Three times as many businesses opened in Malta than closed in 2023

Nearly three times as many businesses opened in Malta than closed in 2023, according to new data from Eurostat.

These figures confirms Malta’s position as one of Europe’s most dynamic economies for enterprise, significantly outperforming the EU average in business creation and survival in 2023.

According to the data, while the EU saw a positive trend with 3.5 million new businesses (a 10.5 per cent birth rate) against 2.8 million closures (an 8.5 per cent death rate), Malta’s performance was exceptionally strong. The island recorded a business birth rate of 17.1 per cent — far exceeding the EU average — against a death rate of 7.6 per cent. This resulted in a remarkable net positive growth of 10.5 per cent.

In other words, this means that in 2023, nearly three times as many businesses opened in Malta than closed (9,669 new enterprises vs. 3,726 closures). This positive gap is the highest in Europe.

Malta’s business birth rate places it in an elite group of only five countries with rates above 14 per cent, alongside Portugal, Estonia, and France. Furthermore, Malta’s low business death rate is a key indicator of stability, ranking among the most favourable in the EU.

Experts attribute such positive growth gaps to a combination of reinforcing factors, and Malta exemplifies this model. The island offers a robust ecosystem designed for business resilience and growth, including:

• Proactive support mechanisms: Agencies like Malta Enterprise provide comprehensive support for both local and foreign companies, from start-up incentives, wage and rent support and expansion grants.
• Efficient regulatory framework: The country benefits from streamlined registration procedures and a pragmatic approach to regulation.
• Attractive fiscal policy: Malta is known for its competitive tax rates and benefits for companies both existing and new.
• Strong advocacy: A vibrant business lobby, notably The Malta Chamber of Commerce, allows a continuous link between the private and public sectors.
• Access to funding: Companies can leverage several EU funding opportunities and a supportive financial system for start-ups and SMEs.

While the headline figures are encouraging, experts advise considering the full context. Giacomo Fersini, senior economic policy advisor at Eurochambres, and Ben Butters, CEO of Eurochambres, told Euronews Business that “disentangling the drivers behind such performance leads to a mixed picture.”

They highlighted that post-pandemic structural changes are a significant factor.

“After the pandemic, many businesses in the EU closed or changed their classification, which could help explain why there were more business closures than openings in some countries,” the experts noted. Furthermore, the rates might be influenced by administrative delays in the registration of new enterprises, suggesting the data may not fully capture real-time economic activity.

This supportive landscape in Malta stands in stark contrast to the intertwined challenges faced by the eight European nations where business deaths outnumbered births. These countries typically face the “decline of traditional industries without sufficient emergence of new sectors; regulatory and administrative barriers to entry; constrained access to finance; and ageing demographics dampening entrepreneurial drive.”

Malta’s performance is a testament to a dynamic economic structure that is successfully expanding into services and technology. While larger economies like France recorded the highest numerical positive difference, Malta’s rate-based success highlights its outsized role as a competitive jurisdiction.

The 2023 data ultimately paints Malta as a resilient and attractive destination for enterprise. However, a truly comprehensive understanding requires acknowledging the complex post-pandemic and geopolitical factors that shape these statistics, reinforcing that Malta’s positive results are achieved within a challenging and evolving European landscape.