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State support for Maltese early-stage start-ups covers practically every need imaginable, from office space to soft loans to mentorship. However, once the idea is market-ready, founders face a cliff-edge of support, with local investors’ aversion to risk forcing many to look abroad for financing options.

That might be about to change, as Government seeks to complete the start-up ecosystem jigsaw puzzle by entering the equity space itself, via Malta Government Investments, a fully state-owned holding company that includes Malta Air Traffic Services, Enemed, WasteServ and Gozo Channel among its assets.

Speaking to, CEO Herald Bonnici says the company has been instructed to explore alternative instruments like fund of fund activities that would allow it to invest in a start-up and exit, at a profit, when the time is right.

“The way a fund of fund activity operates is not by having total control of an enterprise,” he says, noting that this marks a divergence from the company’s other holdings. “It is by having specialised funds and private funds which in turn invest money into companies, in a minority position, with an entry and exit route which normally varies between five and 12 years.”

Malta Government Investments CEO Herald Bonnici

Such an initiative would complement the work done by other national entities in fostering an environment conducive to innovation and disruption, joining offerings by Malta Enterprise (grants and tax credits), Malta Development Bank (loan guarantees) and MIMCOL (seed guarantees).

“Start-ups might not always fulfil financing criteria when it comes to bank loans,” says Mr Bonnici, while local investors are known to be bullish as can be… as long as the investment is tangible and the gains are all but guaranteed.

“In total, so, we will have a whole basket of tools that Government is putting on the table. When taken as a whole, if you are setting up your own business, we are, as Government, serving you better, through loans, guarantees, and other schemes, but now also from an investor point of view.”

The MGI start-up equity scheme will follow the same direction as other national entities, with a preference for high value-added knowledge-based sectors like gaming, video games, fintech, insurtech, medical technology, green technology, and initiatives for the blue economy.

Mr Bonnici points out that Malta needs to offer founders, including foreign ones, a compelling reason to set up a base in Malta.

“It’s a competitive environment out there. Why should a company launch in Malta? Why not elsewhere in Europe, or perhaps America? Why not the Middle East or Asia, even Africa?”

He argues that local stakeholders must offer a narrative, a story about the benefits a start-up in Malta has access to that might not be the case elsewhere.

“We are strategically located in the middle of the Mediterranean, we are English speaking, and part of the EU. There is a reason so many people and companies throughout the years have set up a base in Malta, and beyond the financial aspect, there is also the simple fact that we are Maltese, with everything that means.”

Mr Bonnici continues: “We are friendly, we are nice, and we are a small country. Founders and investors alike feel important here – they are not lost among thousands of others. These are all important considerations for start-ups looking for a destination.”


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