New Aircraft Company Opening in Malta
Posted: 11/05/2012 Filed under: Business Setup In Malta, Malta News | Tags: aviation, business, Employment Leave a comment »
A company that is based in the Netherlands has announced that they are opening their aircraft “cosmetics” company right here in the Malta Aviation Park. Prime Minister Lawrence Gonzi and Finance Minister Tonio Fenech announced late this week that the company, called “Aviation Cosmetics” was relocating to Malta. The owners of the company, which specialises in aircraft cabin refurbishment and external aircraft painting, have put €22 million into the economy thus far through this relocation. This is certainly something that should be celebrated throughout the Maltese aircraft industry.
Dr. Gonzi was quite pleased with the arrangement and gave a short speech that focused on that. He stated that this was an excellent testimony to the success that Malta hopes to achieve in the aviation industry. He announced that there are currently over 1000 people who are employed by this industry and with this new company coming into the country, even more employment opportunities will become available. He also said that this proves that the country of Malta is attractive to investors and the vision that the government has worked so hard to achieve is beginning to take shape. There have been 130 projects approved in the past 4 years that have the potential to create a further 3400 jobs.
Finance Minister Tonio Fenech said that this announcement has injected new life into the economy and the aviation industry will certainly benefit from this. This announcement, according to Mr. Fenech, has allowed the government to achieve a short term goal and given a long term potential. He went on to say that this company’s decision to expand into Malta would help it to expand its market away from Europe. Malta is an ideal place to start this with its access to northern Africa and the Middle East.
High Private Sector Debt in Malta is “No Concern”
Posted: 23/03/2012 Filed under: Business Setup In Malta, Malta News | Tags: business, Debt, Government Leave a comment »
According to a recent report, Malta has a very high private sector debt but the Maltese government is not concerned at this point. Estimates from 2010 state that private sector debt is about €13 billion, which is more than double the Maltese GDP. Though Malta has a traditionally strong economy, this imbalance could be concerning according to independent economists. With private sector debt at about 212% of the GDP in Malta, it may be time to take a closer look at this debt and even though the Maltese government isn’t extremely concerned, others are.
Most of this €13 billion debt is from private businesses in Malta. In 2010, which is the last year in which data like this is available, businesses had racked up €8.4 billion in debt. Private Maltese citizens also had a lot of debt, about €3.8 billion, which was mostly made up of their home mortgages. On top of that debt, there was also about €795 million in securities which made up the total private sector debt in Malta.
When asked if this high level of debt is concerning, government spokespeople widely pushed it aside. A spokesman for the Commission stated that though any debt shouldn’t be pushed aside as meaningless, there was really no reason for alarm. The Commission spokesman went on to say that there is no economic literature that supports any theory that this debt would have a huge adverse effect on the overall Maltese economy. The Commission also said that the economy was vulnerable due to this debt, but there was no indication that anything negative would happen. All forecasts show continued growth in Malta, as planned. The Central Bank of Malta is monitoring the situation, but thus far, has seen nothing of concern when it comes to the high level of private sector debt.
Worrying News from Libya Concerning to Malta
Posted: 20/03/2012 Filed under: Malta News, Small Business | Tags: business, Libya, Malta Leave a comment »
Considering the close proximity of Malta to Libya, it is well known by Maltese that things that happen in Libya can have a profound effect on Malta. With Libya’s interim government struggling with the area of Cyrenaica, Malta could get caught in the crossfire. With Cyrenaica announcing that they were going to break from the National Transitional Council of Libya and setting up a semi-autonomous government in Benghazi, Libya has vowed that they will not tolerate any secession and would keep Libya from splitting in any way possible.
Many Maltese businesses have interest in Libya and the further breakdown and struggle of the interim Libyan government is certainly troublesome to business leaders who have a stake in the country. Though many say it is too early to really get a good assessment of the situation,, the Maltese business community, especially those with close ties to Libya, could see a bumpy road over the next several months.
Those Libyan nationals who have taken root in Malta seem to be a bit more concerned about their homeland. One Libyan national stated that she believed her countrymen in Cyrenaica are simply confused about the role that the new government is taking. She said many Libyans are afraid that the new, interim government will turn into a copy of the Gaddafi regime and they are fighting against any changes, even though many of the changes would be good. She continued by saying they don’t understand that the Libyan government is helping, not hurting.
Overall, those in Benghazi seem to share a feeling of being left out of Libyan government unlike those in Tripoli. Maltese businessmen who have interests in the region are certainly hoping that Cyrenaica doesn’t break away from the new Libya, but only time will tell how the country will work out its internal problems.
Malta Could Save €577 Million by Stopping Tax Evasion
Posted: 07/03/2012 Filed under: Business Setup In Malta, Living in Malta, Malta Taxation | Tags: business, EU, Tax Leave a comment »
New numbers are out that indicate Malta could save €577 million by simply toughening up on tax evasion. There are estimates that many million Euros are being missed by the government of Malta due to underground business operations that are not being taxed nor collected on. In fact, it is estimated that this is about 27.2% of the countries annual income. If the government was able to crack down on this type of practice, the financial health of Malta would surely improve.
Credible sources have announced these numbers to leading media outlets in the country and further state that the underground, untaxed business dealings that go on in Malta could be worth as much as €1.686 billion a year. This is about one quarter of the income of the country and at this point, Malta has no way of collecting any tax on it. Though Malta is not the only country in the EU with this issue, they are surely in the top five or six of the EU27. Even more startling, these unnamed sources go on to say that the taxes being lost by Malta due to this booming underground economy amounts to 255.2% of the 2009 public deficit of Malta. Across the EU as a whole, it is estimated that about €1 trillion is lost annually because of underground and untaxed businesses.
Independent groups throughout the EU as well as in Malta are urging both the Maltese government and the European Council to forcibly begin taking the money that is due to them from these underground businesses. These groups suggest that all countries in the EU addressing this at the same time would make the most sense as there would be no place for underground businesses to go if they wanted to continue this practice, short of leaving the EU, of course.
Saving Money and Taxes by Going Green in Malta
Posted: 01/03/2012 Filed under: Living in Malta, Uncategorized | Tags: business, Environment, Living in Malta Leave a comment »The EU has challenged Malta to reach a 2% target for renewable energy by the end of 2012. At this point, it is likely not going to happen. This challenge would be 2% renewable energy of Malta’s total energy and the challenge was placed because Malta is currently producing the lowest share of renewable energy in the EU.
The EU would really like to see Malta hit 10% by 2020, but at the current rate of 0.75%, this will be a tough go. To even hit the 2% by the end of 2012, the Maltese government would have to have an intense push to install solar water heaters and other such green technologies. After a building boom of highly energy inefficient buildings, the government needs help. Though commercially, this seems to be quite difficult, home and business owners in Malta would certainly be able to help the government to reach this goal.
By installing solar powered energy systems like water heaters and heat pumps, those who live or own businesses in Malta would be able to push the government towards this goal. For residents, these devices can certainly help save money on energy and would not only assist the government, but would lower the carbon footprint of the home. The Maltese government and councils are offering free information and meetings on green energy to residents. It is recommended, however, that before you invest in this type of technology that you get a free energy audit as well. Simply making the change to solar energy, for instance, can save Maltese home and business owners up to 80% on their energy costs which is a huge savings on energy costs. Business owners especially can save on taxes.
Though the initial coast of installing a solar water heater, for instance, can be more than expected to some, the Maltese government is offering a rebate when homeowners buy one. You can find more information on the Government of Malta website’s Environment and Resources page.
Tips for Establishing a Business Premises
Posted: 23/05/2011 Filed under: Business Setup In Malta, Investment, Small Business | Tags: business, Lease, Premises, Purchase Leave a comment »
When considering a location for your business in Malta or anywhere the considerations are the same. Other than finding something in your budget you really have to take into account what kind of business you are planning on conducting. If you are a clothing shop, book store, or other retail shop you are probably looking for a place with good visibility and traffic flow. You are looking pedestrian shopping streets and shopping centres. These are the kind of places that draw retail customers. If you are a bakery or café, or a restaurant you also want visibility, and a popular place but you have more to think about. You have to have a building that can house the kind of equipment you need to use in making food, and the premises has to be able to pass all of the inspections, and obtain the required permits. If your business is more complicated, such as the opening of a new school you are going to want to consider space for classrooms, and a safe are for the children to pay in depending on their age. Hospitals and the like are very similar. You need space, particularly away from most of the major traffic outlets to avoid congestion. Warehouses or plants are entirely different. You need space, but you do not necessarily need to be visible. You need a place where you can work safely and where you can create your products and safely dispose of the waste from producing the product if any.
The point is that you need to consider what your business needs are before you jump on any real-estate. Beyond that the process is very basic. Consider the competition in the area; make sure that your location won’t strain your own business. If there are 5 other bakeries in the area it might not be an optimal location. Talk to the other shop owners in the area to see if the building has any issues that might be too much for you to take on. Make sure you are comfortable with the area as well for your safety and the safety of your employees.
Lastly if you are not planning to purchase, and are instead planning to lease then make sure you check that lease over and over again. Make sure there are no legalities in your lease or that you have over looked (Don’t forget any applicable permits!) that will hamper your business or trip you up later down the road.
Purchasing or leasing property in Malta is not wildly different from doing so in the UK, but there are enough differences that it is wise to work with a seasoned realtor.
Plimco Say the UK is Going to be OK
Posted: 10/08/2010 Filed under: Small Business, UK Company Set Up, UK Immigration | Tags: business, business concerns, corporate tax, Moving to London, moving to UK, VAT 1 Comment »I am always pretty sure that the UK is going to continue to be an economic strength despite the somewhat hard times we have been experiencing. It is always good to have outside confirmation of this though.
The UK have been backed by the world’s second largest bond house, Pimco, after they changed their aggressive stance against Britain’s gilts.
This is a major turn around from the beginning of the year when the very same company warned that the UK gilts (gilt-edged security) were “resting on a bed of nitroglycerine” as a result of the nations high levels of debt.
Strong words indeed and they caused a lot of angst at the time.
But after Pimco talking down the UK for much of the year they now seemed pleased since yields, which fell as gilt prices improved, have recovered from 4.27pc in February to 3.39pc.
The bond house have been quoted as saying “We do not expect the UK to fail in meeting its commitments”. For expert investors, Pimco added: “We believe exposure to the UK in the credit default swap (CDS) market offers a valuable opportunity.”
This dramatic change of stance has been put down to the Governments plan to attack the deficit. Mike Amey, an executive vice-president stated in his bid to support the Coalition Government “The coalition has demonstrated their intent to tackle the deficit immediately, and we think that is generally good news.”
I for one am happy with this new opinion, as I believe it shows the world that Britain is making a come back from our recession and that the likelihood of a ‘double-dip’ recession has decreased.
Austerity measures may well be as much about world opinion as anything else and I suppose we must look at the big picture for the UK economy.
Inflation Up But Interests Stay Down In the UK
Posted: 09/08/2010 Filed under: UK Taxation, Uncategorized, VAT, VAT Registration | Tags: business, business concerns, corporate tax, corporation tax, Small Business, UK tax, VAT Leave a comment »Inflation has been a hot topic in the media these past six months and I believe it can be strongly linked to the VAT rise from 17.5pc to 20pc in January. This may not be rocket science and perhaps it is something we may have to live with but it bears pointing out.
Tensions within the Bank of England Monetary Policy Committee will be “excruciating” for the next 18 months as strong economic data raises the pressure on policy-makers to raise interest rates, according to Peter Spencer, chairman of the Ernst & Young ITEM Club.
Inflation has grown faster than the Bank’s 2pc goal for 41 of the past 50 months and has averaged higher than 3pc for two years, prompting several letters of explanation to the Chancellor from Mervyn King, the Bank’s Governor. ITEM today says that inflation will remain above target until the end of 2011, largely as a result of the planned increase in VAT.
From May until June the GDP, gross domestic product (the measure of the countries overall economic output) growth was 1.1pc, the strongest in four years and far higher than expectations. This has added to pressure on policy-makers to raise rates from their historic low of 0.5pc, Bank policy-maker Andrew Sentance has already called for a rate rise for the past two months.
However, ITEM warns that rates will have to stay on hold until the start of 2014 if the economy is to be given a chance to recover. “The problem is that on the surface the economy looks to be inflating but once you delve deeper, you can see that the situation is very disinflationary,” Mr Spencer said.
So Britain are to hold out on the inflation rise. Staying at 0.5pc will help to build a stronger economy, even though the effects of the VAT rise are said to be felt shortly.
We’ll hang on in there and get through this tough time, coming out stronger and more prepared on the other side. Lower interest rates will help with this process and it will be a great relief to many households and small businesses that they are not set to rise. In my opinion a rise in VAT may turn out to be a small price to pay.
Small Business to Prosper In The UK
Posted: 08/08/2010 Filed under: Small Business | Tags: business, business concerns, moving to the UK, moving to UK, Non Dom, Small Business, UK tax Leave a comment »I have always been confident that Britain is going to pull itself out of the recession and it is great to see the Bank of England have stepped up to lend a hand to small and large businesses alike.
They have done this by purchasing more corporate bonds in May and June under their qualitative easing programme in order to push cash into the economy, for businesses who have been struggling with the sovereign debt crisis.
Bank holdings of corporate debt rose from £1.36bn to £1.6bn in the three months leading up to June, its quarterly Asset Purchase Facility report showed. The Bank has bought £198bn of gilts from companies under the programme and continues to buy and sell around £2bn of corporate debt.
The Banks facilities have been made use of by Corporate’s in the past quarter as concerns about sovereign debts fed through to fears about companies, pushing the price of bond issuance higher and reducing demand.
“Increased concerns about the fiscal adjustment of some euro-area member states and banks’ exposure to sovereign debt fed through into other risky asset prices, such as corporate bonds,” the Bank said. “The resulting increase in uncertainty and volatility saw conditions in UK corporate debt markets deteriorate marginally during May and early June.”
The cost of raising debt through bond issuance, compared with Government gilts, increased by 0.3 percentage points. “Issuance was lower than in 2009 but broadly in line with historical averages. Market contacts suggested that some firms had delayed issuance as a result of market conditions,” the bank said.
This is all good news for Britain and the both large and small businesses that reside here. In times of austerity it is important, in my opinion, that we highlight the positives and at the moment I must say I do not have to search very far to find them.
Small business may well prosper under this government. Time will tell.
A License To Print Money In The UK?
Posted: 29/07/2010 Filed under: Small Business, UK Investment, UK Taxation | Tags: business, business concerns, corporate tax, corporation tax, economy Leave a comment »In recent news it was revealed that economist believe the Bank of England could restart quantative easing in the near future. What does this mean in real terms, well, basically the government is considering printing more money. Whether this is a good or a bad thing, just like with VAT rises, depends on who you talk to.
Minutes have been released from this month’s BoE rate-settings meeting and showed that the topic of “money printing” had been discussed for the first time since February.
The discussion was prompted by fears over the economic recovery.
“In the light of the news over the month, it seemed likely that growth would be weaker than previously expected,” the minutes said.
In a broad debate about policy actions in the event of an unexpected weakening or strengthening of the economy, the minutes suggested: “A further modest monetary stimulus would act to offset the softening in demand prospects and make it more likely that the inflation target would be met in the medium term.”
Vicky Redwood of Capital Economics noted that the discussion was “perhaps the clearest steer so far that more QE could yet be on the agenda”, and added: “July’s minutes suggest that a near-term interest rate hike still looks unlikely. What’s more, there were some dovish comments from other members, who noted that the prospects for GDP had deteriorated a little.”
Philip Shaw at Investec agreed, saying: “The key change was that members recognised that the outlook for activity had weakened since June’s meeting, and as a result, actively discussed the option of easing policy again… We cannot rule out a further round of QE… The outlook for interest rates is shrouded in uncertainty.”
Uncertainty indeed, with the government saying one thing and the Bank of England saying another, how are the British public supposed to know where they stand? I think they need to converse with each other in order to give us an honest answer.
