Investment Aid Regulations 2021

Malta Enterprise has recently published guidelines in relation to Investment Aid and how these will be applied with effect from 1 January 2021. The investment aid program aims to sustain the regional industrial and economic development of Malta. It facilitates the initial investments by encouraging the setting up of “new establishments” as well as the “expansion and development of existing businesses.”

The newly published guide will be applicable from 1 January 2021 and shall be applicable until 31 December 2021.

Which are the Eligible Undertakings?

Eligible undertakings are those small and medium-sized enterprises as per Annex I of Annex I of Commission Regulation (EU) No 651/2014 as well as Large enterprises (in certain instances).

Which are the Eligible Projects?

Projects starting before 1 January 2021 or having a start of works prior to the approval of Malta Enterprise may only be awarded aid in the form of tax credits. Such projects shall be considered only where the activity was covered by the scheme implemented on the basis of the Investment Aid (July 2014) Regulations. Eligible Investment Projects may only be awarded aid in respect of projects commencing after 31 December 2021 but in no case later than 31 December 2023 (or later, if the start of works was delayed due to factors outside the control of the beneficiary as long as the beneficiary submits an application for assistance and the aid is approved by Malta Enterprise during the validity of the scheme which is no case shall be later than 31 December 2021).

Eligible Projects for SMEs

Investment Aid shall be awarded to SMEs in respect of initial investment in tangible and intangible assets resulting in:

The setting up of a new establishment;
The extension of the capacity of an existing establishment;
A fundamental change in the overall production process of an existing establishment;
Diversification of the output of an establishment into product not previously produced in the establishment.

Eligible Projects for Large Enterprises

Investment Aid shall be awarded to large Enterprises in respect to “initial investments in favour of new economic activities” which must consist of:

Investment in tangible and intangible assets related to the setting up of a new establishment or to the diversification of the activity of an establishment under the condition that the new activity is not the same or similar to the one previously performed in the establishment;

The acquisition of the assets belonging to an establishment that has closed or would have closed had it not been purchased and is bought by an investor unrelated to the seller, under the condition that the new activity to be performed using the acquired assets is not the same or similar to the activity performed in the establishment prior to the acquisition.

Which are the Qualifying Activities?

Manufacturing
Maintenance Repair and Overhaul of watercraft, aircraft or industrial engines, or electromechanical equipment.
Industrial Services
Computer Programming
Data processing and hosting facilities
Call Centre
Research, development, and design
Treatment of waste
The operation of environment solutions
The carrying our of activities related to Life Sciences
Pharmaceutical activities
Activities for the production of feature films, documentaries, and audio-visual productions
Activities for the production of audio recording
Design and development of digital video games
Education and tuition
The operation an immovable structure providing human inpatient and/or daycare services
Freeport operations
Operation of logistic facility
Industrial packaging
The operation of hotels and guest houses
The provision of knowledge-intensive services
The restoration of works of art and antiques
The operation of temporary or permanent facilities used for cultural events, trade shows, concerts, festivals exhibition, or sporting activities.

What are the aid intensities?

30% of the qualifying expenditure for undertakings that qualify as “Small”;
20% of the qualifying expenditure for undertakings that qualify as “Medium”;
15% in respect of initial investment by “Small” and “Medium” entities engaged in the development of hotels, guest houses, and their amenities as licensed by the MTA;
10% of the qualifying expenditure for undertakings that qualify as “Large”

What is the Eligible Project Expenditure?

Eligible Project Expenditure shall be the acquisition of “Qualifying Tangible” and “Intangible Assets” required for the implementation of an eligible initial investment project or estimated wage costs arising from Job Creation.