Assistance for Research and Development and Innovation

L.N. 38 of 2015

MALTA ENTERPRISE ACT

(CAP. 463)

Assistance for Research and Development and Innovation

(Amendment) Regulations, 2015

IN exercise of the powers conferred upon him by article 5 of the

Malta Enterprise Act, the Minister for the Economy, Investment and

Small Business, in consultation with the Malta Enterprise

Corporation, has made the following regulations:-

The title of these regulations is the Assistance for Research Citation.

and Development and Innovation (Amendment) Regulations, 2015,

and these regulations shall be read and construed as one with the

Assistance for Research and Development and Innovation S.L. 463.05

Regulations, hereinafter referred to as "the principal regulations".

Regulation 2 of the principal regulations shall be amended Amends

regulation 2 of

as follows

the principal

regulations.

(a)

for the definition "aid intensity" there shall be

substituted the following definition

" "aid intensity" means the gross aid amount

expressed as a percentage of the eligible costs, before any

deduction of tax or other charge;";

(b)

the definition "eligible costs" shall be amended as

follows

(i) in paragraph (a) thereof, for the words

"industrial research or experimental development;", there

shall be substituted the words "industrial research or

experimental development:" and immediately thereafter

there shall be added the following new proviso

"Provided that the eligible costs considered

by this paragraph shall only be applicable to

undertakings which qualify for assistance under

these regulations until the 30th June, 2014;";

(ii) in paragraph (b) thereof, for the words

"preparatory to industrial research or experimental

development;" there shall be substituted the words

"preparatory to industrial research or experimental

development:" and immediately thereafter there shall be

added the following new proviso

"Provided that the eligible costs considered

by this paragraph shall only be applicable to

undertakings which qualify for assistance under

these regulations until the 30th June 2014;";

(iii) paragraph (d) thereof shall be deleted;

(iv) paragraph (c) thereof shall be renumbered as

paragraph (d);

(v) immediately after the proviso to paragraph

(b) thereof there shall be added the following new

paragraph

"(c) to carry out feasibility studies in

preparation for an industrial research or an

experimental development project having the start

of works happening on or after the 1st November,

2014;"; and

(vi) paragraph (e) thereof shall be substituted by

the following new paragraph

"(e) to carry out industrial research and

experimental development projects as well as to

carry out feasibility studies in preparation for

industrial research or experimental development

projects, having the start of works happening on or

after the 1st November 2014, in accordance with

the terms and conditions set out in the Guidelines;";

(c)

immediately after the definition "eligible costs"

there shall be added the following new definition

" "effective collaboration” means collaboration

between at least two independent parties to exchange

knowledge or technology, or to achieve a common

objective based on the division of labour where the parties

jointly define the scope of the collaborative project,

contribute to its implementation and share its risks, as well

as its results. One or several parties may bear the full costs

of the project and thus relieve other parties of its financial

risks. Contract research and provision of research services

are not considered forms of collaborations

Provided that this definition shall be

applicable to industrial research and experimental

development projects having the start of works happening

on or after the 1st November, 2014;";

(d) in the definition "experimental development", for

the words "to be used in industrial commercial applications or

commercially;" there shall be substituted the words "to be used

in industrial commercial applications or commercially:" and

immediately thereafter there shall be added the following new

proviso to the whole definition

"Provided that the following definition for

"experimental development" shall be applicable to

research and development projects having the start of

works happening on or after the 1st November, 2014

"experimental development" means acquiring,

combining, shaping and using existing scientific,

technological, business and other relevant knowledge and

skills with the aim of developing new or improved

products, processes or services. This may also include, for

example, activities aiming at the conceptual definition,

planning and documentation of new products, processes or

services

Provided that experimental development may

comprise prototyping, demonstrating, piloting, testing and

validation of new or improved products, processes or

services in environments representative of real life

operating conditions where the primary objective is to

make further technical improvements on products,

processes or services that are not substantially set. This

may include the development of a commercially usable

prototype or pilot which is necessarily the final

commercial product and which is too expensive to produce

for it to be used only for demonstration and validation

purposes

Provided further that experimental development

does not include routine or periodic changes made to

existing products, production lines, manufacturing

processes, services and other operations in progress, even

if those changes may represent improvements;";

(e)

immediately after the definition "experimental

development" there shall be added the following new definition

" "feasibility study" means the evaluation and

analysis of the potential of a project, which aims at

supporting the process of decision-making by objectively

and rationally uncovering its strengths and weaknesses,

opportunities and threats, as well as identifying the

resources required to carry it through and ultimately its

prospects for success

Provided that "feasibility studies" in the above

definition refers to feasibility studies in preparation for

industrial research and experimental projects as

contemplated by these regulations

Provided also that the above definition for

"feasibility study" in preparation for industrial research

and experimental development projects shall be applicable

to feasibility studies in preparation for industrial research

and experimental projects having the start of works

happening on or after the 1st November 2014, in

accordance with the terms and conditions set out in the

Guidelines

Provided further that the applicable definition for

technical feasibility studies preparatory to industrial

research and experimental development for research,

development and innovation projects approved by the

Corporation till the 30th June 2014, is provided in the

Guidelines applicable at the time;";

(f)

the definition "highly qualified personnel" shall be

deleted;

(g) in the definition "industrial research" for the words

"a significant improvement in existing products, processes and

services;" there shall be substituted the words "a significant

improvement in existing products, processes and services:" and

immediately thereafter there shall be added the following new

proviso

"Provided that industrial research comprises the

creation of components parts of complex systems, and may

include the construction of prototypes in a laboratory

environment or in an environment with simulated

interfaces to existing systems as well as of pilot lines,

when necessary for the industrial research and notably for

generic technology validation;";

(h)

the definition "innovation clusters" shall be deleted;

(i)

in the definition " "large undertaking", "medium-

sized undertaking", "small undertaking" and "micro

undertaking" " for the words "in application of Articles 87 and

88 of the Treaty (General block exemption Regulation);" there

shall be substituted the words "in application of Articles 87 and

88 of the Treaty (General block exemption Regulation):" and

immediately thereafter there shall be added the following new

proviso

"Provided that for industrial research and

experimental development projects as well as for

feasibility studies in preparation for industrial research or

experimental development projects having the start of

works happening on or after the 1st November 2014,

" "large undertaking", "medium-sized undertaking",

"small undertaking" and "micro undertaking" " shall have

the meaning attributed to them by Annex I of Commission

Regulation (EU) No 651/2014 of 17 June 2014 declaring

certain categories of aid compatible with the internal

market in application of Articles 107 and 108 of the

Treaty;";

(j)

immediately after the definition "research

organisation" there shall be added the following new definition

"

"research

and

knowledge-dissemination

organisation" means an entity (such as universities or

research institutes, technology transfer agencies,

innovation intermediaries, research-oriented physical or

virtual collaborative entities), irrespective of its legal

status (organised under public or private law) or way of

financing, whose primary goal is to independently conduct

industrial research or experimental development or to

widely disseminate the results of such activities by way of

teaching, publication or knowledge transfer

Provided that where such entity also pursues

economic activities the financing, the costs and the

revenues of those economic activities must be accounted

for separately

Provided further that undertakings that can exert a

decisive influence upon such an entity, in the quality for

example, shareholders or members may not enjoy

preferential access to the results generated by it

Provided finally, that the above definition for

"research and knowledge-dissemination organisation" shall

be applicable to industrial research and experimental

development projects having the start of works happening

on or after the 1st November 2014 in accordance with the

terms and conditions set out in the Guidelines;";

(k)

the definition "secondment" shall be deleted;

(l)

immediately after the definition "research and

knowledge-dissemination organisation", as added, there shall be

added the following new definition

" "start of works" means the earlier of either the

start of construction works relating to the investment, or

the first legally binding commitment to order equipment or

any other commitment that makes the investment

irreversible

Provided that buying land and preparatory works

such as obtaining permits and conducting feasibility

studies are not considered start of works

Provided further that for take-overs, "start of

works" means that moment of acquiring the assets directly

linked to the acquired establishment;";

(m) in paragraph (c) of the definition "undertaking", for

the words "under the Co-operative Societies Act;" there shall be

substituted the words "under the Co-operative Societies Act:"

immediately thereafter there shall be added the following two

new provisos

"Provided that for industrial research and

experimental development projects having the start of

works happening on or after the 1st November 2014,

"undertaking" shall have the same meaning as assigned to

it in paragraphs (a) to (c) under the definition

"undertaking" above

Provided also that, for feasibility studies in

preparation for industrial research and experimental

development projects having the start of works happening

on or after the 1st November 2014, "undertaking" shall

have the same meaning as defined in the Act.".

In sub-regulation (1) of regulation 3 of the principal Amends

regulations, for the words "in accordance with the terms and regulation

the principal

conditions set out in the Guidelines." there shall be substituted the regulations.

words "in accordance with the terms and conditions set out in the

Guidelines:" and immediately thereafter there shall be added the

following two new provisos

"Provided that as from the 1st November 2014 where the

Corporation is satisfied that an undertaking requires assistance

to carry out industrial research and experimental development

projects, the Corporation may assist such an undertaking by

means of a tax credit or a cash grant as a percentage of the

eligible costs incurred by such an undertaking in accordance

with the terms and conditions set out in the Guidelines;

Provided also that as from the 1st November 2014 where

the Corporation is satisfied that an undertaking requires

assistance to carry out feasibility studies in preparation for an

industrial research or an experimental development project, the

Corporation may assist such an undertaking by means of a cash

grant as a percentage of the eligible costs incurred by such an

undertaking in accordance with the terms and conditions set out

in the Guidelines.".

Regulation 4 of the principal regulations shall be amended Amends

regulation 4 of

as follows

the principal

regulations.

(a)

the current regulation shall be re-numbered as sub-

regulation (1) thereof; and

(b) immediately after sub-regulation (1) thereof, as re-

numbered, there shall be added the following new sub-

regulation

"(2) Where the Corporation, on or after the 1st

November 2014, is satisfied that an undertaking requires

assistance to carry out feasibility studies in preparation for

an industrial research or an experimental development

project, the Corporation may provide such an undertaking

with the form of assistance referred to in regulation 3 in

accordance with the terms and conditions set out in the

Guidelines.".

In regulation 5 of the principal regulations, for the words

"in accordance with the terms and conditions set out in the

Guidelines." there shall be substituted the words "in accordance with

the terms and conditions set out in the Guidelines:" and immediately

thereafter there shall be added the following new proviso

"Provided that, as from the 1st November 2014, where the

Corporation is satisfied that an industrial research or an

experimental development project referred to in regulation 4(1)

involves effective collaboration between two undertakings

independent from each other or between an undertaking and a

research and knowledge-dissemination organisation, the

Corporation may provide such an undertaking with the forms of

assistance referred to in regulation 3 with the aid intensities for

collaboration as indicated in Schedule A, in accordance with the

terms and conditions set out in the Guidelines.".

In regulation 6 of the principal regulations, for the words

"in accordance with the terms and conditions set out in the

Guidelines." there shall be substituted the words "in accordance with

the terms and conditions set out in the Guidelines:" and immediately

thereafter there shall be added the following new proviso

"Provided that, as from the 1st November 2014, where the

Corporation is satisfied that an undertaking as defined in the Act

may contribute to the economic development of Malta requires

assistance to carry out feasibility studies in preparation for an

industrial research or an experimental development project, the

Corporation may provide such an undertaking with a cash grant

in accordance with the terms and conditions set out in the

Guidelines.".

Regulations 7, 8 and 9 of the principal regulations shall be

deleted.

Regulations 10, 11, 12 and 13 of the principal regulations

shall be renumbered as regulations 7, 8, 9 and 10, respectively.

In regulation 11 of the principal regulations, as

renumbered, for the words "the Corporation may specify by means of

a notice in the Gazette." there shall be substituted the words "the

Corporation may specify by means of a notice in the Gazette:" and

immediately thereafter there shall be added the following new

proviso

"Provided that the Corporation may approve until the 31st

December 2020 new industrial research and experimental

development projects as well as feasibility studies in

preparation for industrial research or experimental development

projects having the start of works happening on or after the 1st

November 2014, and the provisions of these regulations shall

mutatis mutandis apply to such industrial research and

experimental development projects and feasibility studies in

accordance with the terms and conditions set out in the

Guidelines.".

In regulation 12 of the principal regulations, as Amends

renumbered, for the words "The maximum intensity levels of regulation

the principal

assistance shall be as indicated in the Schedule." there shall be regulations.

substituted the words "The maximum intensity levels of assistance

shall be as indicated in the Schedule:" and immediately thereafter

there shall be added the following new proviso

"Provided that the maximum aid intensity levels of

assistance for industrial research and experimental development

projects as well as feasibility studies in preparation for

industrial research or experimental development projects having

the start of works happening on or after the 1st November 2014,

shall be those as indicated in Schedule A.".

In regulation 13 of the principal regulations, as Amends

renumbered, for the words "firms in difficulty as described in the regulation

the principal

Official Journal C244, 01.10.2004." there shall be substituted the regulations.

words "firms in difficulty as described in the Official Journal C244,

01.10.2004:" and immediately thereafter there shall be added the

following two new provisos

"Provided that the Community Guidelines considered by

this regulation shall only be applicable to undertakings which

qualify for assistance under these regulations until the 30th

June, 2014

Provided also that for industrial research and experimental

development projects as well as feasibility studies in

preparation for industrial research or experimental development

projects having the start of works happening on or after the 1st

November 2014, these regulations shall not apply to firms in

difficulty in terms of Commission Regulation (EU) No

651/2014 of 17 June 2014 declaring certain categories of aid

compatible with the internal market in application of Articles

107 and 108 of the Treaty.".

Immediately after the Schedule to the principal

Schedule to the

regulations, there shall be added the following new Schedule A

regulations.

"Schedule A

(Regulation 5)

Maximum aid intensities for industrial research and experimental

development projects as well as feasibility studies in preparation for

industrial research or experimental development projects having the

start of works happening on or after the 1st November, 2014

Small

Medium

Large

Undertaking Undertaking Undertaking

Research and Development

Tax Credits

Industrial Research Projects

70%

60%

50%

Experimental Development

Projects

45%

35%

25%

Collaborative Industrial

Research Projects

80%

75%

65%

Collaborative Experimental

Development Projects

60%

50%

40%

Feasibility Studies

Feasibility studies in

preparation for industrial

research and experimental

development projects

70%

60%

50%

".

€0.90