Significant decline in Malta’s attractiveness for investment, study finds

While the majority of respondents in the annual competiteveness survey by advisory firm EY found that the majority of businesses find Malta to be an attractive destination for FDI, at 62%, this figure is the lowest this survey has ever registered in its 15-year history. Additionally, one out of every four investors now states that Malta is not attractive for investment purposes.

Malta’s political, legal and regulatory environment, is now considered one of the country’s weakest points. Despite such a strong warning signal, Malta seems to be still in time to take decisive action on the matter, with four out of every five investors saying that they will still be here in 10 years’ time.

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.

Impact of Covid-19

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 level. 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.

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.

The full report is available here.