. Its Mediterranean climate makes it a comfortable all-year residence and holiday location that is visited by over a million tourists each year.
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Malta has a vibrant economy, experiencing modest growth even at a time when the world is living a prolonged recession. Malta has long-standing commercial ties with Europe, North Africa and the Middle East and this represents one of the key advantages of doing business in or from the island.
Malta's EU-based (but with Westminster system foundations) legislative and regulatory systems create a sound and flexible framework for business. Direct and indirect labour costs are very competitive when compared to the older EU Member States. When productivity, working hours, social security costs and other employment taxes are factored in, labour costs become even more competitive and advantageous when compared to that in the European continent (and the European leader in cost of operations amongst English speaking countries). Collective bargaining is conducted at enterprise level with industrial strife remaining a rare occurrence.
Malta's has a well regulated banking system and the Central Bank of Malta is a member of the European System of Central Banks (ESCB) and the Eurosystem. Its safe and stable banking environment is well recognised with it being classified as the most solvent in the EU and the 10 soundest bank in the World (by the World Economic Forum). It in fact is one of the few systems that avoided any need for bank bail-outs during the global financial crisis.
The World Economic Forum (WEF) has confirmed Malta's place as the 27th "most networked economy in the world"., Malta is also been identified as one of the top three financial centres worldwide and is also listed among the more attractive countries for financial centre relocation.
English is the more widely used business language but its multi-lingual and multi-cultural background facilitates global business for locally based firms. Malta’s currency is the Euro.
The end result is that Malta now has a long-standing capacity to attract and retain significant Foreign Direct Investment. Malta’s economy is now steadily moving from labour-based to a knowledge based industry thus attracting Foreign Direct Investment from countries like the UK, German, Italy, France, Spain and the United States in primary areas as are the eGaming, Financial, Pharmaceutical, ICT and maritime industries. Malta’s favourable industrial climate and pro-business policies have led it to become identified as a lead, innovation-driven economy by the World Economic Forum (The Global Competitiveness Report 2012-2013):
Source: World Economic Forum; The Global Competitiveness Report 2012-2013
Findings of the GCI 2012–2013 for the top performers globally, as well as for a number of selected economies in each of the five following regions: Europe and North America, Asia and the Pacific, Latin America and the Caribbean, the Middle East and North Africa, and sub-Saharan Africa.
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Malta is generally considered to be a competitive investment location attracting significant foreign direct investment. Malta’s reliance on foreign investment has promoted the development of a dynamic and flexible approach to provide solutions tailored to the needs of those who invest in Malta and helping Malta compete globally with top innovation driven economies. Currently, Malta is particularly attractive to industries hailing from:
- Pharmaceutical & Healthcare;
- Maritime Activities - Transport & Logistics;
- Call Centres;
- ICT and Electronics;
- Financial services;
- Furniture Industry; and
- Real Estate.
Irrespective of your area of business, Malta can offer an interesting array of support and incentives (fiscal and non-fiscal) including:
- Grants and loans;
- Favourable tax rates, tax credits and other fiscal incentives;
- Fiscal exoneration;
- Training aids and support;
- Participation in EU funding schemes and opportunities;
- Business incubation support;
- Support schemes targeting SMEs, start-ups, process and product innovation, improved international competitiveness and export potential, networking, employment expansion and training;
- Quality office and industrial space at affordable rates (within 10 industrial zones or business clusters or privately managed business centres)
Clear, transparent and simple regulations and a long tradition in financial and other services Malta provides excellent fiscal incentives. Malta offers a highly efficient fiscal regime which avoids the double taxation of companies and their shareholders. Maltese companies are taxed at a rate of 35 per cent, but a full imputation system applies to the taxation of dividends. This entitles shareholders to a tax refund of 6/7ths on trading income and 5/7ths in the case of passive interest and royalties. The refund is reduced to 2/3rds where the distributing company claims double taxation relief. With respect to a participating holding (where a company holds directly at least 10 per cent of the equity shares of a non-resident company, or meets certain other criteria) a full refund applies. Malta’s tax system has been deemed by the European Commission to be compliant with EU non-discrimination principles and has also gained approval from the OECD.
Malta's excellent tax system together with generous fiscal incentives and grants translate into bottom line benefits for any company. Malta is a country that offers the most competitive incentives in the EU for knowledge based firms.
Moreover, Malta boasts a comprehensive financial legislation also catering for the regulation of hedge funds, investment services providers, banking and financial institutions, and retail and captive insurance business.
Malta’s strategic location is complimented by it state-of-the-art transport facilities. It has significant air and sea port facilities that connect Malta to most major global destinations with regular and frequent connections (major EU, North Africa and Middle East destinations being mostly within a 1 to 4 hour flight range). Its facilities include an award-winning airport (cargo and passenger handling facilities), a major EU Freeport (offering trans-shipment, ro-ro and similar facilities), a stunning grand harbour (offering both cargo and passenger handling facilities) and extensive yacht (including super yacht) berthing facilities. This is complimented by regular road-cargo transport links (via-sea links with mainland Europe). All this ensures that the island is now connected to practically every major port in the Far East, Europe, North America and North Africa.
Moreover, the close proximity of Malta’s transport facilities (all are within a 12 km radius) facilitates multi-transport mode logistic solutions. Malta also has one of the largest world shipping register and a growing air register.
The Malta Free Port with 2,260,000 TEUs handled during 2009 ranked as the 44th Worldwide Port and the 10th European Port in terms of TEUs handled. Source: AAPA World Port Ranking 2009.
Malta’s Shipping Register is now the second largest flag fleet in Europe after the Greek flag. Source: Country Profiler, Malta Country Profile 2011, Flying the Flag, Pg. 175.
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Malta is a lead EU member state in e-government and aims to become one of the top five information societies in the world. Supporting its vision it has attracted significant investment in this area that is expected to grow with the finalisations of the ‘Smart City’ project designed to host lead global ICT enterprise.
Smart City Malta represents an investment of €220 million from Dubai's Internet City's Tecom-Sama joint venture has attracted technology giants such as Microsoft, Hewlett-Packard, IBM, Cisco and Oracle to join Smart City Malta.
Malta is a multilingual country. English is the official language of business and academia, it is spoken fluently by 90% of the population given that together with the national mother tongue – Maltese it is taught in all schools from the first years of schooling. Fluency in other languages such as Italian, French, German and Arabic is common.
Malta has a sound educational system with a reputed University and post-secondary training Institutions that attract a steady influx of undergraduates and students to enter further and higher education. As a result, there is an ample supply of employees with internationally recognised qualifications and diplomas. Continued training is actively promoted with many private and public training opportunities including a myriad of free training courses offered by the Employment and Training Corporation (ETC).
Recently launched initiatives aim to promote women and other human capital to become actively employed. A growing migrant workforce is furthering bolstering the national human capital and workforce.
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Main economic sectors include tourism, electronics, high value added manufacturing, healthcare, pharmaceuticals and medical devices, ICT and electronics, financial services, education & training, logistics and maritime with:
- more than 600 regulated financial entities, up from 180 at the end of 2004. In addition, around 11,500 other non-regulated entities operate in Malta and service international clients, offering legal and other support services;
- more than 450 remote gaming applications received since 2004, Malta received and boasts a labour force of 2,085 employees who are directly employed in the remote gaming industry;
- more than 20 international pharmaceutical firms such as Actavis and Siegfried Holdings have moved business to Malta
- €60 million expansion of Lufthansa Technik's existing Maintenance, Repair and Overhaul operations in Malta;
- HSBC 300-person call centre to handling "high-value" English-language calls for UK-based bank HSBC. In addition to in-house deployments such as HSBC, there are a number of independent outsourcers established on the island, and a host of others providing a range of services that include technical help, order taking, information lines, telesales and customer support services to a range of industries including travel and tourism, telecommunication and financial services;
- ST Micro Electronics, Methode Electronics, Dowty, Playmobil establishing manufacturing facilities in Malta.