Eurofound's EU PolicyWatch collates information on the responses of government and social partners to the COVID-19 crisis, the war in Ukraine, rising inflation, as well as gathering examples of company practices aimed at mitigating the social and economic impacts.
Factsheet for measure MT-2020-24/937 – Updated – measures in Malta
|Country||Malta , applies nationwide|
|Time period||Temporary, 08 June 2020 – 30 June 2026|
|Type||Legislations or other statutory regulations|
Supporting businesses to stay afloat
– Access to finance
|Author||Luke Anthony Fiorini (University of Malta) and Eurofound|
|Measure added||07 July 2020 (updated 19 June 2023)|
Microinvest is a scheme that was in existence prior to COVID-19. It "encourages undertakings (including start-ups, family businesses and self-employed) to invest in their business, so as to innovate, expand and develop their operations. Undertakings benefiting from this measure will be supported through a tax credit calculated as a percentage of eligible expenditure and wages costs." In order to be eligible for this scheme (since January 2018), applicants must have employed at least one person (full or part time), must not have employed more than 50 full time employees and their turnover did not exceed €10 million in the previous fiscal year.
In view of COVID-19 and the impact it has had upon organisations' cash flows, Government announced that a percentage of these tax credits would be converted into grants.
The updating of this scheme is in line with scheme's documentation that was issued prior to COVID-19 which states that "Malta Enterprise Corporation may issue and publish updates to the official Incentive Guidelines covering this aid scheme in terms of Article 8 (3)(a) of the Malta Enterprise Act, Chapter 463 of the Laws of Malta. The Tax Credits for Micro Enterprises and Self-Employed Regulations as subsidiary legislation 463.09 to the Malta Enterprise Act, forms the national legal basis of this aid scheme."
The measure aims to provide support to those who invested in 2019 in their organisation and benefited from Malta Enterprise’s tax credit scheme, Microinvest. Instead of solely providing tax credits, 30% of these will be converted into grants, thus providing a grant of up to €2,000 for any business. Furthermore, organisations in Gozo, family-run businesses, and those run by female entrepreneurs will receive a grant of €2,500. Costs covered by this scheme include refurbishment and upgrading of offices & factories, and investment in machinery and other assets. In total this measure will provide around €5 million to small and medium enterprises in our country.
Full guidelines and applications for this scheme are yet to be published.
During a 5 August 2021 press conference on the Microinvest scheme, Malta Enterprise CEO Kurt Farrugia stated that since January 2019, €84 million was provided to businesses through this scheme.
During a December 2022 press conference, it was announced that the Microinvest scheme received 3,852 applications in 2021, and €35 million was invested through this scheme that year.
One person or microenterprises
|Does not apply to citizens|
Social partners' role in designing the measure and form of involvement:
|Trade unions||Employers' organisations|
|Form||Direct consultation outside a formal body||Direct consultation outside a formal body|
Social partners' role in the implementation, monitoring and assessment phase:
Through a tripartite agreement, a package of measures to save jobs and organisations was agreed on 24 March 2020. This was the third and most significant package of measures announced by the government. Following this agreement, social partners remained in direct contact with the government highlighting their proposals of what was felt was still necessary to save the Maltese economy and jobs. In view of this, on the 8 June 2020, the government announced a 'mini budget' to help the Maltese economy to recover from the effects of the COVID-19 pandemic. This was the fourth package of measures announced by the government. The current measure formed part of this package. The measure is administered by the Malta Enterprise.
The fourth package of measures, of which the current measure is part of, received public support from an array of social partners. Those positive and vocal about it were primarily business associations, including the Chamber of Commerce, the Chamber of SMEs, the Malta Employers' Association, the Malta Hotels and Restaurants Association, and the Association of Catering Establishments. Also, the General Workers' Union supported the package. The feedback on the overall package from unions was more mixed; The Union Ħaddiema Magħqudin (UHM) Voice of the Workers argued that only 6% of €900 million mini-budget will end up benefiting workers directly.
In May 2021, the Malta Chamber, an Employers' Association, highlighted that the extension of the Tax Credit Certificates, issued through the Microinvest Scheme until 2026, was a positive step because it allowed organisations to use pre-pandemic tax credits that cannot be availed of before businesses become profitable again.
In September 2021, the Malta Chamber of SMEs suggested changes to this scheme, while also highlighting its importance. It was suggested that 50% of the tax credit should be convertible to a grant of up to €5,000, that the duration to use the tax credit should be extended from three to give year, and that the current incentive capping should be increased by €20,000.
Eurofound (2020), Microinvest Cash Conversion, measure MT-2020-24/937 (measures in Malta), EU PolicyWatch, Dublin, https://static.eurofound.europa.eu/covid19db/cases/MT-2020-24_937.html
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Disclaimer: This information has not been subject to the full Eurofound evaluation, editorial and publication process.