Malta is taking steps to spur the growth of early-stage businesses and to attract new talent from around the world.
When one thinks of European start-up hubs, London and Berlin come first to mind, perhaps followed by Dublin and Lisbon too. However, the Facebook, AirBnB and Uber bug has also landed in Malta where a start-up ecosystem is starting to take shape. In the past months, the country has seen the creation of incubators, co-working spaces and seed-financing schemes, as well as the arrival of venture capital firms.
Growing Start-up Community
Traditionally, Malta focused on attracting large foreign-owned corporations with special privileges, however, there is a new desire to support smaller business ventures of a domestic and international nature. Malta has already picked up some promising start-ups. Gaming is the biggest field due to the country’s reputation as Europe’s iGaming hub, with ex-employees of gaming operators establishing their own companies. Malta has also launched its first technology business incubator, TAKEOFF, which is based at the University of Malta. A similar initiative is the Microsoft Innovation Centre and the Innovation Hub run by Malta’s national IT agency. Concurrently, Malta is witnessing the creation of lobby and networking groups such as the Silicon Valletta network.
MIMCOL as a Partner
Maltese start-ups have been successful in raising finance on global crowd-funding platforms, but the initial capital injection remains one of the top hurdles young companies. However, start-ups in Malta can find many helping hands, including the Malta Investment Management Company Limited (MIMCOL). MIMCOL has recently introduced a Seed Investment Scheme to help start-ups raise equity finance. The scheme, capped at €5 million, grants tax credits to individual investors resident in, or operating in, Malta investing in start-up businesses.
The next building block to reinforce Malta’s credentials as a start-up hub is to attract an International Accelerator, and MIMCOL is currently establishing links with foreign accelerator programmes to lure a big-hitter to the island. MIMCOL is also looking at other initiatives that could be pursued to bolster Malta’s start-up ecosystem, one of them being a dedicated national centre for start-ups. It is also entertaining the idea of so-called start-up exchanges, where incubators from different countries cooperate to give entrepreneurs the opportunity to explore markets abroad. Start-ups, which are part of a participating incubator, can benefit from free office space for a certain period of time, as well as from introductions to key players in the local ecosystem.
Malta’s start-up scene looks promising and full of potential as it evolves through a mixture of public and private initiatives. However, Malta needs to find its own voice in the choir of start-up nations. Research shows that a company’s seed capital can last three to five times longer in Malta than in the bigger and more expensive start-up hubs. Start-ups with a small budget can also benefit from less burdensome auditing requirements and a deduction in tax.
Recognising that some products do not scale as quickly as others, Malta is positioning itself as a partner for early-stage ventures that require time to build traction and revenues. Due to its small size, the island is also an ideal research and innovation test bed. There are numerous areas of opportunity for industry players to get involved in, either through research and development projects or innovative ideas that could help Malta address some of its very own challenges in sectors such as energy, transport and health.