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Alan Camilleri, chairman of Malta Enterprise—the government agency responsible for facilitating and stimulating the economic development of Malta—recalls the words of a foreign investor, who had a taken stake in Maltese business. The investor imagined what he would say to other potential promoters, if asked whether they should put their finances into some venture on the island. Camilleri remembers: "He would bluntly tell them, 'Why aren't you here?'"
This confidence is true of a great many foreigners that have undertaken projects in Malta. Once initially enamored by the island, they stay, and they grow. Over the past decades, the Mediterranean nation has actively positioned itself as an appealing epicenter for global interest. Its efforts have not gone unnoticed. Tonio Fenech, the Minister of Finance, the Economy, and Investment, notes that in 2008, Forbes magazine ranked Malta as the fifth most tax-friendly country in the world, and the single most attractive country in the European Union in terms of taxes and social contributions paid out by companies. In that same year, the World Economic Forum named Malta the 27th most networked economy in the world; the Global Financial Centers Index (GFCI) identified it as one of the top three financial centers likely to increase in importance over the next three years; and the GFCI further listed it among the financial centers where operators might think of opening in the next five years. These accolades begin to suggest why entrepreneurs relish Maltese prospects.
Alan Camilleri, Executive Chairman of Malta Enterprise
The Malta pharmaceutical industry is a prominent example of the international investment momentum taking hold in the country. It is an industry that already employs over 1,000 people and exports more than €150 million ($205 million) in products per year—to Europe, and even beyond. "Most notably," Camilleri says, "Malta is experiencing significant expansion of current operators, and this is a sign of confidence in the local environment."
This local environment is marked by an attractive legislative framework, championed by Malta Enterprise. In particular, the Business Promotion Act and the Malta Enterprise Act are helping to position Malta as one of the most progressive and proactive business environments in the world. Pharmaceutical players that come to the island enjoy low taxes, financial support and loan guarantees, logistical and workforce training assistance, and even ready-built factories provided by Malta Enterprise. An imperative legislative point centers on the inclusion of the Bolar Exemption in Maltese law: This provision allows third-party companies to conduct clinical trials and commercial testing on patented medications—with the intention of improving on the patent or producing a cheaper generic version—before the drug patent expires. In an industry where speed to market is crucial, generics companies situated on the island can complete preparatory testing in advance, and bring their products immediately after patent termination. The Bolar Exemption is instrumental in the consequent proliferation of generics manufacturers in the country, and Malta currently has more than 15 such operators, from all over the world.
Tonio Fenech, Minister of Finance, the Economy, and Investment
The island also prominently invests in its infrastructure and human resources. For example, the Maltese have recently invested in a €20 million ($27 million) Life Sciences Park, and Finance Minister Fenech notes that the government "works very closely with the University of Malta, other private universities, and the Malta College of Arts, Science, & Technology, so that, in tandem with industry, the necessary academic formation is provided" for the sciences. This academic emphasis equates to a highly skilled work force, with a much-needed English proficiency.
Malta uses its small size to its advantage: Camilleri explains that, beyond even the Bolar Exemption, Malta's small market size helps generics players because most foreigners do not bother to register additional patents uniquely for the island. Compactness also facilitates swift and efficient decision-making, according to Finance Minister Fenech. And because of its small size, Malta enjoys well-developed infrastructure, and long-term stability.
Sergio Vella, Country Manager, Actavis
Finally, Malta is strategically located, with easy access to Europe and North Africa. If one considers its location together with its competitive costs, it becomes quite apparent that Malta is, in the words of Camilleri, "a unique hub for combining testing, R&D, manufacturing, production, and batch release of pharmaceuticals," a happy hunting ground for any pharma player.