Employment in Malta

Since the archipelago is lacking in natural resources, working in Malta was limited to fishing and subsistence-level agriculture in harder times. However, the islands have also known several periods of prosperity during their long history.

Due to Malta’s location, it is hardly surprising that economic booms were mostly connected to a strong military presence and an equally strong focus on trade. Both the Knights of St John and the British colonials depended on Malta’s ports and dockyards.

However, Malta has lost its military importance since the Second World War. Today’s economy still relies on foreign trade to a considerable extent, as a significant source of income for those working in Malta.

Where It All Begins

The only mineral resource that Malta possesses is limestone. It has several uses in the construction industry, e.g. as a raw material for cement and mortar, as building stone, or as aggregate, which forms the base for paved roadways. Nonetheless, the number of people working in Malta’s quarries is mostly negligible, as are those employed in agribusiness.

Malta produces various crops like potatoes, grapes, wheat, barley, tomatoes, and citrus fruits, but they are not even enough to meet domestic needs. With a rather limited area of arable land available, a mere 1.5% of the general labor force is currently employed in Malta’s agricultural sector.

The Maltese Industrial Sector

In the manufacturing sector, ship-building used to make a major contribution to Malta’s economy. In the 19th century, the shipyards of the Royal Navy offered a good way to earn a living to many people working in Malta. Malta Drydocks, a 20th-century state-of-the-art shipyard, then took over this function — until its recent closure in 2010, when government subsidies had become too high and profits too low. Despite that setback, ship maintenance and repairs keep providing some job opportunities.

Nowadays the Maltese government prefers to back high-end manufacturing and potential growth sectors, especially electronics, semi-conductors, and the pharmaceutical industry. Moreover, some well-known toys and games requisites are produced in Malta. Playmobil, the German manufacturer of popular plastic figurines, has a factory there.

It’s All about Transport

The service sector is by far the most important provider of jobs for those working in Malta. Logistics, shipping, and storage have replaced the fitting out of sailing vessels or the refueling of steamships.

But just like in centuries past, Malta serves as a stepping stone to the Mediterranean market for plenty of businesses and as a base of operations for North Africa or the Middle East. Malta has one of the largest shipping registers in Europe, and its freeport is a major trans-shipment center for container goods. If you have professional experience in transport or trade, working in Malta as an expat might therefore be ideal.

In addition to commerce, IT and communications, as well as finance and real estate, play another important role in Malta’s national economy. To the relief of all employees in the banking sector, the local financial institutions weathered the global downturn in 2008/09 far better than their overseas competitors. This positive development is often ascribed to the strict legal regulations that control the Maltese banks.

So far, Malta’s economy has remained relatively unaffected by all the crises in the Eurozone, and the prognosis for 2016 predicts a slow, but relatively stable and continuous growth.

Malta’s Booming Tourism Industry

Unfortunately, the worldwide economic crisis briefly left its mark on Malta after all. Those working in Malta’s tourism industry were strongly affected for a while — a rather unpleasant effect as about 20% of all jobs depend on tourism. Luckily, this has now blown over. With 1.58 million visitors, the tourism industry reached a new record high in 2013, with an additional increase of 1 million in 2014, and the Maltese economy in general is going strong!

An increasingly popular sub-segment of the service sector is the outsourcing of film productions to Malta. Due to their stunning scenery the islands seem to be the perfect setting for “swords and sandals” blockbusters and fantasy spectacles. So, the Hollywood versions of ancient Greece in Troy and Rome in Gladiator or the fantastic city of “Pentos” in the US show Game of Thrones were actually brought to life by people working in Malta.

Working Conditions in Malta

As Malta’s economy remains a haven of stability in Southern Europe (the gross domestic product grew by 2.4% in 2013), there will also be new employment opportunities. We have outlined the most important fields of employment on the previous page of our guide to working in Malta.

In addition to high-end manufacturing, finance, commerce, and tourism, the IT/CT sector may be of interest to overseas job-seekers. Smart City Malta, a regional hub for software engineering, e-business, and iGaming, is currently under development.

The Maltese Labor Market

If you are looking for a job outside an intra-company transfer or foreign assignment, you should be aware that Malta’s labor market is rather small — the entire workforce consists of 170,000 people — and has certain employment restriction for overseas applicants. The public sector (which employs a small, but significant percentage of the labor force) is largely off limits because most candidates are required to speak Maltese. So, unless you happen to work in a sought-after occupation or stumble upon the specialist position to match your qualifications, lots of vacancies are found, for instance, in business services or call centers.

But don’t let this discourage you! Finding work in Malta from abroad simply requires a bit of patience. If you want a well-paid, challenging position, you probably shouldn’t just travel there on a tourist visa and hope to find the perfect job within three months. That strategy is only recommended if you are not in it for the work, but purely for Malta’s charms and the local lifestyle.

The following resources come in handy for job-seekers:

• EURES
• Careerjet Malta
• Employment and Training Centre Malta
• Times of Malta
• Muovo (IT jobs only)

What’s In It for You

To the disappointment of some expats, salaries in Malta are lower than in many other European countries. According to different sources, the average Maltese employee earns either 15,000 EUR or up to 21,000 EUR per year. The average gross wage reached an all-time high in the first quarter of 2015, namely 16,300 EUR.

Salaries may be higher for very specialized jobs, management positions, and foreign assignments, though. And even if the local cost of living is no longer as low as it used to be, Malta remains a comparatively affordable place. In 2010, the annual cost of living was noticeably below the EU average, though it has been on the rise ever since.

Still, it is probably safe to say that you shouldn’t be in it only for the money. If you are dreaming of a highly lucrative job with lots of perks and a huge career boost, Malta might not be the right place for you.

The Working Week and Public Holidays

The working week in Malta has 40 hours on the average, and 48 hours are the legal maximum. (The eight additional hours have to be paid for in overtime compensation.) Daily office hours in the private sector are usually between 08:00 or 08:30 and 17:00 or 17:30. It’s slightly different in public sector offices, where many employees only work half days during the summer months. This doesn’t apply to most expats, though.

While working in Malta, you are legally entitled to 25 days of annual leave. You also get a day off from work on every public holiday that does not fall on a Saturday or Sunday. Since Malta has 14 public holidays altogether, you might thus benefit from a slew of additional leisure time.

You’re Part of the Family

The atmosphere in Maltese companies is often very warm and welcoming. Due to the islands’ tiny size, Malta’s business-world is fairly tight-knit. This has both its advantages and some downsides. Your new employer and co-workers may quickly come to regard you as “part of the family”. This will make it easy to settle down in your new life.

However, in case you don’t like the job or simply happen to find a better employment opportunity, your decision to leave the company may be taken more personally than elsewhere. And since the labor force is rather small, chances are that your old boss actually knows your future employer. The very personal atmosphere in the workplace — for good or for ill — is something that many expats have to get used to.

Social Security and Taxation in Malta

Malta’s National Pension System

If you don’t intend to move to Malta to actually spend your sunset years there, you should consider making provisions for your retirement during your time as an expat. Malta’s national insurance scheme includes an old-age pension plan for its citizens. This social security arrangement covers all residents who are over 18 years old, as well as citizens employed by a Maltese company overseas.

Both employer and employee each have to pay 10% of the salary, and the government adds another 50% of this sum to the pension fund. Self-employed people need to cover most of their contributions on their own, thus paying somewhat more than an employee.

Once a Maltese resident reaches the official retirement age of 65 (applicable to everyone born after 31 December 1961), he or she ceases to be gainfully employed. If they have collected at least 156 weeks of paid insurance contributions, with an annual average of at least 50 weeks for 35 years, they are entitled to receive a state pension.

The amount depends on their previous earnings, as well as their marital status (retirees with dependent spouses get more money), and it adds up to a maximum of circa 220 EUR per week.

Expat Pensions

Expats only benefit from the Maltese pension plan if their country of origin has a social security agreement with Malta. Social security agreements coordinate the pension programs of two countries for everyone who has lived or worked in both of these nations. Malta has entered into such a social security agreement with all other EU member states, as well as Australia and Canada.

If your country is not among these states or if you want to provide for a higher pension than the modest sum that Malta’s insurance scheme allows for, you have to make your own arrangements. For example, talk to the social security administration back home and to your bank about possible alternatives.

Taking Care of the Kids

EU nationals will receive maternity benefits from the Maltese government if they give birth to a child in Malta. Alternatively, the benefits must be covered by a woman’s employer if there is a stipulation for her occupation or company in the Employment and Industrial Relations Act. In the latter case, third-country nationals profit financially as well.

Regardless of whether or not she is entitled to monetary support, a working mother always has a legal right to 14 weeks of maternity leave. She must take at least four of them before the child is due, and a minimum of six weeks after the delivery. For some expat mothers, though, the maternity leave remains unpaid. Fathers may be granted up to three months of parental leave, but they don’t receive any financial compensation at all.

Tax Benefits for Affluent Expats in Malta

For so-called “high net-worth individuals” who settle in Malta under the Permanent Resident Scheme, the country has plenty of fiscal advantages. Capital gains made overseas and overseas income not derived in Malta do not have to be taxed there. There is no property or estate tax, either, and Malta’s fiscal legislation does not include taxation on individual wealth or inheritance. People with an annual tax liability of 20,000 EUR or more automatically fall into the flat tax rate bracket of 15%.

Income Taxes in Malta

The average taxpayer only has to report all income arising in or remitted to Malta. So, if you still have a savings account or an investment portfolio at home, you don’t have to pay any tax on the capital interest in Malta. Moreover, all residents of Malta are exempt from local as well as municipal taxes. The taxes you do have to pay depend on the amount of income that you earn in Malta. There are four tax brackets, ranging from 0% for low-income earners to 35% in 2015.

Sadly, paying income tax in Malta does not necessarily save you from filing a tax return in your country of origin. However, Malta has a number of bi-lateral tax agreements with other nations (e.g. all EU states) to prevent that the same income is taxed twice. Please get in-depth advice on international taxation from a tax accountant. He or she will help you with minimizing the taxes you must pay in two countries.