This article was published on 21 June 2020 in Corriere di Malta newspaper
Inside the new measures to support businesses
In the last article we anticipated the content of the package of new measures that the Maltese Government announced a few days ago to support the recovery of the economy following the COVID-19.
Today we can provide more detail in our analysis and, in this article, we intend to summarise the main incentives that are made available for business support. Such financial aids include the drafting of business plans, the investments in machinery, equipment, materials, assistance to open new markets and for the training of employees.
Businesses are facing a new reality now that the COVID-19 emergency is behind them and will therefore have to redesign their business plans so that they can tackle the new challenges with determination. For this purpose, an aid measure of up to EUR 5,000 has been introduced for the development of business plans by external consultants. The budget allocated for this measure is EUR 2.5 million and will allow you to use more technology in your business by guiding the country more and more towards a digital economy.
In the construction sector, EUR 4 million has been allocated to enable companies to purchase modern, more efficient machinery that reduces environmental impact as well as reduces costs. The maximum incentive each company can get is EUR 200,000.
Those companies that in 2019 obtained a tax credit through Microinvest, the development support measure managed by Malta Enterprise, the operational arm of the Government, will now be able to obtain the conversion of 30% of the tax credit into a corresponding contribution to the cost of restructuring and improving offices and factories, investments in machinery and other equipment. This measure was designed to support those at a disadvantage having made investments last year, just before the outbreak of the pandemic. The maximum grant is EUR 2,000 for all companies, while it reaches EUR 2,500 for companies located in Gozo, family-run businesses and those run by women entrepreneurs.
As Malta’s traditional business markets may be in a weak position at the moment, opening up to new markets such as the African continent, the Middle East and Latin America can strengthen the capacity for economic recovery even if there is an element of risk that hinders access to these markets. To encourage this new opening and help companies to address this risk, EUR 10 million has been put in place to activate an export credit guarantee system to be managed by Malta Enterprise with the help of Malta Development Bank.
In addition, Malta Enterprise will define a cash grant in the maximum limit of 80% of eligible costs to support companies in the implementation of projects that increase or start the production of products being relevant to COVID-19 or that involve the diversification of existing production towards products connected with COVID-19.
Investments must be completed within 6 months from the start of work and eligible costs must be incurred after 1 February 2020. These include material and intangible goods, the cost of personnel developing tools for collecting and processing data (including Artificial Intelligence solutions) to support the medical profession and public issues associated with COVID-19. Also included are the costs for testing new plants and the material costs required for such tests and the data sets acquired to the test the processing and data collection processes. The measure will be available until 31 December 2020.
Finally, Malta Enterprise will strengthen an existing skills development measure, called the Skills Development Scheme. This measure will enable more beneficiaries to be reached through an additional EUR 5 million to be allocated to small businesses, those with no more than 50 employees. The aim is to support employee training, especially internal training by focusing on sharing skills between the most experienced and the youngest.
As you can see the measures activated by the government are numerous, you only have to wait for the enactment of the operational criteria and then activate in the preparation of any business plans and applications for access to the different facilitative opportunities.
Please do remember that if you need assistance in this regard you can contact us by writing to the email address below. We will be happy to help you.
Stefano De Stalis
European Affairs and State Aid Manager
Sheltons Malta
S.Destalis@SheltonsGroup.com