Investor confidence in Malta has risen marginally to 81%, according to EY's annual Malta Attractiveness Survey for 2026. Malta's attractiveness to foreign direct investment (FDI) has improved slightly from last year's 79%, which had marked a sharp +25% rise from 2024's result.

After five consecutive years of alarming FDI attractiveness levels for Maltese standards between 2020 and 2024 - years marred by the Covid-19 pandemic - Malta's perception as a positive business environment looks to have rebounded with back-to-back years of much improved investor confidence.

The survey results were presented at the annual EY conference by Simon Barberi, EY Malta Advisory and Attractiveness Prgramme Leader, at the Mediterranean Conference Centre in Valletta.

In 2020, investor confidence had dropped to 62% from 77% the year prior. It then dropped to a low 46% in 2021 at the height of the pandemic before then increasing and remaining in the fiftieth percentile for another three years. This trend of low attractiveness levels for Malta ended last year; this year's result may indicate a real turnaround of lost attractiveness.

Most foreign investors (90%) are looking keen on maintaining or expanding their business in the Maltese islands - despite them noting some significant drawbacks in Malta's business climate.

81% of survey respondents believe Malta is an attractive place for foreign direct investment today, 13% disagreed, and the remaining 6% said they were unsure about this.

59% of companies plan on maintaining their investment in Malta, 31% aim to expand operations in the country, 6% intend on reducing their investment in the upcoming year, 2% remain unsure, and another 2% plan to leave the country altogether. All these metrics floated around the same results as last year's survey, give or take not more than three percentage points.

Most respondents (30%) aiming to expand their operations in Malta said they are doing this as a "natural extension of existing operations." The next most common reason for expansion was pinpointed to increased demand for their product/service in Malta, at 16%. Following this, 13% of respondents mentioned Malta's favourable tax and incentive schemes.

82% of respondents stated that current geopolitical conflicts have not affected their plans to invest in Malta. 11% admitted that they contributed to investors slightly reducing their investment.

In addition, 78% of foreign investors stated that Malta is as at least as attractive as other European locations in terms of investment attractiveness. 38% of foreign investors see Malta as a more attractive location than other European ones, 37% place Malta on the same wavelength, and 3% viewed Malta to be "much more attractive." Positively, fewer respondents view Malta as a less attractive destination across the board. The proportion of investors perceiving Malta to be a "more attractive" investment destination than other European places went up by 12% in the past year.

Investors growing in doubt about their businesses' long-term presence in Malta

This year's EY attractiveness survey indicates that Malta's investor confidence may have stabilised back to pre-2020 levels, though questions remain on whether foreign investors are truly bullish about the Maltese islands in the long-term.

When asked if their company will still be present in Malta a decade from now, only 60% could give this confirmation; this is the lowest mark since 2014 (59%), a 10% drop in two years, and a 20% decrease since 2019.

While just 2% of respondents said they will retract their business operations from Malta over the next decade - which marks a significant improvement from 2025's 6% and 2024's 10% of respondents looking sure about a long-term exit - uncertainty in this regard is at its highest since 2014. Over a third of foreign investors (38%) said they don't know whether their company will still be present in Malta in 2036. This uncertainty metric went up by 5% from last year and has gone up by 18%, from 20%, in just two years.

When asked to rate Malta's planning and preparedness for population growth, in terms of infrastructure development, 57% of investors rated Malta's planning and preparedness as inadequate or very inadequate. 24% said it is at least adequate and 19% answered neither.

Skills shortages marked as biggest risk to Malta's FDI attractiveness, and rising

Skills shortages were once again found to be Malta's greatest risk in its ability to attract foreign direct investment.

EY survey respondents were asked to state their three biggest risks in this regard. 63% listed skills shortages, thus marking a 3% rise from last year when this was already flagged as investors' top concern. Cost competitiveness (45%) and international tax reform (42%) followed as the next largest risks, followed by physical national infrastructure (28%), banking challenges (22%), and quality of life factors (21%).

Only three in every 10 investors (31%) said they are able to find or recruit the required specialised skills in the local labour market. Similar results were recorded over the past five years, indicating that little has changed in this regard since 2022. However, Malta remains generally attractive in attracting international talent at different levels.

Foreign investors believe Malta needs more quality, but split on if it should do more or less

Survey respondents were asked what Malta should do vis-à-vis its current scenario and from a socioeconomic development perspective. The majority of investors (84.5%) believe that Malta should do better and enhance its quality, though they are split on changing growth direction.

No survey respondents believe that Malta should enhance its quality without simultaneously opting for more or less economic growth and output.

Nearly half (47.3%) want Malta to do better and achieve more growth and output, while around 10% less (37.2%) want Malta to do better and less.

15.6% of business representatives said they are satisfied with Malta's quality. 14.0% of these think Malta should increase its output while retaining its quality, while just 1.6% of respondents said Malta should retain its quality and opt for less output.

Telecommunications infrastructure overtakes corporate tax as Malta's strongest attractiveness parameter

This EY survey - entitled "Reliance Restricted" - found that corporate taxation is no longer Malta's strongest FDI attractiveness asset. For the first time, it has been overtaken by Malta's telecommunications infrastructure.

Telecommunications infrastructure is now considered as Malta's top strategic national asset, with 81% of respondents praising it as reason to expand, develop, or retain investment activities in the country. Corporate taxation was marked as such by 73% of respondents, followed by the stability of the Maltese social climate (72%).

Just over half of respondents said that taxes and energy costs in Malta are lower than in other countries they conduct business in. 54% noted payrolls (including social taxes) to be lower or on par with other jurisdictions. Meanwhile, rent/property was listed to be higher or significantly costlier in Malta by 40% of respondents, with an additional 28% saying Maltese prices are neither higher nor lower.

Transport and logistics, R&D, labour costs listed as Malta's main drawbacks

Malta's transport and logistics infrastructure was found to be unattractive by 57% of survey respondents; just 14% considered it a strategic asset for the Maltese islands' attractiveness.

46% said Maltese logistics prices are higher than in other locations; 9% of which said they are "significantly higher." An additional 22% of respondents said that Maltese logistics prices are similar to their other business locations.

Meanwhile, Malta's R&D and innovation environment was considered attractive by only a quarter (24%) of respondents, while labour costs and labour legislation's flexibility were deemed to be attractive by 29% of investors respectively.

Local labour skills level and Malta's domestic/regional market followed with around a third (34%) of respondents each ratings these criteria as attractive factors for the Maltese islands.

EY's 2026 survey observed a steady downward trend in Malta's labour costs and in its local labour skills level across the years.

It noted that labour costs' attractiveness has plummeted from 65% favour in 2014 to 29% 12 years later. Similarly, the attractiveness of Malta's local labour skills level has halved in the same period, from 68% in 2014 to 34% in 2026.

"Labour costs and other input costs" were marked as the fourth most important factor that investors consider when choosing a country to invest in, with 33% of survey respondents marking it as such. The three factors ahead of it were a country's regulatory environment (40%), its workforce's quality and availability (43%), and its overall tax competitiveness (53%).

Gaming sector is Malta's X factor - key growth driver and highest risk of decline

The gaming sector was identified by investors as the sector most perceived to drive Malta's growth as well as the sector with the highest risk of decline.

Survey respondents were asked to select sectors they believe will drive Malta's growth. Gaming (60%) was the most selected sector for this query, followed by AI (59%), and tourism and leisure (58%).

When asked to select just one sector that they view to have the highest risk of decline, gaming (22%) garnered twice as many selections as the next sector, other manufacturing (11%). Tourism and leisure (9%) was perceived to have the third-greatest risk of decline according to foreign investors.

Artificial intelligence (AI), by far, was selected as the single sector with the highest growth potential with 31% of investors marking it when asked to provide one option. This was followed by tourism and leisure (11%), payments and fintech (7%), aviation (7%), and gaming (5%).

Looking into the next decade, most investors (58%) believe that AI will enhance productivity across the board to maintain Malta's economic model. 29% believe AI will drive significant growth in high-value sectors. 5% think it will disrupt legacy industries, causing them to lose economic activity.

In terms of technology-related factors, Malta is generally seen as attractive as other European jurisdictions with 60% saying so. A fifth of respondents see Malta as more attractive than other European countries in this regard, while 12% disagreed and saw it the other way. Where tech is involved, Malta has grown more attractive when compared to other European countries over the past year.

In addition, 59% of investors believe AI and automation will result in the disappearance of some jobs in Malta over the coming decade, but for higher-value roles to emerge at an equal pace. 20% believe it will cause local productivity to increase and for most jobs to remain, while 16% think that AI job losses will outpace AI job growth and resultantly shrink the workforce.

Lack of specialised talent was highlighted as Malta's greatest barrier to AI adoption, according to 35% of respondents. This was followed, at very similar rates, by limited business value, resistance to change, high investment costs, data challenges, and regulatory policy burdens.

From a global standpoint, 81% of investors expect the adoption of technology that automates manual human processes to accelerate more than other trends over the next three years. After this, geopolitical tension and digital customer access to services are followed equally, at 59% each, as trends expected to accelerate most by foreign investors.