Malta’s failure so far to attract large companies which are relocating from Britain is partly a result of poor infrastructure, Parliamentary Secretary Silvio Schembri has said.
Mr Schembri said that Malta lacked high-quality office space and international schools, which puts it at a disadvantage compared to competing jurisdictions such as Dublin, Luxembourg and Frankfurt.
The parliamentary secretary, entrusted with the financial services sector portfolio within the Office of the Prime Minister, was not disheartened, however, by what he described as the “challenges” facing the country.
“Cities like Dublin, Frankfurt and Luxembourg are already geared to such services, but the upside for a country like Malta that is still developing its infrastructure is it can still develop it to be ahead of times and future ready,” Mr Schembri said.
British financial services firms have been looking at other EU jurisdictions for relocation after Brexit so as not to lose out on the European market.
Malta has missed out on some of the big names, such as insurers Lloyds of London, despite initial interest from these companies.
But Mr Schembri is not disheartened, noting that some of the biggest firms already operate in the competing jurisdictions and moving there is simply an expansion of existing operations.
Malta would struggle as a result of its lifestyle offerings, apart from needing domestic talent
“There are discussions going on with medium-sized firms which are considering Malta to expand or relocate their business,” he added without elaborating.
He described Malta’s approach as “proactive yet respectful” in view of its close ties with the UK. “One of our main underlying messages was that firms do not necessarily have to relocate entirely here but can instead choose to set up a part of their operation in Malta and retain passporting rights to the EU,” he said.
Based on this, Mr Schembri added, a number of sectors and players have been targeted and the government plans to step up its efforts to attract business.
However, some within the financial services industry have rued the government’s meek approach to attracting British business Malta’s way.
Christopher Orchard, CEO of WGP Global, a UK-based business advisory firm, did not mince words when asked why Malta has been overlooked by large firms.
“If Malta did a better job of promoting itself internationally, it could attract some of the high-profile exiting businesses… It has to get serious, stop talking and start doing,” Mr Orchard said.
He urged a more aggressive ap-proach to attract a large merchant or development bank to set up in Malta, which would encourage businesses to follow.
The lack of significant, tier 1 banks of international repute, apart from HSBC, he added, was a disadvantage Malta had in its “hardware”, because it would not be seen as a serious relocation point. However, Mr Orchard also pointed at what he described as the “software factors”, dealing mainly with the ‘human’ aspect of business relocation.
“Malta would struggle to attract talent to relocate depending on the schools, shops, theatres and other lifestyle offerings available, apart from the need to have domestic talent to fill positions.”
Claire Camilleri Gauci, director at AID Compliance, WGP’s Malta partner, believes developing the infrastructure to attract new technologies such as blockchain and artificial intelligence could provide a cutting edge platform.
She said a holistic effort was required to modernise the legal system and encourage more students to pursue maths, physics and computer sciences as careers.
A strong reform of the regulatory framework was also needed, she added. “The creation of a positive economy will attract visionaries, entrepreneurs and leaders,” Ms Camilleri Gauci said.
“Malta could distinguish itself from competitors when trying to attract some of the Brexit business by marketing itself as a digital economy and a place where business is done in English.
“However, before we start the promotion, we really need to make this happen through reforms,” she said.