Malta’s economy is heavily industrialized and service-oriented. The International Monetary Fund classifies it as an advanced economy, while the World Bank classifies it as a high-income country and the World Economic Forum classifies it as an innovation-driven economy. It is a member of the European Union and the eurozone, having accepted the single currency on January 1, 2008.
Malta’s economy benefits from its advantageous location at a crossroads between Europe, North Africa, and the Middle East, as well as its fully developed open market economy, multilingual population (88 percent of Maltese people speak English), productive labor force, low corporate tax, and well-developed finance and ICT clusters. Foreign commerce, manufacturing (particularly electronics), tourism, and financial services are all important to the economy. Over 1.7 million tourists visited the island in 2014.
Malta’s GDP per capita was $29,200 in 2012, adjusted for purchasing power parity, and it placed 15th among EU countries in terms of buying power parity. Malta had a budget deficit of 2.7 percent in the 2013 calendar year, which is within the Maastricht criteria’s restrictions for eurozone countries, and a gross debt of 69.8 percent. Malta has the sixth lowest unemployment rate in the EU in 2015, at 5.9%.
According to the Economist Intelligence Unit’s Democracy Index, Malta is the world’s 18th most democratic country.
Is Malta impoverished?
Poverty is an issue that must be tackled in the island nation of Malta, especially given recent evidence that reveals that poverty is not only a persistent but also a growing issue in this country. Understanding the origins of poverty in Malta is critical to addressing the problem.
Malta is a Mediterranean island in the Mediterranean Sea, just south of Italy, with a population of over 400,000 people. According to a 2015 estimate, 16.3 percent of the island’s 400,000 residents live below the poverty level. Furthermore, Malta is one of 14 European nations that saw a rise in poverty between 2008 and 2014, according to EU figures. Malta, behind Greece, Spain, and Cyprus, saw the fourth-largest growth in poverty during this time period.
Unemployment is one source of poverty in Malta; an estimated 4.8 percent of Maltese people are unemployed. Nonetheless, there are numerous good signals pointing to favorable growth in Malta’s economy, which might help many people find work. The Maltese economy is heavily reliant on foreign commerce, industry, and tourism, all of which have contributed to an annual growth rate of 4.5 percent, the highest in Europe between 2014 and 2016.
Certain Maltese people are also more vulnerable to poverty than others. Victims of violence and neglect, as well as the mentally ill, immigrants, the crippled, and those from single-parent households, are more likely to be poor and rely on social assistance. Poverty affects the elderly those aged 65 and older on this island at a substantially higher incidence 22% than other age groups. Many of those who are most vulnerable to poverty have been pushed in that way by a habit of heavy indebtedness.
Despite the recent trend toward poverty, Malta is mainly on the right track. Economically, the country is growing, and this growth might raise the unemployment rate and be used to provide more social services to help at-risk groups of people escape poverty. Nonetheless, much work has to be done, and the causes of poverty in Malta must be thoroughly addressed in order to see change.
Why is Malta so prosperous?
Why is Malta so prosperous? Foreign commerce, manufacturing (particularly electronics and pharmaceuticals), and tourism are all important to the Maltese economy. Malta joined the Eurozone on January 1, 2008. Around 15% of GDP is generated by tourism.
Where does Malta’s money come from?
Tourism, trade, and manufacturing are all important to the economy. The recent addition of Malta to a money-laundering “Greylist” may have a detrimental impact on investment.
What is Europe’s richest country?
Luxembourg is the wealthiest country in the European Union per capita, with a high quality of living for its residents. Luxembourg is a prominent hub for substantial private banking, with the finance sector accounting for the majority of the country’s GDP. Germany, France, and Belgium are the country’s biggest trading partners.
What is Europe’s poorest country?
**The transcontinental countries of Azerbaijan ($4,214) and Armenia ($4,268) would feature on the above list if they were counted as European countries rather than Asian countries.
Ukraine
Ukraine is the poorest country in Europe as of 2020, with a per capita GNI of $3,540. Ukraine was once the USSR’s second-largest economy. When the USSR fell apart, Ukraine struggled to adapt to a market economy, leaving a large portion of the population in poverty. Government corruption, Russian aggression (particularly, Russia’s unlawful invasion of Crimea in 2014), and a lack of infrastructure are all factors contributing to Ukraine’s poverty.
Georgia
Georgia’s GDP per capita in 2020 was $4,290, which was lower than any other European country save Ukraine. This former Soviet republic, which is located between Russia, Turkey, Armenia, and the Black Sea, is going through some difficult times. Its future, on the other hand, appears to be promising. Georgia’s economy and Human Development Index (HDI) score are both improving as a result of changes such as significant financial reforms, reduced corruption, and significant government investment in education.
Kosovo
Kosovo had a per capita GNI of $4,440 in 2020, making it the third poorest country in Europe, assuming it is a sovereign country and not an independent Serbian territory for the sake of discussion. Kosovo is a semi-autonomous province of Serbia that declared independence in 2008. Around 550,000 people live in poverty in Kosovo, which means that 30 percent of the population earns less than the poverty threshold. Furthermore, Kosovo’s unemployment rate is extraordinarily high, at 34.8 percent as of 2016, with the majority of households earning less than 500 Euros per month.
Moldova
Moldova, with a GNI per capita of $4,570 in 2020, is one of Europe’s poorest countries. Following the dissolution of the Soviet Union in 1991, Moldova endured political instability, economic decline, trade barriers, and other problems. Lack of large-scale industrialization, food insecurity, economic collapse during the transition to a market economy, and social policy blunders, among other things, all contribute to poverty in the country. Despite its recent difficulties, Moldova is improving, with the percentage of the people living in poverty falling from 30.2 percent to 9.6 percent between 2006 and 2015.
Albania
Albania’s Gross National Income (GNI) per capita is $5,210. Albania transitioned from a socialist to a capitalist market economy following the dissolution of the Soviet Union in the 1990s. Despite being Europe’s fifth poorest country, its economy is steadily growing. Albania’s vast natural resources, such as oil, natural gas, and minerals such as iron, coal, and limestone, are largely responsible for this.
North Macedonia
North Macedonia is Europe’s sixth poorest country. North Macedonia suffered major economic transformation after winning independence in 1991, and its economy has progressively improved. Around 90% of the country’s GDP is derived from trade. Despite the government’s successful implementation of programs, North Macedonia still has a high unemployment rate of 16.6%. The unemployment rate reached 38.7% at its peak. In 2020, North Macedonia’s per capita GNI was $5,720.
Bosnia and Herzegovina
Bosnia and Herzegovina’s GNI per capita in 2020 was $6,090. The country is currently recovering from its own war for independence from Yugoslavia, which lasted from early 1992 until December 1995. The conflict, as well as the ethnic cleansing that accompanied it, caused devastation on the people, infrastructure, and economy of the country. When the battle stopped, there were so many casualties that one out of every four houses was headed by a woman. Women make up a smaller percentage of the workforce in Bosnia and Herzegovina, and they are generally paid less than men, putting many families at a disadvantage. As a result, many families were forced to live in poverty.
Belarus
Following the dissolution of the Soviet Union, Belarus, like other former Soviet republics, had economic difficulties. Belarus had a strong economy and one of the highest living standards among Soviet republics in previous years. Belarus suffered economic difficulties over the next few years, until 1996, when it began to recover. Belarus’s spending among the bottom 40% of the population climbed between 2006 and 2011, when many nations in Europe were feeling the consequences of the recession. The country’s per capita GNI is expected to be $6,330 in 2020.
Serbia
Serbia’s per capita GDP is expected to be $7,400 in 2020. Serbia had eight years of economic expansion at the start of the 2000s, until the worldwide recession in 2008. Serbia’s economy entered a recession in 2009, resulting in negative growth rates of -3 percent in 2009 and -1.5 percent in 2012, pushing the country’s public debt to 63.8 percent of GDP. Around a quarter of the Serbian population is poor. Food and energy production, on the other hand, are thriving, and Serbia’s economic situation is improving.
Montenegro
The Gross National Income (GNI) per capita in Montenegro is $7,900. Montenegro’s economy is modest and mainly reliant on the oil sector. The country’s natural resources have been depleted as a result of urbanization and deforestation, making it vulnerable to resource depletion. Furthermore, discrimination based on gender and age results in significant economic disparities, notably for women. Approximately 50,000 people have been internally displaced or are refugees. They are among the poorest people in the country, with a poverty rate almost six times higher than the national average of 8.6%.
What is Malta’s average salary?
According to the National Statistics Office, the average yearly gross pay in Malta is roughly 18,660. Specialists, on the other hand, can make significantly more. A financial controller, for example, may earn up to 88,440, while a UX/UI designer could earn up to 36,610, and a project manager could earn up to 144,000. A CTO may earn roughly 240,700 on the top end, while a company’s CEO could earn around 240,000.
Employees also earn a statutory bonus, which is paid quarterly on top of the wage and amounts to 512 per year in 2020. A minor Cost of Living Allowance (COLA) is paid to all employees once a year (it was 1.75 per week in 2021).
While wages are lower than in some European countries, the expense of living more than makes up for it. Eating out can be fairly affordable, especially when rents, public transportation, and childcare are all relatively modest, and bills aren’t too expensive either. More information about the cost of living in Malta may be found here.
Calculating your NET salary in Malta
You and your company will agree on a gross annual salary. Salaries are often paid on the last day of each month, but some employers have different rules, so it’s wise to double-check with your boss.
1. Your take-home pay
After taxes and Social Security contributions have been deducted, this is your take-home pay.
2. Imposition of taxes
Your employer will usually deduct tax on your behalf based on your earnings. For the first 183 days after relocating to Malta, non-residents (i.e. those relocating to Malta) will be subject to a higher tax rate. Non-resident tax rates can be found here. After this term has passed, any extra tax paid will be partially reimbursed through a tax rebate. After this time, the usual Maltese tax rates apply.
3. Contributions to Social Security (SSC)
Employees and employers are equally responsible for paying a maximum of 10% of their gross earnings in Social Security contributions (SSC). This includes sickness benefits, injury benefits, unemployment pay, pensions, and child benefits, among other things. In Malta, the amount of social security contributions paid is determined by your age and wage. Learn more about your SSI and SSB benefits.
Why is Malta so impoverished?
Poverty in Malta is classified as relative, yet according to 2014 estimates, 15.9% of the population lives below the poverty line. Poverty in Malta, on the other hand, is a result of recent economic growth that have come at the expense of job security, access to child care, and have marginalized family finances, particularly for single mothers.
Tourism, trade, and manufacturing all contribute to Malta’s economic stability. In July 2016, the country has the lowest unemployment rate in the European Union (EU), at 3.9 percent.
Malta is sandwiched between Sicily and North Africa, putting it in the middle of several of the world’s busiest shipping lanes. Malta’s government recognizes the country’s potential for prosperity as a result of global investment and commerce.
According to the US Department of State, foreign direct investment (FDI) in the areas of health technology, communication and information technology, aerospace and defense, and finance services is particularly vital for increasing the rate of economic development.
Economic infrastructures in Malta have been more flexible as a result of labor market deregulation and liberalization, according to the 2010 European Social Watch Report.
More jobs and profit have resulted from economic improvements, but at the expense of deteriorating labor standards, insecure work status, unemployment, and lower family incomes.
Single parents, parents of large families, and the elderly, according to the University of Malta, have the lowest yearly average. These people are more likely to fall into poverty than others, and all of the aforementioned groups consider housing inefficiency to be a significant barrier. Children frequently lack access to food, adequate housing, health care, and clothing due to low family finances.
In a 2016 Maltese national report, the European Commission stated that Malta is “quite distant from attaining its poverty reduction target as established in the Europe 2020 Strategy.” Individuals with low skills and children have been disproportionately affected, while the lack of material things in households contributes to poverty and social marginalization.
The country is in the process of implementing 17 Sustainable Development Goals as a recent addition to the EU’s collection of member states (SDGs).
The Maltese Ministry of Foreign Affairs (MFA) has yet to operationalize educational efforts, but has declared that “Malta is fully committed to the implementation of the 2030 Agenda and is engaging and following debates at both the regional and international level in this regard.”
Is Malta considered a tax haven?
According to a report issued by the EU Tax Observatory, Malta is one of 17 nations in the world that offers a tax structure that allows 36 of Europe’s top banks to keep more profit than they would in countries with less generous tax regimes.
According to the analysis, tax haven countries account for up to 20 billion in annual revenues.
Large multinationals like Deutsche Bank can benefit from lower taxes on declared profits in Malta, as well as other tax havens like the British Virgin Islands, the Cayman Islands, and Luxembourg, padding shareholders’ pockets with money that would otherwise go to the country’s taxes.
The only three European Union jurisdictions classified as tax havens in the report are Malta, Luxembourg, and Ireland. The study calculates how much would be payable if a minimum tax rate were implemented by calculating the effective tax rate for each country.
While Malta’s effective company tax rate is roughly 10%, Luxembourg firms pay 15% and Ireland companies pay around 8%.