Gaming is a formidable emerging force in Malta’s growth prospects.
The Maltese business scenario has experienced a great transformation with iGaming including eSports, video game development and electronic games, emerging as one of the top three sectors that is expected to drive Malta’s growth over the next five years.
The insightful findings stem from EY Malta’s annual attractiveness survey, a comprehensive assessment of Malta’s appeal to foreign direct investment (FDI) based on the responses of 130 FDI companies operating on the island. These companies were surveyed during the months of July and August 2023.
Key Sectors to Fuel Malta’s Growth in the Next Five Years
With 51 percent of respondents targeting Europe as their primary market and 16 percent looking toward North America, the survey highlights the optimism of investors regarding Malta’s future. In the coming half-decade, tourism and leisure, gaming, and artificial intelligence are anticipated to be the triumvirate of sectors that will propel Malta’s growth.
- Tourism and Leisure continues to reign supreme, recording a remarkable seven percent increase over the previous year, standing at an impressive 58 percent, nearing pre-pandemic levels of 2019.
- Gaming, a developing industry, follows closely behind at 49 percent, indicating its significant potential in shaping Malta’s economic landscape.
- Artificial Intelligence is the third cornerstone, with a 45 percent acknowledgment of its potential contribution to Malta’s growth. In the same tier, aviation, payments and FinTech share fourth place, each boasting 32 percent of investor interest.
Challenges and risks on the horizon for Malta’s businesses
While Malta’s attractiveness to foreign businesses maintained a steady rating of 59 percent compared to the previous year, it still lags behind the peak levels seen before the pandemic. Malta’s corporate tax policy emerged as the top feature attracting foreign businesses. International tax developments in the form of OECD and EU reforms were identified as the primary risk to the country’s appeal as a jurisdiction.
The second most substantial concern is a challenge familiar to Malta’s iGaming sector – a skills shortage. In the third position, reputational concerns come into play, followed by considerations of cost competitiveness and banking challenges. These insights offer a comprehensive view of Malta’s current business landscape, shaping expectations for its economic growth in the coming years.
Risks impacting Malta’s FDI
The greatest risks facing Malta’s FDI attractiveness are international tax policy changes, with 61 percent of respondents expressing concern for the next three years. Skills shortages, reputational concerns, cost competitiveness, and banking challenges also rank high as risks. Notably, there is an increased emphasis on quality of life factors (rising from 11 percent in 2022 to 24 percent in 2023), while the perceived risk of logistics and supply chain challenges has decreased significantly (from 18 percent in 2022 to just 5 percent in 2023).
Significance of the gaming industry in Malta
The results of the EY survey reflect the dynamic and evolving nature of the gaming sector, with its potential to create jobs, attract foreign investments and contribute to Malta’s economic prosperity.
The survey sheds light on the confidence of investors and businesses in the growth potential of Malta’s gaming industry, which, in combination with tourism and leisure and artificial intelligence, is poised to be a key driver of the nation’s economic landscape.
This reaffirms Malta’s status as an attractive hub for businesses seeking to tap into the vibrant gaming industry and positions it on the global map as a promising destination for gaming-related ventures.
Related topics:
SiGMA’s next stop is Malta from 13 – 17 November
Treating crypto assets as a form of gambling would pose a risk (www.sehablalapaz.com)
