Malta: Grants for diversification and internationalisation

This article was published on 05 July 2020 in Corriere di Malta newspaper

Grants for diversification and internationalisation of companies

At this delicate stage of the economy, companies need to strengthen their business by opening in new markets or by activating new services or product lines. Besides, they can also become more competitive through enhancing innovation or by diversifying internal productions or organisational processes.

The Government of Malta provides some measures that allow small and medium-sized enterprises to grow and internationalise thanks to the support of some grants. Let us analyse how.

Participation in international trade fairs, for example, is a traditional but always good way to allow your products or services to be known and to be able to increase orders, especially if you can present in the stands something innovative with respect to the existing products or services.

One of the incentive still available this year, with several deadlines for submissions in the coming months, is the incentive that provides for a maximum grant of EUR 10,000 to cover 50% of the costs of participation at fairs held abroad, aimed at introducing new products and services in new markets with the aim of strengthening the presence of the company at international level.

This measure also supports the participation to trade fairs abroad as part of trade missions abroad.

In this case, the costs which could be reimbursed refer to:

  • Participation fee.
  • Rental of hexibition space/stand.
  • Expenses for services related to the construction and installation of the stand.
  • Travel expenses for up to 2 employees/administrators representing the company.
  • Per Diem allowance for up to 2 employees/administrators representing the company up to a maximum of 8 nights according to the rates set by the Ministry of Finance.
  • Costs related to the design and printing of advertising material within the limits of the guidelines.
  • Shipping costs of the products that will be displayed in the stand.

All the costs described above must be incurred from external sources to the beneficiary company.

Moreover, another way to achieve new goals and lead the company towards new development and real growth paths is via innovation and diversification projects. Also for this, there are support measures.

Especially in this period companies have been looking for and are still thinking about new paths, For example, we are assisting a company active in the manufacturing sector and that manufactures products destined for the tourism sector. The company has suffered a drop in turnover and its aware that tourism will start again in a year time or two. Still, the entrepreneurs who lead this company have decided to move towards innovation so to strengthen their product and, at the same time, develop a new type of service. Such service will operate in a completely different field and can be activated right away. So, this is what innovation is all about: is the ability to get back into the game in other areas while continuing the existing path.

But let us go back to the analysis of the aids available.

There is one which deadline for submitting applications is at the end of this month. This tool aims to specifically support companies in developing investment strategies for their diversification, for the implementation of substantial change or for bringing significantly improved and innovative products/services to the market, compared to those already offered by the company.

In this case, it will be necessary to develop a business plan with the aim of better defining the specific activities. For example, activities which can be supported by this measure are:

  • production diversification in an existing plant of different products or services;
  • implementation of a substantial change in the production process of an existing plant;
  • adoption of solutions for the development of a significantly improved product service.

To be eligible for such aid measures, companies must operate in certain sectors, such as:

  • The production, manufacture, improvement, assembly, preservation, processing of goods, materials, commodities, equipment, plant machinery.
  • Biotechnology, pharmaceuticals, and life sciences.
  • Research and technological innovation.
  • The repair, overhaul or maintenance of pleasure boats, yachts, aircraft.
  • Development of information and communication technologies (ICT), software development.
  • Eco-innovations and environmental solutions.
  • Developments of tourism products and/or services because of networks created between traditional tour operators and craft companies.
  • Development and supply of tourism products and/or services related to emerging niche markets.
  • Development and supply of tourist products and/or services related to social tourism with a focus on the elderly.
  • Development and provision of childcare-related services and products.
  • Development and creation of artisanal products.

While the costs covered by this measure are as follows:

  • Leasing and rental costs of premises required for the operation of the enterprise activity for the duration of the project. Such costs must not exceed 10% of the project’s total eligible expenditure.
  • Costs of building and improving the premises for the operation of the business activity. Such costs must not exceed 10% of the project’s total eligible expenditure.
  • Costs for the purchase of equipment, machinery and/or plant. Machinery and equipment can also be used, refurbished, or reconstituted, but only under certain conditions set out in the guidelines.
  • Costs related to patents or licenses essential for the effective implementation of the project. Such costs must not exceed 10% of the total eligible expenses of the project.
  • Costs of the full-time salary of a “Change Manager” who has the ability to drive the necessary change within the company through diversification or a substantial change initiative, for the duration of the project, i.e. for a period of no more than 24 months.

In addition to the typical documentation to be provided in such cases, to benefit of this aid measure a project must be supported by a solid business plan that must be attached to the application. Such business plan must include some minimum requirements, defined by the guidelines, requirements normally provided in any standard business plan.

If you need help developing a new project, or developing a good business plan, or evaluating which type of state aid or financial support measure is best suited to your initiative, be aware that we can help. Simply send us an email at the address below.

Stefano De Stalis
European Affairs and State Aid Manager
Sheltons Malta