Malta has put foreign investment in the country at the top of its economic list of priorities and the budget 2010, which was recently presented by Finance Minister Tonio Fenech, shows a further commitment to attracting foreign investment. Fenlex has compiled the below list of the most common and interesting incentives provided.
A number of investment facilities have been introduced in Malta, most of which are administered by Malta Enterprise. These incentives are aimed for the promotion and expansion of industry and the development of innovative enterprises. They are normally provided to foreign direct investors and local enterprises demonstrating commitment towards growth and increase in value added and employment.
In addition, recently Malta Enterprise has been also entrusted by the Managing Authority for Maltese EU Structural Funds as an Intermediate Body (IB) responsible for administering a number of European Regional Development Fund (ERDF) Grant Schemes. These schemes mainly focus on innovation, competitiveness, energy, environment, R&D, ICT and start ups.
The main incentives for companies can be subdivided as follows:
Investment Aid:
Investment Tax Credits:
This incentive aims to stimulate investment and job creation by attracting new investment projects and promoting expansion or diversification of existing enterprises. Eligible enterprises can benefit from tax credits calculated as a percentage of the value of the investment project. Tax credits are computed as a percentage of either:
• the value of capital investment, or
• the value of wages for 24 months covering new jobs created as a result of an investment project.
Tax Credits may not exceed the following aid intensities:
• 30% with regards to Large Enterprises
• 40% with regards to Medium sized Enterprises
• 50% with regards to Small Enterprises
The tax credits which are not utilised during a particular year are carried forward to subsequent years.
SME Development:
Innovative Start-up Grants:
This scheme aims to support innovative start-up enterprises and provides part-financing of up to Euro 15,000 to cover costs incurred by these enterprises during the stetting-up phase. These costs are covered at up to 45% and may include:
• Procurement of services provided by outside consultants;
• Investments in tangible assets;
• Investments in intangible assets.
SME Development Grants:
(First time trade fair participation/Expert support)
This incentive may be provided to support Small and Medium–sized Enterprises to help them develop and diversify their activities, penetrate new markets, increase competitiveness, develop new products and services, and consolidate their existing market share.
Through this incentive eligible enterprises may be provided with part financing for:
• their first time participation in trade fairs, and
• subcontracting external experts in relation to new development projects.
Through this incentive ME will cover up to 50% of the total eligible costs. The total aid received by one enterprise may not exceed €10,000 in one calendar year.
The ERDF Innovation Actions Grant Scheme (Innovation)
The ERDF Innovation Actions Grant Scheme (Innovation) seeks to assist Small and Medium-sized Enterprises (SMEs) meet today’s business challenges by stimulating innovative processes, products and services.
The ERDF Innovation Actions Grant Scheme (Innovation) will part-finance:
• Consultancy Services
1. Consultancy and services required for implementing Innovation Management Techniques;
2. Consultancy and services required in relation to process, product and organisational innovation.
• Investment Costs in Tangible and Intangible Assets.
Projects should be completed within 24 months and must have a minimum value of € 50,000 in eligible costs.
The applicable percentage of aid is:
• 40% of eligible costs in the case of Medium-sized Enterprises;
• 50% of eligible costs in the case of Small Enterprises;
• 30% of eligible costs in the case of SMEs active in the transport sector.
ERDF Innovation Actions Grant Scheme (Environment)
The ERDF Innovation Actions Grant Scheme (Environment) supports Small and Medium-sized Enterprises (SMEs) invest in improving their environmental performance through eco-innovation.
The ERDF Innovation Actions Grant Scheme (Environment) will part-finance:
• Consultancy;
• Plant, machinery and equipment;
• Licensing and certification.
Projects should be completed within 24 months and must have a minimum value of € 50,000 in eligible costs.
The applicable percentage of aid is:
• 40% of eligible costs in the case of Medium-sized Enterprises;
• 50% of eligible costs in the case of Small Enterprises.
The ERDF e-Business Development Grant Scheme
The ERDF e-Business Development Grant Scheme supports Small and Medium-sized Enterprises (SMEs) who plan to invest in Information and Communications Technology (ICT) projects that integrate business functions, streamline workflows and enhance interactions with clients and suppliers. The scheme will co-finance ICT Developmental Services, ICT Hardware costs and ICT Software costs.
The aid intensity for projects supported under this incentive is set as a percentage of the eligible costs incurred in relation to the items of expenditure mentioned below. The applicable percentage aid is:
• 50% of eligible costs in the case of Small Enterprises;
• 40% of eligible costs in the case of Medium-sized Enterprises;
• 30% of eligible costs in the case of SMEs active in the transport sector (in line with the General Block Exemption Regulation).
Projects benefiting from this incentive should be completed within 24 months. For an application to be considered for co-funding, the project value (based on eligible expenses) must be at least Euro 25,000 and must not exceed Euro 200,000.
ERDF Small Start-up Grant Scheme
The ERDF Small Start-up Grant Scheme supports the growth of new enterprises having less than 50 employees. The scheme is open to start-ups that have been operating for less than 3 years in the manufacturing, Information and Communication Technology (ICT), Research & Development & Innovation (R&D&I), waste treatment & environmental solutions and biotechnology.
The ERDF Small Start-up Grant Scheme will part-finance up to 25% of costs incurred for:
• Wages of employees;
• Renting / leasing of equipment that is required by the enterprise to operate;
• Renting / leasing of production facilities;
• Water and electricity;
• Subcontracted legal services, consultancy and administrative services directly related to the creation of the enterprise.
Start-ups must have a minimum project value of € 50,000 in eligible costs. Any aid provided may cover a period of 24 months which must fall within the first 5 years from the setting up of the enterprise.
Enterprise Support:
Business Advisory Services:
Forward looking enterprises may benefit from the services provided by Business Advisors, specifically selected by Malta Enterprise, to assist them in the competitive development of their business. Business Advisory Services are charged at €50 per hour, part of which is part financed by Malta Enterprise. The Corporation may also allocate ten (10) hours of free advisory services to help the enterprises and the assigned advisor to carry out preliminary assessments.
Trade Promotion
Participation at International trade fairs and trade missions can be funded if
• enterprises participate in trade events coordinated by Malta Enterprise
• enterprises form part of a contingent participating together in a particular trade fair.
Malta Enterprise may part finance, up to 60% of costs incurred for:
• Rental of exhibition space / stand
• Stand construction services,
• Freight expenses incurred for shipping materials/exhibits required to setup and run the stand.
• Travel and Per Diem
ERDF International Competitiveness Grant Scheme
The ERDF International Competitiveness Grant Scheme supports enterprises to tap into new international markets. This international competitiveness incentive will support enterprises to extend their activities in new markets or to introduce a new service or product in an existing market.
The ERDF International Competitiveness Grant Scheme will part-finance up to 50% of costs incurred for:
• Translation services from and to the language(s) of the target market(s);
• Marketing material;
• Costs leading to the certification of products, processes and services;
• Participation in international promotional events;
• The wage costs of a newly engaged Business Development Manager.
ERDF Energy Grant Scheme
For an application to be considered for co-funding, the minimum project value (based on eligible expenses) must be at least Euro 25,000 and must not exceed €200,000. The resultant minimum grant value per project is Euro 12,500.
(A) Energy Saving Measures
Investments for the implementation of energy saving solutions and lighting, such as the installation of intelligent lighting systems, solar heating, thermal insulation, building management systems and energy-saving lighting;
(B) Alternative Energy Sources
Investments in renewable energy solutions, such as the installation of energy generating solutions based on the use of solar power and wind power.
Access to Finance:
Loan Guarantees facilitate access to finance to assist enterprises in the acquisition of capital assets that will lead to a more effective and efficient production and supply of service/s.
Soft loans support enterprise through loans at low interest rates for part financing investments in qualifying expenditure.
Loan Interest Rate Subsidies is an access to finance tool that aims to help increase the competitiveness and innovative capacity of enterprises by supporting the acquisition of tangible and intangible capital assets that lead to a more effective and efficient production and supply of service.
Employment & Training:
Training Aid Framework:
Through the Training Aid Framework, the Employment and Training Corporation provides financial assistance to companies that invest in the training of their workforce. The scheme is available for companies in the private sector and the subsidy will vary according to the type of training and the size of the enterprise. Training can be in-house or out-sourced and can be given in Malta or abroad through distance learning. The Training can be a course at the University of Malta or at a foreign university. The training can even lead to a PhD. Self-employed persons will also be eligible. Each company will be eligible for a maximum of €250,000 each year.
Employment Aid Framework:
Through this scheme employers can receive a subsidy to the wage costs if they hire jobseekers that fit into certain categories. Over 8 million in EU funds are available for this scheme. The Employment Aid Programme is aimed at jobseekers that are in a disadvantaged situation due to their life circumstances. These persons are:
• youth aged under twenty five years, and are within two years after completing their full-time education, and are unemployed;
• persons who have been absent from work for at least two years and who want to re-enter in the labour market;
• persons who have been absent from work for at least two years and who want to re-enter in the labour market;
• single persons who are looking for work, but are looking after other persons dependent on them;
• persons who left school after secondary school and were made redundant, or given redundancy notice, in the past six months;
• persons who are over fifty years old;
• persons who have been registering for work for a long time; and
• persons with disability.
The financial assistance is in the form of a subsidy in the salary of these individuals, as well as in the employer’s contribution to the employee’s National Insurance. The actual duration varies, ranging from a minimum of 26 weeks to a maximum of 156 weeks.
For assistance in applying for any of the abovementioned schemes, you can contact Impetus Europe Consulting Group Ltd on +356 2124 1232 or send an email to This e-mail address is being protected from spambots. You need JavaScript enabled to view it . Impetus Europe is a partnership between Fenlex Corporate Services Limited and Marketing Intelligence Services Company Limited (MISCO). The company specialises in EU driven consultancy and assists entities in applying for EU funding calls and tenders.Malta Enterprise also provides further information on the incentives.