Overview

The Republic of Malta is situated in the Mediterranean Sea, approximately 90 kilometres to the south of Sicily, and is comprised of five islands, only three of which, Malta, Gozo and Comino, are inhabited. The total population is approximately 400,000 people. Malta is by far the largest and most industrialised island in the archipelago and is home to the capital, Valletta.

Malta has been an independent state since 1964, following more than 150 years of British colonial rule, and became a republic within the British Commonwealth in 1974. In April 2003, the Prime Minister and Foreign Minister signed the EU accession treaty and the country became a full member of the EU in May 2004 and on the 1st January 2008, Malta adopted the Euro as it official currency

Malta has two official languages, Maltese and English, which are both widely spoken.

Economy

The Maltese economy has undergone considerable change during the last few decades. The presence of the British forces on the islands and the commercial activity they generated had played a crucial part in the economy for over a century, and when they finally withdrew in 1979, it had a significant negative impact on the islands prosperity. Since then, Malta has established a diversified economy, and has been preparing for EU membership by privatising state controlled companies and introducing a variety of legislation to liberalise markets.

Figures from the National Statistics Office show Malta's GDP was approximately 3.5 billion USD in 2001 and by 2007 GDP (PPP) had risen to 9.342 billion USD according to the CIA World Factbook. The country's economy is largely based on the tourism, manufacturing and financial services industries. Tourism is the single biggest industry and, according to the World Travel and Tourism Council, accounting for 11.8 per cent of GDP in 2007. The Malta Development Corporation states that there are approximately 200 foreign and 400 locally owned manufacturing companies operating in Malta. Some of the main manufacturing products produced include clothing and textiles, electronics, processed food and tobacco products. There is also a significant shipbuilding and repair industry.

Infrastructure

The Island has an excellent air and sea connections to all parts of the world. Malta International Airport, situated around 6 miles southwest of Valletta, received a new terminal in 1992 and is capable of handling 6 million passengers a year. In 2007 the airport handled 2.97 million passengers, a 10.36% increase over the previous year according to Malta International Airport Plc. Direct flights to and from Malta cover almost all major destinations in Europe as well as destinations in the Russian Federation. Also there are flights to Libya, Morocco and Tunisia in North Africa and the UAE and Egypt in the Middle East. All destinations in Europe, North Africa can be reached within 3 hours.

Malta's strategic position in the centre of the Mediterranean Sea has helped it to become and important distribution hub. The country has two harbours at Valletta and Marsaxlokk and is served by a large number of shipping lines including the national shipping line, Sea Malta, which offers weekly connections to all major destinations in the Mediterranean. The port of Valletta, also known as the Grand Harbour, is a natural deep-water harbour extending about 3.5 kilometres inland and is in operation 24 hours a day throughout the year. In 1988, Malta Freeport was established in the port of Marsaxlokk, which has subsequently become a major container terminal.

Malta has an extensive internal road network comprised of some 1,500 kilometres of roads and journeys between any 2 destinations within Malta take no more than 40 minutes. However, the roads require a significant amount of investment to bring them up to Western European standards.

To aid the development of new technological initiatives the government has established a Technology Venture Fund, which is administered by the Institute for the Promotion of Small Enterprise and the Malta Development Corporation.

The fund is aimed at small and medium sized companies in a variety of sectors including Biotechnology, e-Business and e-Commerce, Energy, Engineering and Software development and will largely focus on start-ups and firms in the early stages of development.

Workforce

Figures from the CIA World Factbook show that the total number of people employed in Malta in 2006 was in the region of 164,000. Additionally the Factbook goes on to show that in 2005(est.) the labour force by occupation was services 75%, industry 22% and agriculture 3%.

According to the Malta Development Corporation, Malta's workforce is highly skilled, educated and multilingual, with a high percentage of the population speaking English and Italian. There is close partnership between industry, the university and training colleges on Malta, which helps to ensure that the workforce is equipped with the required skills.

Business Costs

In order to stimulate investment and encourage economic growth, the Maltese government has introduced a number of measures which help to reduce the cost of operating in Malta. For example, the Business Promotion Act introduced in 2001 offers a wide range of incentives to businesses, such as tax incentives, soft loans, investment allowances and training assistance.

Map