Malta, a small island in the middle of the Mediterranean Sea, possesses one of the strongest investment networks in Europe, with the country’s economy currently experiencing an unprecedented amount of growth, despite the current situation of European economies.
The island’s strategic position, acting as a middle-ground between Europe and North Africa, along with its array of history and beaches, makes tourism the most renowned pillar in the Maltese economy. Tourism, along with Financial Services and iGaming, make up a significant portion of the Maltese economy, which will only continue to grow in the future.
Apart from this, the country is experiencing political and social stability, with it being a parliamentary democracy, with the two major political parties both being keen on attracting foreign investment, and creating a business environment that is secure and open at the same time. Malta is also a member of the Eurozone and the Schengen area, making foreign transactions easier.
Malta also maintains a stable macroeconomic environment, with the country recording the fourth-lowest unemployment rate in Europe, with the rate being just 3.5% according to Eurostat, the European Union’s statistics body.
Apart from the above, Malta also has a multi-skilled, bilingual, and relatively cheap labour force, with very well-established links to Europe, North Africa, and the Middle East, making communication between countries extremely easy.
So what can you gain from investing in Malta, rather than in other countries?
Malta Enterprise, Malta’s economic development agency, has developed a number of incentives aimed at helping business develop thoroughly in Malta throughout the years.
First of all, Innovation Aid for SMEs is an incentive that is open to all SMEs which qualify for this measure, allowing them to recover a segment of the costs incurred on the loans of highly qualified personnel from large campaigns, in the form of tax credits, capped at 50% of the eligible costs.
Secondly, Investment Aid Tax Credits (2014-2020), is a measure that facilitates initial investments by encouraging the founding of new establishments, as well as the expansion and growth of existing businesses. These aim to sustain the regional and industrial development of Malta as a country. Aid Intensity depends on the size of the undertaking and is also determinant in the sector the business is involved in.
Aid for Research and Development Projects is a measure that allows companies to collect tax credits on costs that arise directly or indirectly as a result of a Research and Development project, or projects that are relevant to the company’s industry. Projects that are eligible should pursue a possible advancement in science and technology, as there is scientific or technological uncertainty. Eligible enterprises will receive a tax credit of 25% of eligible costs, while medium sized enterprises shall receive a tax credit of 35% and small enterprises that of 45%.
Another measure is that of Business Advisory Services (2018-2020), a scheme that is devoted to supporting business development operating in Malta and to help access advisory services that are suited to their particular circumstances. This scheme aims to aid entrepreneurs, managers and business owners in designing business strategies that guarantee growth and sustainability. Such professionals may aid businesses in business planning, financial planning, industrial space auditing, market development, and also start-ups and entrepreneurship. Beneficiaries will receive a voucher valid for six months which shall not exceed €500 for a minimum of five advisory hours. Additionally, a tax credit is also available at 50% of the costs capped at €2,000.
Furthermore, the Business Development and Continuity scheme, is an initiative taken by Malta Enterprise, which is committed to facilitating value added projects which are expected to assist in the regional development of Malta, whilst also supporting existing undertakings to sustain operations during such restructuring. This scheme can aid different types of activities, such as the initial development phase of undertakings that are setting up their operational base in Malta, expansion projects, consolidation of activities, as well as the reorganisation of activities. Priority is given to manufacturing operations, providers of industrial services, creative enterprises, developers of digital media, and activities related to Life Sciences. The level of financial aid given cannot exceed €200,000 over a three fiscal year period, and the value distributed in any fiscal year should not exceed the wage costs incurred by the undertaking in that current fiscal year.
When it comes to starting up your business, Malta Enterprise has got you covered as well, through its Start-Up Finance (2017-2020) scheme. This measure aims to finance innovative undertakings in their initial stages of development, with Malta Enterprise providing support related to private equity, crowd funding and the acquisition of machinery and equipment. This support may be up to €100,000 if linked to crowd funding campaigns, and up to €200,000 if linked to private equity or to the obtainment of machinery and equipment, all depending on the type of support provided.
Apart from the Start-Up Finance (2017-2020) scheme, Malta Enterprise also provides a Start-up Advance measure, which aims to aid small start-up undertakings that are still building up a business operation that has shown signs of market potential and is deemed economically feasible and innovative by Malta Enterprise. The Corporation may give a maximum grant of €100,000, with a limit of €25,000 for any six months, with the condition that the grant shall only be given if the company stays classified as a start-up undertaking at the start of the six-month period. The grant is to be disbursed over three-month intervals, with each disbursement being calculated by multiplying €1500 with the total amount of full-time employees that have been working with the beneficiary for at least one full month.
