Methodological Notes
1. The collection, compilation and presentation of both the International Investment Position (IIP) and the Balance of Payments (BoP) statements of Malta fall under the responsibility of the National Statistics Office (NSO), with the co-operation of the Central Bank of Malta (CBM). Direct Investment is extracted from both statements, and compiled in accordance with the international guidelines set out in the sixth manual of the International Monetary Fund (BPM6).
However, the Direct Investment news release is presented on a directional basis, ie. inward and outward, rather than on an asset and liability basis. The statement incorporates data relating to special purpose entities which are classified under financial service activities. This inclusion has brought about significant changes in the FDI statement.
2. Direct Investment is defined as “a category of cross-border investment associated with a resident in one economy having control or a significant degree of influence on the management of an enterprise that is resident in another economy.” (BPM6).
a. Direct Investment is sub-divided into two categories:
● Foreign Direct Investment (FDI) in Malta – where a foreign investor owns 10% or more of the ordinary shares (or voting power) of an enterprise in Malta; and
● Direct Investment Abroad – where a Maltese resident entity (or an individual, government or association) owns 10% or more of the ordinary shares of an enterprise in another economy. These companies can be subsidiaries, affiliates or branches.
b. Direct Investment is made up of three basic components:
● Equity and investment fund shares/units – comprising equity investment in subsidiaries, associates and branches. Capital contributions (e.g. provisions of machinery) and purchase of immovable property are also classified under equity capital. Also consists of the direct investor’s share of earnings not distributed as dividends by subsidiaries and associates; and earnings that branches do not remit to the direct investor. Losses are regarded as negative reinvested earnings.
● Debt Instruments – including inter-company transactions such as borrowing and lending of funds; and trade debits and credits between direct investors and direct investment enterprises. Transactions between enterprises in different economies that share the same direct investor are also considered as direct investment and included under debt instruments.
3. Direct Investment flows include transactions occurring during a particular period. Besides accumulated flows, the Direct Investment Stock Position takes into account any market value revaluations, reclassifications and exchange rate changes prevailing at the end of the reporting period.
4. The type of data collection system used to compile the Direct Investment is a composite system based on monthly, quarterly and annual direct reporting (DR) enterprise surveys, as well as various other sources that are identified from time to time by the BoP compilers. No major sectors of the economy are excluded from the aggregate data. The data for all components are compiled from these surveys. Where not directly available, preliminary figures on reinvested earnings are estimates based on an average of the previous four years. The final data on reinvested earnings are then compiled from the annual DR survey.
5. The classification used for economic activity is NACE Rev. 2, which corresponds to the Statistical Classification of Economic Activities in the European Community. Both the data on Direct Investment abroad and Foreign Direct Investment in Malta are classified on the basis of the industrial activity of the resident direct investment enterprises. Due to confidentiality issues, aggregate economic activities are grouped as follows:
Manufacturing includes:
Manufacturing industry
Transportation, Accommodation and Real Estate Activities include:
Land, sea and air transport
Warehousing and support activities for transportation
Postal and courier activities
Accommodation and food service activities
Real estate activities
Financial and Insurance Activities include:
Financial service activities
Insurance, reinsurance and pension fundings
Activities auxiliary to financial services
Information and Communication Activities include:
Publishing activities
Activities connected to audio and video productions
Telecommunications
Computer programming, consultancy and related activities
Information service activities
Professional, Scientific and Technical Activities include:
Legal and accounting activities
Business and management consultancy activities
Architectural, engineering and other technical activities
Scientific research and development
Advertising and market research
Other professional, scientific and technical activities
Veterinary activities
Other Activities include:
Agriculture and fishing
Mining and quarrying
Electricity, gas, steam and air conditioning supply
Water supply; sewerage, waste management and remediation activities
Construction industry
Wholesale and retail; repair of motor vehicles and motorcycles
Administrative and support service activities
Education, health and social work activities
Arts, entertainment and recreation
Other activities not allocated elsewhere
6. Data are to be considered provisional.
7. More information relating to this news release may be accessed at:
8. References to this news release are to be cited appropriately. For guidance on access and re-use of data please visit our
dedicated webpage.
9. A detailed news release calendar is available
online.