Malta As a Logistics Platform Free Trade Zone Activities
For thousands of years Malta has capitalised on its strategic location in the middle of the Mediterranean. For Malta hubbing is not a novel concept is has been a way of life for seven thousand years. Now as a member of the European Union the new and exciting opportunities available to business are unlimited.
What is a Free Trade Zone? A free trade zone (FTZ) is a special area of a country where some normal trade barriers such as customs tariffs and quotas are eliminated and bureaucratic requirements are lowered with the purpose of attracting new business and foreign investments. Bureaucracy is typically minimized by outsourcing it to the FTZ operator and corporations setting up in the zone may be given tax breaks as an additional incentive.
Typical activities carried out in a FTZ Storage for the oil and gas industry for equipment and consumables, during exploration and drilling, and bulk tank storage for petroleum. Storage of general cargo, electronics and household goods, steel, automotive industry, fashion industry, etc..
Typical activities carried out in a FTZ Use of sea-air connectivity between Asia and Europe to: Reduce transport costs Re-route shipments after dispatch Speed up orders Pack and label in transit Merge shipments from different origins
Typical activities carried out in a FTZ A FTZ is an excellent Show case for the display and sale of commodities from China. In this way enterprise from Europe or the Mediterranean may have direct contact with commodities in Malta and avoid having to travel to China or order over the web without seeing the product.
Typical activities carried out in a FTZ Onward Supply Relief (OSR) is a VAT exemption on the importation of goods into Malta from a third country (non-eu) by a taxable entity registered for VAT in Malta. Payment of customs duties are effected in Malta, cargo will then be released into free circulation within the EU and transported to a taxable entity into another EU member state as an intra-community supply. This is particularly lucrative to the Maltese government as 20% of the duty paid will remain in Malta.
The Malta FTZ The free trade zone in Malta has been established since 1988, and is now a major maritime transhipment logistic centre in the Mediterranean region. To most, the FTZ in Malta is known as a container terminal discharging containers from mother vessels and relaying to other ports on feeder vessels. Last year alone, 1.95 million Teus, have transited in Malta. The FTZ is more than just a container terminal. Warehouses and yard facilities are present in Malta, representing a crucial link in the global warehousing and logistics chain within a free zone environment and offer solutions for companies looking for a single, strategically located and integrated centre for distribution.
Malta is the ideal location Geographically located Over 170 direct Sea Freight connections from the Freeport Terminal. Daily flights to major European cities and to hubs connecting to the rest of the globe. Daily ferry boat services connecting Malta to Sicily and Italy for Trucking services.
Malta s Weaknesses Malta is not yet internationally known for its FTZ. The government has done very little in the logistics sector. Where as priority has been given to IT, financial services, pharmaceutical, and electronics industry, the logistics industry has been neglected.
Action Malta needs to firstly address the issue of an under qualified work force in the logistics sector. Today the logistics sector is forced to recruit school leavers no specialised academic courses are yet available thus hindering potential opportunities in Logistics. Local Authorities should be given further guidelines on how they can smoothen processes and encourage use of European procedures which will cut down on costs, such as further use of T1 documents within Malta when transiting from one customs zone to another for cargo which is not in free circulation. Also one needs to look into the restructuring of terminal operator charges, specifically for cargo that is in transhipment which arrives in one ports, and exits from another.
Aspiring to turn Malta into a Logistics Platform Malta should exploit the logistics industry by strengthening its current mechanisms, exploring new grounds and thus building the foundations for a platform which will revamp Malta s entire logistics concept, consequently rendering current activities more viable and efficient, which will in turn attract further investment. Given Malta s potential to rise as the leading logistics platform in the Euro-Mediterranean region, the spotlight should now turn to our industry.
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