Company Formation

Covid-19 - Malta's Economic Measures

On the 7th of March, Malta registered its first case of Severe Acute Respiratory Syndrome Coronavirus 2, commonly known as coronavirus or COVID-19. As of the 20th of April, Malta has registered a total of 427 cases, 118 of which have recovered.

Malta has not taken the threat lightly.  Aware of the danger to both public health and the economic well-being of the jurisdiction, Malta has carried out a total of 21,164 swabs, making this the third highest per capita country around the globe with regard to testing.  As a preventative measure against the spread of COVID-19, the Maltese authorities have imposed a lockdown for people older than 65, pregnant women and people with chronic illnesses.  The Minister for Home Affairs, National Security and Law Enforcement has also imposed fines of €100 per person on those caught gathering in groups of more than three in public places, and the Superintendent of Public Health has ordered the closure of the Law Courts and the Registry until further notice. Nonetheless, the country has slipped with efficiency into a routine of remote working, and this system is proceeding relatively smoothly.

Malta’s medical and health services have a reputation for excellence and they have risen to the occasion splendidly. The rate of contagion in Malta has been notably slower than in other countries in the same phase of infection.  This is testimony to the outstanding efforts of Malta’s health personnel and the excellence of its infrastructure. In fact, Malta’s outstanding medical response to the contagion drew praise from Hans Kluge, WHO’s regional director for Europe.  On the 28th of March, Kluge tweeted a message of congratulations to Malta’s Deputy Prime Minister and stated that Malta was on the right track and an example to follow.

By mid-April, the measures imposed by the authorities, the cooperation of the local population and the unstinting work of Malta’s health and public safety services, started to bear discernible fruit. Over the past week, the rate of infections has noticeably slowed, while recoveries have leapt and are now on an upward trajectory with growing momentum. Most importantly, Malta has managed to keep the mortality rate to a statistically significant minimum, with just three cases in the five weeks since the outbreak of the infection.  In view of this, both the Government of Malta, as well as the country’s Medical Services, are beginning to speak of preparations for an exit strategy from the emergency measures that have prevailed over the past five weeks.

The Maltese economy was no less pro-active in combating the threat.  Many firms drew up their COVID contingency plans in February and started implementing remote working measures as from the second week of March.  All economic activity that can be carried out remotely is still ongoing, with companies providing full services to their clients short of physical contact.  

Zeta activated its remote working contingency procedures on the 16th of March and has been operating as normal since then.  Essentially, through remote work, we have extended the dimensions of our operations from our office to our homes and our full spectrum of services and support remains fully available to our clients through all the usual channels of communication and information technology.

COVID is not only a menace to public health.  Social distancing and lockdown measures which numerous jurisdictions have implemented, have interrupted the physical interaction necessary for sustained economic activity.  Mindful of these issues, the Government of Malta is determined to spare no effort in supporting its industries and residents to the best of its capabilities. To this end, it has taken numerous measures to alleviate the risk to the Maltese economy, and to all its stakeholders, including citizens, residents, third party nationals, investors, and all other interested parties.

The first measure, which was launched on the 18th of March, consists of around €1.8 billion worth of measures including tax deferrals, loan guarantees, cash injections, salary subsidies, compensation for lost earnings and additional benefits for families under specific circumstances. On the 24th of March, the Government announced a new package to finance wages and salaries in sectors particularly affected by the virus and to sustain workers forced to take leave.  These measures will also serve to buffer industries and employers, thus protecting the economic infrastructure of Malta. This package is worth between 65 and 70 million euros per month, and is further evidence of the Government of Malta’s determination to protect the economy of the jurisdiction with as much energy as it has dedicated to the health of all its residents.  Other measures include assistance to third-country nationals, including employment assistance, as well as liquidity measures and the facilitation of teleworking.

While these are the main measures outlined by the Government of Malta, it has also proven amenable and flexible in light of subsequent developments. In the weeks following the announcement of the first measures, more assistance was forthcoming.  In particular, the Central Bank of Malta announced that the Government had directed locally licensed banks to offer a moratorium on loan repayments applying to credit facilities sanctioned prior to the 1st of March 2020.  The moratorium applies equally to individuals, households or businesses which can show that they have been negatively affected by the pandemic.  Moreover, the Government will be subsidising 2.5% of an interest rate for the first two years of the loan, as well as guarantees provided by the Malta Development Bank to cover loans used to pay salaries, payments for stock and material and payments related to cancelled or suspended contracts.

Meanwhile, Malta Enterprise, the country’s economic development agency, has launched a specific portal to support all stakeholders in the Maltese economy that are affected by COVID and its activities.

Malta’s measures to protect its economy appear to have been no less successful than its efforts to protect the health and well-being of its residents. According to projections by the IMF, Malta’s economy will likely shrink by 2.8% over the next months, but is expected to bounce back to a strong 7% growth in 2021.

Zeta would like to remind all its current and prospective clients, that short of physical contact it remains fully active and at their service. Please contact us through the usual channels.