What investors need to know about licensing, support and incentives in Malta

Foreign investors considering Malta as an investment destination will be pleased to know that there is a wealth of support available to help them get their journey started.

In a bid to reduce red tape for businesses, Malta no longer requires every business to obtain a trade licence. Licensing now operates on a sector-specific basis via semi-autonomous authorities led by professional staff. These authorities are committed to upholding the standards investors and consumers expect while working together with stakeholders to improve the business environment.

Regulated Activity	Regulatory Authority
Financial Services	Malta Financial Services Authority
Blockchain	Malta Digital Innovation Authority
iGaming	Malta Gaming Authority
Accommodation and catering	Malta Tourism Authority
Aviation and maritime	Transport Malta
Education	Malta Further and Higher Education Authority
Pharmaceutical and life sciences	Malta Medicines Authority
Telecommunications	Malta Communications Authority

Business support is also available through a network of public and private entities. These agencies, associations, and other structures representing the Maltese business community often prove to be invaluable to foreign investors. The wealth of information and assistance they offer, not to mention the contacts, allow new entrants to kick-start their investment in Malta on the right note. More information on some of these entities can be found in the section devoted to their particular economic activity, and a thorough (but by no means exhaustive) list can be found in Chapter 10, together with their contact information.

Before proceeding, particular mention is due to the leading non-sectoral associations: The Malta Chamber, the Malta Chamber of SMEs, the Malta Employers Association, and the Gozo Business Chamber.

All four work tirelessly to represent the interests of Malta-based businesses, and are highly active in the publication of research, guidance, and proposals to improve the country’s business landscape. Prospective investors may find the information provided by these entities useful for the development of their plans, and membership of at least one is recommended, serving as a platform for communication and knowledge-sharing between Malta’s most important economic stakeholders.

Gozo

Malta’s smaller sister, Gozo, is known as the more tranquil one, with stunning natural features and landscapes that serve as a welcome respite from the hustle and bustle of its larger sibling. The peace and calm it offers is often sought after by expat retirees and digital workers, but it also hosts some of Malta’s leading enterprises, particularly in manufacturing.

A recently launched plan to tie Gozo’s development to the twin green and digital revolutions in production opens further possibilities – be sure to ask for the latest incentives issued, as this transformation is just beginning.

Many schemes operated by Malta Enterprise and others include advantageous terms for Gozo-based businesses. The Micro Invest scheme, for example, allows Gozitan enterprises to obtain a tax credit for up to 65 per cent of their investment, compared to 45 per cent for Maltese ones – prospective investors are invited to consult Malta Enterprise and the Ministry for Gozo for the latest information. Meanwhile, incentives specific to Gozo are related to:

Transport

Manufacturing undertakings in Gozo benefit from reduced costs on inter-island transport, allowing them to compete more effectively.

Employment

Companies established in Gozo that hire workers for employment on the island are eligible for a refund on their wages of up to €6,000 over three years. On the other hand, companies based in Malta that offer employees resident in Gozo the facility to work from home can benefit from a salary refund of up to €10,000 over three years, plus a partial refund on any associated technological or capital investment.

Companies wishing to set up a back-office service enterprise are eligible for a separate scheme that partially reimburses the salaries of workers employed at the company’s Gozitan back-office operation. The refund ranges from €13,500 to €24,000 over three years, depending on the employee’s salary, and is capped at €65,000. This scheme, run by the Ministry for Gozo, is due to close in November 2023, and recruitment must have taken place by that date.

Malta Enterprise Schemes

The incentives offered by Malta Enterprise can be pivotal for investors’ decisions to start operating in Malta. Below is a small sample of its offering, which is regularly updated in line with changing economic realities. For the full, current list, visit its website.

Research and Development

The aim of this incentive is to assist industrial research and experimental development activities required by industry for the acquisition of knowledge, leading to the development of innovative products and solutions.

Start-Up Finance

This measure is aimed at small start-up undertakings that demonstrate a viable business concept and exhibit commitment to expand and further develop their economic activity, with support of up to €400,000, or €800,000 if the start-up qualifies as an innovative enterprise.

Business START

For start-ups at an earlier phase of development, Business START offers seed and growth funding with an initial grant of up to €10,000 to help them develop their business proposal and determine the feasibility of their business idea. Start-ups that present a viable business plan may receive additional support linked to full-time employment which may reach up to €25,000 per quarter, up to a maximum of €200,000.

Invest

Invest aims to sustain the regional industrial and economic development of Malta by facilitating initial investments through the setting up of new establishments, expansion of existing facilities, and diversification of existing businesses. Support may be awarded through loan guarantees, interest rate subsidies, cash grants, and tax credits.

Business Development

This measure facilitates value added projects, including new business initiatives, expansions, and transformation activities, with support awarded in the form of a tax credit or a cash grant.

Access to Finance (Soft Loan)

This is a financial instrument designed to support undertakings engaged in a manufacturing or service activity to accelerate their plans in establishing new products or entering a new geographic market, addressing environmental concerns, and digitising processes. Beneficiaries may be supported through a soft loan covering part of the funding requirements of up to €1,000,000.

Micro Invest

Micro Invest encourages undertakings to invest in their business to innovate, expand, and develop their operations through a tax credit equivalent to 45 per cent (65 per cent for Gozo) of eligible expenditure.

Allocation for Industrial Land and Space

Developable land or space in existing buildings can be offered in state-owned industrial zones throughout the country.

EUREKA Instruments

EUREKA is an EU initiative supporting the development of rapidly marketable innovative products, processes, and services across all technological sectors through collaborative industrial research or experimental development projects involving partners from Malta and other EUREKA countries.

Priority Areas

While each scheme has different eligibility criteria, investments related to Malta’s strategic economic development objectives will be best placed to receive the most generous support. These include:

• manufacturing
• management of waste and environmental solutions
• research and development activities
• provision of industrial services and solutions to manufacturing operations
• digitisation of processes
• software development (including video games and entertainment systems)
• health, biotechnology, pharmaceuticals, and life sciences
• maintenance, repair, and overhaul of aircraft and other electromechanical equipment
• artisanal works
• services that by nature are not limited to geographic scope and are scalable internationally
• projects that may lead to an increase in business performance and innovation

This feature was first carried in the Malta Invest 2023 edition. Malta Invest is the first-ever comprehensive international investment guide focusing on Malta as a destination. It is produced by Content House Group.