In these hard financial times, more and more organisations are looking at outsourcing to take advantage of lower infrastructure costs along with lower wages.
Malta is rapidly becoming one of the many nearshoring destinations for companies aiming to cut costs by bringing their technology and business processes closer to home. In order to promote Malta as the cost-effective choice for ICT operations, the Maltese Ministry for Infrastructure Transport and Communications recently hosted a promotional seminar in association with the National Outsourcing Association.
Many organisations are realising that there is a value in keeping outsourced work close to where the business generally is especially for many companies who are tentative about their initial outsourcing deals. Big names such as HSBC, Crimsonwing and Lufthansa Technick are already taking advantage of Malta’s world-class ICT infrastructure, SmartCity media park, bilingual workforce and various tax benefits.
Three years after the announcement of one of the most ambitious projects in its country’s history, SmartCity Malta officially opened last month based on the successful clusters of Dubai Internet City, Dubai Media City and Dubai Knowledge Village.
The MITC is hoping that the SmartCity will spur development across many sectors and create a high-tech eco-system, bringing in a minimum of 5,600 jobs with links to Dubai and the rest of the world.
Malta has some serious competition from Eastern Central European countries such as Poland, the Czech Republic, Ukraine, Slovakia and Hungary who are becoming increasingly popular as other nearshore destinations. These nations have been working hard to gain a slice of the market and offer businesses a ready supply of high-quality, low cost labour.
Growth in Poland in particular has surged. Last year Poland was the only member of the European Union which did not fall into recession during the financial crisis with 1.6% growth. Its total exports also climbed 21.23% to $135 billion.
At the seminar, Jin Choi, SmartCity Malta Executive Director of strategy and business development, said: “Malta is the most cost effective English speaking base to serve EU customers. Quality does not get compromised with Malta. The value and the quality which SmartCity will bring lies in its network of opportunities, market opportunities and technology updates.”
Malta has a full imputation tax system through which tax paid by companies qualifies for a refund, which is usually equivalent to 6/7s of the tax paid and tax credits are equivalent to between 30% and 50% of investments.
Commenting on his nearshore experience, David Walsh, CEO at the international IT solutions company Crimsonwing, said: “We have been fortunate enough to experience extremely low attrition rates, which has helped us to offer clients a great deal of continuity on projects. Crucially, the Malta centre has also allowed us to negotiate some of the typical offshore barriers, such as travel time, culture and language differences, all of which have helped us to compete in this competitive global marketplace.”
Choosing between nearshore destinations can be difficult however by continuing to focus on expert service areas, cost savings and the promotion of SmartCity, Malta will continue to grow and become a viable and attractive alternative in the sourcing industry.