Malta: A Spotlight on Business and Tourism

Aired August 2005

Basking in the Mediterranean, Malta offers compelling business and attractions well out of proportion to its size. With a population of 400,000 in an area less than twice the size of Washington DC, it is one of the most densely populated countries in the world. Malta is a democratic republic that has adopted an industrial policy aimed at maintaining steady productive growth whilst keeping in line with international economic developments. It has nurtured an environment that is conducive to the needs of international business with minimal bureaucracy and high productivity. The word is out. Welcome to the best kept secret in Europe.

Malta's traditional reputation as a packaged sun and sea destination for holidaymakers is changing rapidly as the island ever more aggressively pursues its own role within the world business community. Recognizing the intrinsic value of its geographic location and flexible workforce, this newly welcomed member of the European Union has a formidable determination to succeed on a global stage.

For decades Malta has welcomed many companies from a wide range of sectors. These companies have found that the country offers definite advantages. While the European Union is Malta's major trading bloc, the United States is their third largest individual trading partner, and American companies are slowly discovering the island’s benefits.

Malta is located at the crossroads of the Mediterranean and has served as a stepping-stone between Europe and Africa. The islands of Malta, Gozo and Comino have strong and positive relations with its neighbors and, thanks to the island’s history, the Maltese have acquired considerable cross-cultural skills and capabilities.

As more and more Americans are developing and expressing business interests in Libya, Malta’s role becomes more important than ever.

The Maltese economy is based on free enterprise. American investors and traders looking for a safe, English speaking country as an entry point into Europe would do well to consider Malta as their home base. Join us as we explore a new world of opportunities in the Maltese islands.

FINANCE AND BANKING

Malta’s banking system, whose total assets amount to about 6.2 billion dollars, is considered extremely sound. There has been steady expansion in the financial sector since Malta joined the European Union. The Central Bank has a vital regulatory role in safeguarding the integrity of the financial sector and acting as banker to both the government and the commercial banks.

Interest rates on foreign currency deposits are in line with international money markets. Backed by a worldwide correspondent network, the banks offer a broad range of foreign exchange operations as well as standard lending services and financing.

The role of the financial services sector has become increasingly important in the Maltese economy with the privatization of some of the largest public enterprises. In 2002, an Austrian consortium bought 40 percent shareholding in Malta International Airport. In 1999, HSBC bought the majority share in the country's largest financial institution, Mid-Med Bank. The government has also announced its intention to find a strategic partner for the second largest commercial bank in Malta, the Bank of Valletta. U.S. financial institutions are now working with local commercial banks in facilitating international transactions.

The Malta Financial Services Authority is the single regulator for financial services in the country.

BUSINESS AND TRADE

Malta's position in the centre of the Mediterranean Sea has helped it to become an important distribution hub. Malta boasts two of the finest natural harbors in the world at Valletta and Marsaxlokk and is served by a large number of shipping lines. The port of Valletta is a natural deep-water harbor extending 2 miles inland and is in operation throughout the year.

Over the past 15 years, the Government of Malta has made it a priority to improve the country's infrastructure in order to reach comparable EU standards. There is one free trade zone in Malta, the Malta Freeport.

The advantage of a Freeport to American firms is having a European base of supply, assuring customers prompt delivery and low cost inventory. Minimum bureaucracy and investments in information technology are also an important factor.

Industrial development has always been a difficult task for any small country with absolute limitations of size and manpower. Malta’s economic success has been based on a diversification of activities in which manufacturing has become an important pillar.

American companies would find Malta to be an excellent country to base light to heavy manufacturing. While production costs have increased since Malta’s accession into the EU, the quality of its products compared to the rest of the new EU member states as well as in the Middle East and North Africa guarantee a healthy return on investment.

HEALTH CARE

There is a rich mix of the public and private health care sectors. The sustainability of the health care system has been a focal point of the government and in recent years many foreigners have come to Malta for its exclusive professionals and services.

REAL ESTATE AND PROPERTY DEVELOPMENT

The real estate market, boosted by prestigious and ambitious developments at Portomaso in St. Julian’s and Tigne Point in Sliema, is on the upswing. Still relatively cheap compared to similar high-end properties in Europe and the Caribbean, major American businessmen and financiers are seizing the opportunity for some hefty investment in the sector.

Malta has witnessed a substantial increase in property sales of short to long-term investments offering a good rental return and capital appreciation. Americans looking for safety and security should look no further than the Maltese property market.

TOURISM

Malta has always been regarded as an affordable destination. The sea is clear and warm, the sun shines all year, and accommodation options of good value abound. Add its dramatic coastal scenery and a family-friendly environment and you have a perfect recipe for an unforgettable holiday. It is not surprising that tourism is one of the biggest foreign exchange earners for the country.

There is more to the Maltese islands than packaged beach tourism. It is hard to imagine a country where so much of its mysterious past is still visible today. Visitors will set out on a journey through time on islands rooted firmly on the present. Malta has an astonishing number of Unesco World Heritage Sites. The temples of Hagar Qim, Mnajdra and Ggantija are the world’s oldest standing monuments, even older than the Pyramids in Egypt. The reason for their existence remains shrouded in mystery.

The magnificent fortress city of Valetta is renowned as a “city built by gentlemen for gentlemen”, and is a masterpiece of the Baroque, medieval town planning, and a profusion of Europe’s finest art and architecture. This city of the Knights of St. John remains virtually intact, and wandering among the narrow streets and squares you can chance upon the 16th-century Grandmaster’s Palace, and the Barakka Gardens, with it’s magnificent view of the three cities. The co-Cathedral of St. John, with its richly ornamented interior and abundance of art treasures, is Malta’s most impressive church.

Mdina, the former capital city, sits enthroned and well fortified atop a rocky plateau in the centre of the island. Horse-drawn carriages still roll over ancient cobblestone streets, and the utter stillness of the “Silent City” is broken only by the sound of church bells.

The islands of Gozo and Comino provide a soothing respite from the crowded resorts and traffic of Malta. Only 60 minutes away by ferry boat, many visitors looking for a relaxing getaway have made these the primary focus of their trip. Gozo and Comino offer a glimpse of how the rest of Malta must have been before the advent of mass tourism.

It is not just tourists that are being drawn to Malta. Hollywood has taken notice as well.

The country hosts one of the largest music festivals in Europe, the Malta Jazz Festival. Every summer hundreds of people flock to the picturesque quayside in Valetta to savor a good helping of jazz and world music.

If it’s living the high life you’re after, Malta also does not disappoint.

But Malta’s biggest strength is its people. It’s the islanders themselves, with their healthy sense of community and a strong attachment to their land that one recalls with affection. And what better way to know them than over a delicious meal of traditional Maltese cuisine.

To fully appreciate the frivolity of Maltese life, come in the summer when Malta and Gozo come alive with religious festas. In the last two centuries festas have developed from simple village feast days into extravagant spectacles. It’s a chaotic, exuberant party, and everyone’s invited!