The two most important issues that Malta is facing that small and medium-sized businesses would like the government to do something about, are overpopulation and the lack of good governance, the SME Barometer for Q2 2025 shows.
The SME Barometer Q2 2025, which was conducted in collaboration with MISCO, had 406 respondents, all of which were businesses operating in Malta.
The most common type of business run by the respondents were retail, import, distribution, and wholesale, followed by tourism services. 38% of respondents were businesses with 1 to 9 employees, followed by businesses with 10 to 49 employees at 30%, then 50+ employees at 22%, with the remainder of the respondents, at 10%, replying that the business consisted of “just myself.”
On the matter of the most important issues faced by Malta, of which respondents were able to select two, 37% of the respondents chose overpopulation, making it the most important issue according to the barometer, with lack of good governance being second with 31% of respondents selecting it. The third and fourth most important issues were indicated to be corruption at 26% and an increase in inflation at 24%.
When it comes to what the SMEs believe are the two most important issues that their business is currently facing, the most common answer was that of employee shortage, with 45% of respondents indicating that it is the most important issue for their businesses. Unfair competition was listed as the second most common answer at 24% of respondents, followed by excessive competition, issues with late payments, and skills mismatch all with 17%.
70% of SMEs indicated that they believe Malta is moving in the wrong direction, with 30% thinking otherwise and indicating that they believe the country is moving in the right direction. This is identical to the Q1 2025 Barometer, where the percentages for this question were the exact same.
Of the 406 respondents, 17% said that they believe that the next twelve months will be a good time to invest, with 59% indicating that they are not sure, and 24% saying that they do not believe the next twelve months will be a good time to invest.
48% of respondents said that they are “quite satisfied” with the grants, schemes, and incentives offered by the government. 4% of respondents said that they are very satisfied, 11% said they are not satisfied at all, and the remaining 37% indicated that they are “not so satisfied”.
The size of the business seemed to have an effect on whether or not they considered themselves to be satisfied with the incentives, as 60% of respondents who had indicated their business consisted of just themselves indicated that they were not satisfied, whilst for businesses with 1-9 employees, the result was almost even, but still had the majority say they were not satisfied. Continuing on this point, the majority of businesses with 10-49 employees indicated they were satisfied, and nearly 60% of businesses with over 50 employees said they were satisfied.
Asked how satisfied the SMEs are with the service they are receiving from government departments and entities, 49% said they are “quite satisfied”, while only 1% said they are very satisfied. 12% replied that they are not satisfied at all, and 38% said they are “not so satisfied”.
In regard to whether they were satisfied by the service of the government departments and entities, each business size had the majority of their respondents say no, except for businesses with over 50 employees, where the majority said that they were satisfied.
Detailing their observations and recommendations, the Chamber of SMEs stated that employee shortages and difficulty in sourcing skilled talent locally are causing disruptions, especially so in industries which are heavily reliant on skilled labour. It continued that the perception of unfairness and inequality is undermining trust in the system, and added that the skills mismatch has gained significance as a challenge faced by businesses.
The Chamber said that issues for businesses are spreading further and hitting closer to home, with issues such as increasing inflation, ease of doing business, and consumer buying power. It continued that this Barometer has indicated overpopulation as a top issue for businesses for the first time, and commented that this may reflect the increase felt as a result of the increased amount of tourist arrivals this year, along with the lack of infrastructure to cater for the increased demand.
Going over its recommendations, the Chamber of SMEs suggested that government schemes should be more oriented to cater for microbusinesses and sole traders. It said that schemes need to be easily accessible for smaller businesses, and added that already accessible schemes should be enhanced for sole traders and microbusinesses to apply for them.
The Chamber also said that increasing the maximum credit threshold from €50,000 to €70,000 for small enterprises would encourage them to invest more, ultimately enhancing their productivity and competitiveness.
It continued that consistent customs control measures should be implemented across all entry points in order to ensure that no goods enter Malta undeclared or untaxed. The Chamber also said that transparency and anti-corruption measures should be strengthened to increase trust in public institutions, and further commented that a comprehensive review of existing regulations should be conducted to identify overlaps and redundancies.
The Chamber of SMEs concluded by recommending that a centralised advisory platform be established, which provides businesses with guidance on accessing green and digital financing opportunities. It added that capacity-building workshops should be conducted to improve the financial literacy of SMEs and other stakeholders when it comes to funding mechanisms.
The survey took place from 8 July to 21 July and has a 4.8% margin of error.
