Incentives

In addition to the competitive tax system the Maltese islands offer a number of other incentives, some of which are included as follows:

1. Gozo Based Incentives

a) Supporting Knowledge Based Sectors in Gozo Scheme

Scheme provides for partial reimbursement to employers for:

salaries of up to €8,000 per annum per employee for a period of 3 years (maximum of €24,000 per employee)
training costs, including conferences, seminars and conventions of 65% up to a maximum of €1,500 per annum per employee for a period of 3 years (maximum €4,500 per employee).

The above 2 incentives have an overall capping of €85,000 per year (€255,000 over 3 years) per single employer.

This scheme is aiming for knowledge-intensive economic sectors based in Gozo, targeting research, analysis and development in the following sectors:

Software Publishing
Computer Programming, consultancy, and related activities
Data processing, hosting, and related activities
Financial and insurance activities
Legal and accounting activities
Activities of head offices; management consultancy activities
Architectural and engineering activities; technical testing and analysis
Scientific research and development
Specialized design activities
Gambling and betting activities.

To benefit from the scheme the employer must have a registered address in Gozo from where the operations are carried out and the employee must be employed on a full-time basis and on an indefinite contract and be residing in Gozo. The Euro incentive received is in the form of a partial refund of the basic salary as follows:

Annual Basis Salary €17,000 - €23,999 = Annual Refund of €4,500 (€13,500 in 3 years)
Annual Basis Salary €24,000 - €30,999 = Annual Refund of €6,000 (€18,000 in 3 years)
Annual Basis Salary €31,000 and above = Annual Refund of €8,000 (€24,000 in 3 years).

b) Supporting Sustainable Quality Employment in Gozo Scheme

Scheme offers a partial salary reimbursement to employers located and having a business address in Gozo, spread over 3 years for full-time indefinite employment. Eligible staff includes newly hired staff or those continuously employed since Jan 1, 2018, whose employer benefited from the full 3-year cycle under the previous Gozo Employment Refund Scheme or Gozo Back-Office Employment Refund Scheme.

c) Gozo Telework Scheme

Scheme assists employers, based or having business premises in Malta, to offer their Gozitan resident employees the facility to work from home. Aid represents a financial grant of up to €10,000 per employee, spread over 3 years, paid proportionately on the number of telework days granted. The Scheme also offers a one-off financial granted related to the Technological and Capital Investment.

d) Restoring and upgrading venues with the capacity to host MICE events in Gozo

Scheme assists Voluntary Sector Organizations or Private Business entities in restoring and upgrading their venue facilities to bolster their capacity for hosting high-quality MICE activities. Under this scheme, aid is provided in the form of a financial reimbursement covering 50% of eligible expenses incurred, with a ceiling set at EUR 50,000.

e) Supporting the adventurous Tourism Industry in Gozo through hiring equipment refund scheme

Assists adventurous tourism operators in investing in eco-friendly and zero-emissions equipment for hire thereby modernising while also increasing their service offering capacity. Aid granted cover up to 50% of the costs incurred on the purchase of eligible equipment, capped at €5,000.

f) Supporting marketing initiatives for specific niche tourism markets in Gozo

Supports specific niche businesses in marketing campaigns to promote Gozo as a destination. Scheme covers up to 75% of eligible expense, capped at €3,000 for advertisement campaigns targeting a foreign audience or participation in international fairs/events aboard. Capping increases to €4,500 in case of businesses undertaking both advertisement campaigns and participating in international fairs/events aboard.

g) Supporting Marketing Initiatives for the Accommodation Sector in Gozo

Supports accommodation operators in Gozo to promote the island as a holiday destination through digital marketing through a reimbursement of up to 65% of the eligible expenditure, capped at €8,000. Eligible operators must invest a minimum of €5,500 including the grant and the content marketing plan developed should cover between 6 to 12 months.

2. Malta & Gozo Based Incentives

a) Start-up Finance

Supports Start-Ups at various stages in their development process based on the milestones achieved and their vision for growth. Eligible Start-ups should demonstrate innovation in doing business and a vision to expand beyond the Maltese market. Scheme provides support up to €500,000 for small start-ups or up to €750,000 for Start-ups operating in an assisted area. Support may be doubled for innovative start-ups.

b) Start-Up Enhance

Supports Start-Ups by part-financing investments in tangible and intangible assets. Aid is capped at 50% of eligible costs with minimum and maximum funding amounts set at €10,000 and €400,000 respectively. Investments in Gozo will benefit from an additional 10% aid intensity.

c) Business Start

Support small Start-ups deemed economically feasible and innovative by Malta Enterprise through a grant of €10,000 aimed at assisting them in developing their business proposal and undergoing a feasibility study.

d) Exploring Research Grant

Assists businesses in planning better their R&D initiatives whilst encouraging them to think strategically, consider the market disruptions the research results could lead to and look beyond the organisation for strategic collaborations. A cash grant of up to €100,000 seeks to support the implementation of a feasibility study to this end.

e) Invest – Support for Initial Investment Projects

Facilitates initial investment projects relating to new establishments or expansion or diversification of already existing business operations. Support under this scheme is provided through loan guarantees, interest rate subsidies, cash grants and/or tax credits, with more advantageous rates for investment projects carried out in Gozo.

f) Micro Invest

Encourages undertakings to invest in innovation, expansion, and development of their operations. Aid is granted in the form of a tax credit equivalent to 45% of eligible expenditure up to a maximum of €50,000 over 3 years. Aid intensity increases to 65%, up to a maximum of €70,000 for Gozo-based undertakings, registered family business or businesses having more than 50% of ownership attributable to female persons.

g) Research and Development

Supports undertakings, either through a tax credit or a cash grant, that aim to achieve further economic growth through innovation and that require Industrial Research and / or Experimental Development to address uncertainties to achieve their objectives.

h) Patent Box Deduction

The Patent Box Deduction Rules establishes a fiscal regime through which taxpayers generating income from patents, similar Intellectual Property (IP) rights and copyrighted software would be entitled to a percentage of their income from taxable income.

i) Guaranteed Co-Lending Scheme

Offers favourable financing terms to SMEs in favour of projects focusing on innovation, digitalisation and more broadly, the preservation and enhancement of competitiveness; socially oriented initiatives; investment that addresses environmental issues; and investment aimed at achieving a high level of sustainability or to promote the circular economy.

j) Tailored Facility for Businesses

Enhances access to finance for businesses by addressing barriers to lending for which commercial banks may not be willing or able to provide the required financing. The required loan is co-financed by the commercial bank and the MDB in such portions as may be agreed between the parties. The MDB may also offer a guarantee on part of the commercial bank’s share of the loan.

k) Digitalise your Micro Business

Assists Micro Enterprises in digitalising their operations by investing in new digital capabilities and digitalised processes. This improves their resilience, efficiency, productivity, and customer experience. Scheme offers a 50% part-finance of eligible costs, capped at €10,000 per digitalisation investment. Aid intensity increases to 60% for investments in Gozo.

l) European Innovation Council Support Scheme

The aim of the scheme is to support entities applying to the European Innovation Council Programmes. Eligible applicants may benefit from grants covering proposal development (capped at €10,000) and/or business coaching (capped at €5,000) and/or pitch coaching (capped at €2,000).

m) Innovate – Innovation Aid for SMEs

Supports SMEs in carrying out projects leading to product, process and organisational innovation in collaboration with a Research and Knowledge-Dissemination Organization. The measure can provide funding for the secondment of a highly qualified person, access to innovation advisory and support services.

n) Digitalise your business

Assists Enterprises in digitalising their operations by investing in new digital capabilities and digitalised processed. This improves their resilience, efficiency, productivity, and customer experience. Scheme part-finances 50% of eligible investment costs in Malta and 60% of eligible investment costs in Gozo, up to a maximum €120,000 plus an additional 7% flat rate to finance indirect costs related to such investment.

o) SME Enhance (GBER)

Supports SMEs by part-financing investments towards expansion, diversification, innovation of operations and initial investment, aimed at potentially improving their productivity. For projects in Gozo, aid is capped at 35% for micro and small enterprises or 25% for medium size entities. Minimum and maximum funding amounts are set at €10,000 and €500,000 respectively.

p) SME Enhance (de minimis)

Supports SMEs by part-financing investments towards expansion, diversification, innovation of operations and initial investment, aimed at potentially improving their productivity. Aid is capped at 50% of eligible costs with minimum and maximum funding amounts set at €10,000 and €120,000 respectively. Investments in Gozo will benefit from an additional 10% aid intensity.

q) Cyber Assess Scheme

The Cyber Assess Scheme seeks to bolster businesses’ cyber security and resilience by offering free specialised cybersecurity expertise and services. Services offered through this scheme focus on assessing IT systems and infrastructure, emphasizing on vulnerability assessments, penetration testing, security architecture reviews, risk assessment and audits and reviews.

r) Cyber+ALT Grant Scheme

Assists SMEs in enhancing their overall level of security and resilience to be better equipped in handling cyber threats and be proactive in meeting future challenges. Aid under this scheme represents non-repayable grants covering up to 80% of the costs of investment in Malta, capped at €60,000 per project.

s) Purchase of New Electric Vehicles

Scheme supports the purchase of and replacement of currently registered vehicles with new electric vehicles. Grant amounts shall be capped at 60%, 50% and 30% of eligible investment costs for small, medium and large enterprises respectively. An additional grant of €1,000 shall be awarded for those vehicles registered in Gozo.

t) Qualifying Employment in Innovation and Creativity

This scheme facilitates employment of non-residents within the knowledge-based industries in roles which are currently not addressed by the local labour market. Assistance under this scheme is in the form of a temporary ease of personal tax expenses incurred by such individuals through a flat 15% tax rate for a period of 4 years.

u) Access to Employment

Scheme facilitates labour market integration by enhancing opportunities to access the labour market and providing work experience to those furthest away from gainful employment. Eligible employers would receive a subsidy of €186 (full-time) / €93 (part-time) per week for each employee engaged.

v) Bridging the Gap Scheme

Supports individuals in disadvantages situations or registered persons with disability in the transition from unemployment to employment by allowing employers to evaluate the performance of prospective employees in the workplace, prior to proper engagement whilst providing such employees with a weekly allowance of 80% of the minimum wage.

w) Mature Workers Scheme

Promote access to employment for unemployed persons aged between 45-65, by providing a tax deduction on chargeable income to eligible employers, up to a maximum of €11,600, for the first 2 years of employment of each eligible employee and a further tax deduction of 50% of training costs, up to a maximum of €400 per employee.

x) Energy Audits for SMEs

Encouraging SMEs to conduct energy audits aimed at identifying actions and investments that could be carried out to reduce energy consumption on a daily basis. The financial grant covering the reimbursement of costs incurred in the performance of an energy audit, varies depending on the NACE Codes of the entity in question.

y) Tax Incentive Scheme

Intended for employers who are willing to participate and train participants in a hands-on-training job exposure. Eligible employers benefit from €600 deduction from taxable income for each hands-on-training placement with a duration of 26 weeks or more.

z) SME Guarantee Scheme

Enhances SME access to bank credit for new investments, including working capital for new investment and business transfers, through an uncapped guarantee of 80% on loans issued by accredited credit institutions to such SMEs. This enables them to be more responsive to the borrowing requirements of smaller businesses.

aa) Tax Credit on Higher Educational Qualifications

Provides for a tax exemption on employment income which may be claimed by way of a tax credit, to individuals who complete relevant courses of studies at MQF Level 7 or 8.

ab) ERC Support Scheme

Strengthens the opportunities for researchers to obtain grants for excellent and ground-breaking research. Aid comprises mentoring whereby eligible researchers are assisted in identifying international experts to provide coaching and advise and training designed to assist applicants in enhancing their proposal writing skills. Aid is capped at €5000 and €2000 for mentoring and proposal training respectively.

ac) Horizon Europe Networking Support Scheme

Supports attendance to Horizon Europe networking and brokerage events held overseas through reimbursement of flight tickets and subsistence allowances capped at €750 and €150 per night respectively. These networking activities generate long-term outcomes leading to the formation of and/or participation in consortia capable of applying for Horizon funding.

ad) Horizon Internationalisation Partnership Award Scheme

Supports entities intending to submit a Horizon Europe proposal by part-financing costs incurred to engage a proposal writer/s or consulting service firm with a proven track record in proposal writing. Eligible costs include proposal writer/s or consulting services fees and graphic designer fees aimed at improving the visual appearance of the proposal.

ae) Postdoctoral Fellowship Training Scheme

The Scheme supports travel and accommodation expenses for experienced researchers willing to submit a proposal with a Maltese entity host (Beneficiary) for the MSCA Postdoctoral Fellowship call.

af) Skills Development

Supports undertaking in providing training to develop and update skills and knowledge of their workforce and to train new employees to acquire the necessary skills and knowledge to perform effectively. Aid is in the form of tax credits and/or cash grants with aid intensities of up to 70% of eligible costs, depending on the size of the entity in question.

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