Government to reinforce incentives for R&D, capital investment, and higher wages

Finance Minister Clyde Caruana has announced a package of measures targeting investment, wage growth, and innovation across Malta’s business landscape.

The popular Microinvest scheme will be reinforced. Eligible tax credits will rise to €65,000 for businesses in Malta and €85,000 for specific categories of enterprises in Gozo. The Gozo bonus will remain in place to support regional competitiveness.

A new wage support mechanism will reward companies that improve pay for long-serving staff. The Government will finance up to 65 per cent of salary increases for employees who have worked at least four years with the same firm. This support will be capped at €780 per year, rising to €960 in Gozo where the contribution increases to 80 per cent.

Businesses investing in productivity upgrades or launching new ventures will qualify for tax credits covering 60 per cent of investment value. These investments must be made within the next two years and tax relief will be spread over a four-year period.

Research, innovation, artificial intelligence, and digitalisation will be incentivised through an accelerated tax write-off. Eligible costs will receive a tax benefit rated at 175 per cent or higher over two years. The measure aims to drive faster adoption of advanced technologies.

Further legal updates are expected to make it a statutory right for businesses to hold a bank account. The Government said consultation with financial institutions is underway to strengthen access to essential banking services.

Additional measures will support mental health in the workplace, although details have not yet been disclosed. Incentives will also encourage start-ups focused on Maltese language, culture, and artistic development.

Young people will gain new opportunities to enter the market. 16 to 18-year-olds will be recognised as entrepreneurs and allowed to conduct commercial activity. Internships with local SMEs will support early exposure to enterprise.

Mr Caruana highlighted financial services as a critical pillar of the economy. Ongoing reforms in asset management, family offices, and insurance are intended to reinforce Malta’s jurisdictional appeal. Investments in a National Payments Centre and centralised identity management will streamline compliance and payment operations.

Malta’s early regulation of blockchain and digital assets under MiCA is creating results. Firms including Bitpanda, Crypto.com, Gemini, and OKCoin Europe are consolidating their presence.

The video games and esports industry is also gaining momentum. The minister cited companies that are building global-market products from Malta. Partnerships with Unity and Unreal Engine have already resulted in 400 certified students, with 200 more currently applying.

Esports continues to support tourism and media exposure, with BLAST establishing its European headquarters locally.

Mr Caruana stated that gaming now contributes roughly eight per cent of Malta’s value-added economy. Plans include strengthening the legislative and fiscal framework to support long-term sector growth.