VALLETTA, Oct. 23 (Xinhua) -- Malta's overall attractiveness for foreign direct investment (FDI) is on the decline, according to a survey report published by consulting firm Ernst and Young (EY) on Tuesday.
The annual report shows that 54 percent of surveyed foreign investors in Malta believe that the country is attractive for FDI, a drop of 5 percentage points from a year ago. While this is an improvement from the low of 37 percent recorded in 2021, it remains significantly below the 87 percent rating achieved in 2016.
Corporate taxation remains Malta's strongest point, valued by 75 percent of investors. Telecommunications infrastructure is another significant draw, appreciated by 63 percent. However, foreign investors are concerned about labor costs and skills, with only 39 percent and 32 percent of investors finding them attractive, respectively. Only 29 percent view the stability and transparency of the political, legal and regulatory environment are attractive.
The survey highlighted that international tax policy changes and a lack of skilled labor remain the two major perceived threats to Malta's ability to attract FDI during the next three years, with each concern being flagged by 50 percent of respondents. Reputational concerns, cost competitiveness and the physical national infrastructure follow.
Artificial intelligence (AI), intelligent automation and the distributed cloud are the top three emerging technologies being considered for investment, according to the survey. Especially, 61 percent of respondents consider AI as a critical area for their investments, a notable 12 percent increase from 2023. Nearly half of investors believe that Malta is as attractive as other European countries in terms of technology-related factors.
The survey shows that 70 percent of FDI companies plan to remain in Malta for the next 10 years. Meanwhile, only 38 percent have expansion plans over the next year, which is similar to last year's result, but less to what it was a few years ago.
