MONEY ISSUE 83 by BE.COMMUNICATIONS

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Editor’s note — Europe faces a pivotal moment as the dust settles on the U.S. elections and a new administration prepares to take charge in January. The transatlantic relationship, historically the backbone of global stability, hangs in the balance, with unknown implications for future cooperation. Yet, amid this political shift, two crises demand Europe's immediate attention: the escalating humanitarian crisis in Gaza and the ongoing war in Ukraine.

European public opinion has long supported the Palestinian cause, but recent developments have intensified this support. Demonstrations have surged, and significant political actions have followed. Countries like France, Ireland, and Italy have implemented arms embargoes on Israel, while Spain and Ireland have formally recognised Palestinian statehood. These moves reflect a deepening commitment to addressing the Israeli-Palestinian conflict and a divergence from traditional EU policy.

Recently, the International Criminal Court (ICC) issued arrest warrants for Israeli Prime Minister Benjamin Netanyahu and former Defense Minister Yoav Gallant, citing alleged war crimes. This marks a critical moment for Europe, as all EU member states are signatories to the Rome Statute, obligating them to cooperate with ICC decisions. Yet, the EU's muted response has drawn criticism for its lack of consistency in addressing international justice, especially compared to its decisive stance on Ukraine.

The EU has been a staunch supporter of Ukraine, providing significant military and financial aid since the Russian invasion. Swift and unified sanctions against Russia showcased the EU's

EDITOR Anthony P. Bernard

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capacity to act decisively when its core values are at stake. However, the stark contrast between its robust actions in Ukraine and its hesitancy in Gaza raises questions about the EU's willingness to apply its principles universally.

Roberta Metsola, the re-elected President of the European Parliament, epitomises the EU's tightrope walk. In her interview with MONEY, Metsola highlighted priorities like economic growth and security but steered clear of commenting on Gaza. This mirrors a broader political trend, raising questions about the EU's readiness to uphold accountability standards across all conflicts.

This duality reflects the EU's broader struggle to balance historical alliances, geopolitical interests, and an increasingly vocal citizenry demanding justice in all conflicts.

With the U.S.'s post-election stance still unclear, Europe faces the challenge of navigating without its traditional ally. This uncertainty could stifle EU decision-making or empower it to forge an independent, values-driven path. While the U.S. has been a critical partner in supporting Ukraine, its influence over Europe's Gaza policies has been less clear. As public pressure mounts, the EU can lead rather than follow in shaping a consistent foreign policy.

The road ahead is fraught with challenges. Internally, the EU must contend with political fragmentation and rising Euroscepticism. Externally, it must navigate a complex global landscape where its moral authority is increasingly questioned. Yet, within these challenges lies an opportunity. By adopting a bold, unified stance on both Gaza and Ukraine, the EU could reinforce its foundational principles and establish a new precedent for addressing global conflicts with consistency and courage.

This is a pivotal moment for Europe to act decisively and with integrity. Its decisions in the coming months will shape its legacy for future generations.

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Leading the way forward: Through EU crises and Maltese reforms

Having been re-elected as President of the European Parliament in July 2024, Roberta Metsola remains a leader of one of the three central decision-making institutions in Brussels and the EU. MONEY asks about her plans and priorities in her continued role in light of brewing conflict on EU borders and her thoughts on specific sectors within the local context of Malta.

Who really wins?

MONEY delves into the SiGMA conference, a marquee event touted as a boon for Malta's economy. But as residents endure gridlocked streets and disrupted routines, we ask: does this event serve the "greater good," or is it a spectacle benefiting the gaming elite at the public's expense?

FDI in focus: EY survey reveals Malta's strengths and weak spots

Malta's investment landscape is highlighted in EY's 20th Attractiveness Survey. Despite 70% of foreign investors planning to stay, challenges like talent shortages, rising costs, and infrastructure woes persist. MONEY analyses the findings, highlighting the factors driving investor confidence and the critical areas that demand immediate attention

Tangentopoli

Manuel Delia examines Italy's 1990s corruption scandal that toppled its First Republic, revealing a system fueled by kickbacks from public contracts and compromised governance. The investigation, Mani Pulite (Clean Hands), exposed deep political rot, drawing parallels to Malta's current challenges, where political financing and corruption scandals echo those of Italy's past, highlighting the urgent need for transparency.

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Malta's 2025 budget: A consumption fix, but where's the vision?

Why transparency works

The real estate industry is undergoing a seismic shift driven by technology and evolving investor expectations. Justin Mizzi, head property valuer and advisor at Archi+, and Bradley George Tayne, co-franchise owner at Zanzi Prime, explore why transparency is essential for a competitive edge, how PropTech is revolutionising market data, and what Malta must do to adapt to the demands of a new generation of investors.

Beyond attractiveness scores

Paul Rostkowski examines Malta's untapped potential in private equity (PE) and venture capital (VC). While known for its affordability and business-friendly environment, he argues that Malta must redefine itself through innovation, sustainability, and collaboration to emerge as a leading jurisdiction for transformative investment opportunities.

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Is Malta's competitiveness in crisis?

Victor Calleja interviews six of Malta's leading economic minds: Marthese Portelli, Marisa Xuereb, Paul Bonello, Ronald Attard, Norman Aquilina, and Chris Vassallo Cesareo, to discuss Malta's economic journey.

In his analysis of Malta's 2025 budget, economist JP Fabri highlights its focus on stimulating consumption through tax cuts and social handouts. While these measures provide short-term socio-economic relief, Malta risks undermining its long-term economic resilience and competitiveness without significant investments in productivity-enhancing reforms.

BRICS: The new kid on the (power) block

As Malta stands on the sidelines of global power plays, the emergence of BRICS—a formidable alliance of Brazil, Russia, India, China, and South Africa—brings glittering opportunities and shadowy challenges. MONEY takes a closer look at how BRICS might shape the future of the island state.

Malta heads to further business consolidations

Thomas Cremona takes a deep dive into Malta's evolving business landscape, where consolidation is becoming the norm. With family succession declining, regulatory demands rising, and foreign competition increasing, Maltese businesses are navigating a new era. Cremona examines how strategic mergers can drive growth, efficiency, and resilience in this dynamic environment.

The Digital Product Passport

A manifesto on manifestos: Minimising stress via business development

Richard Muscat Azzopardi explores the hidden costs of misaligned business relationships, arguing that tension should fuel growth, not drain energy, and advocates for creating a values-driven manifesto to guide partnerships. Aligning on core principles can minimise stress, boost productivity, and foster long-term business success.

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Autumn apparel

MONEY welcomes the new season with a show of delectable fashion pieces.

MONEY's columnists —

JP is a founding partner at Seed, a multi-disciplinary advisory practice.

Justin is a real estate valuer and advisor at Archi+.

Manuel is a civil society activist and writer.

Richard is the CEO of Switch — Digital & Brand, a marketing agency that forms part of ICOM, the world’s largest network of independent agencies.

Paul is the CSO for a local alternative investment fund manager in Malta. He has

extensive experience in local and international asset servicing operations, focusing on UCITS and alternative investment funds.

Stephen is a freelance product regulatory compliance expert and mechanical engineer with over 13 years of experience in the field.

Thomas is an ACCA-certified professional who founded Casa Rooms in 2014, which was later sold to VBL plc. Now leading IDISAV, he aids firms in exit planning and fundraising.

Victor is a writer and columnist.

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Leading the way forward

Through EU crises and Maltese reforms

Having been re-elected as President of the European Parliament in July 2024, Roberta Metsola remains a leader of one of the three central decision-making institutions in Brussels and the EU.

MONEY asks about her plans and priorities in her continued role in light of brewing conflict on EU borders and her thoughts on specific sectors within the local context of Malta.

The EU role

Congratulations on your recent re-election as President of the European Parliament. What are your main priorities for this term, and how do you plan to address the growing challenges within the EU, particularly with the rise of populism and Euroscepticism?

Being trusted to lead the European Parliament for a second term is a huge honour for me and our country. After the renewed trust by the Maltese and Gozitan electorate last June, I have the opportunity to continue to wave the Maltese flag proudly wherever I go.

This will be a challenging legislature, but one in which we must provide even more solutions to people's aspirations and needs. It will be defining for trade, for competition, for economic governance and for security. And whilst we will continue to legislate to make people's lives better, fairer, safer and more just, we must continue to push back against extremism and populism. We must be courageous, acknowledge where we can improve, and cross and build bridges to embrace a new future where we can. I know that we can deliver on people's expectations.

Tech industry in Malta and the EU

Malta's tech industry has grown, but there are concerns about lagging behind other EU states in digital innovation. How can the EU foster a more robust digital economy in smaller member states like Malta?

We must be courageous, acknowledge where we can improve, and cross and build bridges to embrace a new future where we can.

One of the pivotal roles of the European Union is the Single Market; it is truly our biggest asset, and we must build on it. This allows countries such as Malta to think beyond geographical size. We need to take advantage of the existing frameworks that can help the Maltese tech industry grow and become a point of reference not only for small member states but also for larger ones. Let's take artificial intelligence, for example. At the European Parliament, we have recently adopted the world's first AI Act. A balanced and human-centred legislation that sets global standards. Are we, as a country, prepared to adopt and implement these rules to protect our people and, at the same time, ensure →

Roberta Metsola, interviewed by CNN’s Richard Quest in Brussels, Belgium

that we are leading on these technological developments? If we really want to see sustainable economic growth, we must harness innovation and digitalisation. We have the personnel and the skills to do so. However, we must also have the political will, the right infrastructure, and the necessary regulations. And that depends on us as a country.

The global tech race is heating up, with the EU competing against giants like the US and China. How do you plan to position the EU as a leader in AI, cybersecurity, and digital sovereignty?

As I said earlier, the EU is already a global leader in this area. I can just mention the AI Act, the Digital Services Act, and the Digital Markets Act. But we all know that when it comes to technology and innovation, we must always be a step ahead. We must keep setting standards and go further. This will be one of our priorities during this term, as indicated by the President of the European Commission, Ursula von der Leyen, when announcing the priorities of her College of Commissioners. Here, I want to add that isolationism, overprotectionism, and over-regulation cannot work in this world that we live in. We must work to build each other up rather than compete in races to the bottom.

Geopolitical issues and Ukraine

The ongoing war in Ukraine continues to reshape European security and economic policies. What role do you see the EU playing in the post-war reconstruction of Ukraine, and how can the EU ensure its security commitments while managing internal challenges?

Russia's war of aggression against Ukraine has brought immense suffering to its people and huge material destruction of civilian infrastructure. The EU remains committed, as we stated on the first day of this illegal invasion, to help rebuild Ukraine. As many like-minded international partners as possible are involved in a common effort to address the short-term needs of Ukraine, as well as the medium and long-term recovery and reconstruction efforts. The EU and its Member States have so far contributed EUR 118 billion in different assistance to Ukraine. We have

Ukraine is our challenge, and how we respond is the litmus test of our generation.

also agreed on EUR 50 billion to the Ukraine Facility for 2024-2027 to help reconstruct Ukraine. Together with the G7 countries, the EU remains one of the main participants in the Multi-agency Donor Coordination Platform for Ukraine's recovery and reconstruction. We must continue to stand with Ukraine, and we will do so for as long as it takes. Because that is what is fundamentally in our best interest— because our way of life deserves it. Because our rhetoric must match our actions. Ukraine is our challenge, and how we respond is the litmus test of our generation.

There are growing concerns about the longterm economic consequences of the Ukraine conflict. How do you plan to balance support for Ukraine with safeguarding the EU economy and preventing social unrest within member states?

We need to remember that helping Ukraine defend itself is not only about Ukraine but also about us. Europe's security depends on Ukraine. We have seen the EU's Member States find common ground to support Ukraine in the best way we can. And that is what the EU will keep on doing.

At the same time, we must continue to invest in our people and reinvigorate our industries by fostering economic growth, competitiveness, and entrepreneurship, creating quality jobs, boosting productivity, and speeding up investments in sectors that will define our future. We must continue to offer our people

Roberta Metsola, receiving the Ukrainian Order of Merit—First Class from the President of Ukraine, Volodymyr Zelenskyy, in Kyiv, Ukraine

predictability, reduce red tape and be ready for public funding to match private ambition.

The situation in Malta

Many believe Malta's rule of law is declining, with corruption scandals regularly surfacing. Given your EU platform, how can you leverage your influence to restore public trust and integrity in Maltese politics?

I am proud to come from Malta and represent the Maltese people. It is an honour to fly the Maltese flag wherever I am. You are right that in the past years, Malta's reputation has been dented by abuses committed by the few in power. But I have been taught that in politics, just as in life, there is nothing that you cannot change.

Malta is not corruption, scandals, or shady deals. It is people like Neil Agius, Andre Schembri, Yazmin Zammit Stevens, Maya Theuma, Edward Despott, and so many others who consistently make our country proud. These are the ambassadors who truly represent our country, not people who ended up in positions of power to get richer off the public's taxes.

The EU’s approach to Gaza and the Israeli-Palestinian conflict

At the time of the interview, the conflict in Gaza had not escalated into Lebanon. However, recent developments have seen a significant intensification, with Israeli airstrikes in Lebanon resulting in substantial casualties and a worsening humanitarian crisis. Dr Metsola was asked about the EU's stance on the Gaza conflict and the Israeli-Palestinian situation but chose not to respond to these questions. We have decided to publish the unanswered questions in the interest of transparency and accountability, especially concerning pressing global issues.

European states are also party to the Arms Trade Treaty, which forbids them from authorising the transfer of arms that could be used in "attacks directed against civilian objects." This international commitment underscores the importance of the questions raised, particularly in light of ongoing discussions around human rights and the EU's role in global conflict resolution.

Moreover, the International Criminal Court (ICC) has issued arrest warrants for Israeli Prime Minister Benjamin Netanyahu and former Defense Minister Yoav Gallant, citing alleged war crimes. This development adds urgency to addressing the EU's double standard in its responses to global conflicts. While the EU swiftly imposed sanctions on Russia for its invasion of Ukraine, it has refrained from imposing weapon sanctions on Israel despite ongoing ICC investigations and substantial evidence of civilian harm in Gaza.

Our intention is not to misrepresent Dr Metsola but to highlight the importance of these topics in current international discourse. By sharing these questions, we encourage further dialogue on matters significantly impacting European and global policies.

The International Criminal Court (ICC) has opened an investigation into potential war crimes by Israeli forces in Gaza. Despite this, the EU has refrained from imposing any weapon sanctions on Israel, in stark contrast to the swift sanctions against Russia over Ukraine. How do you justify this double standard, and what message does this send to the global community?

The EU has been vocal about human rights in other conflicts. Still, critics argue that it has failed to hold Israel accountable for its actions in Gaza despite the ongoing ICC investigation into possible war crimes. Why has the EU not taken more robust measures, such as sanctions, to pressure Israel to comply with international law?

These questions remained unanswered.

Israeli bombing of Gaza ranks among 'most devastating' in history

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EY survey reveals Malta's strengths and weak spots

FDI IN FOCUS

EY Malta released the findings of its 20th Malta Attractiveness Survey during the Future Realised Conference on 23rd October. This annual study, which gathers insights from existing foreign direct investment (FDI) companies in Malta, provides a comprehensive overview of the island's investment appeal and areas for improvement.

Attractiveness Index

In this latest study, 54% of existing FDI investors considered Malta an attractive location. Although this represents a slight decrease of 5% from the previous year, it is well above the low point reached in 2021. Yet, it does not match the high confidence levels Malta had enjoyed up to 2019.

Investors acknowledge Malta's strategic advantages but also recognise pressing challenges that must be addressed. These include the rising cost of living and the strain on the labour market, which could impact the country's ability to sustain long-term growth and retain its attractiveness for FDI.

innovation, although marginally better at 26%, remain at the lower spectrum of the attractiveness scoreboard.

Continuing the trend from previous years, Malta's corporate taxation is still the leading factor in its FDI attractiveness, with 75% of respondents acknowledging it as a pivotal aspect behind the country's investment appeal.

Following corporate taxation, 63% of investors recognise Malta's telecommunications infrastructure as a considerable benefit, underscoring the country's expanding influence as a hub for the digital economy. The emphasis on robust connectivity is especially vital for critical sectors such as finance, gaming, and technology, which are integral to Malta's economic framework.

On the other hand, only 39% and 32% of respondents perceive the level of labour costs and skills as attractive. The stability and transparency of the political, legal, and regulatory environment are third from the bottom of the attractiveness index.

Transport and logistics infrastructure continues to be an area of concern, with only 16% of investors viewing it positively, a further decline from the previous year. Research and Development (R&D) and

Biggest risks facing Malta's FDI attractiveness

The evolving international tax landscape and the scarcity of skilled labour continue to dominate as the principal risks to Malta's FDI allure, with each concern being flagged by 50% of respondents. Reputational risks have notably risen, now considered a significant threat by 42% of investors. This increase indicates a heightened emphasis on the importance of transparency and good governance practices, highlighting the critical need for Malta to uphold and enhance its regulatory framework to maintain investor confidence.

Cost competitiveness and the state of the physical national infrastructure are also among the concerns that follow closely behind, at 34% and 29%, respectively. The survey paints a picture of an investment community aware of Malta's enduring economic potential yet equally aware of the emerging risks that could alter its course. →

Presence in Malta in 10 years

In an era marked by rapid economic and geopolitical changes, projecting the long-term presence of companies in any location is a complex task. Nonetheless, the investment community in Malta exhibits a resilient outlook, with a substantial 70% of FDI companies confirming their intention to sustain their presence on the island for the next decade. This figure represents a slight increase from the previous year.

approach, with investors believing Malta must invest in its physical and human capital to remain competitive.

Expansion plans

Tangible growth plans complement this confidence, as over one-third of investors are preparing to expand their operations in Malta. Investor commitment to growth within Malta remains positive, with 38% of companies planning to expand their operations over the next year. This figure indicates a modest increase from the previous year's 36%, highlighting a steady but cautious investment climate. The current percentage of companies with expansion plans is still lower compared to the more robust post-pandemic recovery period of 2022, which saw 46% of investors looking to expand.

Despite not reaching the heights of a few years ago, this continuity in expansion sentiment suggests that while investors remain optimistic about Malta's business environment, they are also mindful of the broader economic context and its potential impact on their growth strategies.

Priorities to remain globally competitive

Investors have identified critical focus areas for the coming decade to sustain and enhance Malta's position in the competitive global arena. Infrastructure, transportation, and planning, alongside education and skills development, are at the forefront, with 46% of respondents prioritising each area.

Long-term economic planning is also emphasised, with 37% of investors highlighting its importance. This underscores the need for strategic foresight and the development of sustainable economic policies that can navigate the complexities of the global market and support Malta's growth. The alignment of these priorities indicates a comprehensive

Infrastructure planning for population growth

The adequacy of Malta's infrastructure for its current and future population remains a significant concern among investors. In 2024, a substantial 70% of respondents view Malta's infrastructure as inadequate for supporting the anticipated expansion of its population. An additional 19% perceive the infrastructure planning and development as neither adequate nor inadequate, signalling a sense of uncertainty or ambivalence about the country's readiness.

The consensus among investors is clear: Malta urgently needs to enhance its infrastructure across all sectors. The growing demands of a rapidly expanding population and economy exert considerable pressure on existing systems, highlighting the urgency for comprehensive and forward-thinking infrastructure development.

Skills challenges

Several critical factors continue to influence the recruitment and retention of specialised personnel in Malta, with the cost of housing and living emerging as the primary concern. Over half of the respondents (51%) cite the excessive cost of living as a significant obstacle to attracting and retaining international talent, particularly for roles requiring specialised skills. The housing market poses a considerable challenge for expatriates and local talent, creating a barrier to filling essential positions.

Challenges to finding the required specialised skills persist. For several years, Malta's skill supply has been unable to keep up with the increasing demand for specialised (and other) skills. This year, sixty-nine per cent of this year's cohort reported being unable to find the required specialised skills in the local labour market.

Technology and AI-related factors attractiveness compared to other European countries

Malta's technological landscape is increasingly recognised for its competitiveness within Europe. 46% of respondents consider Malta's IT capabilities on par with those of other European countries, and 17%

even view Malta as more attractive, indicating a positive perception of Malta's tech environment. However, 28% of respondents feel that Malta lags, highlighting areas for potential improvement in a rapidly evolving tech sector.

Artificial Intelligence (AI) is a crucial area of focus for investors, with many also looking to invest in cloud technologies and intelligent automation as drivers for future growth. These technologies enable businesses to enhance efficiency, reduce costs, and improve adaptability.

EY Malta's perspective

In his opening address at the Malta Future Realised Conference, Ronald Attard, EY Malta country managing partner, reflected on the island's transformation and journey over the past two decades. "Twenty years ago, Malta's official population was just over 400,000. Today, that number is close to 540,000," he noted, highlighting the significant growth in population and economic output, with GDP rising from US$6 billion in 2004 to over US$20 billion.

Attard addressed Malta's fluctuating attractiveness for FDI, acknowledging a recovery from the lows of 2019–21 but also a slight dip in attractiveness this year. "Telecommunications infrastructure has been a resounding constant positive over the years," he stated, pointing out that other previously attractive criteria have lost their appeal.

"The stability of social climate has scaled down from the peaks experienced when we started undertaking our research," Attard remarked.

"Labour cost and skills, which were a major selling point, are now a challenge, with the increase in labour costs likely a consequence of growth. The stability and transparency of the political, legal and regulatory environment, although improved from 2020–21, remain distant from the highs of 10 years ago. Transport and logistics infrastructure, which has always been a challenge, continues to be perceived badly, exacerbating the challenge over the last two years. Growth pains and strains are evident throughout the responses.

Unsurprisingly, 70% view Malta's infrastructure as inadequate. Infrastructure and education are seen by most as the key areas that Malta needs to prioritise, with some adding economic planning. Against this background of economic growth, we are losing ground in two of the most fundamental areas that potential investors assess: workforce skills and availability and stability of the political and regulatory environment. Respondents highlighted skills, tax reform, and reputational concerns as challenges.

"In our survey, we sought to discover whether respondents would prefer less growth. The survey indicates, probably unsurprisingly, that despite the challenges in attractiveness and infrastructure readiness, only one in 10 respondents want less—the majority of investors want more quality, and one in every four wants more of everything. According to respondents, the solution is enhancing and nurturing investment, with some arguing for rationalisation or sharing of infrastructure and resources but very few for slowing growth.

Demand for more investment is pervasive across different areas— education, energy, roads, health, and the natural environment. On the positive side, four in 10 investors plan to expand. And 70% believe they will still be here in 10 years—a proportion higher than 10 years ago. Tourism and technology—gaming, artificial intelligence (AI), and Fintech—are seen as Malta's future.

Technology is viewed as the primary driver for change—overtaking sustainability, and the availability of the necessary skills is viewed as more important than government support. Nearly two-thirds of respondents view Malta as attractive, or at least as attractive as other European countries, regarding technology. Leveraging Malta's strengths in telecommunications infrastructure and technology, not least the significant skills base on the island built through the growth of the gaming industry may be part of the answer.

Last year, we referred to calls from several groups, including the government, the opposition, The Malta Chamber, industry groups, employer associations, trade unions, and society, suggesting the need for an adjustment or change to the island's economic model, to one that emphasises substantial, tangible improvements in infrastructure, the labour market, and holistic economic sustainability beyond mere numerical growth. And those calls are more pronounced this year.

There is a desire to build more infrastructure, particularly as businesses expand. When we refer to build, it is not necessarily bricks and mortar. In fact, the greatest call is in education. There is some opportunity to share, which will need effort in building consensus, not least in sharing risks and rewards. We also need to question if the island is, at least in some areas, served better with more or less. Logistics immediately comes to mind as an opportunity to explore alleviating growth pains.

Perhaps Malta should even help its businesses offshore some of their less value-adding processes to cheaper locations. In a more globally connected world, collaboration is critical. And choices need to be made. The public and private sectors must engage with new technologies to manage growth as efficiently as possible. Views on the ground are encouraging. This should help us be efficient and change behaviours to sustain the island's attractiveness and appeal. This does not mean the road ahead is easy, as we need to develop the right skill sets, particularly with the young generations coming into the workforce."

Ronald Attard

DATA, REGULATION AND DIGITAL TRANSFORMATION

Data-driven growth at the Housing Authority

Malta's private rental market has transformed remarkably, fueled by digital innovation and a surge in foreign tenants. Matthew Zerafa, chief executive officer, and Brian Micallef, executive head responsible for digitalisation, legal and communications, explain how the Housing Authority's efforts—ranging from a digital regulatory platform to dashboards—are setting new standards for transparency, streamlining processes, and shaping policies through data-driven insights.

The landscape of Malta's private rental market has experienced profound shifts over the past decade, driven by the strong influx of foreign workers who rely on this sector for their accommodation. Before 2020, however, anyone interested in analysing this sector in Malta would have encountered a significant stumbling block—the absence of official statistics. No meaningful assessment is possible if the most basic information, like the number of active rental contracts, the characteristics of rental properties, and rental prices, is unavailable.

The introduction of the Private Residential Leases Act in 2020 was a game changer. In addition to the introduction of muchneeded basic standards in the sector, it led to the establishment of a rent register—an online

regulatory platform where registrations are recorded on the private blockchain of the Housing Authority, one of the first of its kind in the public sector—that is updated in real-time, yielding an invaluable source of information.

As of June 2024, the number of active contracts in this register rose to around 65,000, with 17 localities surpassing 1,000 contracts.

Since then, the Authority has

continued to upgrade its data management infrastructure and has embarked on a much-needed digitalisation journey. In 2024, we have started the arduous task of scanning to convert physical documents—sometimes going back decades—into digital format in a centralised repository. The first scheme to be digitised was the Housing Benefit Scheme (HBS), which provides rent relief to around 2,900 low-income

households. We also took this opportunity to simplify this process to make it less bureaucratic.

As part of this digital transformation, we have established a cross-departmental team to focus on data governance. This allowed us to construct internal dashboards that are updated daily, giving senior management real-time access to a wealth of information. These dashboards span the different areas of the Authority, including our schemes for homeownership and rent relief, assistance to pre-1995 tenants, social housing applications, compliance, our stock of housing, and the requests for maintenance and repairs.

Unlocking the value of this data puts us in a better position to identify gaps, anticipate future

Matthew Zerafa

Dr. Brian Micallef

needs, and improve our existing services. Our recent experiences in the rental sector, of which the Authority is the regulator, best illustrate this.

The shifting composition of foreign workers, with an increasing share of TCNs, led to significant changes in sharing arrangements. The situation had changed drastically compared to a few years earlier, when back in 2016, around 70% of these workers were EU nationals.

In response to these new realities, the Housing Authority spearheaded a comprehensive review of the existing legal framework, with the regulatory amendments becoming effective on 1 September 2024. Among the main changes, the revised regulations provide better support for shared living arrangements to limit overcrowding issues, thereby addressing health, safety and well-being concerns for the tenants and those residing within the same neighbourhood.

In parallel, the Housing Authority is collaborating with other public sector entities to give them secure access to its online platform. Once in place, these entities can access this information in real time for their decision-making.

This data allowed the Housing Authority to become one of the leading institutions on the island for housing research. Over the past twelve months, we have published several studies,

including on compliance in the rental market and a survey with landlords and tenants on their experiences in the sector. Earlier

A key feature of this dashboard is a 'rent calculator' that shows the average and median rent by property type, size, and locality (or region) from contracts registered with the Housing Authority. At present, the information refers to new contracts registered in the first half of 2024. For instance, the median rent for a two-bedroom apartment stood at €1,300 in Sliema, €1,100 in Gzira, €950 in Birkirkara and €800 in St Paul's Bay. While we acknowledge that

The Housing Authority's rent calculator now provides timely benchmarks, offering tenants and landlords unparalleled clarity.

this year, we complemented these studies with a dashboard, which makes this information easily accessible to everyone from our website.

rents for similar-sized properties can differ even within the same locality, sometimes from one street to another, we believe that this platform provides

the best available benchmark for market rents and serves as a helpful guide for price comparison purposes.

The dashboard also plots other key rental market information, such as the most popular localities for rents, the number of active contracts, the growth rate in registered leases, and statistics on rental dwellings, such as their type and size.

Thanks to this initiative, we have made significant strides in improving the data available on housing for policy analysis and research. This is also a testament to the Authority's commitment to fostering price transparency in the private rental market, providing transparency commonly found in other European countries.

This dashboard represents one building block in our digital transformation strategy, which we hope to continue refining and enhancing in the future. We trust that such a platform will interest other stakeholders, in addition to tenants and landlords (and the associations representing them). It shows the long way we've come in this sector and highlights our commitment to relying on a data-driven approach to make evidence-based decisions.

IS MALTA'S COMPETITIVENESS IN CRISIS?

Insights from economic leaders

Victor Calleja interviews six of Malta's leading economic minds: Marthese Portelli, CEO of the Malta Chamber; Marisa Xuereb, former president of the Malta Chamber; Paul Bonello, economist; Ronald Attard, EY Malta country managing partner; Norman Aquilina, group chief executive of Farsons Group; and Chris Vassallo Cesareo, president of the Malta Chamber, to discuss Malta's economic journey over the past two decades as an EU member and its future challenges.

Crises come, and crises go, but it seems Malta has continued successfully forever. In contrast to most other countries in the Mediterranean, Malta has sailed on without huge economic problems for the last couple of decades.

Can this go on? Shouldn't more be done to examine the years gone by and analyse what we did right and wrong and what happened just by chance? Shouldn't we plan better and truly stick to what we plan, not just pay lip service to reports, analyses, and surveys?

Reflecting on the past two decades, what did Malta get right and wrong when attracting investment?

Marthese Portelli The country successfully positioned itself as a preferred jurisdiction in areas such as yachting, gaming, financial services, and, more recently, aviation.

On the other hand, Malta could have done better by diversifying its economy more, ensuring a better balance between paper-pushing, substance-based, and high-value-added industries. Additionally, more investment in critical infrastructure such as the energy distribution network, transport modality and logistics, traffic management, and urban planning was needed. RD&I also deserved more attention.

Ronald Attard Malta's economic performance shows that the country has achieved a lot—not least an open business environment that's attracted significant investment across financial services, iGaming, manufacturing, aviation, telecoms, maritime, life sciences and more. On the one hand, a well-diversified economy. On the other hand, given its size and diversity, it is fragmented. The island has also grown fast, with GDP increasing from 5 billion to 20 billion in 20 years since EU accession. Infrastructure, however, needs to catch up with the growth.

Marisa Xuereb Malta got it right on iGaming. It was a first-mover and paced the industry's growth quite well. We messed up on things where we took big gambles, such as with blockchain. The timing of this was also unfavourable, as all eyes were already on us because of Moneyval, and it eventually contributed to our greylisting, which was a big test for our financial services industry. Medical cannabis was another one where we took a gamble that didn't go in our favour.

We managed to keep what we have in manufacturing, which is quite a feat considering how operating costs increased over the years. More recently, we attracted substantial property investment and bounced back well from COVID-19 in tourism.

Paul Bonello The volume of non-residentowned businesses in Malta in the financial services sector has been astronomical.

However, this type of investment often does not percolate in the local domestic economy. Foreign Direct Investment has faltered over the years. There is very little foreign direct investment in the high-valueadded manufacturing industry. What little there is from time to time is incremental investments in companies that have been on the island for a very long time.

We still have a very inadequate infrastructure, and our international reputation stinks. Unfortunately, we are only associated with gaming companies and ancillary industries.

Norman Aquilina What is clear from this two-decade trajectory is that attractiveness is a moving target that needs constant monitoring to ensure our economic strategy and related policy decisions are aligned and favourably connect investors with investment opportunities. That said, our rapid economic growth has somewhat clouded our economic vision and investment destination.

What we certainly got right was Malta's EU accession and subsequent entry into the eurozone. This played a crucial part in setting our investment footprint. From a sectoral perspective, investment is somewhat of a mixed bag, increasingly weighted in favour of the services sector, notably financial, iGaming, and tourism-related, with manufacturing placed on the other end of the scale.

Chris Vassallo Cesareo While Malta has attracted investments in tourism, financial services, and iGaming, it has become overly reliant on them, leading to economic vulnerabilities. The country needs to diversify its economy, particularly considering challenges like sourcing human resources, energy dependence, and the need for sustainable urban planning. A shift towards a knowledge-based economy with high-value-adding industries is crucial for long-term prosperity.

Malta's size is its obvious limitation—space, talent, capital. From your perspective, are there any ways in which size can be positive as the country looks ahead?

Marthese Portelli While Malta's size creates several challenges, particularly in economies of scale, it also presents many opportunities. Being small means that, with the proper political will, it is easier to →

Marthese Portelli

Ronald Attard

bring about tangible change in a relatively shorter term than in a much bigger country. Malta can quickly act as a test hub for pilot projects in technology and RD&I.

However, the country needs to shift from the current labour-intensive economy with low productivity to one driven by quality.

Marisa Xuereb Our space limitations facilitated the property boom. The high rate of return on property development projects triggered significant talent and capital → leakage from other more knowledge-based and potentially more sustainable industries.

Our present challenge is synchronising further property development with a highly strained infrastructure that needs massive investment to catch up. The global talent shortage in critical areas such as technology and healthcare represents a significant challenge for a very small country with a highly fragmented business landscape and an inward-looking culture.

Consolidation is required to make investment more viable. We also need a shift in mindset to make the required quality leap and become more strategic in attracting talent, investment and business.

Paul Bonello Of course, there is: in capable political hands, we could really be the Switzerland of the Mediterranean, with less dependence on imported labour force but with a much higher GNP per capita.

Ronald Attard Like a nimble sailing boat among larger ships, our small size allows us to navigate changes swiftly, adapt to new circumstances, and implement innovative solutions. This agility, this inherent advantage of being small, is a key factor we need to leverage as we chart our course forward. We should always remember that while the sailing boat cannot match the larger ship's cargo capacity, it can quickly respond to changes or challenges, be it in weather or currents.

Malta's size allows for rapid decisionmaking and adaptability. We can quickly develop and test innovative policies with a focused approach, creating an attractive "test market" for harnessing emerging tech and AI in sectors like financial services, education, transportation, life sciences and

energy. This nimbleness can set Malta apart, attracting investors seeking a fast-moving, responsive EU jurisdiction with English as an official language, where the connectivity of the ecosystem makes this possible.

Norman Aquilina Size is a limitation but not necessarily a hindrance. Indeed, it can be turned to our advantage, subject to our ability to focus on our capabilities and exploit our nimbleness. Furthermore, we need to strategically target and place ourselves in a position that is primarily focused on innovative value-added sectors driven by technological and jurisdictional advantage rather than being overly skewed towards size and scale.

Chris Vassallo

Cesareo

The pursuit of growth at all costs has impacted the quality of life in the country. Issues like overdevelopment, noise pollution, traffic congestion, and environmental degradation are of major concern. Even the government has acknowledged this. The Malta Chamber has long been calling on the government to shift focus from quantity to quality. We need an urgent shift in focus from growth at all costs to a more sustainable approach, which is essential for Malta's long-term prosperity and the well-being of its people.

As we have done in the past, we need to reinvent ourselves by focusing on valueadding industries, innovative technologies and solutions. Niche sectors like yachting, aviation, and virtual assets can also help establish a strong position in specialised markets.

Rising labour costs and skills gaps are vital challenges. What should Malta prioritise today regarding talent development?

Marthese Portelli Knowledge and competence in tools that facilitate operations, decision making and problem-solving. Knowledge of new technology tools to keep up with the pace of time and to learn how to do more with less. Development of transversal skills. All of this needs to be done from the very early ages to lifelong learning – we need to transform the core of our education system.

We must focus on foreign labour policies that attract the right talent. Additionally, we should introduce incentives to retain local talent and encourage Maltese professionals working abroad to return to Malta.

Norman Aquilina

Paul Bonello

Competitiveness isn't just about costs—it's about capabilities.

— Norman Aquilina

Marisa Xuereb There needs to be a combination of local talent development and attraction of foreign talent, with an improvement in retention. It's partly about forward-looking formal education, onthe-job training, and lifelong learning and partly about improving quality of life.

Paul Bonello Education, education, education. Many government measures are taken ostensibly in the name of encouraging further education. But very often, they are merely populist measures which increase students' pocket money and the churning out of often mediocre university degrees. There is probably no other place in the Western world where students get free tertiary education, free transport, and stipends. Still, notwithstanding all this, the output – in terms of quality and quantity – is disappointing. Politics and populism keep failing our poor island.

Ronald Attard Malta's near-full employment highlights the need to prioritise quality over quantity in job creation. We should focus on the types of roles we want, the industries we aim to grow, and how these choices impact our infrastructure, environment, and workforce. AI offers an opportunity to achieve more with fewer resources – well-suited to Malta's small size – but it requires us to rethink education.

Developing future-ready skills, emphasising communication, critical thinking, problemsolving, and adaptability, will be essential. If we approach this wisely, Malta could become a model for the next wave of education. Aligning these efforts with Malta's economic vision is vital, especially as skills become a key differentiator and tax plays a less central role in Malta's model looking forward.

Norman Aquilina Competitiveness is not only driven by costs but also by our capabilities. Skill gaps present a growingly complex challenge given the rapidly evolving job market, which is driven by technological progress, educational mismatches, changing industry needs, and demographic shifts. Addressing these challenges requires more coordination between government, educational institutions, and businesses.

This needs to be addressed both from a shortand long-term perspective. The former is predominantly through the right employment

policy, and the latter by better anticipating our gaps and emerging demands by analysing industry trends, technological advancements, and consumer behaviour. This requires developing comprehensive skills maps that outline the skills needed for future jobs.

Chris Vassallo Cesareo The strong economic growth of recent years was achieved on the back of substantial importation of foreign labour by the private sector. We have, however, been experiencing significant human capital challenges, including skills gaps, staff shortages, and difficulty retaining foreign workers. Prioritising upskilling and retraining the existing workforce is crucial to address these challenges.

Encouraging returning Maltese professionals with incentives like tax breaks and promoting STEM education from an early age can also contribute to developing a highly skilled workforce. We must transform into a knowledge-based economy, but to do so, we must reform our education system. We need to collectively challenge the acceptance of low achievement levels in our education system.

What critical infrastructure investments are needed to support Malta's growth ambitions?

Marthese Portelli Several areas require immediate attention, including the transport network, the energy distribution network and renewable energy generation, water and sewage infrastructure, waste collection and management, the integration of systems across all government sectors to reduce excessive bureaucracy, as well as investment in digitalisation, new technology, and AI across various government entities to facilitate service delivery, compliance and proactive enforcement.

Marisa Xuereb Energy generation and distribution, water and wastewater management, solid waste treatment, land, sea, and air transport, and disaster relief are all critical infrastructure areas that we need to invest more in.

Technology will place increasing demands on energy, as will climate change. We are not immune to extreme weather events and must improve our disaster recovery capabilities. If we are not able to tame population growth and wean ourselves off mass tourism, we will need →

to invest heavily in energy distribution, water, waste, and especially transport infrastructure.

Paul Bonello The elephant in the room: water and electricity, roads and traffic management, reduction of population density.

Ronald Attard Our recent EY study reveals that most of Malta's physical and social infrastructure is nearing capacity and needs billions in investment over the next decade. This requires a well-structured plan. Unlocking close to €30 billion in bank savings for productive use could be transformative. The sequencing of projects is key – not only to minimise disruption but to ensure efficiency and cohesion and avoid costly overlaps. Equally important is rethinking infrastructure holistically, exploring shared models for logistics, rethinking transport, and ensuring proper spatial planning, with due consideration given to population and tourism growth, to guide planning.

Norman Aquilina We need to stop playing catch-up, making our infrastructural investments seem like afterthoughts. Such investments need to supersede our socioeconomic development. We cannot aspire to attract investment if our infrastructure cannot fully satisfy the demand. This calls for better nation-wide coordination and planning amongst all the relevant entities.

Chris Vassallo Cesareo To support its growth ambitions, Malta requires significant investments in critical infrastructure, particularly in areas like energy, transportation, and waste management. Modernising the energy grid to accommodate the increasing demand, particularly with the shift towards cleaner energy, is essential. This includes exploring renewable energy sources like wind and wave power and potentially integrating hydrogen into the energy mix.

Upgrading public transportation to cater for industrial areas and better managing traffic flow, especially during peak hours, is also crucial. Additionally, investing in waste management infrastructure, promoting circular economy practices, and addressing issues like illegal dumping are vital for environmental sustainability.

Is Malta doing enough to leverage tech to remain agile and drive innovation?

Marthese Portelli More needs to be done— the European Innovation Score Board 2024 ranks Malta 21st out of 27. Over the past years, the Malta Chamber has put forward several proposals for the government's consideration, including doubling the country's expenditure allocation on RD&I.

Marisa Xuereb There are some attempts here and there, but they're somewhat disjointed. Coordinating a national effort on tech when everyone is competing for our scarce tech talent is not easy.

When it comes to enabling technologies, sharing platforms and infrastructure could significantly accelerate uptake and improve payback periods. However, firstmovers tend to use such investments as barriers to entry for others.

Even at the EU level, the Letta and Draghi reports have triggered an epiphany that we must rethink regulation, competition policy, and state aid.

Paul Bonello Yes and no. This is flourishing in the gaming sector but is absent in other industries as Malta is often perceived internationally—possibly not erroneously— as a no-no. Government authorities and bodies such as Finance Malta give the impression that it is increasing by leaps and bounds, but this is not the case.

Ronald Attard Malta has done relatively well in this area in recent years. However, a bolder focus on AI is essential to stand out globally. We have an opportunity to make Malta a showcase for how smaller nations can use AI to enhance public services, streamline business operations, and improve quality of life. This would require adopting AI tools and embedding them into critical areas like healthcare, education, and transport. We are an attractive place to harness AI innovation, and we need to be bold in creating the framework to capture this. Strategic partnerships and investment in digital skills will be crucial to making this vision a reality and building a workforce capable of supporting these advancements.

Norman Aquilina In today's mainly techdriven environment, and more so given that we are a small island economy, we are compelled to punch above our weight. We need to ensure

The timing of Malta's blockchain gamble was unfavourable and contributed to our greylisting.

— Marisa Xuereb

that our resulting nimbleness is fully exploited. But this is also conditional on us strategically positioning ourselves to effectively leverage all possible technological advantages, along with incentivising innovative activities through start-ups or established businesses.

Chris Vassallo Cesareo As a country, we have taken initial steps towards digitalisation. However, we need to do more rapidly to leverage technology for innovation. Investing in research and development, particularly in the government sector, is crucial. Promoting digitalisation across various industries and encouraging public-private partnerships in emerging technologies are key steps to achieving a knowledge-based economy. The country's expenditure budget remains low.

How can Malta enhance the stability and transparency of its political and regulatory environment significantly to improve investor confidence?

Marthese Portelli It is crucial to ensure the independence of regulatory bodies, increase transparency in government decisionmaking processes, and foster a culture of accountability. Additionally, engaging more effectively with stakeholders, including the private sector and civil society, in policy-making processes will help increase trust and ensure that policy decisions and regulations are fair and effective.

Marisa Xuereb We need to speed up judicial processes, first to ensure that our laws effectively deter abuses and second to shorten the shadow of reputational damage cast by high-profile cases.

We also need to improve the credibility of our political class. This will impact the kind of investors we attract and, hence, the reputational risks we could be exposed to in the future.

Paul Bonello By replacing the Boy Scouts in the cabinet with able and mature people. This is where Malta got it wrong. Compare our cabinet with the level of talent of its counterparts in places such as Luxembourg and Switzerland.

Ronald Attard Governance should be a consistent, visible standard. We did well pulling through the greylisting quickly, but

we must set and keep the bar high. Malta must focus on quality over volume, attracting businesses and sectors that align with what we want to be known for and ensuring that regulated sectors are highly respected. Investment in regulatory capacity and expertise is essential, especially given our small size and the high standards expected globally. We must also better publicise what we get right and where we do well.

Norman Aquilina Beyond considerations of lucrative incentives that may enhance Malta's attractiveness, investors expect clear directional guidance. Competition in attracting foreign direct investment is high, and the attention span from such investors is generally tight, so clarity is critical; any complexities will only dissuade a would-be investor, who is then likely to consider elsewhere.

The starting point hinges on how well we are ranked within the reputational value ladder. Over the years, despite progress in some areas, this has generally been erratic and certainly not optimal. Needless to say, the stronger our reputation and country brand positioning, the better we position ourselves as an investment destination.

Chris Vassallo Cesareo Good governance, transparency, and accountability are vital to improve investor confidence in Malta.

Implementing recommendations from international bodies, strengthening enforcement agencies, and reducing the reliance on persons of trust are crucial steps to improve transparency and good governance. Addressing the perception of corruption, particularly in the public sector, and reforming the justice system to ensure efficiency and fairness are essential to building trust and attracting foreign investment.

The Malta Chamber's "Report on Public Procurement Reform 2021" provides specific recommendations for achieving this goal within the context of public procurement. Implementing our recommendations, including a Public Procurement Outlook and a Contracts Register, Financial Statement Transparency and Strengthening Blacklisting Procedures, will enhance investor confidence by demonstrating a commitment to fair competition, ethical practices, and the responsible use of public funds.

Marisa Xuereb

Chris Vassallo Cesareo

WHO REALLY WINS?

Every November, M alta becomes a hub for the global gaming and tech industries as the SiGMA Conference rolls into town. Branded as the "World's Gaming Festival," SiGMA draws thousands of delegates,

industry leaders, and investors to our small island, promising innovation, economic benefits, and international recognition. But as the dust settles after yet another jam-packed week of panels, networking events,

and extravagant parties, it's worth asking: who truly benefits from this spectacle?

W hile the gaming industry undoubtedly reaps the rewards, the average Maltese citizen is left wondering what they've gained— apart from disrupted traffic and a series of tone-deaf posts from SiGMA organisers urging them to accept the chaos as a necessary evil for the "greater good."

Economic boost or concentrated gains?

SiGMA's organisers proudly tout the conference's role in boosting the local economy. And indeed, the numbers seem impressive. In 2024 alone, SiGMA Europe was projected to contribute over €100 million to Malta's tourism revenue, accounting for approximately 3.3% of the

national total. This influx benefits the hospitality sector, with luxury hotels and restaurants in areas like St Julian's experiencing a surge in business.

While these figures highlight the event's significance, the benefits remain unevenly distributed. High-end establishments see a windfall, but smaller businesses, particularly those outside the immediate conference area, report minimal impact. Additionally, a significant portion of the revenue generated by international companies during the conference is repatriated, limiting the long-term benefits to Malta's economy.

Who bears the brunt of SiGMA's success?

While the gaming industry and a handful of related sectors toast

SiGMA 2024

their success, the rest of Malta deals with the fallout. Traffic, already a perennial issue in the country, reaches nightmarish levels during SiGMA week. Main roads are closed, detours become the norm, and commutes double or even triple in length. Parents struggle to get their kids to school, workers arrive late, and emergency services face delays that could have life-threatening consequences. In 2023, the conference's relocation to the Mediterranean Maritime Hub in Marsa exacerbated these issues, leading to widespread gridlock across central Malta. Social media posts urging residents to "embrace the bigger picture" offer little solace to those stuck in hours-long traffic jams.

To their credit, SiGMA has acknowledged these disruptions. In 2023, founder Eman Pulis publicly apologised for the traffic chaos and vowed to implement changes. By 2024, Transport Malta introduced several measures to mitigate the impact, including geofencing around the event venue and designated pickup points for transport services.

A public-private imbalance

The SiGMA conference also highlights a deeper issue: the growing imbalance between public inconvenience and private gain. The Maltese government, keen to position the country as a hub for gaming and tech, provides significant support for SiGMA, including logistical assistance, public resources, and promotional backing.

Yet, for all this public investment, the returns seem heavily skewed toward private entities. The gaming industry, which already enjoys favourable tax rates in Malta, gets an unparalleled platform to expand

its networks. In contrast, the public bears the cost—both in terms of tangible disruptions and intangible frustrations.

SiGMA has demonstrated its commitment to philanthropy through initiatives like its 2024 anniversary auction, which raised €186,000 for charity. However, the beneficiaries were international organisations rather than local causes. This underscores a crucial gap: despite drawing heavily on Malta's infrastructure and

and glamorous after-parties.

But amidst all this selfcongratulation, there's little acknowledgement of the impact on residents. Phrases like "Thank you for your patience as we drive Malta forward" come across as patronising rather than empathetic.

Starting in 2025, SiGMA will significantly restructure its European events.

The traditional November SiGMA Europe conference in Malta will

the answer is undoubtedly yes. The conference provides an invaluable platform for networking, deal-making, and brand-building. It reinforces Malta's position as a critical player in the global gaming ecosystem and attracts new business to our shores.

But for the rest of us, the answer is less clear. While the conference brings economic benefits, these are concentrated in a few sectors and do little to improve the day-to-day lives of most Maltese citizens.

What needs to change?

SiGMA's €100 million economic contribution sounds impressive—but

who benefits from this windfall?

goodwill, SiGMA lacks a robust local arm for giving back.

Establishing a dedicated arm for charitable initiatives—whether through funding NGOs, supporting educational programmes, or investing in community projects— would balance the scales and foster goodwill among residents.

The social media disconnect

SiGMA's communication with the public often exacerbates frustrations. Their social media accounts are filled with posts celebrating the conference's success, highlighting recordbreaking attendance figures

be rebranded as SiGMA Euro-Med and moved to September, aiming to avoid the peak traffic period and improve the experience for both attendees and residents. Meanwhile, SiGMA Europe will relocate to Milan in November, tapping into one of Europe's most promising gaming markets.

This strategic shift reflects a proactive approach to addressing residents' concerns while balancing the event's logistical requirements.

Is SiGMA still worth it?

This leads to a crucial question: is SiGMA still worth the disruption it causes? For the gaming industry,

If SiGMA is to maintain its place in Malta's annual calendar, it must evolve. Its organisers must recognise residents' legitimate concerns and take meaningful steps to address them. This includes better traffic management, transparent communication, and a stronger focus on local initiatives.

Secondly, the government must ensure that SiGMA's benefits are more evenly distributed, with investments in community projects funded by the event's revenues or policies encouraging gaming companies to contribute more directly to Malta's economy.

Finally, there needs to be a broader conversation about Malta's priorities. While the gaming industry is undoubtedly important, it shouldn't dominate our national agenda at the expense of other sectors and the well-being of our citizens.

SiGMA may be a marquee event for the gaming industry, but its broader impact on Malta remains mixed. If it truly wants to benefit the island, its organisers and supporters must examine their responsibilities and make meaningful changes.

← Bettino Craxi and Silvio Berlusconi.

TANGENTOPOLI

→ Antonio Di Pietro (middle) is an Italian politician, lawyer and magistrate. He was a prosecutor in the Mani Pulite corruption trials in the early 1990 s.

In Tangentopoli, Manuel Delia examines Italy's 1990s corruption scandal that toppled its First Republic, revealing a system fueled by kickbacks from public contracts and compromised governance. The investigation, Mani Pulite (Clean Hands), exposed deep political rot, drawing parallels to Malta's current challenges, where political financing and corruption scandals echo those of Italy's past, highlighting the urgent need for transparency and reform to safeguard democratic integrity.

TANGENTOPOLI

Italy's modern republic had not existed for 50 years before its citizens started speaking of it as the "first" republic, implying it was defunct. It was the early 1990s, and a team of prosecutors had gathered evidence of rot at the very heart of the country's governance. They called the project of investigating and prosecuting wrongdoing in public life "clean hands." All other hands were dirty. It is perhaps helpful to remember what the wrongdoing was.

In its basic form, it involved private businesses working on government contracts, paying kickbacks to politicians funding their party's political campaigning. Everybody did it: politicians from all

parties running municipalities, provinces, regions, Christian Democrats, Socialists, Communists, and sundry others.

Almost none of the politicians pocketed any kickbacks or used the money for profit. A contractor would build a road or a bridge, and a small portion of the fee paid by the council would go to the mayor's political party. Strictly speaking, the donation would be against the rules, so it was passed quietly in cash to convince the public to vote for that party again.

The public had long known this had been happening. To some extent, they accepted it as the system, just how things work. →

Also, political controversies usually emerge when parties disagree, which is most of the time. However, since all parties worked this way, this wasn't an issue that came up with any frequency in political discourse.

When the clean hands prosecutors decided to clamp down on this, the public realised what happened when they weren't watching. Competition for public contracts became less about getting the best value for money for taxpayers and more about getting the most significant kickbacks for political parties. Bidding for public contracts became an auction of bribes. It also became an opportunity for organised crime to syphon off public money, laundering the proceeds of their

more violent activities like drug trafficking and extortion into the concrete they poured into road projects they never finished. Political parties became dependent on the money coming from these kickbacks. They needed it to pay salaries, organise election campaigns, and even exist. Their need for the funds overrode any sense of propriety and decency. They pressured the governments they ran to give contracts to their most generous donors. When they knew the donors were fronts for organised crime, they pretended not to and ensured the police held back. They became in thrall to the criminals.

The word for 'kickback' in Italian is 'tangente': a diversion of a portion of public funds

The word for 'kickback' in Italian is 'tangente': a diversion of a portion of public funds flowed back towards the decision-makers who spent them.

flowed back towards the decision-makers who spent them. When they decided to stop it, they called the system that ran their country Tangentopoli: the city built on kickbacks, the party system that relied on corruption, and the surrender to criminals.

Those who benefited from the system sucked everybody else into it. Honest politicians who entered public life for the right reasons found themselves unable to raise the money to get elected without joining the kickback system. Businesses that wanted to compete for public contracts found they could only win if they paid up. Political parties couldn't function if the money stopped flowing. Everyone shut up. And organised crime flourished, sucking up the profits while no questions would be asked of it.

Eventually, the system collapsed. It wasn't replaced by a political paradise free of corruption. Quite the contrary, Italian politics pushed back on law enforcement

and systemically sought to undermine it. The son of the Tangentopoli revolution was an unlikely figure: Silvio Berlusconi, who used politics principally to avoid being prosecuted for corruption. When the first Italian republic collapsed because the lines between business and holders of public office had been so blurred, the second republic was dominated by an individual who personified the merger between business and holding public office.

The lessons for our time and our country from that trip back to Italy in the last decade of the previous century are here.

Political parties here are primarily funded from kickbacks paid by contractors. Contractors pay back a portion of public money spent on them for public contracts or a slice of the profits they make from exploiting public land or the air they are permitted to fill with their towers and concrete monsters. Businesses find they cannot beat them, so

they choose to join them instead. Paying taxes on time is insufficient to acquire the right to succeed in our economy, particularly in the economic areas where the government enjoys influence. If you need a permit, a license, and especially a purchasing contract, you need to make it to the list of friends, which is a euphemism for the list of donors.

Some ministers are not above enriching themselves, but that is not quite an essential job requirement. But to be re-elected and maintain and renew the party's power, money needs to come from somewhere, and it is incumbent on them to get it.

Everybody does it, so it's not a subject often discussed in political discourse. However, it would be a false equivalence to ignore that the opposition PN now officially believes that secret private funding of political parties should be replaced by transparent public financing.

The fact that this wasn't an official policy up until now gives an inkling of the political courage required to promote it. It also contrasts with the ruling PL's hostility to the idea.

State funding of anything is inherently unpopular, let alone the funding from your tax money of a political party you profoundly dislike and disagree with. However, the absence of state funding does not save you money. Whatever you may believe, even party gatherings you won't be caught dead attending, party advertising you don't look at, and party TV stations you'll never watch don't come free. If your taxes are not funding them, someone else is paying for their costs. Though you're told the money comes from commercial activities conducted by political parties or small €5 donations by party supporters at telethons, that's mostly a fudge, sometimes a flat-out lie. It is primarily businesses that are funding

your democracy through informal taxation and unaccounted flows of money hidden from view. They consider them an operational expense, something they have to live with, like utility bills and the more formal and transparent taxes. And for business to make sense, they will need to recover their informal expense somehow. That's what you pay for. You pay for more expensive public contracts paid to the less efficient, more expensive, and more generous funders of political activity. Your taxes go into the pockets of the less good—some in the pockets of criminals hidden in the silence of systemic bribery that runs our country.

This is Tangentopoli. So far, we haven't been smart enough to look to dismantle it, and we've been even less savvy to think ahead about what might come after it. And yet, with or without our foresight, something, at some point, has got to give.

A success story of easing access to finance for local SMEs

For over a decade, thanks to EU funding and risk-sharing instruments, local SMEs benefitted from financing schemes that enabled them to invest in their long-term growth.

The European Investment Fund and Bank of Valletta have been working closely together since 2011 when a European pilot initiative called BOV JEREMIE was successfully implemented, providing improved access to finance for SMEs with a total portfolio of just over €60 million. Two years later, the two

subsidy to ease access to finance for individuals and enterprises keen on investing in green investments.

Fast-forward to 2024, and both BOV and EIF signed another collaboration agreement, by which two new EIF-guaranteed instruments were launched: the BOV SME Grow and the BOV SME Grow Green. The collaboration allowed for developing a €42 million EU-funded guaranteed portfolio under the Invest EU program. As the first local commercial bank to benefit from

Investment Fund, Bank of Valletta can transfer the capital relief to the benefit of the SME through a reduction in the interest rate, a lower collateral requirement, and initial contributions. Both the BOV SME Grow and BOV SME Grow

institutions collaborated again to develop the BOV Start Plus product, and in 2016, the BOV JAIME financing package followed up the success of the JEREMIE initiative and built up a new SME lending portfolio of just over €100 million.

The BOV Energy Loan, launched in 2021, was another European pilot initiative that blended a guarantee instrument with an interest rate

an EU-funded guarantee under the Invest EU Malta Member State compartment, Bank of Valletta has developed these two products to focus on traditional SME financing and green investments such as renewable energy solutions and energy efficiency investments.

Thanks to the recently signed new risk-sharing mechanism between the bank and the European

Green request a minor upfront contribution of 5% together with lower extendible collateral requirements capped at 30% of the loan value.

The BOV SME Grow is priced at a variable interest rate of 3.8%, while the BOV SME Grow Green is

priced at a variable interest rate of 2.8%. The green alternative has been specifically designed to align with the bank’s ESG strategy to encourage the business community to move towards greener investments.

With the latest collaboration, Bank of Valletta continues to position itself as the natural go-to option for the local SME business community, with a success story spanning over 10 years.

The BOV SME Grow and the BOV SME Grow Green are funded by the European Union through the European Regional Development Fund with the financial backing of the Republic of Malta under the InvestEU Member State Compartment for Malta. All loans are subject to normal bank lending criteria and final approval from the bank.

Issued by Bank of Valletta p.l.c., 58, Triq San Zakkarija, Il-Belt Valletta VLT 1130. Bank of Valletta p.l.c. is a public limited company regulated by the MFSA and is licensed to carry out the business of banking in terms of the Banking Act (Cap. 371 of the Laws of Malta).

Budget 2025

A consumption fix, but where's the vision?

The 2025 Budget presented by the Maltese government is an ambitious effort focused on stimulating consumption and providing immediate socioeconomic relief, particularly to vulnerable groups. Tax cuts and social handouts dominate the fiscal landscape, reflecting a pro-social approach designed to increase disposable income and support domestic demand.

While these measures may bolster short-term economic activity, the budget must have the long-term vision and investment to address Malta's fundamental produc tivity issues.

Without substantial investment in productivity-enhancing initiatives and critical infrastructure, Malta risks failing to build a competitive, resilient economy that can sustain growth and prosperity for future generations.

Productivity: The missing pillar in Malta's economic strategy

Productivity is the cornerstone of economic resilience, high-quality job creation, and sustainable public services. In recent years, Malta has grappled with stagnant or declining productivity levels, which has significant implications for long-term growth.

Although the National Productivity Board has consistently highlighted these challenges, this budget needs more concrete solutions.

Increasing productivity should be a national priority. Productivity improvements enable economies to grow without increasing labour input, making them more efficient and competitive. They also provide the foundation for sustainable wage growth, better public services, and enhanced living standards. Yet, the 2025 Budget largely overlooks this crucial dimension, focusing instead on immediate redistribution measures.

A demand-driven model with limited capacity enhancement

The budget's primary orientation is demanddriven, aiming to boost consumption through increased disposable income. Tax reliefs and direct social assistance form the bulk of the

The Msida Creek Project.

fiscal policy, designed to stimulate spending among low- and middle-income families. This approach may support economic activity in the short term, but it needs more depth to drive sustained growth. Without a strong emphasis on building capacity—through workforce skills and infrastructure investment—Malta risks becoming overly dependent on consumptiondriven growth, which is inherently limited.

To ensure long-term resilience, Malta must pivot towards an economic model that balances consumption-driven growth with strategic investments in capacity and productivity. This shift requires policies beyond social redistribution, prioritising structural reforms that unlock the economy's full potential.

Infrastructure investment: A foundation for future growth

Infrastructure is not just about physical structures like roads and bridges; it includes digital connectivity, energy networks, and educational facilities. Jeremy Rifkin's Third Industrial Revolution underscores how converging digital, energy and transport infrastructures can create resilient economies. Malta's infrastructure needs a similar approach to enhance productivity, connectivity, and sustainability. →

Unfortunately, the budget lacks significant investment in this broader sense of infrastructure. While infrastructure spending is mentioned, it leans heavily towards traditional projects with limited transformative impact on the economy's productivity capacity. Malta's economic model will struggle to compete globally without targeted investment in modern infrastructure— particularly digitalisation and green energy.

A comprehensive infrastructure investment plan that includes sustainable energy grids, digital infrastructure, and public transport would create efficiencies, reduce business costs, and attract foreign investment. Such investments would also facilitate Malta's transition to a greener, more technologically advanced economy, aligning with the long-term goals outlined in Vision 2050.

Structural reforms in education and workforce development

Malta's education system needs reform to prepare a workforce capable of driving productivity. Despite increased funding for educational infrastructure and teacher benefits, the system faces several critical issues: low attainment levels, high rates of early school leavers, and a persistent gap in STEM (science, technology, engineering,

and mathematics) proficiency. Addressing these structural weaknesses is essential to ensuring that Malta's labour force can meet the demands of a modern economy.

Reforming education should go beyond infrastructure improvements to focus on outcomes. Programs that emphasise STEM education, critical thinking, and vocational training aligned with industry needs are essential. Malta can strengthen its innovation, productivity, and resilience by creating an education system that produces highly skilled workers.

Furthermore, Malta needs policies that encourage lifelong learning and skills upgrading, particularly as technology and global competition reshape job requirements. Investments in workforce development, especially in digital and green skills, will position Malta to meet future challenges and attract high-value industries contributing to economic growth and sustainability.

Vision 2050: An ambitious blueprint

Vision 2050 offers a long-term roadmap for Malta, aiming to transform the economy into one that is sustainable, competitive, and resilient. However, a vision is only as compelling as the strategies and financial

resources that support its realisation. While this budget is cognisant of Vision 2050's objectives, it falls short of allocating sufficient resources to build the foundational elements needed for long-term success.

To bridge the gap between Vision 2050 and current fiscal policy, Malta needs a more cohesive approach that aligns yearly budgets with the vision's broader goals. Strategic investment in productivity, infrastructure, and education should be prioritised, ensuring that fiscal policy meets immediate socio-economic needs and lays the groundwork for a competitive future.

Vision 2050 requires more than just aspirational targets; it demands actionable strategies supported by sustained investment.

The case for capacity-driven growth

Malta's future competitiveness and attractiveness depend on its ability to enhance productive capacity. This requires a fiscal policy shift from short-term demand stimulation to long-term capacity building.

Key areas that would benefit from investment include: (1) Digital Infrastructure: Enhancing connectivity across the island to support businesses, innovation, and remote work

capabilities. (2) Green Energy: Malta should invest in renewable energy sources to reduce dependence on imported fuels and position itself as a leader in sustainable development. (3) Education and Skills Training: Overhauling the education system to focus on outcomes that align with industry needs, particularly in STEM fields. (4) Public Transport and Urban Development : Developing efficient, sustainable transport options to improve mobility, reduce traffic congestion, and boost productivity.

By focusing on capacity-driven growth, Malta can create an economic environment that attracts investment, supports high-quality job creation, and increases resilience to global economic shifts.

A call for action on structural reform

Malta's 2025 Budget, while addressing immediate social needs, overlooks the structural reforms necessary for long-term competitiveness. A wellrounded fiscal strategy should prioritise productivity-enhancing investments, not just consumption-boosting measures. As global markets evolve, economies that invest in capacity, infrastructure, and innovation will be best positioned to thrive. Future budgets must reflect a balanced approach that aligns short-term socio-

Without strategic infrastructure and workforce reforms, Malta's economy risks falling behind in a competitive global landscape.

economic relief with structural reforms. By building productive infrastructure, strengthening the education system, and implementing Vision 2050's ambitious goals, Malta can transform into a resilient, competitive economy capable of sustained prosperity.

In summary, Malta's 2025 Budget provides valuable support for vulnerable groups and aims to boost consumption, but it lacks the depth required to prepare Malta for future challenges. Productivity-enhancing measures, investments in digital and green infrastructure, and educational structural reforms are essential to ensuring Malta's competitiveness in a rapidly evolving global landscape. Vision 2050 provides a guiding framework for turning aspirations into reality but also requires committed strategies and financial resources.

A robust, capacity-focused fiscal policy will be essential to Malta's long-term growth. Moving beyond a demand-driven approach to one that builds economic capacity will secure Malta's place in an increasingly competitive world. It is time for Malta to adopt a forwardthinking strategy that balances short-term needs with the investments necessary for a resilient, productive economy.

WHY TRANSPARENCY WORKS

TRANSPARENCY

A new era of investing

A kid with a smartphone has more intelligent access to knowledge than the President of the United States 20 years ago. — Ray Kurzweil, 2014

Research from the CFA Institute and the Financial Industry Regulatory Authority Investor Education Foundation (2023) revealed some interesting findings about Gen Z's financial decision-making priorities and mindset.

Technology is reshaping industries globally; Malta's real estate sector cannot afford to lag behind.

The study examined Generation Z (1997–2012) in the US, Canada, the UK, and China and found that most Gen Zs aged 18–25 invest. Cryptocurrency often serves as their gateway into financial markets, and investing apps are their preferred method for managing investments and making trades.

Unsurprisingly, these findings suggest that we are on the brink of a profound generational shift, with this cohort entering the investment world and leaving its mark on all asset classes, including real estate. →

Transparency

isn't just good ethics; it's smart business.

As two professionals in the real estate sector, these findings prompt the question: Is the real estate market keeping pace with the changing preferences of this growing demographic, or is it at risk of alienating an entire generation of customers?

Setting aside the discussion on sustainability, ESG considerations, and other vital topics such as quality, affordability, and the democratisation of real estate through tokenisation and REITs—issues that have been thoroughly debated in Malta—this article explores how property technology (PropTech), data, and market transparency are evolving globally. We will discuss why transparency is good for business, what today's tech-savvy investors expect, and what Malta's real estate market must do to remain relevant, attractive, and competitive.

A call for clarity

Once upon a time when markets were driven by a desire to be in a specific locality, the valuation adage was 'location, location, location.' This changed in subsequent recessions and downturns when the proliferation of bankruptcies led to the default of leases to 'covenant, covenant, covenant.' Today, where we are in a world of sophisticated investment decision modelling, I would suggest the adage now should be 'transparency, transparency, transparency'. — Nick French, 2024

Investors' expectations and values are evolving rapidly in this increasingly digital world. The ease of investing on FinTech platforms such as Revolut and even Moneybase locally has led to greater financial freedom and literacy among Gen Z. These apps have transformed investing in stocks and commodities into a simple, accessible process, allowing users to invest smaller amounts.

What does a transparent market look like?

Malta can learn from several success stories. The UK, for example, is one of several countries that sets an objective benchmark for real estate transparency, contributing to higher standards and healthier real estate markets.

The availability of market data in these transparent markets creates ample opportunities for PropTech, which is vital for market data to be utilised effectively. PropTech

This generation is accustomed to analysing real-time data at their fingertips and has become used to seamless, data-driven investment experiences. With a swipe, users can access market trends, track price changes, and review historical and actual returns, creating a smooth investment experience.

As financial literacy grows and people rely more on data-driven investment decisions, the real estate sector is under increasing pressure to adapt. This generation places ever-increasing importance on sustainability, innovation, authenticity, accountability, ethics, and efficiency. It expects the same level of simplicity and transparency across all investment asset classes, including real estate.

These developments are driving the need for the real estate market to become more transparent, which has far-reaching benefits for local and global investors, as discussed in a previous article published with this magazine (Issue 72: Data Matters—How can Malta solve its transparency challenge?).

allows real estate investors and users to gather large amounts of data. Access to such data can increase efficiency by saving time and resources by centralising all relevant information, leading to improvements in the market and enabling more informed decisions.

Examples of these platforms include mortgage rate comparisons, iBuying options, and tools like Zillow's Zestimate. Platforms like Zoopla—which provide detailed information on historic property sale prices, rental yields, neighbourhood statistics, and market trends on a single platform—exemplify the benefits of consolidating data. They make information readily available and user-friendly, empowering investors to make confident, informed choices.

The local scenario

However, market transparency still feels like an unachievable dream for most property markets. While a vast amount of data is generated daily, most information remains incomplete in analogue formats, such as PDF documents. Additionally, many real estate

markets have never excelled at collecting data systematically, hindering the ability to capture and consolidate it for better insights.

Malta is one of the many countries facing these challenges, as highlighted in the latest (2024) JLL Global Real Estate Transparency Index (GRETI), where Malta's position showed little to no improvement since the previous report (2022). The local PwC Malta report, 'A Focus on Real Estate Transparency in Malta 2024', also indicates significant room for enhancing transparency practices.

This is because the real estate sector worldwide is notorious for information asymmetry, lagging innovation, and resistance to change. It is an old industry with a triedand-true formula: learn the market, establish connections, build a network, negotiate effectively, and close valuable deals. Market players repeat this cycle time and again. Whilst we still believe that this human element

will always remain a crucial part of what makes the industry appealing and that this formula is timeless, the way each step is executed must evolve. Traditional methods still dominating the market must make way for more dynamic, engaging, and technologically enriched strategies designed to appeal to this new audience.

Malta's existing 'traditional methods' of investing—with limited information and market data that heavily rely on asking prices, scarce use of PropTech, lack of standardisation, questionable advice and valuations, a lack of internationally accredited professionals, minimal use of explicit valuation methods, and

inconsistent and limited details on property and location descriptions—simply must change.

"Because we have always done it that way" can no longer be an acceptable response.

Technology is transforming industries globally, and the local real estate market needs to follow suit, as it cannot resist market forces forever. The consequence of failing to respond is an inevitable long-term decline. These changes are necessary not only for the sector to remain relevant and meet the expectations of a new generation of investors but also because we all deserve better.

The mantra has evolved from 'location, location, location' to 'transparency, transparency, transparency.'

Moving forward

Working in real estate—whether as an estate agent, architect, or other role—can be a great profession. One can have a purposeful and rewarding life working and investing in real estate in Malta, even without these vital technological and transparency advancements.

However, real estate in Malta must recognise the value of data and technology. Enhancing market transparency, consolidating data sources, and creating a centralised platform that can provide clear and comprehensive insights will help build trust, ensure the industry's long-term sustainability, and meet the needs of modern investors.

DEFENDER TAKES LUXURY ADVENTURE TO NEW HEIGHTS

Greater choice and more power

MONEY is thrilled to spotlight the latest evolution of the Defender, a hallmark of luxury and off-road capability. The iconic 4x4 has undergone a transformative upgrade, blending enhanced comfort with unrivalled performance. With new models like the Defender 110 Sedona Edition and refined specification options, Land Rover's Defender promises an elevated adventure tailored to every explorer.

Luxury meets adventure: A new era for Defender

The Defender family expands with the 110 Sedona Edition, drawing inspiration from Sedona's striking landscapes. This limitededition model features an exclusive Sedona Red exterior, complemented by 22-inch Gloss Black alloy wheels and sophisticated design elements like the Extended Black Pack. Its bold aesthetic matches a topographic bonnet decal, reflecting both rugged capability and refined luxury.

Unparalleled

comfort with the Captain Chairs Pack

Defender 130 customers can now experience next-level comfort with the new Captain Chairs Pack. This seating option redefines the second-row experience with individual luxury seats with heating, cooling, and winged headrests. The design ensures seamless access to the spacious third row, offering unparalleled comfort for long journeys.

Signature Interior Pack: Where craftsmanship shines

The new Signature Interior Pack enhances those seeking an indulgent driving environment. Enjoy the tactile allure of Windsor Leather and Kvadrat™ seats, Nubuckedged carpets, and a Suedecloth headliner. With options for Ebony or Caraway/Ebony interiors, the Defender exudes sophistication, ensuring every journey is as comfortable as it is memorable.

Power and performance:

The new D350 engine

Performance enthusiasts will appreciate the introduction of the D350 powertrain. With a robust 350PS and 700Nm of torque, this diesel engine delivers unparalleled flexibility and responsiveness. From towing heavy loads to navigating challenging terrains, the Defender's powertrain options ensure it remains the ultimate allterrain companion.

Simplified choices for a tailored experience

Defender has streamlined its offerings, presenting a range of thoughtfully curated packs. Whether you prioritise off-road capabilities, advanced driver assistance systems, or cold climate comfort, the Defender line-up offers tailored options to suit every lifestyle. Each model, from the compact 90 to the versatile 130, embodies Land Rover's legacy of innovation and durability.

A legacy of excellence

Since 1948, Defender has been synonymous with resilience and adventure. Beyond its commercial success, the vehicle is vital in humanitarian and conservation efforts worldwide, supporting organisations like the Red Cross and Tusk Trust. Designed and engineered in the UK, the Defender's global reach spans 121 countries, solidifying its status as a symbol of luxury and reliability.

Ready to experience Defender's new era? Visit www.defender.com or follow the brand on social media for the latest updates and innovations.

BEYOND ATTRACTIVENESS SCORES

Malta's path to private equity and venture capital success

As a professional in the asset servicing industry, I have long contemplated Malta's potential to thrive as a private equity (PE) and venture capital (VC) hub. Over the years, I have attended numerous industry conferences, exchanging ideas with some of the industry's leading general partners (GPs) and limited partners (LPs). These experiences have underscored one truth: Malta has untapped potential. While this topic is broad and encompasses various facets, I will approach it from an asset management and asset servicing perspective for the sake of this article. While building a PE and VC ecosystem is an ambitious endeavour, I firmly believe Malta can continue positioning itself as a competitive and credible jurisdiction.

The latest EY Malta Attractiveness Survey revealed that only 54% of businesses consider Malta attractive for foreign direct investment—a five-point decline from the previous year, emphasising the need for strategic reform. While the jurisdiction has made strides in growing its PE and VC sectors, Malta is at a crossroads. To attract toptier investment firms and funds, it must shift from being perceived as a small, cost-effective jurisdiction to one with a robust, interconnected, and scalable ecosystem.

PE and VC investments have become drivers of economic growth worldwide, supporting innovation, entrepreneurship, and job creation. With its strategic location, agile regulatory environment, and ease of doing business, Malta is well-placed to leverage these opportunities.

Malta's current appeal is often summarised as "costeffective," "English-speaking," and "business-friendly." While these are undoubtedly strengths, they fail to provide the unique edge to set Malta apart in the competitive financial services landscape. Malta must shift its narrative from affordability to delivering actual value to attract top-tier private equity and venture capital firms. Instead of focusing on "what can go wrong," we should focus on "what can go right."

Shifting toward proactive value creation

In 'private equity' and 'venture capital', value creation is not just a post-transaction activity—it is the foundation of success. Malta should adopt this philosophy and embed value creation into its jurisdictional offerings.

By focusing on five transformative pillars—expertise and operational support, talent acquisition and retention, innovation, adaptability, and agility —Malta can redefine its role and thrive as a centre of excellence for private equity and venture capital.

To foster a thriving PE and VC sector, Malta must build on its expertise and operational capabilities. This involves strengthening support services such as asset managers, →

fund administration, legal advisory, and regulatory compliance—all critical areas in asset management. Skilled professionals and high-quality support services make a jurisdiction more attractive to investors. A suggestion could be developing specialised courses at the University of Malta or offering professional certifications in collaboration with international institutions and internship opportunities within local funds and financial firms to cultivate practical experience.

Talent is at the heart of private equity and venture capital. While Malta boasts a strong base of local talent, challenges remain. Attracting and retaining top-tier professionals is essential for the industry's success, especially as these professionals are the ones who drive investment and operational improvements. Creating programs that encourage talented Maltese students to pursue careers in finance, supplemented with incentives for international experts to work in Malta, could provide a strong foundation. We must ensure our workforce is globally competitive, with the skill sets required to excel in a dynamic, complex environment.

To future-proof our ecosystem, Malta must continue to embrace digital transformation. Innovation can be a differentiator that attracts modern, tech-driven funds. Integrating artificial intelligence, data analytics, and fintech into the PE and VC industries can help streamline operations and improve investment decisions. By continuing to position itself as a tech-friendly jurisdiction, Malta can attract investment firms that prioritise innovation. For instance, offering regulatory sandboxes

could provide a controlled environment for firms to test new technologies without exposing them to unnecessary risks.

Private equity investors increasingly prioritise ESG (environmental, social, and governance) factors when making investment decisions. Sustainability is not just a trend; it is a value that will drive investment flows in the future. Malta could establish sustainability incentives, such as tax breaks or grants, for funds prioritising ESGcompliant investments. Positioning Malta as an ESGfriendly jurisdiction could attract firms looking to manage "green" funds, thus aligning with global investment trends. For example, we could provide green incentives for fund managers: Tax breaks for funds that meet ESG criteria.

Source: eu-startups.com

Malta Private Equity Venture Capital Association launched.

Photo: Times of Malta

Malta's small size can be an advantage here. As a smaller jurisdiction, Malta has the ability to quickly adapt to new regulations, trends, and investor needs. By establishing a dynamic regulatory framework that evolves with industry needs, Malta can offer a responsive, adaptable environment that larger domiciles might struggle to replicate. Stakeholders could develop a fast-track PE and VC funds licensing process, ensuring compliance without unnecessary delays.

Transparency and efficiency in regulatory approvals can become a cornerstone of Malta's value proposition.

Expanding Malta's strategic identity in the private equity and venture capital market

What if Malta could transform itself into a true centre of excellence for niche private equity and venture capital funds, leading the way in healthcare innovation, creative media, decentralised finance, and sustainable infrastructure? Imagine a jurisdiction where cutting-edge healthcare technologies are developed, virtual reality industries thrive, and tokenised fund structures redefine financial systems.

With its strategic location, robust legal framework, and forward-thinking mindset, could Malta become the go-to destination for funds that shape the future of industries? By embracing these high-growth sectors and creating tailored incentives for funds specialising in biotech, creative economies, DeFi, and green tourism, Malta would not just attract capital—it would attract industry leaders, positioning itself as the epicentre of transformative investment. The question is not "Why Malta?" but rather, "Why not Malta?"

One of the most exciting trends in private equity is its democratisation. Traditionally, PE was accessible only to large institutional investors. Today, smaller investors are

gaining access through platforms that offer lower entry points.

Malta could position itself as a leader in democratised private equity by:

» Creating a regulatory framework for retail PE funds: Allowing smaller investors to participate while ensuring adequate protection.

» Partnering with fintech platforms: Offering seamless onboarding for retail investors into PE and VC funds.

» Educational campaigns: Raising awareness about the benefits and risks of private equity among retail investors.

Imagine a Malta leading the way in biotech, creative media, and decentralised finance—this vision is within reach.

A call to action

Building Malta's private equity and venture capital ecosystem is not a one-person or one-organisation effort— it requires collective action. Government, regulators, industry professionals, and academic institutions must share a shared vision. For example, the recent establishment of the Private Equity & Venture Capital Association – Malta (PEVCA) is a significant step forward, with its main objective to promote private investment on the island, including Malta as a destination for private equity and venture capital firms and funds. Organisations like FinanceMalta are pivotal in fostering this collaboration by acting as a bridge between the public and private sectors. Their initiatives to promote Malta internationally, provide networking opportunities, and create platforms for knowledge-sharing are invaluable.

Malta can potentially carve out a unique identity in the PE and VC world. By focusing on innovation, sustainability, and collaboration and leveraging its agility and talent, Malta can position itself as a competitive jurisdiction capable of attracting global players.

The question is no longer, "Can Malta compete?" but rather, "How far can Malta go?" The answer lies in our ability to think big, act strategically, and embrace our strengths. The time to act is now.

March 18, 2024. Minister for the Economy, Enterprise and Strategic Projects Silvio Schembri inaugurated the Venture Capital’s offices in Sliema.

BRICS

← 16th BRICS Summit.

Joint photo opportunities for BRICS heads of delegation

The

new kid on the (power) block

Malta, a Mediterranean island famed for its sun-drenched shores and strategic location, is navigating an increasingly complex global landscape. As this small island stands on the sidelines of global power plays, the emergence of BRICS—a formidable alliance of Brazil, Russia, India, China, and South Africa—brings glittering opportunities and shadowy challenges. So, what does this all mean for Malta? MONEY takes a closer look at how BRICS might shape the future of the island state.

First, let's set the scene. BRICS didn't just pop up overnight. What began as "BRIC" in 2006 became "BRICS" when South Africa joined in 2010, turning this economic clique into a global force. The bloc accounts for over 40% of the world's population and approximately 25% of global GDP.

Formed to foster cooperation among major emerging economies, BRICS has a shared vision of promoting a multipolar world order that challenges the traditional dominance of Western-led institutions like the International Monetary Fund (IMF) and the World Bank. Through initiatives like the New Development Bank (NDB), BRICS funds infrastructure

Walking the diplomatic tightrope isn't easy with EU and BRICS interests at play.

projects and encourages economic collaboration, aiming for equitable growth and mutual support among its members.

With these ambitions and their growing influence on the global stage, BRICS is reshaping how countries interact economically and politically. For Malta, this shift in global power dynamics presents both challenges and potential pathways to new opportunities.

So, as BRICS forges ahead with plans for trade deals, infrastructure projects, and even talk of a common currency (though that's more dream than reality, for now), Malta has to decide: Watch from the stands or play ball?

Malta's golden ticket?

Let's face it—Malta's trade cards are mostly played with the EU. It makes sense; the island is a proud EU member. However, BRICS' expanding influence could open doors to new markets, especially as the middle classes balloon and the demand for high-value imports grows. Imagine Maltese tech services and pharmaceuticals going to bustling markets in India or China. The potential is as bright as a summer day in Valletta.

Malta can't just hope BRICS comes knocking. Proactive outreach—think trade missions, high-profile business summits, and strategic partnerships—is critical. Building these bridges now can position Malta as the Mediterranean's go-to link for BRICS-EU trade.

China and India are well-known for their global investments, and they're not just buying up skyscrapers in Manhattan. They're funding tech, sustainability projects, and infrastructure wherever opportunity calls. With its prime location and business-friendly reputation, Malta could be an attractive investment prospect.

But here's the catch: there's no solid evidence yet that BRICS-driven FDI is streaming into Malta. It's more like a glimmer of potential than a flood of capital.

Malta's policymakers must step up their game to turn potential into reality. Investment roadshows, targeted incentives, and showcasing Malta at international summits could transform the island into a magnet for BRICS capital.

And why not lean into green projects and digital innovation while they're at it?

Not all that glitters is gold

Malta's allegiance to the EU is unwavering, but this bond comes with strings attached. Regarding BRICS, especially Russia and China, things can get politically dicey. EU policies may not always vibe with BRICS strategies, making Malta's balancing act more challenging than a tightrope walk over the Grand Harbour.

Stick to non-contentious areas. Green technology, education, and cultural

Trade opportunities exist, but so are energy and geopolitical challenges.

Double down on energy diversification. Renewable projects should be on the agenda, making the island more resilient to international energy fluctuations. Partnering with EU initiatives and BRICS countries invested in green tech (China!) can help secure Malta's energy future.

The balancing act: challenges meet strategies

Tourism and business exchanges with BRICS countries sound like a win-win. But inviting visitors and investors to soak Malta's sun is brutal. Geopolitical sensitivities mean Malta must tread carefully, especially when hosting events or fostering ties that involve players like China or Russia.

Think soft power. Academic programs, tech collaborations, and cultural festivals can build bridges without stirring political tensions.

Malta's charm and strategic savvy can make it an ideal stage for non-controversial engagement with BRICS visitors and business leaders.

partnerships are Malta's safe bets. These allow the island to collaborate with BRICS without ruffling EU feathers. It's all about tact and timing—finding the sweet spot where Malta can engage without stepping on any geopolitical landmines.

BRICS has hinted at wanting to topple the dollar's dominance. Although the idea of a BRICS currency is still more fiction than fact, the push for trade in local currencies could shake up global finance. For Malta, that means keeping its financial ducks in a row.

Adaptability is key. Malta's financial institutions should invest in technology that can handle multi-currency transactions and train professionals for a potentially diverse trade environment. Flexibility now could mean staying ahead of the curve later.

Malta isn't energy self-sufficient—it relies on imports to keep the lights on and the wheels turning. BRICS includes major energy players like Russia and Brazil. Malta could feel the pinch if this bloc prioritises energy for its members or hikes prices.

Malta's next move

BRICS isn't just a buzzword; it's a sign of changing tides in global economics.

Malta, poised at the crossroads of history and modernity, can't afford to be a passive observer. The opportunities for trade diversification, fresh investment, and more robust tourism flows are all for the taking. But so are the challenges—financial shifts, geopolitical complexities, and energy uncertainties.

By playing its cards right—investing in adaptable financial systems, focusing on renewable energy, and championing diplomacy—Malta can make its mark. The goal? I want to be a small nation in a big-block world that thrives on its strategic moves, resilient spirit, and innovative mindset.

In this dance of global giants, Malta must keep pace and set a rhythm that balances EU loyalty with global engagement. And who knows? Malta might just turn these BRICS into stepping stones with the right moves.

Malta heads to further business consolidations

Where are we?

Malta's business landscape is at a crossroads. With various sectors under pressure, the trend toward consolidation is accelerating. Businesses merge from familyowned enterprises to professional services and retail to survive and thrive. Key drivers include family succession challenges, the demand for specialisation, regulatory burdens, foreign competition, and shifting cultural attitudes. Consolidation is no longer just an option; it is becoming necessary for many.

Family succession: A vanishing tradition

Family businesses have long

driven Malta's economy, but this cornerstone of the local business ecosystem is beginning to crumble. Founders who launched their ventures in the 1990s and 2000s are now retiring. Ideally, they would pass on their businesses to the next generation, but this is increasingly rare.

Many younger family members opt for different career paths, driven by their aspirations or a desire to avoid the challenges of running a business. As a result, founders are often left with no choice but to sell. This trend is pronounced in sectors such as retail and healthcare, particularly pharmacies. Without successors, consolidation becomes a logical exit strategy, offering founders

a way to monetise their years of hard work while ensuring the business continues under new ownership.

The demand for specialisation

As Malta continues to climb the global value chain, the need for specialised knowledge, technology, and processes becomes increasingly critical.

To remain competitive, businesses must invest in state-of-theart software, hardware, and continuous training. However, these investments are costly, especially for SMEs with limited resources.

Here, consolidation offers a lifeline. By merging, companies

can pool resources and share the burden of costly investments. This enables them to provide higher-quality, more specialised services at competitive rates. In a small economy like Malta, where achieving economies of scale can be challenging, consolidation offers a clear path to staying relevant and profitable.

Regulatory pressures: A growing burden

Over the past decade, regulatory requirements across various industries—such as architecture, accountancy, and legal services— have intensified. Compliance now involves extensive reporting, auditing, and adherence to strict standards. These activities rarely generate direct revenue, putting

additional strain on profit margins. The burden of compliance can be overwhelming for smaller firms. Consolidation offers a way to distribute these costs across a more extensive base, restoring profitability and operational efficiency. By merging, firms can create more robust entities capable of meeting regulatory demands without compromising their bottom line.

Foreign competition: Raising the stakes

Malta's strategic location and robust regulatory framework have made it an attractive destination for foreign businesses. From retail to hospitality, international companies are entering the market, leveraging their global economies of scale. These firms bring superior bargaining power, advanced systems, and extensive resources, posing a significant challenge to local competitors.

The grocery sector is a prime example, with foreign operators intensifying competition and driving local consolidation. To survive, Maltese businesses must adopt similar strategies, merging to form more vital entities capable of competing on equal footing.

Changing cultural perspectives

In the past, selling a business was often viewed as a failure or a sign of defeat. However, cultural attitudes are shifting, particularly among younger entrepreneurs.

Today, divestment is increasingly seen as a savvy business move—a way to capitalise on a successful venture and pivot to new opportunities. This changing mindset fosters a more dynamic business environment where mergers and acquisitions are viewed as strategic tools rather than a last resort. Entrepreneurs are more willing to divest non-

Consolidation is no longer about survival; it's about thriving in a competitive market.

core activities, streamlining their operations and focusing on areas where they can add the most value.

Financing consolidation: New tools for growth

Consolidation requires capital, and Maltese businesses are exploring diverse financing options. While traditional methods such as cash and debt remain prevalent, innovative approaches like seller financing and investment funds are gaining ground. Investment funds, which have already significantly

influenced the telecom sector, offer a promising avenue for midmarket acquisitions. By tapping into these resources, businesses can more effectively finance mergers and acquisitions, paving the way for sustainable growth.

The role of MCCAA

The Malta Competition and Consumer Affairs Authority (MCCAA) is vital in regulating consolidation to ensure fair competition. As of May 2024, the MCCAA registered five significant transactions, signalling an active year ahead.

Mergers offer a lifeline for businesses to pool resources, enhance specialisation, and stay competitive.

However, many mid-market deals fall below MCCAA's reporting thresholds. These unregistered transactions represent a significant portion of the consolidation activity shaping Malta's economy, highlighting this trend's dynamic yet often under-theradar nature.

The strategic edge of consolidation

Mergers and acquisitions are complex, requiring careful planning and execution. Yet, they offer a strategic edge for businesses prepared to seize the opportunity. A clear consolidation strategy allows companies to identify partners, streamline operations, and enhance their market position.

Consolidation is not merely about survival; it's about thriving in a competitive and ever-evolving market. Businesses embracing this approach can achieve greater resilience, unlock new growth opportunities, and position themselves as industry leaders.

The time to act is now

The forces driving consolidation in Malta are unlikely to abate. From regulatory pressures and succession challenges to the need for specialisation and the influx of foreign competition, businesses face a rapidly changing landscape.

Consolidation offers a path to sustainability and growth for those willing to adapt. By acting now, companies can meet today's challenges and lay the groundwork for future success.

The question is not whether to consolidate but when—and the answer is sooner rather than later.

From compliance to competitive edge...

The Digital Product Passport

Eng. Stephen Mallia explores the EU's transformative initiative to boost transparency and sustainability in global trade. The Digital Product Passport (DPP) empowers consumers and streamlines supply chains by embedding detailed lifecycle data into products. It strengthens ESG practices, offering businesses a competitive edge in an increasingly transparent marketplace.

In the rapidly evolving global trade and sustainability landscape, the European Union (EU) is pioneering an initiative to reshape industries and redefine financial paradigms: the Digital Product Passport (DPP). Set to become a cornerstone of the EU's circular and sustainable economy strategy, the DPP mandates that products carry a digital record detailing their entire lifecycle, from raw material sourcing to end-of-life disposal.

For businesses and consumers alike, the implications of the DPP are profound. This isn't merely a regulatory hurdle for companies to clear; it's a transformative development that could influence investment decisions, credit assessments, and risk management strategies. The DPP's transparency requirements will offer unmatched insights into supply chains, environmental impact, and corporate sustainability practices—data points increasingly considered in financial models and Environmental, Social, and Governance (ESG) considerations.

As businesses prepare to integrate DPPs into their operations, they face challenges and opportunities. The upfront investment in technology and data management systems could strain resources, particularly for small and medium-sized enterprises (SMEs). However, companies that adeptly navigate this transition may unlock new value streams, enhance their brand reputation, and gain a competitive edge in progressively rewarding sustainability markets.

In this article, we delve into the mechanics of the Digital Product Passport, exploring how it empowers consumers, facilitates trade within the EU, and aligns with the bloc's ambitious climate neutrality goals by 2050. We'll examine why financial stakeholders must pay attention now, assessing the potential impacts on asset valuations, lending risks, and portfolio management. Join us as we unpack how the DPP is not just a policy development but a signal of the shifting tides in global commerce, where transparency isn't just a regulatory requirement but a financial imperative.

The Digital Product Passport is moving from a regulatory concept to a tangible reality by being physically embedded into products using QR codes, RFID tags, and NFC chips. These digital identifiers are gateways to comprehensive product information covering

The DPP is more than a regulatory tool; it's a competitive advantage.

origin, composition, environmental impact, and end-of-life options, which are accessible via smartphones or specialised readers. Businesses must take concrete steps to implement DPPs. The first critical action is data collection and management.

Companies must conduct comprehensive audits of their supply chains to map out every production tier, from raw material sourcing to final assembly. This involves identifying all suppliers and subcontractors, assessing their compliance with sustainability and ethical standards, and collecting detailed data on materials, processes, and environmental impacts. Investing in robust data management systems is essential. Businesses should adopt or develop platforms capable of handling large volumes of data, ensuring integrity and facilitating secure sharing with stakeholders.

These systems must be scalable and adaptable to accommodate evolving regulatory requirements and technological advancements. Technological investments are the next pivotal area. Companies must update their physical infrastructure to integrate DPP tagging into their products seamlessly. This may involve modifying production lines to include applying QR codes, RFID tags, or NFC chips during manufacturing. Ensuring that these identifiers are used correctly and consistently requires adjustments to equipment, processes, and quality control measures. Additionally, businesses should collaborate with technology providers to select the most appropriate tagging solutions for their products, considering factors like durability, cost, and consumer interaction.

Implementing these technologies also necessitates cybersecurity measures to protect data and prevent unauthorised access. By embedding DPPs, companies meet upcoming EU requirements and enhance supply chain transparency, engage consumers with detailed product insights, and gain a competitive edge in markets increasingly valuing sustainability and transparency—this strategic move bridges regulatory compliance with consumer expectations.

The DPP is transforming consumer engagement by offering unprecedented access to product information. Consumers interact with DPPs by scanning a QR code or tapping an NFC chip with their smartphones. →

This instant connection opens a digital gateway to detailed insights about the product they are considering or have purchased. Through this interface, consumers can access comprehensive information on a product's sustainability credentials, such as the environmental impact of its production, use requirements, features, repair opportunities for extended use, the recyclability of its materials, and its carbon footprint. Ethical sourcing details reveal the labour practices and sourcing locations involved in the product's creation, ensuring that purchases align with personal values regarding fair trade and human rights. Additionally, authenticity checks help consumers verify that they are buying genuine products, combating counterfeit goods that undermine trust and safety.

This level of transparency empowers consumers to make informed decisions like never before. With detailed information at their fingertips, they can choose products that meet their standards for sustainability and ethics, fostering a more conscious and responsible consumption pattern.

The DPP thus becomes a tool for consumers to participate in promoting sustainable practices and holding companies accountable actively. Businesses that implement DPP ahead of regulatory deadlines gain a significant competitive edge in the market. By proactively adopting this technology, they position themselves as leaders in transparency and sustainability, differentiating themselves from competitors who may be slower to adapt. This early adoption signals a commitment to innovation and corporate responsibility to the market, appealing to a growing demographic of consumers prioritising ethical and sustainable products.

Moreover, transparency builds trust, a cornerstone of brand loyalty. When consumers access honest and detailed information, their confidence in a brand strengthens. This trust translates into increased customer loyalty, as consumers are more likely to repeat purchases with brands they perceive as aligned with their values. It also encourages positive word-of-mouth referrals, enhancing the brand's reputation and reach. By embracing DPPs early, businesses ensure compliance with regulations and improve their market position. They create stronger relationships

benefit derived from DPPs. Access to realtime data allows businesses to streamline their operations effectively. For instance, accurately tracking inventory levels and product movement can reduce overstocking and understocking issues, leading to optimised inventory management. The data from DPPs can inform demand forecasting, production planning, and logistics, resulting in reduced waste and improved resource utilisation.

Moreover, tracing products through the supply chain can enhance quality control processes. Any defects or issues can be quickly traced back to their source, enabling prompt corrective actions and minimising disruptions. This efficiency reduces operational costs and improves customer satisfaction by ensuring product reliability and availability.

Early adoption of the DPP secures market leadership.

In essence, DPPs catalyse the transformation of supply chains and operational practices. By leveraging DPP’s detailed insights, businesses can create more transparent, efficient, and responsible operations. This transformation meets regulatory expectations and delivers tangible business benefits, positioning companies to thrive in an increasingly competitive and conscientious market.

Adopting the Digital Product Passport presents significant financial implications and business opportunities. Starting with asset valuation, incorporating DPPs can positively affect a company's asset valuation by demonstrating a commitment to sustainability and compliance. Assets that are transparent, traceable, and compliant with regulatory standards are often valued higher due to reduced risk and enhanced marketability. This is particularly relevant in industries where sustainability is becoming a key differentiator. Investors and stakeholders recognise that companies embracing DPPs will likely be better positioned for long-term success, thereby increasing their overall valuation.

with consumers, foster brand advocates, and potentially command a premium for their products.

Early adopters of the DPP are well-positioned to lead and influence consumer expectations in a market where transparency and ethical considerations are increasingly important. Operational efficiency is another significant

Banks and financial institutions increasingly integrate ESG criteria into their risk assessments regarding lending risks. Companies that adopt DPPs may be viewed as lower-risk borrowers because they exhibit proactive compliance with regulations and a commitment to ethical practices. This transparency reduces supply chain risks, regulatory penalties, and reputational damage uncertainties. In portfolio management,

investors are keenly aware of the growing importance of ESG factors in driving investment decisions.

Companies with DPPs can demonstrate tangible evidence of their ESG commitments, making them more attractive to investors focused on sustainability and ethical considerations. Portfolio managers may favour these companies, anticipating they will be more resilient to regulatory changes, consumer shifts towards ethical consumption and potential environmental liabilities. By including companies with DPPs in their portfolios, investors can align financial performance with social responsibility, catering to a growing segment of clients seeking sustainable investment options.

The Digital Product Passport is instrumental in helping businesses reduce their carbon footprint by promoting circular economy practices. This shift has already begun in the textile industry with the Eco-design for Sustainable Products Regulation (ESPR). DPPs provide detailed product materials and lifecycle information, enabling efficient recycling, reuse, and responsible disposal. By facilitating transparency, DPPs encourage the design of sustainable products with longer lifespans, directly contributing to the EU's climate neutrality goals.

Early adoption ensures businesses comply with upcoming regulations, avoiding penalties and securing uninterrupted access to the EU market, where non-compliant products may eventually be restricted. By acting now, companies can navigate the complex data requirements ahead of enforcement deadlines, ensuring they are not caught unprepared when regulations come into full effect.

Consumer demand for transparency drives market trends, making DPPs a necessity rather than an option. In the textile sector, a heightened awareness of environmental and ethical issues leads consumers to seek products with clear information on sourcing and sustainability. Businesses can leverage DPPs in marketing strategies to highlight their commitment to these values. By showcasing detailed product information through DPPs, companies can differentiate themselves, build trust, and enhance brand loyalty, ultimately strengthening their market position. Several companies have successfully implemented

DPPs. For example, Swedish fashion brand KappAhl introduced DPPs for their clothing lines, providing consumers with insights into material origins, production processes, and recyclability. This initiative improved customer engagement and boosted their reputation for sustainability. Critical lessons from such cases include close collaboration with suppliers to gather accurate data and investing in robust data management systems to overcome data collection and standardisation challenges.

In the electronics industry, manufacturers use DPPs to provide detailed information on sourcing minerals, compliance with hazardous substances regulations, and recycling options. This enhances consumer trust and meets stringent regulatory requirements in the EU and other markets.

Implementing DPP comes with challenges, notably data privacy and intellectual property concerns. Protecting sensitive information while maintaining transparency requires secure data management practices that are compliant with regulations like GDPR. Balancing openness with protecting intellectual property is crucial to preventing competitive disadvantages. Supply chain complexity is another significant challenge, especially for SMEs with limited resources. Tracing multi-tiered supply chains is daunting, but strategies to manage this include deploying advanced supply chain tracing technologies like blockchain and fostering solid relationships with suppliers to ensure data accuracy and reliability. Adopting scalable solutions tailored to company size and resources helps SMEs manage implementation.

Digital Product Passports represent a broader shift towards transparency and accountability in global trade—this paradigm shift positions transparency as a regulatory compliance issue and a competitive advantage. Businesses worldwide will likely see similar regulations emerge, making DPPs a potential global standard. For financial stakeholders, transparency is becoming critical in financial performance assessments and investment decisions. Companies embracing DPPs are better positioned for sustainable growth and are more attractive to investors focused on ESG criteria. Transparency reduces risks, enhances reputation, and aligns with the

growing emphasis on sustainable investing.

The Digital Product Passport is poised for full-scale implementation in the EU as early as 2026-2027, such as in the textile and batteries industries, and businesses should act now to prepare. Other sectors, such as electronics and construction products, will soon follow. Early adoption is not just about regulatory compliance; it's a strategic move that offers significant benefits. The DPP fosters trust and enables informed, sustainable purchasing decisions by empowering consumers with transparent, fact-based product information.

This transparency enhances brand reputation, builds customer loyalty, and opens new market opportunities. Businesses using the DPP early will align with new rules like the Eco-design for Sustainable Products Regulation (ESPR) and the Corporate Sustainability Due Diligence Directive (CSDDD). This lowers the risk of penalties and problems in the supply chain.

It also facilitates supply chain efficiency by enhancing traceability and reducing risks associated with unethical practices. By investing now in data collection, management systems, and supplier relationships, companies can navigate the complex data requirements ahead of enforcement deadlines.

Moreover, the DPP contributes to the EU's climate neutrality goals by promoting circular economy practices, which can reduce carbon footprints and encourage sustainable product design. Early adopters will be better positioned to innovate, optimise operations, and capitalise on emerging consumer trends demanding transparency and sustainability. In a rapidly evolving global market where transparency is increasingly linked to financial performance and investment appeal, acting now on the DPP is imperative.

Businesses that seize this opportunity will ensure uninterrupted access to the EU market and gain a competitive edge, drive innovation, and contribute to a more sustainable and prosperous future. Embracing the DPP today is a wise business decision that prepares companies for the demands of tomorrow.

The time to act is now before the DPP becomes a regulatory requirement and a defining element of competitive strategy in global commerce.

A MANIFESTO ON MANIFESTOS

Minimising stress via business development

“What

a waste of time and energy.”

We've all either said or heard someone say that at work, and it usually stems from a fundamental misalignment or miscommunication between stakeholders about what should be considered a priority or about the way things should be done at a basic level. If you've had

supplier because they stress your team?

I'd argue that you should if you value growing your business through quality work rather than just volume.

If your business's financial situation relies on these existing high-stress partnerships, removing them immediately to avoid stress is an obvious no-go.

Tension should fuel growth, not drain energy.

an experience like this with a business partner, it's usually an omen of things to come.

Tension is a natural part of growing a business. Without a little bit of the right kind of pain, businesses remain static. But that pain should be related to building skills, pushing boundaries, and improving internal processes. It's the muscle soreness you feel after a challenging run or session at the gym.

Unfortunately, the tension we often face at work stems from a less productive place. It's usually around incompatibility with those we're working with—internally or externally. Suppose it's an internal issue governed by the company culture you've built over time and how HR conflicts are resolved. The external side of things is where things get murky.

Do you sacrifice a profitable relationship with a client or

For example, at Switch, we believe that business can and should be a force for good - that focusing on purpose and people inevitably leads to profit. We believe in kindness and empathy as a strategy. We think true success is measured by our positive impact on our people, clients, planet, and bottom line. And we've taken concrete actions that align with these beliefs.

As a result, we can quickly outline the kinds of partnerships we're looking for. We want to work with people who embody genuine kindness in and outside of work, strive to revolutionise their industry efficiently and responsibly, truly prioritise their team's well-being, and have taken tangible steps towards embodying these virtues.

We want to work with people who share our beliefs. We want better business.

expressing these beliefs in our external communications and during chemistry meetings with potential partners allows us to attract the right kind of business, detect whether a relationship will turn sour in the long run, and nip it in the bud.

Potential clients and partners are also desperate for a value match. The proper alignment always increases our value proposition. It ends up being the primary deciding factor for the partner in question when they have other options on the table that, from a technical point of view, tick more boxes.

The bottom line

Running a business this way isn't easy and doesn't happen overnight. Companies often need to take on work that isn't perfectly aligned with their values because payroll needs to be met.

But your next step should be to build a plan to eventually replace these high-stress partnerships with more productive and fulfilling ones.

That starts with a manifesto about what kind of external partners you want to work with, not based on their industry or specialisation but on what they stand for and value in a working relationship. One that you're confident enough in to make public.

How do you build an effective manifesto?

If you haven't already, articulate your core beliefs about how business should be done.

This set of principles will serve as the foundation of your manifesto. They should cover your collective attitude towards how you feel companies should treat each other.

A values-driven manifesto attracts the right business.

Every time these beliefs have been aligned, the relationship has been fruitful for both sides— financially and in terms of internal growth—because everyone involved is aligned regarding attitude and priorities. Operating from the get-go based on mutual respect and equal standing makes any relationship near-seamless, and even tricky situations are significantly more straightforward to deal with and overcome. As a result, we've learned that

Slowly replacing stress-inducing partnerships with ones that complement your values can be financially daunting, but it is worth it in the long run.

A happier, less stressed team is more productive, easily retained, produces better results, and brings innovation.

If you can back up your talk with the right action, getting good business will lead to more promising business.

AUTUMN APPAREL

1. Saint Laurent

Tiny Cassandre logo-appliquéd croc-effect leather cardholder

€330

2. Drkshdw by Rick Owens

Straight-leg cotton-twill cargo trousers

€660

3. Dries Van Noten

Straight-leg cotton-twill cargo trousers

€565

4. Cutler and Gross

1386 square-frame acetate sunglasses

€420

5. Nike

Field General 82 SP suede-trimmed perforated-leather sneakers

€100

6. Visvim

Social Sculpture 101 paint-splattered denim jacket

€1,060

7. The Elder Statesman

Brushed-cashmere polo shirt

€1,395

8. Brunello Cucinelli

Leather weekend bag

€3,650

[All items available from mrporter.com, unless otherwise specified]

9. Cherry Los Angeles

Cherry Gasoline printed cotton-jersey t-shirt

€80

10. Tom Ford

Double-breasted wool-felt coat

€4,790

11. Loro Piana

Reinga straight-leg pleated wool and cashmere-blend flannel trousers

€1,400

12. Incotex

Wool-blend jacket

€925

13. Stòffa

Wool and silk-blend polo shirt

€790

14. Parmigiani Fleurier

Tonda white gold

€29,600 / elcol.com

Breitling opens first boutique in Malta to celebrate 140 years of innovation

Breitling officially launched its first flagship boutique in Malta, located in the vibrant town of St Julian's. Jacopo Caspani, Breitling's new retail director, attended the ribbon-cutting ceremony, marking a pivotal moment in the brand's global expansion. This follows recent openings in Rome, Taormina, Turin, and Milan.

The St Julian's boutique opened in September 2024 and is positioned in one of the island's most dynamic areas.

The event celebrated this milestone in a landmark year for the Swiss watchmaker, commemorating its 140th anniversary with the theme "140 Years of Firsts." Guests and the press enjoyed several special activities, including an exhibition of eight rare heritage

models from the Breitling Museum collection (on display until December 1st) and the "B a Watchmaker" workshop, where visitors could experience assembling and disassembling a Breitling movement. Watch enthusiasts also tried on new models from the brand's iconic Air, Land, and Sea collections.

Managed in partnership with Edwards Lowell, the boutique occupies a prestigious 70-square-meter space in the newly completed "Mercury Towers," part of the luxury St Julian's complex designed by renowned architect Zaha Hadid. Mercury House, Malta's tallest residential tower, also houses the fivestar ME Malta Hotel by Meliá.

The boutique's industrial-loft-inspired design features Breitling's signature Watch Bar, offering a relaxed setting to explore the collections. The immersive environment reflects Breitling's modern-retro aesthetic, celebrating the brand's heritage and values of casual, inclusive, and sustainable luxury.

Managing director of Breitling Italy, Eddie Eliakim, said, "We are excited to open our first boutique in Malta during such an important year. The positive response confirms we're on the right path in our retail expansion."

Lowell family and Jacopo Caspani

Neil Agius and Breitling watchmaker