Malta: Country and Foreign Investment
Investments by Foreigners
The Maltese government actively promotes foreign investment, particularly into the high technology sector. The Industrial Development Act 1988 introduced incentives and benefits for foreign investors, which were administered by the Malta Development Corporation. Some incentives were automatic, others were at the discretion of the Malta Development Corporation. Incentives included tax holidays, exemption from withholding tax, accelerated capital allowances, export promotion allowances, subsidised factories, customs duty relief, training grants, reduced tax rates, soft loans, etc.
In April 2001, the government amended the Industrial Development Act to incorporate a new incentive package to boost existing and new investment, primarily in the manufacturing sector which employs over 30,000 people and which, together with tourism and the services sector, is a key element of Malta's economy.
The incentives on offer no longer depend on whether a company exports or not. They are meant to promote productivity growth regardless of where the product is sold. The new package contains not only new tax incentives, with reduced rates of corporate tax which start from 5% and move up to 15% over a 15-year period, but also investment tax credits, a value added incentive scheme, special provisions for small businesses, and other incentives related to training and job creation.
These incentives are not only available to prospective investors, but also to existing ones ensuring that all companies can retain and increase their investment in Malta.
It is possible for foreign companies to employ expatriates subject to approval; normally the company would have to provide training or an understudy situation in order to bring Maltese nationals up to speed in the jobs occupied.
As part of Malta's preparations for EU entry, the Government replaced the IDA in 2001 with a Business Promotion Act which removed discriminatory treatment of certain types of company, giving all companies access to a more modest range of fiscal benefits. These are described in detail here.
In January, 2004, the government launched Malta Enterprise, a new body tasked with attracting more foreign direct investment (FDI) to the island. The umbrella body's mission is to sustains Malta's competitiveness and to offer assistance to those seeking to invest in Malta. Malta Enterprise consists of separate units, the first of which is responsible for business development and includes attracting FDI, trade promotion, marketing strategies, knowledge management, and foreign offices. The second unit is primarily responsible for client relationship management, whilst the third deals with corporate services.
Malta Enterprise has overseas offices in Germany, Dubai and Libya. Detailed information can be found on their website: www.maltaenterprise.com.