Malta, a small Mediterranean island with an attractive location, has over 300 days of sunshine yearly. It is known for maintaining a perfectly functioning startup ecosystem. The country is also a serious player in the AI industry. Its geographic location ensures access to pivotal markets and global talent.

International Living magazine acknowledged it for having the World's Best Climate. Spread between three continents: Africa, the Middle East, and Europe, Malta has become a geographic and economic hub. Its policy can make the cosmopolitan place "the Silicon Valley" of Europe. Let's see why!

The Mediterranean island – the startup heaven

The ratio of AI startups to residents, which are just over 500,000 in the Pearl of the Mediterranean, is much higher than in the US. The startup tracker Tracxn Technologies reveals that the island has one AI startup per 9,500 people compared with the United States' 1 for every 14,000 residents.

The country has long been a destination for wealthy tourists since its program guarantees citizenship to foreigners who invest in the country. Expatriates comprise 38% of the island's workforce. Malta’s cosmopolitan nation creates a vivid, collaborative, and creative environment. It stimulates startups in the country, attracting more from around the globe. Cutting-edge sectors, such as Fintech, digital technologies, and Life Sciences, are such examples.

The diverse workforce of the Maltese Islands will continue expanding thanks also to the Malta Startup Residence Programme. Its three-year residency permit can be extended for another five years. Foreign investors can live on the islands while launching their startup ventures, offering fresh and innovative solutions to the European market. Several startups have attracted public attention with innovative services and impressive growth: Trust Stamp (the first NASDAQ-listed company in the country), Draw and Code, and Weavr.io.

Malta – the Silicon Valley of iGaming

Malta has long been recognized as a hub for innovation, especially in online gambling. As the iGaming industry keeps expanding and evolving, the republic is in a strong position to remain a global authority.

The main factors contributing to Malta's reputation as a global leader making it the "Silicon Valley of iGaming" are:

1. Regulatory Framework: The country offers a robust and transparent legal framework for online gambling operators.

2. Strategic Geographic Location: Spread in the heart of the Mediterranean, the country has strong ties to Europe, Africa, and the Middle East, which is appealing to international iGaming organizations.

3. Government Support: The Maltese government constantly stimulates the growth of the online gambling industry. It provides highly favorable policies, tax incentives, and a stimulating business environment.

4. Market Growth: Malta has seen fast expansion in the sector, constantly attracting lots of international companies that start operating on the island.

5. Talent Pool: One of its competitive edges is the availability of experts and leading brands.

6. Internationally Recognized: Malta is a global leader in iGaming. The country's regulatory expertise, infrastructure, and innovation are unparalleled.

"Looking at everything that makes Malta stand out in the online gambling industry, it’s easy to see why the country has earned its reputation as a leader. Its strategic location, business-friendly tax incentives, solid regulatory framework, and talented workforce has helped the country create the perfect environment for iGaming businesses to grow, innovate, and succeed", shares Titko Titev, CEO of GameZinger, a digital platform that provides information on secure online gambling, offering players tons of resources.   The Mediterranean Island is well on its way to becoming an international online gambling hub thanks to its beneficial laws, government support, and constantly increasing network of companies and professionals.

Malta’s ecosystem value increases 5x since 2021

In May 2024, the island hosted the EU-Startups Summit, demonstrating its thriving ecosystem to the world. Over 2,000 ecosystem founders, angel investors, and international startup leaders flocked to the event from all parts of the world. It is an addition to Startup Festival Malta, another yearly gathering in October at the Malta Fairs and Convention Centre.

The Global Startup Ecosystem Report (GSER) 2024 results on Malta's ecosystem value show five times increase since the 2021 report. The economic influence of startup exits and valuations for the last 30 months has grown 39% compared to the 2023 GSER thanks also to several large exits of $50+ million have contributed to that.

Startups can build and grow from the islands. Europe Startup Nations Alliance survey ranked Malta fourth as the best ground- destination for breaking startups, surpassing 17 other EU countries, which is remarkable.

What makes the archipelago inviting to entrepreneurs?

Besides the superb location, let’s see what other factors contribute to the successful business development of the country:

• The Government of Malta take serious steps to ensure a nurturing environment for startups. Its goal is to establish inducements and key services to support highly innovative and disruptive operations.

• Initiatives like the Startup Festival attracted 1,800+ attendees in 2023. Malta launched a national $10.7 million venture capital fund demonstrating its dedication to innovation. Non-dilutive financial aid packages of up to $1.6 million are also available to ventures of innovative businesses.

• The economic development agency Malta Enterprise’s initiative Start in Malta aims to grow the local ecosystem and encourage startups to move here. The next-generation Startup Framework will mark the country's progress.

"There's an appeal to living in Malta that you need to experience in order to understand its value. Great weather and fresh air — there's nothing like being able to go for a swim in the morning before going to or coming back from the office.", shares Malta Enterprise's CEO Kurt Farrugia.

• Malta’s globally competitive policies include minimizing bureaucracy and enhancing its proposition. Its Startup Framework promotes transparency catering to startups by collaborating with the community.

• During EY Malta's Future Realised Conference, MeDirect Bank of Malta’s CEO Arnaud Denis announced that using the latest technologies is a main priority for most local businesses.

• The island is compact with a close-knit business community that gives startups access to decision-makers. Entrepreneurs here can engage directly with policymakers and industry leaders. This collaborative atmosphere is a critical advantage and rare to find. It ensures faster administrative processes and enterprises quickly adapting to regulatory changes.

Company owners find Malta the ideal spot for their businesses as the country has a perfectly safe environment and a source of inspiration and creativity.

Malta's global AI competition

The republic started investing in AI long before its recent rush, caused by ChatGPT and similar technologies. Malta's ambition to become an AI hub is in a global race for dominance. Here are some examples:

• Amazon collaborated with AI startup Hugging Face to improve the effectiveness of the AI model. This demonstrates the growing importance of AI in diverse sectors.

• The French AI startup Mistral AI founded by ex-Google and Meta's researchers put Silicon Valley's dominance to the test.

• The AI startup Scale confirmed $1 billion from investors including Amazon, Meta, and AMD that doubled its valuation to $13.8 billion. The financial support AI startups receive worldwide has been substantial.

• In China, Alibaba supplies AI startups with cloud credits to help them become the leaders in the global AI race.

• Microsoft reinforced its partnership with OpenAI. The corporation invested billions in integrating cutting-edge AI tools like ChatGPT into its cloud platform Azure.

• NVIDIA's GPUs have become the backbone of AI development in the world having teamed with AI labs in the US, China, and the EU to expand AI capabilities in healthcare and autonomous vehicles.
• The EU launched Gaia-X, an AI-driven cloud infrastructure enterprise to diminish reliance on U.S. tech giants and encourage data sovereignty.

What's ahead for Malta

In 2019, Malta set the goal of becoming the "Ultimate AI Launchpad" by 2030, a hub where companies develop, test, and scale their AI innovations. This is an ambitious but achievable task.

The islands are working on a new AI strategy under the EU's AI Act. It involves ethical frameworks and initiatives to deal with the recently evolving and spreading problem of job displacement that AI dominance has created.

Malta's strategic location, government support, and transparent approach toward commerce have made it an inviting destination for startups that want to scale in a cosmopolitan environment. Its role as a facilitator of international business and innovation will continue to grow.

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