Business Start

Introduction Malta Enterprise, via Business START is offering a seed funding for start-ups. The measure is intended to support Small Start-up Undertakings that have a viable business concept and are in the early stage of their development.  Initiatives that are deemed to be economically viable shall be supported through a grant of up to €25,000. […]

Written By Stephen Balzan

On January 9, 2017
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Introduction

Malta Enterprise, via Business START is offering a seed funding for start-ups. The measure is intended to support Small Start-up Undertakings that have a viable business concept and are in the early stage of their development.  Initiatives that are deemed to be economically viable shall be supported through a grant of up to €25,000.

Business START is intended to support small start-up undertakings that are in the process of establishing and/or consolidating a business operation that has been deemed as economically feasible and innovative by Malta Enterprise.

Duration of the incentive

This scheme will remain ongoing until 31st December 2020.

Small Start-up Undertaking

For the purpose of this Incentive a ‘Small Start-up Undertaking’ is an unlisted Small Undertaking that has been established for less than five (5) years which has not yet distributed profits and has not been formed through a merger. 

For eligible undertakings that are not subject to registration, the five (5) years eligibility period will be considered to start from the moment when the undertaking becomes liable to tax on income from its economic activity.

The main factors determining whether an undertaking is a Small Undertaking are:

  1. number of employees which must be less than fifty (50) Full Time Equivalent (FTE) employees; and
  2. turnover or balance sheet total which do not exceed €10 million.

Eligibility

In order to be eligible for the incentive, the applicant must be: 

  1. incorporated under the Companies Act, being a partnership ‘en nom collectif’, ‘en commandite’ or a limited liability company; or
  2. registered as self-employed with the Employment and Training Corporation (ETC); or
  3. registered Partnership with the Malta Financial Services Authority. In case of unregistered partnerships, the agreement has to be notarized; or
  4. registered as a Cooperative under the Co-operatives Societies Act.

Business Activity

Beneficiaries must carry out a commercial activity where the principle business is classified under one of these sectors.

  1. Manufacturing (NACE Code C)
  2. Electricity, gas, steam and air conditioning supply (NACE Code D)
  3. Water supply, sewerage, waste management and remediation activities (NACE Code E)
  4. Transportation and storage (NACE Code H)
  5. Information and communication (NACE Code J)
  6. Professional, scientific and technical activities (NACE Code M)
  7. Administrative and support service activities (NACE Code N)
  8. Human health and social work activities (NACE Code Q)
  9. Arts, entertainment and recreation (NACE Code R)
  10. Other service activities (NACE Code S)

In order to be eligible, the applicant must be:

  1. proposing products  and/or services that have the potential to be marketed and distributed internationally;  and
  2. producing products and/or service which are new or substantially improved compared to the state of the art in the local industry.

The activities of the start-up undertaking must be linked to the knowledge of the Key Promoter/s. It is expected that key persons engaged in the start-up have the academic background required and/or hands on experience in the relevant sector.

Applicable aid intensity and maximum support

The maximum value of aid that may be provided is a cash grant of up to €25,000 which shall be disbursed as follows:

Initial Installment

An initial installment of up to €10,000 shall be paid once the project is approved.  The amount will be determined by Malta Enterprise after taking into consideration the innovative elements of the proposed business, the employment levels at application stage and the vision of the promoters on how to further develop their business. 

Subsequent Installments 

Subsequent installments shall be paid quarterly after Malta Enterprise reviews and endorses that the progress achieved is in line with the business plan as approved or as adjusted to adapt to market requirements.  The grant at the end of each quarter shall be calculated by multiplying €1,500 to the number of Full Time Employees who would have been engaged with the beneficiary at least one (1) full month prior to the end of the quarter in review.  The total payment in any quarter shall not exceed €10,000.

Budget utilization

The total budget for this scheme is € 1,000,000 per year and € 5,000,000 until 2020. 

How can we help?  

For further information, please contact one of the firm’s tax partners, Stephen Balzan on [email protected] or Elaine Camilleri ecami[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.