Up to three years ago, Malta enjoyed one of the highest rates of business ‘births’ and a low rate of business ‘deaths’ in the European Union, EU statistics show.

But the rate of new business creation dropped significantly last year and there was an increase in the rate of businesses closing down permanently.

Just 2,300 new enterprises went onto the books in 2021 compared to roughly 3,500 in both of 2020 and 2019, according to the National Statistics Office.

The drop could well be attributed to the effects of the COVID-19 pandemic.

Malta well above EU average in 2019

Figures published last month in a Eurostat report show that, in 2019, nearly 14 per cent of all active enterprises in Malta were new businesses created that year.

Just above four per cent of businesses closed permanently.

Malta only trailed Lithuania (19 per cent) and Portugal (16 per cent) in the creation of new businesses, although beating both in the permanent closure of other businesses. In 2019, Malta was also well above the EU average, which was 10 per cent for new enterprises and 8.3 per cent for the shuttered ones.

Eurostat is the official statistics office of the EU and periodically issues publicly available data on the economy, population, wellbeing and social life of member states.

The EU study, which looked at economy and business trends, considered business ‘deaths’ as the permanent closure of a business.

It did not include take-overs, break-ups or other forms of restructuring, such as change in activity.

Slight increased in shuttered businesses

The same comparative data for 2020 and 2021 is not yet available but a National Statistics Office report recorded a significant decline in the creation of new businesses here in 2021 and a slight increase in shuttered businesses over the previous two years.

In a report published last week, the NSO noted that 3,566 new businesses cut the ribbon in 2019 while 1,085 rolled the shutters forever that same year.

Business creation in 2020 climbed slightly to nearly 3,600 more enterprises and closure decreased slightly.

But a significant drop was recorded in 2021, when the statistics office registered fewer new businesses and deregistered more old ones.

The report says that Malta registered 2,302 new businesses in 2021 and deregistered 1,315.