Foreign Direct Investment

Malta is well positioned in terms of foreign direct investment appeal, fuelled by a welcoming and progressive regulatory environment and a strong iGaming sector. According to UNCTAD's 2022 World Investment Report, FDI inflows to Malta reached USD 4 billion, a slight increase from USD 3.9 billion in the previous year. In the same year, the total stock of FDI was estimated at USD 231 billion, around thirteen times the country’s GDP. The main contributors to total FDI flows in 2021 were financial and insurance activities with a share of 85.9% (NSO). Other sectors for investment are electronics, pharmaceuticals and communications. Malta is a natural hub for companies seeking to do business in Southern Europe and North Africa, with more than 31,000 companies established on the island having foreign shareholders. During 2021, outbound direct investment flows totalled EUR 7.2 billion, while the stock position of direct investment abroad stood at EUR 66.2 billion. According to the latest figures by the National Statistical Office, FDI inflows were estimated to at EUR 2 billion during the first six months of 2022, with financial and insurance activities accounting for 85.3% of the total.

The country offers a number of advantages to foreign investors: it is an EU member; offers a highly-skilled, English-speaking labour force at a competitive cost; holds a geographical position that gives it privileged access to the Mediterranean and North African markets; and has developed niche economies, especially in the area of pharmaceuticals. Malta has signed double taxation treaties with more than 50 countries and the Government has also established a global pro-investment policy. Even if the corporate tax rate is set at 35%, the tax is actually much lower due to the participation holding shareholders are allowed to have. On the other hand, the country has a small domestic market, it is heavily reliant on the tourism sector and has sizeable incoming/outgoing financial flows (offshore finance, online gambling industry, citizenship by investment programme). In line with EU Regulation 2019/452, in 2021 Malta has enacted the National Foreign Direct Investment Screening Office Act, which gives the Office authority to screen, assess, investigate, and eventually authorise foreign direct investments carried out by non-EU persons which may affect the security or public order in the country. In June 2022, the Financial Action Task Force (FATF)
removed Malta from its grey list. Overall, the country ranks 21st out of 132 economies in the 2022 Global Innovation Index and 54th out of 180 in the Corruption Perception Index.