Business Grants and other incentives for startup 2020-2023

We continue to introduce to our business partners and potential clients with the recently announced finance schemes for the startup companies and business development.

As part of Malta’s Structural Funds Programme, EU funds will provide an opportunity for local enterprises to unlock their potential for growth. The main goal of the financial incentives schemes is to charge the startups making Malta one of the world’s best places for the entrepreneurs.

The newly start business is encouraged to performance the innovations in different sector of the economy as well as to attract investments for the better growth.

Business grants and other incentives work for the new or substantially improved products and/or services compared to the state of the art in the local industry, which then may be distributed including the international market.

Malta Enterprise introduces the startups to the Government and can help with its Business Start and development schemes.

Business Grant for «Business Start»

This is a funding to small start-ups having an innovative and feasible project, the maximum support of undertaking is amounts to €200,000.

For the startup, which is still in its early development phase, however the business plan is not issued yet, it might be eligible for a grant of up to €10,000 which you can use to develop your business proposal.

If the startup presents a Business Plan, which is recognized economically viable by Malta Enterprise, it may be supported a maximum grant of two hundred thousand euro (€200,000).

This incentive is available until the December 31st, 2023.

Repayable Advance for «Start up Finance»

Scheme is open to the following legal forms of undertakings: self-employed; partnerships; limited liability companies; and cooperatives.

The assistance is repayable and may not exceed €400,000, which may be increased to up to €800,000 if the startup is an innovative enterprise.

This incentive is available until the December 31^st, 2022.

Scale Up Grant for «Business Development»

Those, who want to expand or consolidate their business activities, or undertake new project considering of the new ideas, still need the investments to do the next step to the future growth.

Such business can be supported in the form of tax credit or cash grants of up to €200,000.

Business grants are only considered to support projects that lead to future development of the following activities:

• Manufacturing;
• Management of waste and environmental solutions;
• Research and development activities;
• Provision of industrial services and solutions to manufacturing operations;
• Digitisation of processes;
• Maintenance, repair and overhaul of aircraft and other electromechanically equipment;
• Artisanal works.

Projects that do not address specifically the above activities, but which may lead to increase in business performance and innovation may still be supported through tax credits.

More detailed information of this financial support can be found here:

https://startinmalta.com

Through our proficiency in EU funding and specific programme requirements we can support you to identify the right funding source for project ideas and apply on your behalf for business grants and other incentives.

In view of these developments, we would like to remind about another addition in the Maltese legal framework, the creation of shipping and aviation cell companies. Malta has introduced new regulations, the Companies Act (Shipping and Aviation Cell Companies) Regulations, 2020, into Maltese law on 16 June 2020, under Legal Notice 248 of 2020. This amendment permits the use of the new structure for companies operating in the shipping and aviation sector, mirroring the model employed in insurance where company assets are ring-fenced via the creation of cells.

—   A distinctive feature, unique to cell companies shall be the inclusion of the words ‘Mobile Assets Protected Cell Company’ or the acronym MAPCC in the company’s name.

—   The concepts were introduced to allow a single corporate legal entity to benefit from the statutory segregation of assets and liabilities between segregated portfolios or accounts.

—   Some jurisdictions also introduced the concept of incorporated segregated accounts company (“ISAC”), which is similar to an SAC however each segregated account in an ISAC has separate legal personality.

—   The appropriate segregation structure depends on the needs of the parties to that structure and the particularities of the transaction and the assets involved (some transactions may consider separate legal personality a necessity).

Possible Benefits of Cell Companies:

—   Assets and liabilities for each cell constitute a distinct patrimony for that given cell and are segregated from the core cell company as well as other cells (the ring-fencing of each cell).

—   Following the establishment of the cell company, the setting up of new cells is easy and relatively quick.

—   One board of directors and one set of memorandum and articles of association for the cell company and its cells.

—   Streamlining of administration and fewer governance concerns.

—   Insolvency of one cell will have no impact on the remaining cells.

—   A creditor of a particular cell will only have recourse to the assets of that particular cell.

—   Cells are easier to wind-up in comparison to companies.

General Fiscal and Tax Considerations

 The main benefit of the cell company creation comes from the Maltese tax system:

—   The refund system would apply in a cell structure, insofar as the necessary conditions are met, even without a holding company structure.

—   From a VAT perspective, the cell company and its cells are considered as one. One VAT return is therefore required to be filed by the cell company covering all returns in respect of the cell company and its cells.

—   This reasoning applies with regards to the provision of services from one cell to another; a cell company and its cells are considered to be one entity.

Companies Act (Shipping and Aviation Cell Companies) Regulations

https://legislation.mt/eli/ln/2020/248/eng