Investing in Malta
As an entrepreneur or business decision maker, you know how important investment is to drive forward the business or new venture. At the same time, it may be difficult to commit funds to new projects or ideas, particularly in times of higher uncertainty. Are you aware of the project funding programs that are available to your business to stimulate investment and thus propel future growth?
The European Union has an objective to encourage businesses to invest in member states to increase employment and productivity. Several project funding programs have been launched to promote investment in different areas. Malta, an EU member state, also offers its own national funding schemes to attract business investment to the country.
While many business owners and executives imagine that one needs to have a breakthrough project to qualify for funding, the truth is that funding is also be available for more routine matters, including:
- preparing a business plan
- use of office space
- recruitment of employees in Malta
A Range of Project Funding Programs
There are several funding programs available that may target different industries, offer different amounts of funding or the aid intensity (percentage of costs that the scheme will cover). Project timelines and deadlines will vary from one program to another, and the type of aid may take different forms, such as advance cash grants, reimbursable cash grants, tax credits, soft loans, amongst others. Different funding programs cover a range of eligible expenses (i.e. specific items that the scheme will cover) as well as eligibility criteria & conditions.
Eligibility Assessment
We start eligibility assessments by comparing your project against the various project funding programs. Some programs will typically be more compatible with a project, for instance if the project’s total value is comparable to the scheme maximum funding cap, or if your project fits within one of the areas or industries explicitly promoted by the program.
All schemes will have their own particular benefits and conditions, for example one program may have a lower maximum project funding cap, but would fund a higher percentage of the expenses, or may offer a cash grant in advance rather than after the costs have been paid. Some programs also require the applicant to have a minimum period of establishment, such as the company being incorporated for more than three years.
It may be possible to apply for more than one scheme for the same project, although – not surprisingly – you cannot receive funding for the same item more than once. Therefore, we encourage our clients to apply for more than one scheme if these complement one other to cover different expenses or investments.
State Aid
The state aid route selected is also an important consideration. The de minimis state aid rules permit funding up to a maximum of € 200,000 in every 3-year period. The more recent General Block Exemption Regulation (GBER) mechanism was introduced primarily to support innovative, environmentally sustainable and small-to-medium-sized businesses. The GBER has no absolute funding cap, but typically funds a lower percentage of the total project cost. The project funding amount or percentage varies depending upon the size of the enterprise – the smaller the company, the greater the fund allocation tends to be.
Why Timing Is Important?
The timing of the application for funding is extremely important. Some of our clients have left the funding process until too late in the day and have actually missed out on funding opportunities. Some programs operate as open rolling calls, which means that you can apply at any time during the duration of the scheme. Other schemes are more restrictive, with calls issued periodically – usually annually or bi-annually. These have a stipulated deadline by which applications can be received, following which the call closes. Thus, you can only apply during one such open call and you must plan in advance to ensure you complete your application within the time window.
If you are interested and wish to learn more, let’s discuss in complete confidence.
Contact Steve Muscat Azzopardi, the author of this post here: steve@inter-serv.com