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Malta – The Package of Support Available for Research and Development Projects

Malta

Background

Malta has long been a popular choice for companies and new businesses and is a reputable EU jurisdiction. An exceptional package of support and financial incentives is available to innovative companies seeking to establish themselves and/or extend operations within Malta.

 Companies based in Malta have access to national and EU funding. Dixcart Malta can assist with applications to Malta Enterprise, the Government agency which offers support to companies at different stages of their lifecycle.

Please see below a summary of the support, grants and repayable loans that are available, the Dixcart office in Malta can provide further details: advice.malta@dixcart.com

1. Research and Development Feasibility Studies

Research and development initiatives are associated with high risk, and therefore R&D Feasibility Studies are a vital component, to determine that the critical elements of the proposed research project are based on sound principles.

Businesses, employing at least two full-time employees, and intending to carry out an Industrial Research and Experimental Development Project may benefit from financial assistance.

A cash grant is available, for six month projects, to cover the salaries of research personnel, and costs associated with undertaking ‘contractual research and technical knowledge’.

  • Businesses carrying out R&D Feasibility Studies can receive up to €50,000 per project, up to a maximum 70% of eligible costs, depending on the size of the business. Aid is capped at €5,000 per full-time employee employed by the applicant at the time of application. In situations where an applicant established his/her company in the twenty-four months preceding the date of application, a grant of up to €20,000, may still be approved, irrespective of the number of full-time employees.

2. Cash Grant Towards Wage Costs 

This grant is designed to support industrial research and/or experimental development carried out to gain knowledge that leads to the development of innovative products and solutions.

Two grants are available:

  • A cash grant on wage costs of up to €500,000.
  • A tax credit on; instruments, equipment (depreciation costs) and materials and supplies, relating to a contractual research and technical knowledge project that last up to thirty-six months. This grant is available up to a maximum 25-60% of eligible costs, depending on the size of the business.

3. Aid for Research and Development Projects

This incentive allows companies to claim tax credits on costs incurred directly or indirectly in carrying out an R&D project or projects relevant to the company’s trade. Eligible projects must seek to make advances in a field of science or technology through the ‘resolution’ of scientific or technological uncertainty.

  • Pre-approval, prior to the commencement of a project, is not required for this grant. This grant is available up to a maximum of 45% of eligible costs, depending on the size of the enterprise with a maximum €15million per project being available. 

4. Financing for Business Development

This incentive is targeted towards companies engaged in; manufacturing, industrial services, digital technology, biotechnology, or in other innovative or high value-added operations, as approved by Malta Enterprise.

  • The maximum aid available per business is €200,000 over three rolling fiscal years. The approved financing must be directly related to the operation of the business. It can be used to cover; relocation costs of key personnel, payroll costs, lease and rental of real estate, services directly related to the business operations, rights and licenses, relocation of tangible assets, procurement of tangible assets and utility costs.

5. Skills Development Scheme

This scheme is specifically designed to help companies to provide training to create and update the skills and knowledge of their workforce.

  • Support is available in relation to eligible costs, as follows; wage costs of trainees and trainers, direct contact hours of training service providers, air travel expense to send trainees to foreign training locations, air travel expense to bring trainers to Malta, rental of training rooms, tools, and equipment. The grant available  is a maximum of eligible costs; 70% for a ‘small’ business, 60% for a ‘medium’ business, and 50% for a ‘large’ business. The maximum grant available is €2,000,000 per Skill Development Project.

6. Start-up Finance

  • Grants of up to €400,000 are available in Malta, unless the business is an innovative business, in which case the potential grant increases to a maximum €800,000.

The following criteria apply:

  • the company (following an evaluation by an external expert) must be producing/developing new products/services/processes which are substantially improved OR
  • Research and development costs represent at least 10% of the firm’s operational costs, in at least one of the three preceding years, or, in the case of a start-up, in the audit of the fiscal year, preceding the grant.

This ‘grant’ is offered as a repayable advance, unless the company is interested in taking part in the ‘Accelerator Programme’, please speak to Dixcart Malta for further information: advice.malta@dixcart.com.

The repayable advance support can be used to cover several eligible costs:

  • Co-investment in payroll costs: to finance up to 75% of the full-time employees’ salaries.
  • Co-investment linked to private equity: equivalent to 50% of the increase in share capital from unrelated parties, universities or non-profit research centres or related enterprises. The increase in share capital needs to occur following approval by Malta Enterprise, and not later than twelve months from acceptance of the advance. Disbursements can occur in tranches, linked to milestones established in the initial business plan.
  • Support in relation to working capital: up to €200,000, increasing to up to €400,000 in the case of innovative companies.
  • Support for the procurement of tangible and intangible assets: Malta Enterprise may award up to 75% of the costs to procure; machinery, equipment  and amortizable, intangible assets. Intangible assets must not exceed 50% of the total investment and are defined as being limited to the procurement of; patents, licences, and know-how.

7. Support Linked to Crowdfunding

  • A repayable grant of up to 50% of a project or equity financing increase, that is also being funded through a successful crowdfunding campaign.

The grant may not exceed the amount requested through the campaign, and the beneficiary must notify that s/he has received assistance from ‘Malta Enterprise’. If the beneficiary raises more funds than those featured on the platform, the difference can be deducted from the repayable contribution.

Additional Information 

If you would like further information regarding the support measures for research and development and the opportunities available through the jurisdiction of Malta, please speak to Jonathan Vassallo: advice.malta@dixcart.com at the Dixcart office, in Malta or to your usual Dixcart contact.

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