MALTA: An Introduction
General Overview
Malta is expected to register a 5% growth in gross domestic product (GDP) in 2024, a figure that exceeds previous forecasts for Malta by the European Commission and that represents the highest level of growth in the EU (being more than five times the EU average). In addition, inflation in Malta decreased from 5.6% in 2023 to 2.5% in 2024, and is expected to further decrease to 2.1% in 2025, thanks partly to measures by the Maltese government to counteract the cost of living. Furthermore, the government deficit is expected to decrease to 4% in 2024 and to continue further decreasing to 2.6% over the next three years.
Malta’s continued strength in 2024 was mainly rooted in strong private and public consumption, and was aided by the positive contribution of net exports. Strong economic performance was also reflected in increased employment levels – up by 4.6% by the end of 2024 and expected to increase by a further 4.1% in 2025. Growth was experienced across various sectors in Malta over the course of 2024, particularly in the financial services, manufacturing, aviation, iGaming and tourism sectors.
Activity and Trends
While strong performance was recorded across most sectors of the Maltese economy, the Maltese government implemented a number of strategies and initiatives throughout 2024 in certain areas deemed important for the future of the Maltese economy.
Artificial intelligence
A new strategy was launched by the Maltese government in 2024 with the aim of mapping a path for Malta to gain a strategic competitive advantage in the global economy, as a leader in the field of artificial intelligence (AI). With the goal of becoming one of the top ten nations with a most impactful national AI programme by 2030, the strategy is built on strategic pillars that focus on boosting investment, innovation, development and research.
Revisions were also made to the legislative framework of the Malta Digital Innovation Authority (MDIA) in 2024. They aim at strengthening the functions of the MDIA by sustaining nimble processes, independence, partiality, proportionality, good governance and transparency, as well as by facilitating the implementation of EU legislation in the field (such as the EU Artificial Intelligence Act).
Fintech
Malta is particularly thriving in the fintech space: the island’s fintech sector is already recognised among the top performers, with a number of prominent global entities having set up shop in Malta. Malta’s first mover advantage, garnered through the adoption of comprehensive crypto and blockchain regulation in 2018, continues to bear fruit with a number of prominent market players having already obtained their EU Markets in Crypto-Assets Regulation (MiCA) licences (and with a host of other MiCA applications in the pipeline as well).
Financial services
The financial services sector continues to be one of the pillars of the Maltese economy and now contributes up to 97% of the country’s foreign direct investment. With respect to the insurance sector in particular, Malta has recently garnered recognition as one of the top four European domiciles in the area of captive insurance. Malta also has a burgeoning family office scene, with the Malta Financial Services Authority recently adopting regulation to facilitate the structuring of unlicensed family office vehicles in Malta, set to lead to further growth in this area.
Maritime and aviation
By the end of 2024, Malta’s ship register was ranked in the top ten largest ship registers in the world; Malta’s maritime flag, meanwhile, consistently ranks first in the maritime sector in the EU, and sixth worldwide. The Maltese government also announced the initiation of a consultation process leading towards a National Maritime Transport Policy, aimed at exploring the establishment of a dedicated ministry, maritime authority and maritime court.
The aviation sector in Malta has also seen substantial growth over recent years, with aircraft registrations totalling 900 aircraft by the start of 2024. This figure, which grows by 10% annually on average and has surged by 135% over the past decade, includes aircraft belonging to many international airlines such as EasyJet, Wizz Air, Malta Air and Lauda Air (both subsidiaries of Ryanair), Eurowings and private charter VistaJet. In addition, Malta is also a significant player on the European continent in aviation MRO (maintenance, repair and overhaul), with Lufthansa Technik and EasyJet engineering operating facilities on the island.
Vision Malta 2050
In 2024, the Maltese government announced Vision Malta 2050. This aims to address issues such as climate change, demographic changes and global market dynamics, and outlines a road map for Malta’s sustainable and equitable growth. Vision Malta 2050 will serve as a plan for the economic, social and environmental development of the country, with a focus on digital innovation, infrastructure, education, sustainability and healthcare. It also aims to stimulate economic progress, align Malta with EU climate goals and improve its performance on the United Nations Sustainable Development Goals (SDGs).
Main Legislative Updates
Regarding Maltese law, a number of new legislative acts were enacted in 2024 to support investment – some of which are mentioned below.
The Markets in Crypto-Assets Act was enacted, and amendments were also made to the Virtual Financial Assets Act to implement certain provisions of MiCA into Maltese law. In addition, the Malta Financial Services Authority Act (Digital Operational Resilience Act (DORA)) Regulations were also introduced in order to implement certain relevant provisions of EU Regulation (EU) 2022/2554 (DORA) into Maltese law.
With respect to aviation, the Air Navigation Act came into force at the start of 2024 and regulates the navigation of aircraft over Maltese airspace, including the technical compliance requirements for aircraft registered in Malta. This Act defines the scope and functions of the Civil Aviation Directorate of the Authority for Transport in Malta (TM-CAD), which is tasked with oversight of:
• aircraft registered in Malta and their crew (regardless of their location); and
• such other aircraft within Maltese territory (irrespective of their country of registration) to which the Act applies.
Finally, a special VAT rate on yacht charters commencing in Malta was introduced by virtue of the Value Added Tax Act (Amendment of Eight Schedule) Regulations, allowing yacht charters the possibility of benefiting from a special 12% rate that is lower than the standard 18% Malta VAT rate.