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Amendments to Financial Incentives – the Start-up Finance Regulations and the Smart and Sustainable Grant Regulations

Overview

On the 3rd of February 2023, the financial incentives administered by Malta Enterprise stipulated in the Start-up Finance Regulations (S.L 463.32) and the Smart and Sustainable Investment Grant Regulations (S.L 463.45) available to eligible beneficiaries have been respectively revised by the Start-up Finance (Amendment) Regulations, 2023 (“L.N. 19 of 2023”) and the Smart and Sustainable Investment Grant (Amendment) Regulations, 2023 (“L.N. 20 of 2023”).

The Start-up Finance Regulations

Pursuant to L.N. 19 of 2023, the financial aid afforded to small start-ups in terms of the Start-up Finance Regulation has been extended to 2023. A start-up eligible for aid must be a limited liability company or a similar organisation that has not taken over the activity of another enterprise, has not yet distributed profits and was not formed through a merger, and must operate in any one of the following activities

  • Manufacturing;
  • Software development;
  • Industrial services analogous to manufacturing;
  • Health, Biotechnology, Pharmaceuticals and Life Sciences;
  • Other innovative economic activities which are enabled through knowledge and technology providing services or products which are currently not readily available in the relevant market or which shall be provided through a process which is novel.

The form of aid now available to small start-ups has been updated to consist of funding in respect of:

  • wage costs;
  • working capital;
  • cost of machinery, equipment; and intangible assets; and, or;
  • increase in equity or funds raised through private equity and, or crowdfunding campaigns.

Notably, whilst Malta Enterprise may grant a combination of the above-mentioned funding, support provided cannot exceed €400,000, or €800,000 where the start up is an Innovative Enterprise as defined in the relevant Guidelines published by Malta Enterprise.

Smart and Sustainable Investment Grant Regulations

With a view to achieving the target set by the European Union to become a climate neutral bloc by 2050, the Smart and Sustainable Investment Grant Regulations offer cash grants and/or tax credits to limited liability companies, partnerships or self-employed persons in respect of investments of at least €10,000 that are aimed at achieving sustainability or improving environmental performance or digitalisation.

By virtue of L.N. 20 of 2023, the form of aid available under the Smart and Sustainable Investment Grant Regulations has increased. The cash grant available in respects of eligible investment projects has been increased from €50,000 to €100,000, which covers up to 50% of eligible expenditure.

Moreover, where the investment project addresses sustainable development criteria, the tax credit allowed has been increased from €20,000 to €40,000 and covers up to 70% of the eligible expenditure, which percentage has been increased from 20%.

L.N. 20 of 2023 has also widened the scope of the scheme and now allows support to be granted in respect of the following investments:

  • Investments and modifications in plant, machinery, equipment and technologies that lead to a quantifiable reduction in CO2 emission; and
  • Investments that include specialised technical services and procurement of technologies that enable the undertaking to measure parameters linked to the undertakings’ carbon footprint.

Should you have any queries in relation to the Start-up Finance Regulations or the Sustainable Investment Grant Regulations or require any assistance with the submission of applications thereunder, you may get in touch with Kirsten Debono Huskinson (kirsten.debonohuskinson@camilleripreziosi.com) or Julia Darmanin (julia.darmanin@camilleripreziosi.com).

Kirsten Debono Huskinson

Overview On the 3rd of February 2023, the financial incentives administered by Malta Enterprise stipulated in the Start-up Finance Regulatio...

set up a meeting

Overview On the 3rd of February 2023, the financial incentives administered by Malta Enterprise stipulated in the Start-up Finance Regulatio...

set up a meeting