The atmosphere around Europe has been chaotic since the UK’s shock decision to leave the EU, against all predictions made by the most seasoned political and commercial forecasters. However, rooted in the belief that there is always a silver lining to every cloud, the Maltese Government has set up the Malta-UK Business Promotion Task Force to bridge the new gap that will be formed in March of next year. The task force is headed by Joseph Zammit Tabona, a widely-respected figure in the business circles of both countries, who details just some of the work his team has carried out to find the best opportunities for the island.
“What we’re doing is working with UK institutions and organising events with the Confederation of British Industry. Our main overall aim is to promote Malta as an EU base for the future, with those companies and groups in the UK that have previously relied on the free movement of goods and services within the EU. India, for example, is one of our main focuses, as there is a strong base of Indian companies within the UK that do a great deal of business with other European countries,” Mr Zammit Tabona explains, adding that Malta is soon to be the only EU member state, along with Cyprus, which forms part of the Commonwealth once the UK leaves next year. “On top of that, we have the advantage that we are one of the few English-speaking nations in the EU in that our official business and legislation is all done in English primarily. I think that there are real opportunities for Malta to reap.”
The approach to these discussions has been far more hands-on and face-to-face than many may realise. “Back in February, we organised for the Prime Minister to have lunch with a sizeable number of representatives from Indian businesses in the UK. That, in turn, led to a familiarisation visit here at the end of May of about 20 people led by Lord Bilimoria and Lord Gadhia. I personally currently spend three or four days in London a week, continually talking to people and trying to bring them to Malta for short visits filled with meetings with key persons around the island. I believe that having these people visit Malta can make our talks with them that much more successful,” he maintains.
There has also been a need with these projects to make the absolute most of individual skills and experience. “Our main limiting factor is funding; we don’t really have the ability to have anyone working full-time within the team. As a task force, we did engage two research companies to look into specific areas such as manufacturing, but the majority of our work has to be done through connections and networking. Our close relationship with the Indian business community started about a year ago, and in part came about because I was fortunate enough to have a few contacts in the London business world who have been able to keep sending important persons in that community my way,” Mr Zammit Tabona admits.
He also explains that there is a lot of thought and preparation going into doing business in the other direction, once the UK becomes a new market separate from the EU. “As part of our work we have visited Gibraltar with a view to use it as an option for those Maltese businesses that wish to operate within the UK. Gibraltar has just signed an agreement with the UK to allow for a natural process of passporting, making movement much easier post-Brexit. We are currently looking into what opportunities this could bring to Maltese companies and will likely be recommending that those companies wishing to establish themselves in the UK use Gibraltar.”
Unfortunately, the ever-present doubt that persists around Brexit causes problems for every project linked to it. “One of the biggest issues with Brexit in general right now is that no one really seems to be sure of anything,” Mr Zammit Tabona laments, explaining that “different rumours have suggested that Theresa May is hoping to delay the deadline, others say that if no deal is arranged in November, there won’t be a deal at all. There are even some with professional insight who suggest that, within 10 years, the UK could be reapplying for membership, even though that would mean adopting a much worse arrangement than the previous one.”
And this continuing chaos is having dramatic effects on various sectors, he continues, revealing, “I’ve been told on serious authority that, within the City of London financial sector, thousands of prospective jobs for the future have already been lost to the Brexit uncertainty. For instance, foreign banks which were looking into setting up a UK branch have backed out and looked elsewhere, which was a loss of thousands of potential jobs with them alone.”
Still, these companies retreating from the UK do not necessarily pose a prospect for Malta, Mr Zammit Tabona points out, adding, “in reality, these bigger firms are not really viable for Malta, both in terms of space and more importantly in terms of labour force required. These companies are expected to need anywhere from 1,500 to 2,000 employees, which is impossible in a labour climate where local companies requiring only 300 employees are struggling with recruitment.”
“That is why we are looking into bringing the smaller companies here, as small companies that came to Malta 30 or 40 years ago have become huge employers now. This includes companies like Playmobil, that started with somewhere around 50 employees and now has over 1,000. These companies got to know the culture and work ethic here in Malta, and continued to invest more and more into their operations here. Thankfully, while there is a shortage of talent in some areas, the Maltese Government is more than willing to invest in training where it is needed most,” he continues.
Mr Zammit Tabona also believes that one of the most offputting aspects of setting up in Malta is one that is often mentioned by individual expats too. “One of the biggest hurdles reported by companies migrating to Malta is not the process of establishing the company itself, which for many industries can be relatively easy, but is simply the opening a bank account. The opening of an account here can take at least three months if not up to four or five, and this remains a huge issue; in many cases, companies are forced to set up accounts overseas just to get started here,” he asserts.
Having said that, aside from the difficulties, Mr Zammit Tabona believes that the increase in companies coming to Malta could be beneficial for more than just the local economy. “Maltese companies would certainly benefit from the exposure which could open up many doors for them to grow and expand. There are certain companies currently in the process of setting up a base in Malta that are also transferring several services performed by companies elsewhere to equivalent local companies. At the same time, many of these local companies are already actively attending conventions organised by the various Maltese authorities, and have been establishing links and connections with the foreign companies present. I encourage local business owners to network as much as possible at this time,” he says.
This advice, however, does come with a word of caution about the latest trends in the business world that are gaining momentum through such connections. “When I attended the DELTA Summit held in Malta a few weeks ago, I noticed that there was a huge number of Maltese looking to jump on the bandwagon with things like blockchain and cryptocurrency. I think that Maltese businesses should exercise caution; these are still very new concepts, and while they have potential for success, there is also a great potential for people to get their fingers burned. There is the famous case of bitcoin, which at one point reached a value high of around $20,000 but then dropped to around $6 in a flash. There is no such thing as easy money,” Mr Zammit Tabona warns.
This article originally appeared in The Commercial Courier