Business Promotion (Amendment) Regulations, 2005

L.N. 228 of 2005

BUSINESS PROMOTION ACT

(CAP. 325)

Business Promotion (Amendment) Regulations, 2005

IN exercise of the powers conferred by article 59 of the Business

Promotion Act, the Prime Minister and Minister of Finance has made

the following regulations>-

(1) The title of these regulations is the Business Promotion

(Amendment) Regulations 2005, and they shall be read and construed

as one with Business Promotion Regulations 2001, hereinafter referred

to as “the principal regulations”.

(2) These regulations shall be deemed to have come into

force on the 1 st January, 2005.

Regulation 3 of the principal regulations shall be amended as

follows>

(a) for sub-regulations (1) to (4) there shall be substituted

the following>

“(1) Subject to the other provisions of this sub-

regulation –

(a) a medium-sized enterprise is an enterprise

which –

(i) has fewer than two hundred and fifty

employees< and

(ii) has either an annual turnover not

exceeding twenty-one million and four hundred and

sixty-five thousand liri or a balance sheet total not

exceeding eighteen million, four hundred and fifty-

nine thousand and nine hundred liri.

(b) a small enterprise is an enterprise which –

(i) has fewer than fifty employees< and

(ii) has either an annual turnover not

exceeding four million and two hundred and ninety-

three thousand liri or a balance sheet total not

exceeding four million and two hundred and ninety-

three thousand liri.

(c)

a micro enterprise is an enterprise which –

(i) has fewer than ten employees< and

(ii) has either an annual turnover not

exceeding eight hundred and fifty-eight thousand

and six hundred liri or a balance sheet total not

exceeding eight hundred and fifty-eight thousand

and six hundred liri.

(2) Notwithstanding sub-regulation (1), except in the

cases set out in the proviso to sub-regulation (4)(b), an

enterprise shall not be considered a medium-sized, a small or

a micro enterprise if twenty-five percent or more of its capital

or voting rights are directly or indirectly controlled, jointly

or individually, by one or more public bodies and, for this

purpose, a public body means and includes>

(a)

the Government of Malta<

(b) any Government division or department<

(c) any local council set up under the Local

Councils Act<

(d) any corporation or authority set up by an Act

of Parliament<

(e) any foreign entity similar to a public body

referred to in the foregoing paragraphs.

(3) In determining the headcount and the financial

ceilings of an enterprise for the purpose of this regulation,

the following provisions shall apply>

(a) in the case of an autonomous enterprise the

data, including the number of staff, shall be determined

exclusively on the basis of the accounts of that enterprise<

(b) in the case of an enterprise that is not an

autonomous enterprise, the data, including the number

of staff, shall be the aggregate of>

(i) the data determined on the basis of the

accounts and other data of the enterprise or, where

they exist, the consolidated accounts of the

enterprise or the consolidated accounts in which

the enterprise is included through consolidation<

(ii) the data of any partner enterprises of the

enterprise in question, which aggregation shall be

made in proportion to the percentage of the capital

or voting rights, whichever is the greater, held

directly by each such partner enterprise in the

enterprise in question or by the enterprise in

question in each such partner enterprise, as the case

may be>

Provided that in the case of cross holdings reference shall

be made to the greater of the holdings<

(iii) one hundred percent of the data of any

enterprise which is linked directly or indirectly to

the enterprise in question, unless already included

through consolidation in the accounts<

(c) in the application of paragraph (b)(ii), the data

of a partner enterprise shall be the aggregate of the data

determined on the basis of its accounts and its other data,

consolidated if they exist, and one hundred percent of

the data of any enterprises which are linked to that partner

enterprise, unless already included through

consolidation<

(d) in the application of paragraphs (b)(iii) and

(c), the data of linked enterprise shall be the aggregate

of the data determined by reference to its accounts and

other data, consolidated if they exist, and a percentage

of the data of the partner enterprises of that linked

enterprise, if any, which percentage shall be established

as provided in paragraph (b)(ii) unless already included,

at least to the extent of that percentage, through

consolidation<

(e) where in the consolidated accounts no staff

data appears for a given enterprise, staff figures are

calculated by aggregating proportionally the data from

its partner enterprises and by adding the data from the

enterprises to which the enterprise in question is linked.

(4) In this regulation –

(a) an ‘autonomous enterprise’ is any enterprise

which is not a partner enterprises or a linked enterprises<

(b) two enterprises are partner enterprises of each

another if they are not linked enterprises and if one of

them holds, either solely or jointly with one or more

linked enterprises, twenty-five percent or more of the

capital or voting rights of the other>

Provided that an investor which is not linked, either

individually or jointly, to an enterprise shall not be deemed

to a partner enterprise of that enterprise, even if the said

twenty-five percent threshold is exceeded, if that investor falls

within any of the following categories>

(i) public investment corporations, venture

capital companies, individuals or groups of

individuals with a regular venture capital

investment activity who invest equity capital in

unquoted businesses (‘business angels’), provided

the total investment of those business angels in the

same enterprise is less than five hundred and thirty-

six thousand, six hundred and twenty-five liri<

(ii)

universities or non-profit research

centres<

(iii) institutional investors, including

regional development funds<

(iv) autonomous local authorities with an

annual budget of less than four million and two

hundred and ninety-three thousand liri and fewer

than five thousand inhabitants<

(c) two enterprises are linked enterprises if there

is between them any of the following relationships>

(i) one of them has a majority of the

shareholders’ or members’ voting rights in the

other<

(ii) one of them has the right to appoint or

remove a majority of the members of the

administrative, management or supervisory body

of the other<

(iii) one of them has the right to exercise a

dominant influence over the other pursuant to a

contract entered into with that other enterprise or

to a provision in its memorandum or articles of

association>

Provided that investors listed in the proviso to paragraph

(b) shall not be deemed to exercise a dominant influence if

they do not involve themselves directly or indirectly in the

management of the enterprise in question, without prejudice

to their rights as stakeholders<

(iv) one of them, being a shareholder in or

member of the other enterprise, controls alone,

pursuant to an agreement with other shareholders

in or members of that other enterprise, a majority

of the shareholders’ or members’ voting rights in

that enterprise<

(v) one of them has any of the relationships

mentioned above with the other through one or more

other enterprises or any one of the investors listed

in the proviso to paragraph (b)<

(vi) one of them has any of the relationships

mentioned above with the other through a natural

person or a group of natural persons acting jointly

and the enterprises engage in their activity or in

part of their activity in the same relevant market or

in an adjacent market, that is to say, the market for

a product or service that is situated directly upstream

or downstream of the relevant market.”<

(b) in sub-regulation (5) thereof –

(i) in the proviso thereto, for “available to the

Corporation.”, there shall be substituted “available to

the Corporation>”<

(ii) immediately after the proviso thereto there

shall be added the following>

“Provided, moreover, that an enterprise may or, at the

request of the Corporation, shall, make a declaration of status

as an autonomous enterprise, partner enterprise or linked

enterprise, including the data regarding the ceilings set out in

this regulation. The declaration may or, as the case may be,

shall be made even if the capital is spread in such a way that

it is not possible to determine exactly by whom it is held, in

which case the enterprise shall state in good faith whether or

not it can legitimately presume that it is not owned as to 25 %

or more by one enterprise or jointly by enterprises linked to

one another. Any such declarations shall be without prejudice

to the checks and investigations provided for in the Act, in

these Regulations or in any other regulations made under the

Act.”<

(c)

in sub-regulation (6) thereof –

(i) for the words “using the methods set out in

paragraphs (a) and (b).” there shall be substituted the

words “using the methods set out in paragraphs (a) and

(b)>”<

(ii) at the end thereof, there shall be inserted the

following>

“Provided that the amount to be taken into

account for determining the turnover shall be

calculated excluding value added tax and other

indirect taxes.”<

(d) for sub-regulation (8) thereof there shall be

substituted the following –

“(8) For the purpose of this regulation –

(a) the following shall be deemed to be

employees of an enterprise>

(i) employees of the enterprise<

(ii) persons working for the enterprise

being subordinated to it and deemed to be

employees in terms of the law regulating their

employment<

(iii)

owner-managers<

(iv) partners engaging in a regular

activity in the enterprise and benefiting from

financial advantages from the enterprise<

(b) apprentices or students engaged by an

enterprise in vocational training with an

apprenticeship or vocational training contract shall

not be deemed to be employees of that enterprise<

(c) the number of full-time employees shall

be arrived at by dividing the number of employees

who worked full time for the enterprise at the end

of each whole month comprised in an accounting

period by the number of months in that accounting

period.”< and

(e)

in sub-regulation (9) thereof –

(i) for the words “one thousand and seven hundred

and sixty.” there shall be substituted the following “one

thousand seven hundred and sixty>”<

(ii) at the end thereof, there shall be inserted the

following>

“Provided that employees who are on

maternity or parental leave shall not be deemed to

have worked for the duration of that leave.”.

Mitbug[ fl-Istamperija tal-Gvern — Printed at the Government Printing Press