In a context where global foreign investment increased by 10.9% in 2013, in particular in Europe (+25.2%) and in Latin America (+17.5%), FDI flows to developing economies reached a new high of US$759 billion. However macroeconomic fragility and policy uncertainties are driving investors to caution.
Malta is well positioned in terms of direct foreign investment appeal. The country offers a certain amount of advantages to foreign investors: the country is an EU member; the competitive cost of a highly-skilled English-speaking labor force; its geographical position of the country which gives a privileged access to the Mediterranean and North African markets; the country has developed a niche economy, especially in the area of pharmaceuticals. The government has established a global pro-investment policy.
However, FDI flow has decreased due to the international economic crisis of 2008-9. Under the effect of the war in Libya and the decline in tourism, FDI are registering poor results since 2011. In 2013, FDI reached a total of only 160 million USD.
Information on the 2013 FDI influx in this region can be accessed in the Global Investment Trade Monitor published in January 2014 by the United Nations Conference on Trade and Development (UNCTAD).
|Index of Transaction Transparency*||3.0||5.0||7.0||5.0|
|Index of Manager’s Responsibility**||6.0||5.0||9.0||5.0|
|Index of Shareholders’ Power***||7.0||9.0||5.0|
|Index of Investor Protection****||5.7||6.1||8.3||5.0|
Source: Doing Business - Last Available Data.
Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action. **** The Greater the Index, the Higher the Level of Investor Protection.
|Foreign Direct Investment||2011||2012||2013|
|FDI Inward Flow (million USD)||276||4||-2,100|
|FDI Stock (million USD)||15,458||16,303||14,859|
|Performance Index*, Ranking on 181 Economies||46||-||-|
|Potential Index**, Ranking on 177 Economies||124||-||-|
|Number of Greenfield Investments***||13||12||10|
|FDI Inwards (in % of GFCF****)||20.2||0.3||-147.8|
|FDI Stock (in % of GDP)||167.8||185.8||155.7|
Source: UNCTAD - Last Available Data.
Note: * The UNCTAD Inward FDI Performance Index is Based on a Ratio of the Country's Share in Global FDI Inflows and its Share in Global GDP. ** The UNCTAD Inward FDI Potential Index is Based on 12 Economic and Structural Variables Such as GDP, Foreign Trade, FDI, Infrastructures, Energy Use, R&D, Education, Country Risk. *** Green Field 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. **** Gross Fixed Capital Formation (GFCF) Measures the Value of Additions to Fixed Assets Purchased By Business, Government and Households Less Disposals of Fixed Assets Sold Off or Scrapped.
The country also benefits from structural EU funds for the period of 2007-2013, which will allow it to sustain its economic development, improve its competitiveness and thus attract new foreign investors.
In 2014, Malta has introduced a citizenship program, entitled the “Individual Investor Program” (the “Citizenship Program”), which is targeted to non – European Union nationals. The Citizenship Program permits the granting of Maltese citizenship by a certificate of naturalization to foreign individuals and families who contribute to the economic development of Malta.
Any Comments About This Content? Report It to Us.
© Export Entreprises SA, All Rights Reserved.
Last Updates: October 2014