At a time when the G7 members group have decided to tax multinationals at a minimum 15% corporation tax to be levied in their host country where they actually sell products, it is an open opportunity for Malta to up its ante and revise it incentive tax policy to avail itself of the future opportunities for multinationals looking to shelter against the prospective G7 and OECD suggested minimum tax directive.

This hot topic (amongst others such as tax harmonization) was discussed at a members’ Zoom meeting hosted this week by Dr Marthese Portelli, CEO at the Chamber of Commerce.  Many suggestions were discussed at the virtual meeting aimed to discuss financial services and VFA/Blockchain sectors and one hopes further meetings with members from other sectors will go ahead so as to build a seminal report.  This can finally be presented to various stakeholders.  In this context, one expects that other institutions such as IFSP, FIAU, MFSA, TradeMalta, TechMT and FinanceMalta, join in to help create a holistic document to apply for help from the EU recovery and strategy fund.  

Having said this, one may ask what are the prospects for Malta during post-Covid to attract more multinationals?  This at a time, when several governments are reeling under heavy national debts and investors are facing uncertainties such as creeping inflation - there is a dearth of achievers. 

The trophy goes to SoftBank and its prodigious Vision Fund in Japan.  Mr Son believes he has a unique ability to predict future technology trends, and gallantly states he is ready for the gamble.  In his creed, when it comes to use of artificial intelligence in powering complex robotics, these reduce cost of manufacturing.  One may ask, who is funding such expensive research?  The answer is a cohort of venture capitalists who are constantly poised to look out for talented persons in their ongoing recruiting outreach.  It isn’t uncommon for research firms to head hunt top notch university graduates who show leadership potential.  Created by Mr Son in 1981 to distribute computer programs, SoftBank first delved into internet services in the 1990s before reinventing itself as telecoms business.  

Along the way, in 2000, Mr Son paid $20m for a chunk of Chinese e-commerce upstart called Alibaba.  That genius bet, Alibaba is now a global giant worth nearly $600bn, earned Mr Son kudos as a tech evangelist.  It bought the Japanese activities of Vodafone, a British mobile carrier, in 2006.  In 2013 it bought Sprint, a US mobile provider.

It also inspired him to transform SoftBank into an investment firm.  Mr Son (see picture) is a Japanese businessman with Korean ancestry who studied Economics at the University of California, Berkeley in the late 1970s.  

While still a university student, Son brought Japanese coin-operated arcade games such as Space Invaders, Scrambler and Pacman to California.  His visionary approach started with first arcade games business and many pundits do compare him to Warren Buffet.  Son recorded a log of daily cash received for each video game machine and its trends.  Some games were popular at the beginning and quickly tapered off, while others were perennial hits.  

In the earliest days of the web, Mr Son invested in some 800 companies during the dot-com boom, including well-known brands like Yahoo. But, it was not a garden of roses as controversy did hit the fan when his outfit had become entangled in Europe’s two biggest corporate scandals in recent years: over Wirecard, a fraudulent German payments processor, and Greensill, a British supply-chain-finance firm now facing bankruptcy.  In 2018, Mr Son spun off some Japanese telecoms assets and unveiled the Vision Fund 2.  SoftBank raised $45bn from Saudi Arabia’s Public Investment Fund (PIF) and $15bn from Mubadala, Abu Dhabi’s sovereign-wealth fund.  Readers appreciate the disruptive technology of AI which well harnessed has a benign purpose and is helping in various ways such as to link various civilizations, improve crop yields, scan persons for traces of infection in airports, schools etc and speed up progress in complex human Genome classification.  It has become a cliche how artificial intelligence in machines can do medical assessments during epidemics (such as Corona virus) when over-worked doctors are busy tending the sick.  

Imagine how soon, there will be robots which are efficient and devoid of emotions quietly supervising hundreds of complex factory operations - possibly during the temporary absence of workers cordoned off under extended quarantine mandated during pandemics. Though the pandemic situation may appear grim and we mourn the death toll of millions yet, it is important to draw attention to AI technologies that can ameliorate some of the most pressing and timely problems that Covid-19, has created.  Sadly, early last year was not an easy one for SoftBank.  The company’s losses were slightly higher than its estimates, and the Vision Fund reported a loss of $17.7 billion.  But the bets went into positive territory as in Q4 of 2020, it recorded $17.8bn in net profit - up from $13.23bn in the same period in 2019.  

SoftBank has strived to improve telecommunication quality and speeds so customers can enjoy mobile communications, the Internet, video streaming services and social platforms stress-free.  In a true spirit of resilience, SoftBank will continue to build a telecommunications environment that is convenient for customers, as well as provide services and solutions that meet their needs.  SoftBank was the global winner for Video Experience, a metric that measures the quality of video streamed to mobile devices by measuring real-world video streams over an operator's network, and Games Experience, a new category that analyses latency and the overall gaming experience when using an operator's network.  It’s top clients include Puma and Siemens.  In conclusion, we may heed the fighting spirit of Mr Masayoshi Son, and may the Hon Owen Bonnici (minister responsible to formulate a national revival plan) be inspired by Son’s tenacity and seriously plan our own Renaissance strategy post-Covid. 

 

The writer is a partner in PKFMALTA, an audit and business advisory firm.