Malta Attractiveness Survey 2020: How can we reframe the future during the uncertainty of today?

FDI facts at a glance

Perception

Investors sound a note of caution on Malta’s overall FDI attractiveness index with a 15% decline …

The largest decrease ever recorded, and the number of investors who said Malta is not attractive has also increased and now comprises a quarter of total respondents.

… while, yet again, corporate taxation comes out on top of the FDI attractiveness scoreboard …

While still favorable, the attractiveness of Malta’s stability of social climate has decreased by 11% and is now in third place, and the telecommunications infrastructure is in second place for the first time.

… and the stability and transparency of the political, legal and regulatory environment is now viewed as Malta’s least attractive parameter.

This result reflects the sentiments shared by many FDI investors on the need to improve governance and tackle reputational issues. Transport and logistics and R&D and innovation environment scored low in previous years and more must be done to improve these parameters.

… Telecommunications services scored high levels of satisfaction throughout COVID-19.

Satisfaction levels were consistently high across the three surveyed telecommunications services.

… but there is a strong message to prioritize Malta’s reputation to remain globally competitive.

FDI investors ranked a new inclusion, reputation and brand, as the number one priority for Malta to remain globally competitive.

Priorities to remain globally competitive 

1. Reputation and brand

2. Education and skills

3. Strenghten institutions, enforcement and monitoring 

… Despite all the challenges, a large majority still see their company present in Malta in 10 years’ time …

While the future may be even harder to predict as a result of COVID-19 and the global economic fallout, it is positive that 80% of investors, the same as in 2019, believe they will be present in Malta in 10 years’ time.

The environment should be a priority in order to attract FDI …

Almost all FDI investors have indicated that, as part of its COVID-19 reboot strategy, the Maltese Government should prioritize environmentally sustainable practices (94%).

Investors believe funds and incentives for environmentally sustainable practices will encourage companies to increase their sustainable actions.

Taxes and disincentive measures for environmentally unsustainable practices, and stricter environmental laws and enforcement, are joint second in foreign investors’ priorities.

… and the sectors to drive growth signify a return to Malta’s roots, as well as a sharper focus on digital and tech to rise above the challenges.

Despite COVID-19, respondents still believe tourism and leisure will be the leading business sector in the next five years, followed by iGaming. The sectors being promoted in 2020 could be viewed as a return to Malta’s roots, through aviation, and more secure industries such as ICT and telecommunications, pharmaceuticals and biotechnology, and digital media and games.

COVID-19 crisis

Almost two-thirds of companies have been negatively impacted by the pandemic, and the same number believe it will take a year to return to pre-COVID-19 levels …

Fifty-seven percent said the financial impact of COVID-19 had been negative on their business so far, while 21% stated it was positive and 22% saw no change.

… and half of investors have delayed, decreased or cut back their 2020 investment plans …

The pandemic disrupted almost every aspect of life and is causing untold business uncertainty and almost half of the FDI companies have delayed, decreased or cut back their planned investments. Increased 4% Delayed, decreased or cut back 46% No change 49%.

… but even before COVID-19, expansion plans were on the decrease …

Following the outbreak, only 66% of respondents could confirm whether their company would pursue its expansion plans.

… while scarcity of personnel with specialized skills has eased slightly, the challenge persists …

Most likely as a result of the pandemic, the ability of companies to find and recruit individuals with the required specialized skills has finally seen a trend reversal.

The Government’s success in addressing COVID-19 as a public health care crisis was viewed less positively after the summer, with most responses shifting from positive to neutral …

Respondents provided their views again in late September, and the number of positive replies decreased from 91% to 26% as both the neutral and negative replies increased.

… the support measures provided to companies were received with a little more uncertainty, but more consistently …

Although two-thirds viewed the support measures for businesses positively, one-third saw them as either neutral or negative.