Business Development & Continuity Support

Introduction The Business Development & Continuity Scheme is intended to facilitate value adding projects that are expected to contribute to the regional development of Malta and to support existing undertakings sustain operations during restructuring.  The scheme may support various activities such as the initial development phase of undertakings establishing an operational base in Malta, expansion […]

Written By Stephen Balzan

On January 9, 2017
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Introduction

The Business Development & Continuity Scheme is intended to facilitate value adding projects that are expected to contribute to the regional development of Malta and to support existing undertakings sustain operations during restructuring.  The scheme may support various activities such as the initial development phase of undertakings establishing an operational base in Malta, expansion projects, consolidation of activities and the re-organisation of activities.  Supported initiatives should lead to the development of new business or to ensure the continuity of current operations.

Malta Enterprise may award tax credits or cash grants of up to € 200,000 to undertakings that carry out a project aimed to expand their business operation or to consolidate their current operations.  

The aid shall be awarded to support costs incurred following the approval of Malta Enterprise. The extent of aid granted through this incentive will take into consideration the potential contribution of the project to the Maltese economy and the number of new jobs that will be created or maintained.

Duration of the incentive

This scheme will remain ongoing until 31st December 2020.

Eligible undertakings

The support available through this measure may be awarded to undertakings that following an evaluation by Malta Enterprise are deemed to be relevant to Malta’s economic development.  

Malta Enterprise considers all proposals but gives priority to:

  1. Manufacturing operations;
  2. Providers of Industrial Services;
  3. Creative Enterprises; 
  4. Developers of Digital Media; and
  5. Activities linked to Life Sciences.

Undertakings engaged in any of the following activities are excluded: 

  1. Real Estate;
  2. Retail and Wholesale;
  3. Transportation;
  4. Quarrying;
  5. Construction;
  6. Hotels, resort hotels, suite/aparthotels or guest houses;  
  7. Gambling; 
  8. Financial services and/ or Insurance;  
  9. Voluntary Organisations

Budget

This incentive has an annual budget of €4,000,000 with an overall budget of €25 Million.  The support shall be primarily awarded in the form of tax credits yet the Corporation may approve that the support is provided in full or partially as a cash grant.

Aid intensity

The aid may not exceed €200,000 over a period of three (3) rolling fiscal years.   The value disbursed in any fiscal year shall not exceed the wage costs incurred by the single undertaking in that fiscal year.

Eligible expenses

The approved financing shall be directly related to the operation of the undertaking and in any case shall be limited to:

Relocation Costs of Key Personnel – Support of up to €2,000 per employee (or director) may be awarded to cover the relocation of key employees (or directors), who are not resident in Malta at the time when the aid is awarded by Malta Enterprise.  Employees must have a contract of employment clearly indicating that the persons shall be engaged for at least one (1) year.  

Temporary Secondment of Personnel – The secondment of personnel required to assist in the development of the new business may be supported.  Eligible costs shall be limited to costs paid by the beneficiary to the undertaking providing the seconded personnel as specified in a contractual agreement between the two undertakings.  The maximum aid shall be limited to €2,000 per month for a maximum of twelve (12) months. Applicants benefitting from temporary secondment may not claim for relocation of costs outlined above in respect of the same personnel. 

Relocation Costs of Assets – Relocation expenses related to the transportation of machinery, plant and equipment being relocated to Malta is eligible for funding. 

Operating expenditure covering the twelve (12) months – Costs incurred over a consecutive period of up to twelve (12) months in relation to: 

  1. Telecommunication costs (Internet and Telephone) incurred from a telecommunications provider and that are specific to business usage.
  2. Rental of business premises.
  3. Water and Electricity costs.
  4. Professional Services 

Services directly related to the business operations – Services related to the business operations and that are provided by third parties through an agreement (or contract) covering a period not longer than twelve (12) months which specifies a fixed weekly, monthly or overall fee.    Support services must be specifically approved by Malta Enterprise. Nevertheless, Malta Enterprise shall not support:

  1. services supplied by related undertakings (partner or linked undertaking) or by persons having a controlling interest in such undertakings; 
  2. services related to training and/or resulting in the provision of training. 

Wage Costs – Wage costs limited to full time employees covered by an employment contract of at least twenty-four (24) months.    Malta Enterprise will only accept claims after the person whose wages costs are claimed has been employed with the undertaking for at least six (6) months.  Wage costs shall only be considered in respect of full pay periods. 

How can we help?  

For further information, please contact one of the firm’s tax partners, Stephen Balzan on [email protected] or Elaine Camilleri [email protected]. ACT can help you understand the changes to the tax rules and how these can impact your business.  

Apart from its offices in St. Julian’s Malta, ACT operates from a second office in Gozo, which is situated in the capital city of Victoria.  For an appointment in our Gozo office, please call on 00356 21378672 or send us an email on [email protected]. 

Disclaimer: This article contains general information only and is not intended to address the circumstances of any particular individual or entity. ACT, by means of this article is not rendering any accounting, business, financial, investment, legal, tax, or other professional advice or service. This article is not a substitute for such professional advice, nor should it be used as a basis for any decision or action that may affect your finances or your business. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. Before making any decisions or before taking any action that may affect your finances or your business, you should consult a qualified professional adviser. ACT shall not be responsible for any loss whatsoever sustained by any person who relies on this article.