Low-cost yet high lifestyle
Michelle Swart finds out how trade and investment between SA and Malta open opportunities for overseas property investment
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.