Malta’s attractiveness to foreign investors is at its lowest-ever level since data started being collected, according to a survey published on Tuesday.  

According to EY Malta’s attractiveness survey, a lack of stability in the political environment has gone from once being a leading factor in drawing investors to the island, to now being viewed as a drawback. 

The survey, conducted among foreign companies in Malta, saw the island given its lowest ever rating since the first survey 16 years ago.

The majority of respondents still find Malta an attractive destination for foreign direct investment. But, at 62%, this figure is the lowest the survey has ever recorded. The figure is down 15 percentage points from last year. 

A quarter of respondents now say Malta is not an attractive investment destination - up 10 percentage points over 2019.

The survey found that 80% expect their company to still be present in Malta in a decade's time - the same share as in 2019 - while the share of those who envisage leaving the country increased by six percentage points.

The EY report assessed investors’ sentiments on the overall attractiveness of the island, the impact of the COVID-19 crisis, Malta’s strengths and weaknesses, and companies’ plans to retain a presence on the island. 

The results will be presented during a week-long virtual event by EY that kicks off on Tuesday morning, Malta Future Realised 2020. 

Most attractive factors

While Malta's social climate is still seen favourably by foreign investors, its perceived attractiveness slid by 11 percentage points.

It is now the third most-commonly cited attractive factor about Malta cited foreign investors. Malta’s telecommunications infrastructure in second place, and corporate tax rates the leading factor in Malta's attractiveness.  

Least attractive factors

On the other end of the scoreboard, the stability and transparency of the political, legal and regulatory environment, which was Malta’s second most attractive parameter five years ago, is now bottom of the list, reflecting a growing sense by investors that Malta must tackle governance and reputational issues. A forthcoming Moneyval evaluation also concerned many investors.

As in previous years, Malta’s research and development and innovation environment, as well as its transport and logistics infrastructure, continued to score poorly.

Supporting what many highlighted as one of the main reasons for a decrease in Malta’s overall attractiveness index in 2020, FDI investors ranked a new inclusion, reputation and brand, as the number one priority for Malta to remain globally competitive.

Malta’s long-standing priority, education and skills, is now in second place after several years ranking first. Another new inclusion, strengthening institutions, enforcement and monitoring, is in third place.

Almost all investors, 94%, indicated that, as part of its COVID-19 reboot strategy, the government should prioritise environmentally sustainable practices.

To read the EY Attractiveness Survey 2020 in full, see the PDF below.