Malta’s greylisting by the FATF has clearly harmed the country’s appeal to international investors in a big way.
A new study by EY found that only 37% of investors view Malta as an attractive jurisdiction, down significantly from last year’s 62%, which was back then an all-time low.
Meanwhile, 46% of investors believe Malta is not an attractive jurisdiction, practically double from the 25% registered last year.
This is the first-ever EY Malta Attractiveness Survey in which more foreign investors rated Malta as currently unattractive than attractive for foreign direct investors.
The 2021 Attractiveness Survey took place among 110 existing FDI companies, with virtual interviews conducted between July and August, shortly after Malta’s greylisting.
Asked about this development, 84% of investors said greylisting will lead to reputational damage, while 55% said it will make doing business in Malta harder.
Corporate taxation remains at the top of Malta’s attractiveness scoreboard, chosen by 67% of respondents, followed by telecommunications infrastructure (chosen by 64%), the stability of the social climate (58%) and the skills level of the local labour force (50%).
For the second year running, the stability and transparency of the legal, political and regulatory environment is in last place on the FDI attractiveness scoreboard, with only 17% of current foreign investors deeming this parameter to be currently attractive and 64% not attractive.
On a more positive note, 77% of companies still believe their long-term future is in Malta, slightly down from 79% last year.
However, 15% of companies believe their long-term future lies elsewhere, sharply up from 8% last year.
Also, the number of companies negatively impacted by the COVID-19 pandemic has declined slightly in 2021, with 50% expecting to make a full recovery to 2019 levels next year.
Have you been impacted by Malta’s FATF greylisting?