Stability: One of Malta’s Key Advantages

Malta’s recent launch of its economic vision for the coming decades – Vision 2050 – signals its determination to counter the constraints of its size by ensuring a clear focus on adding value.

And the focus is that quality is more important to the country’s growth and evolution than quantity, whichever sector is considered, from financial services and tourism, to foreign direct investment and manufacturing.

This focus is by no means random: it represents the results of years of innovation and diversification, as well as its commitment to adapt to challenges, not only internal but also external. The government has identified sectors where it complements – rather than competes with – other jurisdictions, and where its size can be used as an advantage, offering a wide-ranging ecosystem of established and experienced professionals.

How to measure the success of this approach? One of the most dramatic improvements was seen in the EY Attractiveness Survey for Malta published in Autumn 2025. This publication, now in its 22nd year, revealed a significant increase in investor confidence, with 79% of foreign investors viewing the island as an attractive destination for investment, up from 54% last year. This survey, which was conducted across 120 foreign-owned businesses, represents the highest level of confidence in a decade.

Malta’s value proposition lies in its ability to combine stability, adaptability and specialisation in a way few jurisdictions can. In a volatile global environment, investors are increasingly drawn to locations that offer predictability and clarity, and Malta continues to stand out on this front.

What really differentiates Malta, however, is how it uses its size as an advantage rather than a constraint. Being small forces focus. Over time, Malta has deliberately positioned itself in sectors where it can add disproportionate value, financial services, digital industries, gaming, aviation and increasingly technology-enabled services.

The EY Malta Attractiveness Survey shows that this positioning is resonating. The rebound in investor confidence reflects trust not just in Malta’s macro fundamentals, but in its ability to adapt its economic model, pivot toward higher-value activities and respond pragmatically to global change.

Investors are responding to Malta’s positioning as a stable base within Europe, particularly at a time when many jurisdictions are contending with political volatility, fragmented supply chains and shifting trade dynamics. “The survey data is very clear on what matters most to investors today. Stability and operating certainty sit at the top of the list, closely followed by cost considerations and infrastructure,” Ronald Attard, the EY Malta and Cyprus Country Managing Partner and Europe Central Risk Management Leader, said.

Corporate taxation continues to be viewed as one of Malta’s strongest advantages, with close to eight out of ten investors rating it as attractive. Social and political stability also score very highly, reflecting Malta’s appeal as a predictable and secure base within the EU.

Beyond these traditional factors, the survey is seeing increasing emphasis on execution‑related enablers. Telecommunications infrastructure, regulatory clarity and the overall ease of doing business are now central to investment decisions. At the same time, investors are becoming more selective. There is a clear shift away from growth based purely on volume toward what the survey describes as “better and less” – growth that is higher‑value, more productive and more sustainable.

“There are challenges. For example, skills shortages are now the single most cited risk to future attractiveness. This is not new, but it has become more acute as the economy continues to grow and diversify. Investors are responding that access to talent, both local and international, will be a defining factor in whether Malta can sustain higher-value investment,” Mr Attard added.

Infrastructure capacity is another recurring theme. Rapid population and economic growth have placed a strain on transport, utilities and planning systems, and investors are increasingly focused on whether infrastructure development can keep pace with demand.

Cost competitiveness also features prominently. Malta remains cost-advantageous relative to many European peers, particularly in taxation and energy, but investors are conscious that these advantages could narrow if demand outpaces capacity.

The message from investors is not one of pessimism, but of realism: confidence is back, expectations are higher, and future success will depend less on attracting activity and more on how well Malta manages growth.

There is no doubt that the economic performance provides encouraging metrics, whether you consider stable and sustainable growth in Gross Domestic Product (3.7% forecast over 2026-2028, according to the Central Bank of Malta), a manageable Harmonised Index of Consumer Prices (2.3% in February 2026 according to the National Statistics Office) and relatively low unemployment rate (3.5% in February 2026 according to the NSO).

Size matters when it comes to human resources, but the Maltese have managed to grow the talent pool by attracting expatriates, with the foreign-born population currently around 30% of the total, representing another metric of success. Of the 170,000 living on the island, over 40,000 are EU citizens. These expatriates have brought with them experience and skills, boosting the population by 3% and the country’s gross value added by 5.3% between 2024 and 2025.

This has resulted in the supply of services aimed at expatriates and their families, from schools and colleges offering internationally-recognised qualifications, to the supply of rental properties aimed at various market segments.

The island has various residency programs in place and recently streamlined some of these into a homogenous Highly Qualified Persons Rules, which offers a flat 15% taxation rate for those eligible.

There is no doubt about the importance of the stability and transparency of the political, legal and regulatory framework for 2025: this factor rose 20 points on the scoreboard to 49%, while stability of the social climate was rated by 70% of respondents.

Of course, the formula for success – such as it is – is one that many other countries are utilising, so remaining competitive and attractive is by no means a unilateral effort. Whether forecasting growth in tourism, financial services or manufacturing, the key is selecting sectors where it can become a ‘centre of excellence’, again in keeping with its focus on quality rather than quantity.

Malta is focussing on building up its reputation and attractiveness for financial services such as family offices, where it aims to offer fiscal advantages to complement passporting into the EU, good connectivity, and a low crime environment. The island is also keeping in mind that those who administer family offices could have considerations such as education and health care.

There is another point that Mr Attard stressed: “One of the strongest themes to emerge from the survey, and from Malta’s broader economic strategy, is the importance of collaboration. Addressing skills shortages, infrastructure gaps and productivity constraints cannot be achieved by government or business in isolation.”

Instead, progress depends on closer alignment between policymakers, regulators, industry, academia and the private sector. For a small economy, collaboration is also how scale is created: through sectoral clusters, public–private partnerships and international alliances that extend Malta’s reach beyond its physical size.

In an era of global volatility, collaboration becomes more than good governance, it becomes a strategic asset. It allows Malta to remain agile, focused and competitive, while continuing to offer reassurance to international investors seeking stability within Europe.