What are Maltese interest rates like?

• The latest figure for the rate on the marginal lending facility is 0.25 (Central Bank of Malta, 16 March 2016).  This is the European Central Bank's rate on the marginal lending facility, which offers overnight credit to banks in the Euro area.
• The harmonised long-term interest rate in Malta in April, 2016 was 1.00.  In the Euro Area, Germany had the lowest harmonised long-term interest rate (0.13); Demark had the lowest harmonised long-term interest rate of those countries outside the Euro Area (0.40).  Greece had the highest harmonised long-term interest rate in the Euro Area (9.30); outside of the Euro Area, Romania had the highest harmonised long-term interest rate (3.49).

Marginal Lending Facility Rate
2012	2013		2014		2015	2016
July	May	Nov	June	Sep	December	March
1.50	1.00	0.75	0.40	0.30	0.30	0.25

(Central Bank of Malta)

Harmonised Long-term Interest Rate
Germany	0.13	Cyprus	3.99
Greece	9.03	Luxembourg	0.34
Malta	1.00	Denmark	0.40
Spain	1.53	UK	1.48
France	0.51	Belgium	0.55
Italy	1.44	Netherlands	0.40

European Central Bank and European Commission

 

Sources:

Interest Rates. (n.d.). Retrieved May 29, 2016, from

https://www.centralbankmalta.org/en/interest-rates

Long-term interest rates. (n.d.). Retrieved May 29, 2016, from https://www.ecb.europa.eu/stats/money/long/html/index.en.html

 

What incentives exist to attract Foreign Direct Investment to Malta?

• Malta has an impressive record in attracting foreign investors to Malta, attracting Foreign Direct Investment from countries such as the UK, Germany, Italy, France, Spain, and the United States of America.
• Incentives include modern business infrastructure, excellent telecommunications, competitive labour costs, a highly skilled and educated workforce, quality of life, cash grants, tax exemptions, property assistance, training and labour market assistance, loan guarantees, cheap loans or finance, exemptions from regulation, and target sectors
• Direct labour costs hold up well, at a competitive 30% to 50% of those in the older EU Member States, and when social security costs and other employment taxes are factored in, Malta's total labour costs are competitive with the new EU Member States and significantly lower than established EU Member States.
• Malta has concluded tax treaties with a number of countries, which enhance the incentives provided by Maltese domestic legislation.  These treaties ensure that profits generated in Malta are either exempt from tax in the investor’s country of residence, or that such a country will provide a tax credit for the Malta tax spared, as a consequence of the incentives Malta provides.

Current Double Taxation Agreements
Albania	Georgia	Latvia	Saudi Arabia
Australia	Germany	Lebanon	Serbia
Austria	Greece	Libya	Singapore
Bahrain	Guernsey	Lithuania	Slovakia
Barbados	Hong Kong	Luxembourg	Slovenia
Belgium	Hungary	Malaysia	South Africa
Bulgaria	Iceland	Montenegro	Spain
Canada	India	Morocco	Sweden
China	Ireland	Netherlands	Switzerland
Croatia	Isle of Man	Norway	Syria
Cyprus	Israel	Pakistan	Tunisia
Czech Republic	Italy	Poland	Turkey
Denmark	Jersey	Portugal	UAE
Egypt	Jordan	Qatar	United Kingdom
Estonia	Korea	Romania	USA
Finland	Korea	Russia	Uruguay
France	Kuwait	San Marino

 

Double taxation agreements signed but not yet in force
Barbados	Liechtenstein	Moldova
Belgium	Mexico	Ukraine

 

Sources:

Upsizing – Small Island, Big Business. (n.d.). Retrieved May 28, 2016, from http://www.maltaprofile.info/article/foreign-direct-investment

FDI Attractions & Incentives. (n.d.). Retrieved May 28, 2016, from http://www.maltaprofile.info/article/fdi-attractions-incentives

Balance of Payments - National Statistics Office (NSO). (n.d.). Retrieved May 28, 2016, from https://nso.gov.mt/en/News_Releases/View_by_Unit/Unit_A3/Balance_of_Payments/Documents/2016/News2016_025.pdf

Malta Enterprise – Foreign Investors. (n.d.). Retrieved May 28, 2016, from

http://www.maltaenterprise.com/en/foreign-investors/why-malta/business-scenario

 

How sound are Maltese banks?

• Malta’s key banking institutions are Bank of Valletta plc, HSBC Bank Malta plc, and Deutsche Bank (Malta) Ltd.
• In 2014, these banking institutions were subject to an assessment by the European Central Bank (ECB), including an asset quality review (AQR), to enhance the transparency of bank exposures, including the adequacy of asset and collateral valuation and related provisions, and a stress test, to test the resilience of the banks’ balance sheets, performed in close cooperation with the European Banking Authority (EBA).
• The ECB concluded all three banking institutions satisfied the applicable criteria and no capital shortfalls were identified, either in the baseline or the adverse scenarios. 
• These results confirm the soundness and resilience of these three Maltese banks, all of which have retained a CET1 capital ratio above the 8% minimum threshold after the AQR.

Sources:

Malta's Banking Institutions Considered Sound and Resilient by ECB. (n.d.). Retrieved May 29, 2016, from http://www.csb-advocates.com/malta-news/malta-banking-institutions-considered-sound-resilient-ecb  

 

What is the extent of Malta’s Foreign Direct Investment?

• As at the end of June 2015, the stock position of Foreign Direct Investment (FDI) in Malta was €148.2 billion.  FDI flows in Malta in the period January to June 2015 was estimated to be €5.2 billion.  This represented an increase of €3.0 billion over the corresponding months in 2014.
• Financial and insurance activities accounted for 98.1% of FDI flows in Malta in the first six months of 2015.

Inward Foreign Direct Investment Flows
Sector	2012 Q1 / Q2	2013 Q1 / Q2	2014 Q1 / Q2	2015 Q1 / Q2
Equity Capital	1,467	-311,046	-3,229,716	-732,603
Reinvested Earnings	89,427	64,108	79,130	430,421
Other Capital	5,228,655	5,318,428	5,360,729	5,546,912
Claims on Direct Investors	4,194,992	4,214,653	4,216,279	4,320,362
Liabilities to direct investors	1,033,679	1,104,354	1,145,622	1,226,556
Total	5,319,559	5,081,514	2,209,901	5,244,732

(National Statistics Office, Malta)

Foreign Direct Investment Flows: Economic Activity
Sector	2012	2013	2014
Manufacturing	-78,026	101,800	50,946
Transportation, Accommodation and Real Estate Activities	48,277	47,001	29,890
Financial and Insurance Activities	11,127,984	8,841,569	8,292,289
Information and Communication	676	4,390	10,371
Professional, Scientific and Technical Activities	-8,534	11,351	9,274
Other Activities	-45,306	80,488	84,009
Total	11,045,071	9,086,600	8,476,781

(National Statistics Office, Malta)

 

Sources:

Balance of Payments - National Statistics Office (NSO). (n.d.). Retrieved May 29, 2016, from https://nso.gov.mt/en/News_Releases/View_by_Unit/Unit_A3/Balance_of_Payments/Documents/2016/News2016_025.pdf

 

What kind of companies have invested in Malta? 

• Malta is one of the most advantageous investment locations in Europe, and the Euro-Mediterranean region.  Financial services, advanced manufacturing, life sciences, ICT, creative industries, and aviation related activities are changing Malta’s foreign investment climate.
• The presence of many renowned names now based in Malta, continually investing in and expanding their operations, is testimony to the quality and productivity of the Maltese workforce as well as the infrastructure within which they operate.

Companies that have invested in Malta
Actavis Malta	Lufthansa Technik
Baxter	Playmobil Malta
Cardinal Health	Siegried Generics
Crinsonwing	STMicroelectronics
De La Rue Currency and Security Print Ltd	Toly Products
Dedicated Micros	Trelleborg Sealing Solutions Malta
Methode	Uniblue Systems Ltd
HSBC Bank Malta

(Malta Enterprise)

 

Sources:

Malta Enterprise. (n.d.). Retrieved May 29, 2016, from

http://www.maltaenterprise.com/en/foreign-investors/why-malta/business-scenario

 

How many banks operate in Malta?

 

• Malta’s key commercial banking institutions are the Bank of Valletta plc, HSBC Bank Malta plc, and Deutsche Bank (Malta) Ltd. There are a number of other commercial banks also operating on the Maltese Islands.

Commercial Banks in Malta
Akbank T.A.S.	FIM Bank plc	Nemea Bank plc
APS Bank Ltd	Fortis Bank Malta Ltd	Novum Bank Ltd
Banif Bank (Malta) plc	HSBC Bank Malta plc	Pilatus Bank Ltd
Bank of Valletta plc	IIG Bank (Malta) Ltd	Raiffeisen Malta plc
BAWAG Malta Bank Ltd	Investkredit International Bank plc	Sparkasse Bank Malta plc
CommBank Europe Ltd	Izola Bank plc	Turkiye Garanti Bankasi A S
Deutsche Bank (Malta) Ltd	Lombard Bank Malta plc	Nordea Bank AB Malta
Erste Bank (Malta) Ltd	Mediterranean Bank plc	Volksbank Malta Ltd
FCM Bank Ltd	NBG Bank Malta Ltd	Go Bank Malta Ltd

Source:

Malta Bankers Association. (n.d.). Retrieved May 29, 2016, from http://maltabankers.org/listofmemberbanks?l=1

 

• The Maltese currency is the Euro.  Malta joined the Euro Area in January 2008.
• In April 2016, the overall Harmonised Index of Consumer Prices (HICP) inflation rate in Malta was 0.8%.  The HICP is a list of the final costs paid by European consumers for the items in a basket of common goods and is produced by European Union (EU) Member State to help measure inflation.
• The overall HICP inflation rate of the Euro Area in April 2016 was -0.2%.  Romania had the lowest overall HICP inflation rate in the Euro Area (-2.6%); Belgium had the highest overall HICP inflation rate (1.5%).
• The percentage (%) HICP inflation rate in Malta increased over the period 2011 to 2016, and was at its highest in 2014.  

Harmonised Index of Consumer Prices (HICP) Inflation Rate
2011	2012	2013	2014	2015	2016
2.72	2.42	1.38	0.31	1.10	1.00

            (National Statistics Office, Malta and Eurostat)

Sources:

Index of Inflation. (n.d.). Retrieved May 29, 2016, from https://nso.gov.mt/en/nso/Selected_Indicators/Retail_Price_Index/Pages/Index-of-Inflation.aspx

Eurostat - Harmonised Index of Consumer Prices. (n.d.). Retrieved May 29, 2016, from http://ec.europa.eu/eurostat/inflation-dashboard/