Foreign affiliates controlled by Maltese resident companies generated €1.9 billion in net turnover in 2023

In 2023, 43.8 per cent of the Maltese non-financial business economy’s Value added was generated by foreign-controlled enterprises.

Inward Foreign Affiliates Statistics (IFATS) provide insight into the ownership and ultimate control of enterprises operating within the Maltese economy. They complement Structural Business Statistics (SBS) by identifying the share of enterprises under foreign control and their contribution to the domestic economy.

Conversely, Outward Foreign Affiliates Statistics (OFATS) describe the activities of affiliates abroad, that are controlled by Maltese resident companies. An enterprise is classified as Maltese-owned if more than 50 per cent of its controlling interest is ultimately owned by a company controlled by Maltese residents.

In 2023, both foreign-controlled and resident-controlled enterprises in Malta recorded a growth across most key variables. The total number of business units rose by 10.5 per cent, however, the proportion accounted for by foreign-controlled enterprises decreased to 2.4 per cent of the total in 2023, compared to 2.6 per cent in 2022.

Overall employment in the Maltese non-financial business economy increased by 9.7 per cent, driven primarily by resident-controlled enterprises. Foreign-controlled enterprises also contributed to this increase, with employment increasing by 5.4 per cent to 45,020 persons. Corresponding Employee benefits expense paid by foreign-controlled enterprises increased by €149.8 million (9.2 per cent), totalling €1,770.3 million.

Value added increased by €1,821.9 million, reaching €13,484.9 million in 2023, reflecting increases of 17.3 per cent in foreign-controlled enterprises and 14.3 per cent in resident-controlled enterprises. By contrast, Gross investment in tangible non-current assets decreased by 39.4 per cent, mainly due to a 60.0 per cent drop among foreign-controlled enterprises.

Performance by size classification

In 2023, foreign-controlled enterprises showed varied performances across different size classifications. Large-sized enterprises were the main contributors to the growth among foreign-controlled enterprises, with Value added increasing from €3,688.5 million in 2022 to €4,671.4 million. Micro-enterprises registered a modest increase, from €93.9 million to €103.2 million. On the other hand, medium and small-sized enterprises recorded decreases of 3.4 and 24.0 per cent respectively.

Large-sized enterprises continued to dominate within foreign-controlled enterprises, accounting for 79.1 per cent of the Value added, 60.6 per cent of Persons employed, and 61.0 per cent of Employee benefits expense. Micro-sized enterprises, despite making up 53.1 per cent of foreign-controlled Business units, contributed only 1.7 per cent of Value added and 0.9 per cent of Net turnover. Meanwhile, resident-controlled enterprises displayed a more even spread of Value added and growth across all enterprise size classes.

Performance of Small Mid-Cap enterprises (SMCs)

In 2023, the number of foreign-controlled Small Mid-Cap enterprises (SMCs) was unchanged from 2022, remaining at just 5 Business units. Despite their small number, they contributed €252.2 million in Value added, representing 4.3 per cent of the total under foreign control.

Compared with 2022, SMCs recorded a 4.0 per cent decrease in Persons employed under foreign control but increases of 14.3 per cent in Value added and 22.2 per cent in Employee benefits expense

Key indicators across activity domains

In 2023, Gambling and betting activities (NACE Division R92) recorded the highest share of foreign control, while the largest contribution to Value added by foreign-controlled enterprises was concentrated in the Technological solutions, professional and business support activities (NACE Sections J, M and N). This latter domain also accounted for the largest nominal increase in Value added, rising by €778.8 million to €2,965.2 million, and represented the largest foreign-controlled employer segment, engaging 36.9 per cent of all Persons employed. Employee benefits expense in this domain reached €667.6 million, the highest across all activity domains.

Gambling and betting activities domain employed 7,829 persons, or 17.4 per cent of the total under foreign control. This domain also recorded a 5.2 per cent rise in Employee benefits expense, to €425.6 million, alongside increases in Value added (up by 6.1 per cent to €1,440.1 million) and Gross operating surplus (up by 6.5 per cent to €1,014.5 million).

Mobility, logistics and hospitality service activities (NACE Sections H, I and L) under foreign control registered a growth in Net turnover, while both Value added and Gross investment in tangible non-current assets declined, with the latter falling by €998.2 million, equivalent to a 69.4 per cent decrease. By comparison, resident-controlled enterprises in the same domain recorded a more consistent growth, with Net turnover and Value added increasing by similar rates of 20.0 per cent and 20.4 per cent respectively, and Gross investment in tangible non-current assets rising by 63.8 per cent.

Wholesale and retail trade (NACE Section G) showed a diverging trend, with foreign-controlled enterprises reporting declines in Value added and Persons employed despite Net turnover growth. Resident-controlled enterprises, in contrast, showed steady growth across key variables with Net turnover, Value added, and Persons employed each increasing by 3.5, 8.4 and 5.6 per cent respectively.

Construction (NACE Section F) remained relatively small and largely oriented towards resident-control, but the foreign-controlled segment, though minor, more than doubled its Value added while still recording a negative Gross operating surplus.

Key indicators by geographical region

In 2023, residents of European countries, including EU Member States, continued to dominate control of foreign-controlled enterprises, accounting for 73.6 per cent of the total enterprises within the non-financial business economy. Residents of non-EU Member States exercised control over 757 Business units, representing 56.4 per cent of all foreign-controlled affiliates within the Maltese non-financial business economy.

Amongst the continents in non-EU Member States, enterprises controlled from Europe recorded the highest values for Persons employed, Value added and Gross operating surplus at 8,096 persons, €1,404.8 million and €1,031.7 million and respectively.

Non-EU Member States employed 24,756 persons, whilst also accounting for 47.3 per cent of the total Value added and 44.1 per cent of the total Gross operating surplus. Almost all foreign-controlled enterprises from non-EU Member States registered a decline in Gross investment in tangible non-current assets with affiliates under European control registering the largest drop, at 95.3 per cent compared to 2022.

Although affiliates controlled from EU Member States had fewer Business units than non-EU Member States, they remained major contributors to Value added and Gross operating surplus, at €3,114.8 million and €2,311.1 million respectively. They employed 20,264 persons, equivalent to 45.0 per cent of the total, and paid out €803.6 million in Employee benefits expense, up 8.1 per cent from 2022.

Key indicators by country

In both 2023 and 2022, enterprises under Swedish ownership accounted for one of the largest portions of Value added among foreign-controlled enterprises, rising from €1,379.0 million in 2022 to €1,630.1 million in 2023. While Swedish controlled companies maintained a strong contribution, the largest increase in Value added was observed in companies controlled from the United Kingdom, which rose from €303.0 million in 2022 to €605.5 million in 2023, an increase of 99.8 per cent.

Ranked by the highest number of Persons employed, enterprises controlled from the United States employed the most persons at 6,808, followed closely by the United Kingdom with 5,580 and Sweden with 5,527.

Companies controlled from Italy recorded Gross investment in tangible non-current assets nearly five times higher than their 2022 investment of €6.1 million, while companies controlled from Sweden and Turkey rose by 28.5 and 65.5 per cent respectively. By contrast, companies controlled from Germany saw a notable decrease, with Gross investment in tangible non-current assets falling from €36.2 million in 2022 to €20.7 million in 2023, a decrease of 42.7 per cent.

Foreign affiliates controlled by Maltese residents

Foreign affiliates controlled by Maltese residents across 59 countries worldwide generated €1,904.9 million in Net turnover and employed 16,582 persons, an increase of 35.7 per cent and 11.8 per cent respectively over the previous year. Foreign affiliates controlled by Maltese resident companies primarily generated their Net turnover in EU Member State countries, with €1,298.3 million or 68.2 per cent of the total.

Persons employed in Maltese-owned foreign affiliates was predominant in EU Member States, with 13,293 or 80.2 per cent of the total (Table 6).

In 2023, Net turnover generated by Maltese-owned foreign affiliates in the United Kingdom increased by €55.2 million over the previous year. Affiliates in Romania accounted for the largest number of Persons employed with 6,178, while those in Poland recorded the strongest percentage growth, with employment increasing by 47.7 per cent, from 411 to 607.