SPOTLIGHT ON EMERGING ECONOMIC SECTORS

In recent years, Malta has positioned itself as a prime destination for several tech companies looking for a secure, reliable and reputable jurisdiction to base themselves, drawing companies from a wide spectrum of digital and innovative sectors, ranging from blockchain to FinTech to Artificial Intelligence.

Speaking of blockchain, Malta was dubbed as the ‘Blockchain Island’ in 2018, being the first country in the world to issue a comprehensive set of regulations and guidelines on blockchain, Initial Coin Offerings, technology arrangements and financial assets. Today, it is reaping the results of this proactive stance through the establishment of a number of FinTech and crypto companies on the island, while also widening its scope to attract companies that operate in all corners of the digital space.

Three bills were passed into law in 2018 which set up the Malta Digital Innovation Authority (MDIA) Act, the Innovative Technology Arrangements and Services Act (ITASA) and the Virtual Financial Asset (VFA) Act.

The MDIA acts as a communicator between key national bodies such as the Malta Financial Services Authority (MFSA), other relevant Government regulators such as the Malta Gaming Authority (MGA) and operators. It also regulates new and emerging technologies. The ITASA is geared towards regulating technology service providers, while the VFA Act regulates Virtual Financial Assets. Such laws limit the scope for fraudulent activity, provide certainty to investors and also provide a legitimate legal framework in which operators can do business.

Another economic niche creating significant buzz on the islands is Artificial Intelligence, backed by Government’s vision to put Malta on the map with a National Strategy for AI. This includes discussions on the subject with stakeholders to identify policy, regulatory and fiscal measures aimed at strengthening Malta’s appeal as a hub for foreign investment in this sector.

To date, the MDIA has certified three Systems Auditors (SA), the roles of whom are to audit the Innovative Technology Arrangements that an applicant proposes, including those concerning Artificial Intelligence.

Meanwhile, local businesses are starting to make use of AI to trim costs, such as having a chatbot as the first point of contact for customer queries. If you’ve got a healthy risk appetite, investing in AI in Malta in these early stages could ultimately yield excellent results, before competition begins to grow. If you would like to get a better feel for the industry and the network of people within it, keep an eye out for conferences and events on AI that typically take place in Malta between September and November.

A regulatory push for all-things digital makes Esports another niche area with interesting investment options. The vast number of skilled software developers, graphic designers and IT proficient workers makes Malta an attractive option for investors. And with an exciting enough project, it should not be difficult to find skilled workers to fill the roles.

With the global Esports industry projected to reach a global audience of 64.8 million people by 2025, according to Statista, a global provider of market and consumer data, it’s no surprise that Malta has opened its doors to Esports companies just as it did with gaming. While still a budding industry locally, Government’s commitment through ‘Malta’s Vision for Video Games Development and Esports’, launched in May 2019, will help propel this sector forward, with plans to grow it from 0.1 per cent to 1 per cent of the islands’ GDP in 10 years.

Tying all this together is the Maltese Government’s plan and commitment to transform the country’s economy into a digital one in the coming years, enhancing ICT policy development and implementation that is intended to meet the expectations of citizens, civil society and businesses – and its efforts are paying off.

In the EU’s most recent Digital Economy and Society Index (a composite index that summarises relevant indicators on Europe’s digital performance and tracks the evolution of EU member states in digital competitiveness), published in July 2022, Malta maintained its ranking from 2021 and ranked sixth among 27 countries for its digital performance, which includes connectivity, human capital, use of internet, integration of digital technology, and digital public services. Placing ahead of Estonia, Luxemburg, Austria, Germany, Belgium and many others, Malta is well-positioned to achieve its target of becoming a leader in the digital economy, creating a robust foundation for digital sectors to reap fruit.