As a small open economy with limited natural resources, Malta is dependent on foreign direct investment to drive economic growth. In recent years we have successfully positioned ourselves as a business-friendly and advantageous location for companies from all sectors. However, only by going directly to investors can we truly measure our successes and, perhaps more importantly, our shortcomings.

For the past 12 years, EY has conducted the Malta attractiveness survey of existing foreign investors in Malta. It forms part of EY’s global series gauging the perceptions and realities of the different countries and regions.

The series is aimed at providing guidance for investment decisions and indications to governments and policymakers on current and potential barriers to growth.

It transpires from our survey results over the years that Malta has consistently remained attractive as a destination for FDI, notwithstanding the turbulent economic and political global and especially regional environment.

Investors believe that the island consistently offers some key palatable features, such as a stable economic and social climate, relative ease to do business as well as an attractive regime of fiscal and non-fiscal incentives. Fortunately this has also meant that the proportion of respondents intending to expand and/or retain their operations in Malta has also been relatively high over the years.

And what about the areas which have been calling for improvements in order to safeguard growth?

Some of the physical limitations, such as Malta’s local market size and geographical location, cannot be helped. Understandably, practically all foreign investors do not set up here to cater for the tiny local market. However they do find Malta attractive as a source of cost-effective talent with a solid work ethic and they are happy to relay this message to potential investors considering Malta.

Such realities are also becoming increasingly important as Malta moves further into a knowledge-based digital economy in which specialised skills sets become increasingly indispensable and harder to source.

The supply of human capital continues to lag behind demand. With every passing year this challenge seems to have become more pronounced

Unfortunately we notice that the supply of human capital continues to lag behind demand. With every passing year this challenge seems to have become more pronounced, especially with the advent and increase in size of new and more sophisticated sectors and competition.

Other areas in which Malta can improve its performance have also been consistently flagged. These include the frequency and cost of air and sea transport connections, the costs and certain ongoing practices in inland logistics and the constant bane of an adequate road and port infrastructure.

Other concerns, such as the costs of telecommunications and utilities, although still important indicators of Malta’s FDI attractiveness, seem to have become less of an issue nowadays compared to a few years ago.

Over the years, we have seen issues which were particularly important at specific points in time. These have included discussions on energy costs, low-cost carriers, access to finance and the implementation mechanisms and time frames for various EU co-financed assistance schemes.

Areas such as research and innovation, as well as the level of protection of intellectual property rights, have become progressively important over the years.

This is again happening as the economy branched out further into the sophisticated areas of financial services, ICT and iGaming.

Year on year, investors have highlighted the importance of protecting and retaining what already works in Malta, while keeping an eye to opportunities that lie ahead. For this reason, we at EY believe that the future is today. Effectively what this means is that in order to reap future benefits we must act proactively today.

This is the theme of this year’s EY conference – to be held on October 7 – during which the results of this year’s survey will be announced.

Visit www.eymaltaattractiveness.com to register.

Simon Lee Barberi is leader of EY Malta’s EU Advisory Unit and the Malta Attractiveness Survey (MAS) initiative.

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