
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 2021 World Investment Report, FDI inflows to Malta reached USD 3.9 billion, a slight increase from USD 3.8 billion in the previous year, despite the global economic crisis triggered by the Covid-19 pandemic. The total stock of FDI is estimated at USD 241 billion. The main contributors to total FDI flows are financial and insurance activities with a contribution of 97%. 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 2020, outbound direct investment flows totalled EUR 6.3 billion. The stock position of direct investment abroad stood at EUR 58.8 billion in 2020, down by EUR 0.9 billion from the stock position in 2019. Financial and insurance activities made up 99.5% of the total FDI abroad (Bank of Malta).
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. Malta ranks 88th out of 190 economies in World Bank's latest Doing Business report, losing four positions compared to the previous year. 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.
Foreign Direct Investment | 2019 | 2020 | 2021 |
FDI Inward Flow (million USD) | 3,778 | 3,944 | 4,005 |
FDI Stock (million USD) | 211,068 | 240,949 | 231,446 |
Number of Greenfield Investments* | 18 | 6 | 12 |
Value of Greenfield Investments (million USD) | 309 | 93 | 92 |
Source: UNCTAD - Latest available data.
Note: * Greenfield Investments are a form of Foreign Direct Investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up.
