An Exploration Of The Business Ecosystem In Malta
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First things first: sure, Malta may not be the first country one would think of when considering a location to start or grow a business in Europe- but there is an argument to be made that this factor by itself is a good enough reason to consider this Mediterranean island nation as a place to invest in when following through on one’s entrepreneurial dreams. For those of us in the UAE, a look at the Maltese government’s initiatives in enabling a pro-business environment within its borders may cause some feelings of déjà vu- much like our nation, Malta may well be a small country, but that has certainly not stopped it from dreaming big when it comes to driving its economy ahead.
The country’s past serves it well in this regard: Malta has been known for being a hub for trading and commerce throughout its history, and while it may well be one of the smallest economies within the European Union (EU) today, it is also regarded as being one of its most resilient, with the country recording an annual GDP growth of around 6% in the last couple of years.
While it may be primarily regarded as a resplendent tourism destination by most of us, it’s also worth noting that the country has been characterized as “an advanced economy” by the International Monetary Fund, “a high-income country” by the World Bank, and “an innovation-driven economy” by the World Economic Forum- all of these factors just bolster the notion of progressiveness that Malta seeks to not just project, but also actively work on realizing it in its business landscape.
I got to witness Malta’s efforts in building a business-ready environment firsthand over a short trip to the nation organized by the Consulate General of Malta in Dubai with the support of Malta Tourism Authority (“the tourism industry's regulator and motivator, its business partner and the country's brand promoter”), Malta Enterprise (“the country's economic development agency, tasked with attracting new foreign direct investment, as well as facilitating the growth of existing operations”) and FinanceMalta (“the public-private initiative set up to promote Malta as an international financial center”). Now, it doesn’t take long to understand this country’s appeal as a tourism destination- be it with its spectacular scenery that’s blessed with sunshine almost through the year, or its rich cultural history and heritage that spans over 7,000 years, Malta comes across as one of those nations that seems to have been almost designed to cater to an almost standard idea for a place where one would like to take a holiday in.
While tourism is certainly one of the major contributors to Malta’s economic growth, the manufacturing industry has been another of the country’s mainstays, with Malta Enterprise pointing out on its website that it is also “the second largest employer on the island.” At the same time, Malta has also made it a priority to push ahead with its economic diversification plans, which has allowed the nation to see new economic sectors develop and grow these include everything from pharmaceuticals, to financial services, to aviation, to information and communication technologies, and much more.
This forward-thinking approach showcased by Malta when it comes to initiating and developing industries is what David Xuereb, President of the Malta Chamber of Commerce, Enterprise, and Industry, pointed toward when characterizing the country’s economic achievements over the last couple of years, despite its limited natural resources. “I think one key factor for our national success is the fact that we always try to reinvent ourselves, and try to find what is new and where it is we should be going, even when things are going well,” Xuereb said. “Certainly, when things aren’t going well, people always want to reinvent themselves, but I think what we’ve been particularly clever in doing is trying to reinvent oneself when things are going relatively well.”
This particular ethos is especially evident in Malta’s pursuit of a number of new technologies and industries that look set to shape the future of the world as we know it. Consider, for instance, Malta’s efforts at making itself known as a “blockchain island”- not only has the country been focused on adopting the technology (the Malta Business Registry will be the country’s first government agency to use a blockchain-based system), it’s also been championing regulation around this industry, while also encouraging companies in this space to take up residence in the nation. One such enterprise that has recently set up shop in the country is EFFORCE, a blockchain-based energy saving firm that counts Apple co-founder Steve Wozniak as both a co-founder and an investor.
Results like these serve as testament to the Maltese government’s whole-hearted efforts in not just setting up ambitious goals for itself, but also in the realization of it. “We engage a lot with niche markets and new ideas that converge with our strategy as a government,” said Christian Cardona, Malta’s Minister of Economy, Investment and Small Businesses. “And we are happy to see that, in the last six years, we have managed to increase the dialogue, and the practicalities of what ensues after, in a very tangible manner.” This statement by Cardona alludes to not just Malta’s can-do approach to whatever goals it sets out for itself, but also to the commitment the government has toward all those who invest and have a stake in the nation-indeed, Malta bills itself as “a vibrant economy open for business.”
For instance, when it comes to new enterprises that want to set up shop in the country, Malta offers them support through a variety of fiscal and financial incentives- these include access to finance in the form of soft loans, interest rate subsidies, and loan guarantees, as well as the provision of tax refunds upon redistribution of dividends to shareholders, among other benefits. It’s easy to see that measures like these are already bearing fruit for Malta- just take a look at the enterprises that have set up outposts in the island nation, which includes internationally renowned companies like Airbus, Boeing Nokia, Microsoft, Ford, Guerlain, Christian Dior, Visa, and many more.
Incentives aside, Cardona points out that Malta has quite a few inherent qualities that make it such a lucrative setting for doing business. For one, English is an official language in Malta, which essentially prevents any lost-in-translation issues for the non-Maltese who choose to work in the country. There’s also its strategic location in the Mediterranean, which affords businesses in Malta easy access to a number of different markets. The country also boasts of long-term economic, political, and social stability, which is further bolstered by a transparent legal and regulatory environment that’s conducive to business. “We have legislative flexibility,” Cardona explains. “So, we can legislate on sectors, which are of interest to us, in very little time. It’s not only legislation which keeps you advanced in terms of international competitiveness- it’s also supportive legislation, which you have to issue regularly in order to keep up with competitiveness.” At the end of it all, there’s also the appeal of Malta as a country to live in- its draw as a holiday destination should be evidence enough for this. “The quality of life in Malta is super,” Cardona declares. “You can relocate here, with your family, friends, kids, etc., because it’s just beautiful to live here. We are Mediterranean- we enjoy our lives, and we work hard.”
That’s a paradigm one will find almost impossible to argue against- which is yet another point in the bag for Malta as a destination for business.