Country GuideMalta

From Global Connections

Malta attracted foreign direct investment flows of EUR5.2 billion during the first six months of 2015. Financial and insurance activities accounted for 98.1 per cent of the inflows, reinforcing its status as an international financial centre.

Malta ranked 80th in the World Bank's 2016 Doing Business rankings, dropping from 76th in the year prior. The country had a mixed profile with relative strengths in the categories of 'paying taxes', 'protecting minority investors' and 'trading across borders', coupled with significant weaknesses in the processes associated with 'starting a business' and 'getting credit'. The rankings acknowledged that, in the past year, reforms had been implemented to reduce the time required for getting an electricity connection.

Key facts about starting a business in Malta:

  • It takes 10 procedures and 28 days to start a new business in Malta; this process is detailed in the Doing Business in chapter
  • Obtaining a work permit can take up to six weeks to process; employment regulations are discussed in detail in the Labour chapter
  • Obtaining a building permit takes up to 21 days and costs EUR50
  • Companies that wish to list and trade securities on the Malta Stock Exchange must, amongst other conditions, have published financial statements with an auditor opinion for at least three consecutive financial years preceding application for admission; this is discussed further in the Finance chapter

Malta is an attractive location for many overseas investors. Nevertheless, in order to make an informed decision, it is critical to understand the nuances of any local regime. The manner in which people conduct business in Malta may differ from the home countries of investors. Furthermore, variations on these distinctions may exist depending on the industry in which a company operates.

Malta's national language is Maltese but it is also accompanied by English as the official languages of Malta; most Maltese are bilingual and many are also fluent in Italian. Malta has a conservative business culture, similar to that of the UK, given the close ties between the countries. Dress codes in the workplace are typically formal.

A handshake is the typical business greeting and business cards will usually be presented at the initial meeting. Gift giving may occur but is not a requirement.

Those looking to establish a business in Malta will often look to countries across Europe as alternative options. While membership of the EU ensures parity in many aspects of the legal, tax and audit regimes, Malta can be differentiated on the following factors:

  • Malta’s GDP per capita is projected to reach 97 per cent of the EU average in 2017
  • The standard corporate tax rate is 35 per cent but through the right to a refund of Malta tax, the effective tax rate may be reduced to as little as five per cent
  • Malta is strategically located at the heart of the Mediterranean with very close ties to mainland Europe, North Africa and the Middle East; the country's transport links are detailed in the Infrastructure chapter
  • Malta's labour costs remain competitive, ranking 18th in the a study of hourly labour costs across the EU
  • Malta is an important beneficiary of European Structural and Investment Funds (ESIF) with EUR828 million available for the period 2014-2020
  • Malta offers investment incentives for businesses operating across various industries, including manufacturing, ICT, R&D and biotechnology; this is discussed further in the Trade chapter

Despite the benefits that Malta offers to investors, the low efficiency of government departments and the country's judicial system continues to pose a challenge to the overall attractiveness of the country as a business environment. As identified by the European Commission, particular problems include: enforcing contracts, licensing and permit systems and lengthy insolvency procedures. While the authorities have attempted to implement reforms to address the inefficiencies, the impact is yet to be seen.

This guide has been developed to provide businesses with an overview of Malta, its legal regime, start-up and market entry considerations, tax and customs requirements and a general summary of the factors that may affect the decision to do business in Malta. However, the information contained in this document is generic in nature and you should not act or rely on it without obtaining specific professional advice.

Please note that the Country Guides may only be available in English.

Useful Links

1 Registry Of Companies
2 Inland Revenue
3 Customs Malta
4 Identity Malta
5 Intellectual Property – Commerce Department
6 Office of the Information and Data Protection Commissioner
7 Malta Enterprise
8 Department for Industrial & Employment Relations

 

Sources

1 FDI Statistics
2 Doing Business Rankings
3 Work permit - Used PracticalLaw which is a legal service Grant Thornton
4 Malta GDP Per Capita
5 Labour Costs
6 Malta EU Funds

 

Download Country Guide - Malta (1.18MB, PDF)

Disclaimer

This document is issued by HSBC Bank Malta p.l.c. (the Bank). This guide is a joint project with Grant Thornton. It is not intended as an offer or solicitation for business to anyone in any jurisdiction. It is not intended for distribution to anyone located in or resident in jurisdictions which restrict the distribution of this document. It shall not be copied, reproduced, transmitted or further distributed by any recipient. The information contained in this document is of a general nature only. It is not meant to be comprehensive and does not constitute financial, legal, tax or other professional advice. You should not act upon the information contained in this document without obtaining specific professional advice. Whilst every care has been taken in preparing this document, the Bank and Grant Thornton makes no guarantee, representation or warranty (express or implied) as to its accuracy or completeness, and under no circumstances will the Bank or Grant Thornton be liable for any loss caused by reliance on any opinion or statement made in this document. Except as specifically indicated, the expressions of opinion are those of the Bank and are subject to change without notice. The materials contained in this document were assembled in January 2016 and were based on the law enforceable and information available at that time.

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