Malta Business Bureau and European partners launch SME knowledge hub to empower entrepreneurs

At a recent conference, the Malta Business Bureau (MBB) officially launched an online SME Hub to help strengthen the financial and digital skills of microentrepreneurs and enable them to
widen their networks and internationalise. The event was organised as part of DIFME – an Erasmus+ Knowledge Alliances Project led by MBB with the participation of the University of Malta’s Edward de
Bono Institute and other European partners.

In her opening address, MBB President Alison Mizzi said, “We have seen the digital transformation of the workplace outpacing educational institutions as well as the labour market itself, leading to skills
shortages in several sectors. For this reason, the EU must continue facilitating cooperation among Member States’ authorities and educational institutions and the private sector to address key challenges by microenterprises.”

The SME Hub serves as an open repository of solutions for entrepreneurs. Through collaborations between the DIFME project partners, practical information was collated and made accessible to
entrepreneurs operating across different industries, including information on doing business in Malta, Bulgaria, Germany, Greece, Ireland, Italy, and the Netherlands, relating to government agencies,
banking sphere and assistance programmes, among others.

Commenting on this, MBB Project Manager Marika Huber stated, “Whether you are kicking off your enterprise or scaling up, the SME Hub will provide you with the tools and resources you need to make
informed decisions regarding your financial and internationalisation well-being now and in the future.”

The hybrid conference was also addressed by Roberta Metsola, First Vice-President of the European Parliament and Josianne Cutajar, Member of the European Parliament. Dr Metsola explained the
European Parliament’s work on boosting entrepreneurship and facilitating investment and trade by pushing the development of better SME financing tools and generating greater business
opportunities. On her part, Dr Cutajar put emphasis on the challenges faced by microenterprises in island states like Malta, whilst also highlighting the critical role of funding and access to finance in
helping microentrepreneurs get equipped with the skills they need to cope with the twin transition and the structural challenges they face.

At the end of the conference, the DIFME project partners signed a Memorandum of Cooperation, thus confirming their intention to develop further activities and maximise on the outputs achieved
throughout the last three years of project implementation.

Good sales required throughout the whole year

Despite the number of challenges faced by business, The Malta Chamber of Commerce, Enterprise and Industry notes that this year’s Black Friday, like in the previous years, in general left a positive impact on business particularly since the majority anticipated the challenging environment and sought to work around it. In fact, many businesses spread their offers over a week and even longer periods. Ensuring extra precaution to avoid COVID spread, logistics and transhipment issues in respect of stock and the very bad weather conditions were just some of the few challenges experienced.

The Malta Chamber notes that there has been a major shift in customer behaviour particularly the move from shopping-in-store to shopping online, hence the importance for business to keep abreast with and invest in digital innovation.

Black Friday outcomes that occur once a year are not enough for business particularly given the current circumstances when business is going through a tough recovery period. The Malta Chamber believes that there should be more incentives which help businesses to innovate and strengthen their online presence as well as further investment in well thought out infrastructure suitable for bad weather conditions.

A resilient environment will help businesses anticipate and set trends whilst ensuring good sales all year round.

Rising energy prices and disruptions in supply chain dominate European business agenda

A Malta Chamber delegation led by President Marisa Xuereb attended the BusinessEurope Council of Presidents (COPRES) meeting in Paris. Business Europe is the leading confederation of European businesses representing enterprises of all sizes in the European Union and other non-EU countries. The Malta Chamber is one of forty industry and employers’ organisations making up BusinessEurope.

The discussions amongst the top business representing bodies on the European continent are evolving on the economic recovery and the challenges being faced at present, including disruptions and increased costs related to supply chains.

Outlook for the European Economy

The EU economy is undergoing a strong recovery, but rapid price increases and bottlenecks in global supply chains are threatening to blunt the upturn.

The EU27 economy is expected to grow by 4.8% this year, followed by 4.3% next year. The recovery is propelled by a consumer-led rise in domestic spending. Retail sales are now 6% above the 2019 average and the household saving rate is at 21%, vs around 12% before the crisis.

In contrast, production in the EU is suffering from supply chain bottlenecks. The share of European companies that report materials/equipment as a factor limiting their production has shot up from 9% in 2019 Q3 to 39% in 2021 Q3.

EU Energy prices are now 7% above the January 2020 level. There is a clear risk that price pressures could translate into longer-term inflationary pressures if wage increase fully reflect such rises. So, wage moderation will be important.

The toolbox to tackle rising energy prices

The rise in energy prices overshadowed all discussions during the meeting of the European Council on 25 October 2021.

A toolbox with short-term measures that member states can take was proposed. These included direct payments to vulnerable households, deferred payments, tax cuts, state aid for companies that are compatible with the EU state aid rules.

Mid-term to long-term measures, were also suggested, including a number of already planned EU initiatives such as the announced revision of the gas/hydrogen market regulatory framework, future guidance on how to accelerate permitting process for renewable energies, as well as new ideas such as joint procurement and/or joint reserves of gas stocks.

The disruptions in supply chains

BusinessEurope created a Supply Chains Taskforce to assess the overall cumulative effect of actions and legal initiatives taken by different countries on supply chains.

The temporary and short-term challenges listed by members, included the current shortages in raw materials, the subsequent increased prices of materials and the peaks in transportation costs and obstacles to mobility of personnel.

To mitigate these impacts, companies themselves are taking measures. For instance, by adopting diversification strategies, increasing strategic safety stocks and improving lead times. However, certain areas require public action. Among the priorities that require public policy action, we have for instance the elimination of all export restrictions, promoting regulatory cooperation and the adoption of international standards, as well as carefully designing initiatives in the area of sustainability.

Regarding the short-term challenges, the taskforce suggests underlining that these are mostly related to disruptions caused by the COVID-19 pandemic. Several measures can be useful to alleviate pressure. For instance:

• simplifying customs procedures,
• ensuring better coordination on health and safety measures as well as travel restrictions,
• monitoring and addressing the uptake of trade-restrictive measures by governments.

Regarding the medium and long-term challenges, the taskforce suggests underlining that even if they can be related and exacerbated by the COVID-19 pandemic, they often have deeper root causes. Building resilience is important and requires good coordination between different policies. For instance:

• addressing trade restrictions will help ensure access to critical inputs that are necessary for European industrial sectors,
• at the same time, boosting investments and production capacity in Europe might be necessary but we also need to cooperate with allies and like-minded partners.

The crisis is also leading governments to increase national content requirements and promote “buy national” policies in many cases attached to the financial stimulus plans. Access to third countries’ procurement market is a long-standing problem for European companies. The taskforce therefore suggests underlining that this crisis is making the case for having the International Procurement Instrument in place even more compelling.

The Malta Chamber reaffirms its commitment to bring to the fore the issues and challenges faced by local businesses within these highly influential European fora.

Is Inflation here to stay or is it transitory?

Inflation has become extremely topical after many years of price stability within the Euro zone.

“The bottlenecks created by the deep recession caused by the pandemic and the relatively quick recovery that followed, coupled with the pursuit of the twin transition of digitalisation and green economy has resulted in an acute concern on inflationary pressures by businesses and discussions on how policy makers should address them to ensure that we do not enter into an inflationary spiral that could jeopardise recovery efforts” said Ms Marisa Xuereb, President of the Malta Chamber during her welcome address at an event co-organised by the Malta Chamber of Commerce, Enterprise and Industry and the Central Bank of Malta titled Inflation: Trends, Threats and Transitions.

The seminar was aimed at economists and business leaders in the country in order to raise a national discussion on the subject of inflation and whether the current global inflationary trends will be transitory in nature or will persist in the longer term and what both scenarios could mean in terms of their impact on the Maltese economy.

In his keynote speech on inflation the Governor of the Central Bank of Malta, Professor Edward Scicluna explained that contrary to popular perception the ECB has been praying and hoping that one day inflation would pick up from a decade of very low inflation and get itself anchored at around two percent. Anything above or below that rate is equally undesirable. The two percent would give enough leeway for monetary policy to be applied without the headache of negative rates, asset purchase programmes and the like.

During the event, economist and Saxo Bank Director, Mr Christopher Dembik spoke of the global scenario in terms of inflationary trends and some of the key factors which are leading to this increase. These include, amongst others, the bottlenecks in terms of global supply chains which are seen as cyclical in nature, the green transition and shift towards ESGs, and lack of investment in energy. He spoke of the possibility that part of the inflation will become permanent or structural, particularly due to the green transition business operators and economies need to undertake during the next years. This in turn will limit the possibility of exploiting productivity gains by the fact that some of the green technology is still in its infancy.

Concluding the session, Central Bank of Malta Mr Jude Darmanin delivered a presentation on a recent study focusing on the inflation impact on low-income households. Mr Darmanin noted in his conclusions that household spending patterns vary significantly across the income spectrum with official Retail Price Index (RPI) weights not adequately reflecting the spending patterns of low-income households. The results also indicated that the relative income of low-income households is harder hit when prices for basic necessities, such as food, increase. Mr Darmanin concluded by suggesting the need for an additional price index, separate from the RPI, based on the basket of goods purchased by low-income households, which could serve as a guide in measuring by how much social benefits should be increased over and above the COLA to maintain the purchasing power of low income households.

Constituted Bodies warn against surge in Public Sector Employment

The Malta Employers’ Association, The Malta Chamber of Commerce, Enterprise and Industry, the Malta Chamber of SMEs, the Malta Hotels and Restaurants Association and the Gozo Business Chamber are calling on government to put an immediate halt on the drain of human resources from the private sector, to be employed in the public sector including state appointed bodies.

More and more members of these organisations are voicing their concern about employees who resign haphazardly to take up what is perceived to be a more secure job with less work pressure in government entities.

Some companies are having to reduce their operations as a result of a shortage of manpower. Many have to resort to replacing Maltese employees lost to the public sector with other nationalities.

This is changing the distribution of the labour force, as government is employing a greater percentage of the Maltese labour force, with companies compensating for labour shortfalls by engaging more foreign labour.

The business organisations stated that they are convinced that, in many cases, there is no real need for these persons in the public sector. It must be borne in mind that public sector employment is financed by the output and taxes generated by entrepreneurs and their employees, and depleting the private sector of human resources will spell trouble even for tax revenue generation.

The employer organisations warned that an ageing work force across the European Union will present a challenge in Malta in the coming years, as countries will compete for the younger cohort. This is all the more reason why government should not make the situation worse, simply for political expediency.

Human resources in Malta are scarce and limited, and therefore cannot be squandered in this manner. To make matters worse, many companies are also complaining about the difficulties they still encounter in employing third country nationals, including cases of repatriation of workers who have been working here regularly for years.

The economy can only progress by upskilling the local labour force and channelling it into productive use, both in the private and public sector.

‘No better time for businesses to venture abroad’ – Liz Barbaro Sant

As Chairperson, what are your aims for TradeMalta and how do you see it developing?

TradeMalta provides an excellent opportunity for Maltese businesses to explore international business opportunities. We have to forge new and ambitious partnerships and open up innovative markets for Maltese goods and services. But while Malta punches above our weight in exports, we also punch significantly below our potential.

We aim to continue to open markets and unlock opportunities for businesses especially in East & West African countries which have considerable unexploited potential in trade. Libya is also a very important market for Maltese businesses albeit depending on the stability of the country. We will continue to assist companies in other countries but we need to prioritise.

We also plan to strengthen the in country support. Government also has a vital role in helping businesses to export, by using its unique assets such as its international network and government-to government relationships.

In May you were appointed as chairperson of TradeMalta; how has the experience been so far?

My experience to date has been a positive one in spite of the situation being challenging. However, during challenging times we still perceive trade as a window of opportunity for diversification and growth of Maltese companies.

It is truly a pleasure to work with Anton Buttigieg, our CEO, and the rest of the team who are talented and inspiring. The Board is made up of a formidable array of passionate community leaders with a veritable storehouse of business acumen.

As vice president of The Malta Chamber, what is your role within this entity?

I mainly focus on the internationalisation aspect and continue to further strengthen the already existent excellent collaboration between government, TradeMalta and The Malta Chamber of Commerce, Enterprise and Industry.

I also enjoy enticing new members to The Malta Chamber. There is so much work behind the scenes which helps businesses of different sizes. Also, it is extremely valuable for building connections and learning about other industries.

Being so involved in TradeMalta and The Malta Chamber, two business-focused entities, when or how would you say your interest in business developed?

Internationalisation has always occupied a special place in my heart – I love it, so when the opportunity presented itself to be part of this incredible team, I was grateful for the opportunity.

As many of you may know, Trade Malta was formed as a public-private partnership between the Government of Malta, currently under the remit of the Ministry for the Economy and Industry and the Malta Chamber of Commerce, Enterprise and Industry

You’ve been part of TradeMalta for over three years now – what have been the biggest challenges so far? Has the pandemic had any part in this?

It may seem counterintuitive to talk about expanding overseas when local businesses are grappling with the pandemic, but for the many firms venturing abroad it seems there is no better time.

The pandemic has led to certain constraints, especially on cross-border travel, but it has also given rise to new ways of doing business. And support for internationalisation, whether from the government or industry partners, is as present as ever.

That being said, we know internationalisation may still seem daunting and this is why we are here to help navigate a business environment which is dynamic and ever-changing. Access to finance, lack of working capital and cover for the financial risks of exporting and payments is always a major challenge.

Read the full article here

Atlas Insurance supports Hospice Malta with a donation towards St Michael Hospice Project

Various organisations and individuals have responded to Hospice Malta’s call to support the development St Michael Hospice, which is currently being refurbished and which will consist of a new palliative care centre with 16 single bedrooms which caters for the increased demand of Hospice Malta’s services.

The present community services will also be expanded, and Out-Patient clinics will also be introduced. The newly refurbished building in Santa Venera will become the main premises for Hospice Malta.

Hospice Malta is a voluntary organisation which provides and promotes the highest standards of palliative care for persons with cancer, motor neuron disease, as well as end of life respiratory, cardiac, renal, and liver diseases.

Its aim is to also help and support the patients’ families, as well as sharing knowledge of palliative care by providing educational and developmental programmes for the wider benefit of the community. The latter will be enhanced by the development of St Michael Hospice, opening opportunities to exchange knowledge with other Hospices around Europe and beyond.

Matthew von Brockdorff, Managing Director and CEO of Atlas Insurance presented the donation to Kenneth Delia, CEO of Hospice Malta at Atlas’s Ta’ Xbiex offices, during which they discussed the progress of the project and the challenges that Hospice Malta faces.

“We wholeheartedly support Hospice Malta in making this project a reality. St Michael Hospice will make a big difference for patients and their families and it will further enhance the already established palliative community services provided by Hospice for the past 32 years.

Atlas believes that Hospice Malta plays an important part in the chain of support for people living with serious illnesses, as well as their relatives,” said Mr von Brockdorff.

Over the years, Atlas has participated in various fund-raising activities organised by Hospice Malta, and has also offered support through employees’ own fund-raising drives and donations made directly by the company.

In addition, Atlas has been very active in the community through initiatives aimed at raising awareness on physical and mental health wellbeing, such as the company’s recent Mental Health Awareness Month, as well as through its support of the Health & Wellness Committee at The Malta Chamber of Commerce, Enterprise, and Industry.

MeDirect Bank wins eBusiness award for Best use of Technology in Business Transformation

The eBusiness Awards are organised by Tech.MT and are aimed at celebrating the successes in technology and promote the most innovative initiatives in the eBusiness community in Malta. These accolades are an endorsement of Maltese success in delivering projects, initiatives, solutions or other achievements in the digital field.

The “Best use of Technology in Business Transformation” category rewards innovation, originality, scope, outcome and external impact. The award also recognises any positive contribution the innovation brings towards environmental sustainability.

“We are truly honoured and proud to be recognised for our efforts in being Malta’s first digital bank. Specifically, the eBusiness award focuses on the success of our new onboarding infrastructure that helps new clients complete their application in a matter of minutes in all countries we operate in” said Arnaud Denis, Chief Executive Officer of MeDirect Group.

MeDirect’s top priority is to provide their customers with the best experience through digital innovation and is therefore continuously adapting to respond to customers’ changing banking needs. The suite of savings and wealth products are available to customers digitally through a best-in-class mobile app and online banking platform.

In 2019, MeDirect embarked on a transformation journey to become a retail-focused digital bank. Through this journey, MeDirect’s technology underwent an impressive transformation, with the bank’s offering excelling at par with the best FinTech companies on the market.

Pawel Malukiewicz, Group Head – Channels and Customer Experience at MeDirect Bank Malta, stated: “This overhaul would not be possible without the direct insights of the Bank’s clients, who continue to push the brand to develop our products and services.”

The award is a great recognition of MeDirect’s successful transformation of the customer application process into a digital one. The new and simplified onboarding process was introduced in the last quarter of 2020, with the aim of significantly reducing onboarding time. The transformation process helped MeDirect improve both its efficiency as well as its customer reach, resulting in an increase of onboarded customers.

The Group has also successfully deployed this upgraded onboarding process in Malta and Belgium.

Chris Portelli, Chief Technology Officer at MeDirect Bank Malta, said: “Such an award would not be possible without the top talent at MeDirect – this is one of the main pillars for the success of MeDirect’s technology transformation. As I thank all those involved for their dedication and hard work, I look forward to our upcoming releases within the digital onboarding space and other key initiatives MeDirect has been working on the past few months, including cards and other innovations in the investment space”.

MeDirect Bank forms part of MDB Group, Malta’s third largest banking group in terms of total assets and is a systemically important bank, supervised by the European Central Bank and Malta Financial Services Authority in Malta.

The Group currently operates with a retail-centric strategy in both Belgium and Malta and offers customers a safe and convenient way to deposit their savings, together with an easy-to-use wealth platform with a wide range of investment products.

Businesses that honour their tax obligations are being discriminated against

The Malta Chamber of Commerce, Enterprise and Industry has taken note of Legal Notice 419 published on 5th November 2021 entitled ‘Exemption from Tax on Property Transfers (Set-off of Tax Arrears) Rules’. According to this legal notice, those who have tax arrears that were due by January 2021 will be allowed to pay any tax due on the transfer of property purchased before March 2021 against their arrears and thereby be exempt from tax on property transfers to the extent that they are in arrears.

Like every other scheme intended to bring taxpayers in order, this scheme benefits only the defaulters, and does not consider those who have their tax payments in order. This in itself is unfair on those employers and businesses who pay their taxes when and as due. This legal notice seeks only to proliferate an unlevel playing field in favour of those who are in default and who are in the habit of using their due tax monies as their overdraft facility.

With its attachment to property transfers, this legal notice indicates that Government believes that tax monies have been used to purchase property, and that defaulters do not have the cash to settle tax arrears promptly and can only do so if they liquidate some of their property. If we do not want to see any more of this cavalier behaviour in the future, we should make sure that people are not able to purchase additional property before they settle their tax arrears. Only then will the exemption from tax on property transfers, which will only be allowed until 31 December 2022 according to said legal notice, be effective in curbing old habits.

The Chamber feels compelled to draw attention to the fact that those who default on tax payments to finance speculative activities may also end up delaying settlement of trade credit indefinitely to the detriment of businesses that supply them. Such practices are extremely damaging and need to be discouraged. It would be good to see schemes designed to help businesses recover their dues from defaulting unrelated parties who are heavily invested in property.

Finally, the Chamber reiterates its call to blacklist businesses that do not honour their tax payment obligations and hold them back from participating in public procurement. There is no level playing field between businesses that honour their obligations and those who do not. Competitive calls must factor this in to encourage more compliance and curb unfair practices.