Malta sees biggest improvement in foreign investment ranking

Malta has seen the biggest jump in the rankings of an index measuring foreign investment (FDI), tapping its status as an EU member state.

The country leapt 50 places in this year's edition of the Greenfield FDI Performance Index to 33rd place.

This was a significantly larger improvement than the 36-place jump seen for El Salvador and the 30-place increase seen for Iceland, which witnessed the second and third largest improvements, respectively.

The index measures FDI relative to a country's gross domestic product (GDP).

The index’s authors noted that several smaller nations had risen in the rankings this year, compared to the results for last year, which were attributed to the size of the countries’ economies and their “relatively small volume” of FDI projects.

Most FDI projects into Malta cited the country’s EU membership as a key driver for investment, according to a Greenfield investment monitor.

FDI is when a company in one country sets up long-term business interests in another, with a minimum 10% ownership in an overseas business. Such investment usually involves the acquisition of real assets such as factories, offices and distribution infrastructure.

The biggest climbers and fallers in the index. Graphic: fdiintelligence.com.

The authors of the index noted that while “most” investment into Malta was related to the services sector – such as financial services, insurance and fintech, for example – it pointed to Turkish company Grimas’ plans to invest €7.5m in Malta as proof of the country’s “capabilities to attract FDI across a range of sectors”.

In a meeting with the company’s management in May last year, Prime Minister Robert Abela said Grimas would invest an initial €7.5 million and employ 44 full-timers at its Ħal Far facility at Ħal Far as part of plans to produce wind turbine components in Malta.

While Malta and others saw substantial improvement in the index, others saw dramatic falls in their fortunes; Uganda dropped by a staggering 43 places to reach 84th place, while EU country Estonia fell by 34 places to 52nd place and Uruguay 27 places to 78th place.

The United Arab Emirates (UAE) secured the top spot in the rankings for the second year in a row, despite seeing its score slip slightly from the last edition, followed by Namibia in second place and Costa Rica in third place.

Greenfield drew on data provided by the Financial Times and the International Monetary Fund.