DF Advocates Malta

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Business in Malta

The Malta Enterprise is the national agency responsible for promoting trade and industrial development in Malta, and provides a comprehensive range of support services and incentives. The business support available is varied and includes a package of incentives under the Business Promotions Act, namely:

Fiscal Incentives

Competitive tax rates – (Reduced Rates of Income Tax):

This incentive applies only to qualifying companies engaged in those particular activities listed under the Business Promotion Regulations. These activities include pharmaceuticals, plastics, biotechnology, electronic and electrical equipment. Such qualifying companies benefit from a highly favourable tax rates, valid up to 31/12/2008. The applicable taxable rates are 5%, 10% or 15%.

Investment tax credits:

This incentive, in terms of which the tax payable is reduced and even eliminated, may be availed of only by those qualifying companies that are entitled to benefit from reduced rates of income tax. Investment tax credits are calculated as follows: Either (a) 50% of investment on capital equipment; Or (b) 50% of the first 2 year wage costs of new jobs created.

Investment allowances:

Tax deductions in addition to normal tax depreciation are provided as follows:

Plant and machinery - 50% of the investment;

Industrial buildings or structures - 20% of the investment.

Value Added Incentive Scheme:

This incentive is applicable to those qualifying companies that are not eligible for reduced rates of income tax, and consists of a scheme whereby such companies benefit from reduced rates of income tax related to the increase in value added derived from their activities (applicable rates 5%, 10% or 15%). The reduced rates of tax apply to part or indeed a multiple of the increased profit when compared to a base period. For new companies, since the base period would be Nil, all the profits in the initial three years would be taxed at the reduced rate of 5%. This incentive will no longer be available after the 31st December 2008.

Reduced Rates of Tax on Reinvested Profits:

The tax on profits that are reinvested in projects approved by Malta Enterprise is reduced by 19.25% from 35% and by 17.5% from 35% in the case of hotel operations.

Non-fiscal Incentives

Soft loans

Qualifying companies may be assisted by low interest rate loans covering up to 75% of the qualifying expenditure undertaken by the company.

Factory space

Malta Enterprise approves the allocation of industrial buildings at competitive rates of rent.

Interest rate subsidies

Loan Interest Rate Subsidies: Companies may qualify for a subsidy on the interest rate payable on loans taken up from licensed financial institutions to acquire additional assets.
Loan Guarantees: Malta Enterprise may guarantee up to 75% of loans taken up by qualifying companies to finance the acquisition of assets.

Training Assistance:

Qualifying companies may benefit from substantial training assistance. Depending upon whether a company is classified as a large enterprise or an SME, such assistance may vary from 35% to 80% of costs incurred on training.

Export marketing services:

A range of overseas promotional activities
Participation in Business Missions and Trade Fairs abroad
Access to market research and business information services