‘Stability of social climate’: Malta’s most attractive FDI feature

Malta’s leaders and the top business people have gathered at the Westin Dragonara in St Julian’s today to discuss Malta’s attractiveness survey prepared by top accountancy firm EY.

Among the top speakers is Alastair Campbell, former British Prime Minister Tony Blair’s spokesman and director of communications. Campbell is expected to speak about the importance of an overall image and brand to small countries like Malta that have to fight much harder to be seen and to be listened to

Read More: Malta lacks ‘powerful sense of what it’s about’

Other important speakers include Prime Minister Joseph Muscat, Opposition leader Simon Busuttil and Poland’s former prime minister Kazimierz Marcinkiewicz.

For over a decade, the annual EY survey has been a watershed, widely recognised by business leaders, the media and major public stakeholders as a key source of insights into foreign direct investment in Malta

Top five most attractive FDI features

The EY’s 2014 Malta attractiveness survey, held amongst 111 top executives from existing FDI investors in Malta, has found that Malta’s most attractive feature is the stability of the social climate (85%), followed by corporate taxation (84%) and stability and transparency of political, legal and regulatory environment (77%). Local labour skills level (68%) and labor costs (65%) made it among the top five.

79% of the respondents believe that Malta is attractive for FDI while 15% “couldn’t say”. 6% replied no. However, the rate of those who believe in Malta's attractiveness has been on the decline for the past four years.

Over half of all respondents believe that the iGaming sector will be the business sector driving Malta’s growth in the next five years. The next most cited was fund administration, with 50% including it on their list.

Only 3% of the companies interviewed do not see themselves still in Malta in 10 years’ time. More than half of respondents (59%) plan on staying while 39% were uncertain about their long-term plans.

Malta: a holiday destination but also a location from which to conduct business

Respondents confirmed their perception of Malta’s international image as a holiday destination, but increasingly also as a location from which to conduct business. Malta’s marketing efforts as an FDI destination are considered effective by 40% of respondents, with a similar number agreeing that Malta has the right brand image for foreign investment.

In fact, 29% believe that Malta does not have the right brand image as a destination for FDI while 31% “couldn’t say”.

While 57% said the local labor market provided the specialized skills they required, certain sectoral respondents such as those from the manufacturing and ICT, telecommunications and iGaming sectors, find that the specialized skills they require are harder to come by in the local labor market than other sectors.

More than half of each sector’s respondents are willing to provide the training and education needed to create or develop their required skills. Internships and vocational training would be the preferred medium for 41% of respondents, whereas financial help or sponsorships to trainees were favored by 39%. Filling these skills gaps is a necessary prerequisite for around 60% of those considering expansion.

How to keep Malta attractive?

According to Malta’s leading businessmen, it is important that Malta maintains a stable social, political legal and regulatory climate while promoting additional specialised education and training programmes in traditional and emerging sectors.

Respondents said more capital investments should be incentivised while government should stimulate research and development and innovation.

Investors also believe Malta must enhance its ‘Malta Inc.’ [transport and infrastructure] marketing efforts while reinforce its position as a high-quality trading hub.