Low-cost yet high life­style

Michelle Swart finds out how trade and in­vest­ment be­tween SA and Malta open op­por­tu­ni­ties for over­seas prop­erty in­vest­ment

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GROW­ING trade and in­vest­ment be­tween SA and Malta has lead to fur­ther in­vest­ment op­por­tu­ni­ties for in­di­vid­u­als and com­pa­nies par­tic­u­larly for South Africans, be it in off­shore or prop­erty in­vest­ment.

Mal­tese ex­ports to SA reached €878 897 in 2008, down from nearly €2m of ex­ports in 2006 and an in­cre­ment of €561 553 from 2007. The main ex­ported items are phar­ma­ceu­ti­cals, ma­chin­ery and me­chan­i­cal ap­pli­ances.

Malta also im­ported from SA €1.7m worth of prod­ucts dur­ing 2008, up from €665 323 in 2006. The main im­ported items are ed­i­ble fruit and nuts, bev­er­ages and spir­its and paper.

Dr Jean-Philippe Chet­cuti, man­ag­ing mem­ber of Chet­cuti Cauchi, a pro­fes­sional ser­vices group pro­vid­ing le­gal, tax, fidu­ciary, ac­count­ing and as­sur­ance ser­vices to busi­nesses and pri­vate clients world­wide, states that the strength­en­ing of eco­nomic ties be­tween SA and Malta along with the re­laxed prop­erty and tax­a­tion laws of Malta presents unique ben­e­fits for South African com­pa­nies and in­di­vid­u­als.

“Malta of­fers sig­nif­i­cant ad­van­tages to South African en­trepreneurs, high net worth in­di­vid­u­als and in­vestors seek­ing safe yet at­trac­tive busi­ness en­vi­ron­ment and a low-cost yet high Euro­pean/Mediter­ranean life­style. A full mem­ber of the Euro­pean Union, the Is­land Re­pub­lic of Malta acts as a gate­way to Europe pro­vid­ing visa free ac­cess to the Euro­pean Schen­gen area to South African na­tion­als res­i­dent in Malta.”

Over the past decade the real es­tate in­dus­try in Malta has seen a pro­gres­sive in­crease in prop­erty prices up un­til the last cou­ple of years where dif­fer­ent mar­kets have been af­fected dif­fer­ently. The low end to mid­dle price ranges saw a drop in prices with the Cen­tral Bank of Malta re­port­ing that dur­ing the first three months of this year prop­erty prices in Malta went up for the first time in 24 months, whereas prices in the high end mar­ket have re­mained rel­a­tively sta­ble.

“Due to the re­laxed prop­erty laws, it is very easy for for­eign na­tion­als and com­pa­nies to pur­chase prop­erty in Malta and take ad­van­tage of the mul­ti­ple ben­e­fits thereof,” says Chet­cuti.

“Prop­er­ties can be pur­chased through var­i­ous meth­ods; through a com­pany, a trust or by an in­di­vid­ual.”

The Mal­tese econ­omy is a very open one and one where for­eign di­rect in­vest­ment in many of its sec­tors will re­main cru­cial. The over­rid­ing at­ti­tude to in­ward in­vest­ment is there­fore one which seeks to en­cour­age and as­sist, which is adopted across the Mal­tese Govern­ment, its agen­cies, the fi­nan­cial in­sti­tu­tions, pro­fes­sional sup­port and prospec­tive lo­cal part­ners.

“There are many good rea­sons to con­sider in­vest­ment in Malta. These in­clude its lo­ca­tion in the cen­tre of the Mediter­ranean, its ex­cel­lent com­mu­ni­ca­tion struc­ture, its ed­u­cated and skilled English-speak­ing labour force, a sta­ble po­lit­i­cal sit­u­a­tion, a strong in­dus­trial re­la­tions record and a great cli­mate.

“Malta is still a rea­son­ably priced lo­ca­tion where the cost of liv­ing is rel­a­tively low by Euro­pean stan­dards as are labour costs. Malta’s busi­ness laws and prac­tices are very stan­dard and the work and busi­ness ethic is high. A strong in­ter­na­tional tax treaty net­work is in place, which can pro­vide com­pet­i­tive tax ad­van­tages.”

Chet­cuti also notes that a prop­erty in­vest­ment in Malta would also yield good rental re­turns due to it be­ing a pop­u­lar tourist des­ti­na­tion.

Malta is con­tin­u­ing to di­ver­sify its econ­omy to in­clude a range of ser­vices, which draw strength from its lo­ca­tion, the ed­u­ca­tion and skills of its peo­ple and its cen­turies’ old tra­di­tion as a hub on one of the most im­por­tant trad­ing routes of his­tory. An im­por­tant devel­op­ment in this re­gard has been the es­tab­lish­ment of the Mal- ta Fi­nan­cial Ser­vices Cen­tre, a reg­u­la­tory body aimed at en­sur­ing that the sig­nif­i­cant ad­van­tages that Malta of­fers are used in a man­ner that both of­fers fis­cal ben­e­fits to the for­eign in­vestor and is con­sis­tent with Malta's in­ter­na­tional obli­ga­tions. SA also rep­re­sents a sig­nif­i­cant busi­ness op­por­tu­nity for many Mal­tese.

“There is a lot of scope for Mal­tese in­vestors to con­sider op­por­tu­ni­ties of in­vest­ment into SA. With such closer links be­tween the coun­tries, can en­hance their co­op­er­a­tion ini­tia­tives to in­clude new ar­eas that have not been con­sid­ered be­fore, in­clud­ing fi­nan­cial ser­vices,” says Chet­cuti.

“SA has enor­mous po­ten­tial with a unique com­bi­na­tion of highly de­vel­oped first world eco­nomic in­fra­struc­ture and a vi­brant emerg­ing mar­ket econ­omy. SA is the EU's largest trad­ing part­ner in Africa, with ex­ports to the EU grow­ing and be­com­ing more di­verse. The coun­try is grad­u­ally mov­ing from mainly com­mod­i­ty­based prod­ucts to a more di­ver­si­fied ex­port pro­file that in­cludes man­u­fac­tured prod­ucts.”

“All this is def­i­nitely an at­trac­tive pack­age to any Mal­tese or Euro­pean in­vestor de­sir­ing a base in the African con­ti­nent,” says Chet­cuti.

The Ci­tadel, Gozo, Malta.

Dr Jean-Philippe Chet­cuti, man­ag­ing mem­ber of Chet­cuti Cauchi.

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