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Malta recovers from the FATF delisting

Following FATF's decision to remove the smallest member of the EU off its "grey-list" earlier this year, Malta's attractiveness for foreign direct investment has increased.

According to a recent EY poll, 58% of businesses feel Malta is favourable for business right now, a significant 21% rise from 2021 levels.

According to the Times of Malta, firms are allegedly apprehensive about changes in international tax policy, which is why the numbers are still below pre-2020 levels despite this increase.

The EY Malta Attractiveness Index is the 18th study that the audit company has undertaken in Malta with 120 foreign investors and businesses.

The data for this year was gathered in June, immediately after FATF announced that Malta had been removed from its "grey-list."

The de-listing has "helped to restore investor sentiment," according to Ronald Attard, EY Malta Country Managing Partner, who was speaking at the Malta Future Realized Conference.

He continued, "Although back on the right path, it is worth noting that at 58% it still falls short of the extremely high confidence levels Malta was reaching a few years ago."

Investors found Malta's 71% corporate tax rate to be its most alluring feature, but they also saw it as its largest danger.

The largest threat to the country's attractiveness over the next three years, according to 58% of respondents, is changes to the international tax system.

"As in recent years, our strongpoint for FDI remains our tax regime," said Mr. Attard. "Survey respondents are clearly aware of the risks of this changing. If our biggest pull factor is potentially coming to an end, what is our attractiveness offer going to be in a new global tax environment?"

"We have a great social climate and telecommunications infrastructure, but is it going to be enough?" he questioned.

Investors recognized skills shortages as one of the largest risk factors, ranking second behind banking challenges (38%), cost competitiveness (36%), and reputational concerns (36%).



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