Country report Malta

Economic overview

Malta is viewed as a high-income country. Thanks to it’s solid monetary establishments, large infrastructure projects and light local interest, the nation has risen up out of the euro territory emergency better than most EU Member States. In any case, the GDP became 4.4% in 2019 – against 7.3% in 2018 – and it is relied upon to tumble to – 2.8% in 2020 because of the flare-up of the COVID-19 and get to 7% in 2021, as indicated by the refreshed IMF figures from fourteenth April 2020. High acquiring costs, frail work showcase request and foundation needs stay expected limitations for future monetary development. 

The Maltese economy is one of the most unique in the Eurozone. The open funds have been fundamentally united, with an obligation to-GDP proportion tumbling from above 70% to around half in five years (assessed at 42.3% in 2019, with a further decline expected in the up and coming years). IMF foresees the administration obligation at 39.1% in 2020 and 35.7% in 2021. The administration balance was evaluated to be 0.2% in 2019, in spite of the fact that the spending surplus is required to increment at 0.7% in 2020 and 0.8% in 2021.

Main sectors of economy

Malta, smallest economy in the euro-zone, has one of the most talented and least expensive work power in Europe, adaptable and multilingual. Its economy is exceptionally industrialized and administration based, while the farming segment just speaks to 0.9% of the Maltese GDP and utilizes around 1% of the workforce (World Bank, 2019). Malta creates not exactly a fourth of its food needs, has restricted new water supplies and scant vitality sources. The primary harvests are potatoes, green peppers, grapes, cauliflower, tomatoes, wheat, grain, and citrus. 

Industry utilizes 19.3% of the workforce and speaks to 12.1% of the GDP. Malta doesn’t have any mineral or vitality saves and is along these lines totally subject to imports in this field. Its economy is basically founded on assembling, particularly microchips and pharmaceutical items. The World Bank evaluates that the assembling area represents 7% of GDP. 

Malta has placed a ton of difficult work into advancing its administrations and prevailing to get one of the principle administration focuses in the Mediterranean locale. The tertiary part speaks to 84% of the GDP and utilizes 79.7% of the workforce. The money related area oversees resources equal to over 500% of GDP and contributes about 15% of open incomes. The travel industry part keeps on developing, with more than 2.5 million sightseers in 2018, as per Malta Tourism Authority assessments, and its immediate commitment to GDP (around 27%) is among the most elevated in the EU. 

Taxation in Malta

Companies are subject to income tax at a flat rate of 35%. There is no corporate tax structure separate from income tax.

VAT – Supplies of goods and services in Malta are usually dependent upon VAT at the standard pace of 18%. Nonetheless, certain provisions might be dependent upon a diminished VAT rate, for example, 7% on qualified convenience and on access to brandishing offices, and 5% on different supplies like the flexibly of power, the importation of show-stoppers, authority’s things and collectibles, sweet shop things, certain clinical frill, printed matter (counting electronic distributions with impact from 1 January 2019), and things for elite use by people with an incapacity. As of the fourth May 2020, the decreased rate of 5% was stretched out to likewise incorporate defensive face veils and visors (yet barring plunging gear). 

Transfers of immovable property situated in Malta are usually subject to a final withholding tax (WHT), which, in most cases, is charged on the transfer value of the property.

Investing in Malta

Aside from its legislation which favors outside speculations, Malta has a great deal of different qualities which cause remote enterprisers to pick it over other EU nations. Among these are: 

  • the talented workforce
  • the country’s magnificent infrastructure which interfaces every single small island; 
  • competitive tax system
  • the incentives and exemptions the Government for setting up companies there
  • the economic stability
  • fast growing economy

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