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The level of English of the Maltese workforce is the most important element that makes Malta attractive to investors according to top-level business executives who run foreign-owned companies based in Malta.
The results of the Ernst & Young Malta Attractiveness survey are a pleasure to read even if they confirm generally held perceptions as to what Malta’s strong and weak points are.
All respondents to the survey also reported that the clear and stable political and legislative environments were a plus point for foreign investors.
Twenty-six foreign owned companies based in Malta replied to the survey, part of the European Attractiveness Survey published by Ernst & Young, which was discussed at the World Investment Conference held earlier this month in France.
The companies range from firms with a turnover of less than EUR2 million to those having more than EUR50 million. Also the employment levels range from less than 10 to more than 100. The industry groups covered hi-tech, ICTs, and manufacturing. The majority of the respondents have been in Malta before the 1990s and a number of them have their parent company based in Europe.
The firms also appreciate Malta’s stable social environment and the productivity reached by the human resources. Other issues scoring high points were the telecommunications infrastructure and government’s fiscal incentives.
The survey also covered Malta’s membership in the EU and the adoption of the Euro. Around 50% of the respondents viewed Malta’s EU membership as beneficial while 60% viewed the country’s adoption of the Euro in a positive light.
Forty-five per cent of the respondents state that their perception improved during the current year and the same level envisage that Malta’s attractiveness will improve over the next three years. It was positive to note that nearly all the respondents, bar one, had expanded their activities in Malta. Also 65% of the companies consider expanding their activities locally whereas 60% outsource business processes to local SMEs. This is good news for the local economy as it leaves a multiplier effect.
An important section of the report is addressed to the Government and refers to the measures the company bosses expect government to take to improrve the situation.
The top-most concern is cargo handling and port charges with those surveyed requesting lower charges. The reduction or elimination of the travel tax, control of wage-induced inflation, less bureaucracy and improving the country’s physical environment to mitigate the effect of construction industry, were also mentioned as issues requiring attention.
The respondents also mentioned other measures that are not dependent on the government including the encouragement of further investment in research and development, the need of networking among the business community and the decrease of input costs such as telecommunications charges.
There are two proposals for the University of Malta that is invited to produce higher quality graduates and to collaborate more with the Industry to provide graduates in the disciplines needed.
The report ends with a SWOT analysis that identifies a number of strengths which includes the corporate tax rate while the country’s main weakness refers to costs. The unanswered question of what will happen beyond 2008 with respect to the present legislation of the Business Promotion Act is an issue considered to be both an opportunity and a threat.
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