EY Malta Country Managing Director Ronald Attard has called for immediate action, after a new survey conducted by his firm found that Malta’s attractiveness for investment has plummeted since 2020.
In a foreword to the report, he commented: "For the first time since we have been conducting our survey, a significant part of the investors interviewed are telling us that Malta is currently unattractive for FDI.”
This, he said, “might not be easy to digest,” considering the country is used “accustomed” to better results, and is not necessarily only due to the greylisting, though it certainly played a big part.
As such, “it would be foolish to bury our heads in the sand and not act immediately,” he said.
It came as the survey found that 46 per cent of foreign investors believe Malta is not attractive for investment – representing a rather dramatic increase on the 25 per cent recorded in 2020, giving a damning indictment of the damage dealt by a year shaken by the pandemic economic damage and Malta’s shock greylisting by the Financial Action Task Force (FATF).
Worse still, only 37 per cent of investors view Malta as attractive, down from 62 per cent in 2020.
On greylisting, a large majority of businesses (84 per cent) believe it will lead to reputational damage, and over half (55 per cent) predict it would make doing business in Malta more difficult.
Notwithstanding these difficulties, three quarters (77 per cent) of business surveyed believe their long-term future is in Malta.
The perspective of companies regarding COVID seems to have improved slightly between 2020 and 2021, as the number of companies reporting having been negatively impact by COVID dropped, and over half of companies now expect to make a full recovery to 2019 levels in less than a year.
Notably, corporate taxation continues to score highly on Malta’s FDI attractiveness scoreboard, with 67 per cent of respondents saying it was the most attractive element of the jurisdiction.
A total of 17 per cent of businesses cited the stability and transparency of the legal, political and regulatory environment as the most attractive, making it the least attractive Foreign Direct Investment (FDI) parameter.
Broadly speaking, companies are finding it harder to acquire required skilled staff, with only 31 per cent finding the required specialised skills, down from 38 per cent in 2020, though up on the 27 per cent recorded in 2019.
Staff retention levels have also sunk to pre-pandemic levels, with 78 per cent of respondents managing to retain their specialised personnel, representing a significant drop from the 96 per cent recorded in 2020.
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