EY attractiveness survey yields strong results despite dipping from 2016

Malta’s level of attractiveness for foreign investors remains strong besides dipping some nine percentage points when compared with the previous year (87% in 2016 to 78% in 2017).

EY Malta yesterday launched the results of its annual attractiveness survey under its Director in EU Advisory Services Simon Lee Barberi.

In total, 107 foreign companies were asked several questions with the aim of assessing how attractive Malta is for investment. When asked whether Malta is an attractive destination to invest in point blank, 78% said yes, 11% said no and another 11% said ‘don’t know’.

It must be pointed out however that companies were surveyed during the run-up to a highly contentious general election and when serious allegations were being levelled against Prime Minister Joseph Muscat, during the months of March, April and May.

The three most attractive features of Malta, according to those companies, is corporate taxation at first place at 88%, down three percentage points from 2016, stability of social climate came in second at 82%, down six percentage points from 2016 while telecommunications infrastructure came in third place at 73%, up four percentage points from 2016.

Of most concern is the “stability and transparency of the political, legal and regulatory environment” dropped 15% from 2015 to 2016, and it has dropped another 12% between 2016 and 2017, down to seventh place.

When asked about areas for improvement, the top three mentions went to flexibility of labour legislation at 49%, down nine percentage points from 2016, transport and logistics infrastructure at 32%, up three percentage points and R&D and innovation environment at 29%, down two percentage points from 2016.

Turning to Malta’s legislative framework, which has been an attractive feature for companies to invest, 64% said they are managing to keep up, down seven percentage points from 2016. In total, 19% said they are not managing to keep up while 18% could not say.

A proportion of 82% managed to retain spe- cialized personnel, down 5% from 2016. In addition to this, 38% managed to find specialized personnel in the local workforce, down seven percentage points from 2016. Exposing students to work placement opportunities and modernization of curriculums were listed as top ways to improve the local workforce.

Interestingly, 61% of companies surveyed have expansion plans in the future, up by eight percentage points since 2016. In total, 78% plan to remain in Malta for the next 10 years, 18% do not and 5% could not say. This shows an overall comment to remaining in Malta.

This year, EY questioned companies on issues related to Brexit, mainly whether there business environment has improved or not since the UK opted to exit from the EU.

A proportion of 18% replied in the affirmative, 83% said that their business environment remained the same while 5% said that it had actually deteriorated.

The companies surveyed make an annual turnover of over 2bn and employ some 16,000 workers.

Managing director laments on ‘conference taking place under dark cloud’

EY Malta’s managing partner Ronald Attard launched the 2017 attractiveness survey conference yesterday, lamenting that it is taking place “under a heavy cloud” due to the “assassination of journalist Daphne Caruana Galizia.

“We Maltese are citizens of a European state where a journalist has been murdered for doing her job, the unthinkable has happened. We had a difficult decision to make, whether to host the conference or not”

“Our response is clear and powerful: Malta should remain the one we cherish and love. Malta is here to stay, so this conference is our small and loud confirmation that Malta is here to stay.”

Mr Attard said that while the survey shows that Malta remains attractive, the results have dipped “marginally” from 2016, while an “equally significant” statistic showed that more companies than last year plan to stay in Malta in the long-term.

This year’s conference is themed ‘Thinking without the box: disruption, technology and FDI’.

On this note, Mr Attard said: “Thinking without the box: if there ever was a time for this country to think outside the box it is now. We need to turn this moment of darkness into a ray of light, and rediscover who we are and where we come from...We really need to think outside of the box.”

He explained that the survey was carried out between March and May, a highly contentious time due to the run-up of the general election.

“In the same spirit with which we made recommendations last year, we are proposing new ones based on our survey findings.

“This year we are pushing to make a cashless society, to make teaching viable, to move away from numbers to quality and building a framework to adopt a more holistic view on measuring country performance.

“On cashless society, the EU is considering very low limits on cash payments, like in other countries.”