Invest Regulations, 2022

L.N. 222 of 2022

MALTA ENTERPRISE ACT

(CAP. 436)

Invest Regulations, 2022

IN EXERCISE of the powers conferred by article 5 of the Malta

Enterprise Act, the Minister responsible for Malta Enterprise, after

consultation with Malta Enterprise and with the concurrence of the

Minister of Finance, has made the following regulations:-

(1)

The title of these regulations is Invest Regulations, Citation, scope

and

2022. commencement.

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

on 1st May 2022.

(3) These regulations shall apply with respect to an eligible

initial investment in favour of carrying out of a qualifying economic

activity.

In these regulations, unless the context otherwise requires

Interpretation.

"Act" means the Malta Enterprise Act;

"aid intensity" means the gross aid amount expressed as a

percentage of the eligible costs, before any deduction of tax or

other charge;

"Corporation" means the Malta

Enterprise

established

under the Act;

"guidelines" means the guidelines as may be published by

the Corporation from time to time in terms of the Act;

"small and medium sized enterprises (SME)" or "(SMEs)"

means small and medium sized enterprises (SME) or (SMEs) as

defined in 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;

"relocation" means a transfer of the same or similar

activity or part thereof from an establishment in one contracting

party to the EEA Agreement (initial establishment) to the

establishment in which the aided investment takes place in

another contracting party to the EEA Agreement (aided

establishment). There is a transfer if the product or service in the

initial and in the aided establishments serves at least partly the

same purposes and meets the demands or needs of the same type

of customers and jobs are lost in the same or similar activity in

one of the initial establishments of the undertaking in the EEA;

"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. Buying land

and preparatory works such as obtaining permits and conducting

feasibility studies are not considered start of works. For take-

overs, "start of works" means the moment of acquiring the assets

directly linked to the acquired establishment;

"undertaking" shall have the same meaning assigned to it in

the Act.

(1) The initial investment project shall be considered for

support if the investment shall result in the setting up of, expansion,

diversification or a fundamental change in the carrying out of a

qualifying economic activity.

(2) (a) Cash grants, loan guarantees and interest rate

subsidies may only be awarded to eligible projects for which an

application is submitted and approved before the start of works and

during the period of validity of the scheme.

(b) Projects having a start of works a f t e r 1 s t M a y

2 0 2 2 b u t prior to the approval of the Corporation may only

be awarded aid in the form of tax credits.

(3) Eligible investment projects can only be awarded aid in

respect of projects commencing on or after the 1st May 2022 but in no

case later than 31st December 2026 or later if the start of works was

delayed due to factors outside the control of the undertaking as shall be

determined by the Corporation, as long as the undertaking submits an

application for aid prior to any deadline established in the guidelines

and the aid in respect of such projects is approved by the Corporation

by 31st December 2023.

(4) The said investment and the qualifying economic activity

shall be retained in Malta for a minimum period of at least five (5)

years or three (3) years in the case where the undertaking is an SME,

after completion of the investment project.

(5) An undertaking intending to avail itself from the benefits of

these regulations must provide a financial contribution of at least

twenty-five percent (25%) of the eligible costs, either through its own

resources or by external financing, in a form, which is free of any

public support.

(6) The undertaking must confirm that it has not carried out a

relocation to the establishment in which the initial investment for

which aid is requested is to take place, in the two (2) years preceding

the application for aid and it must also commit that it will not relocate

for a a period of up to two (2) years after the completion of the initial

supported investment.

A qualifying activity for the purposes of these regulations Qualifying

shall me an an economic activity consisting of a trade or business, activities.

the profits or gains from which are chargeable to tax pursuant to

article 4(1)(a) of the Income Tax Act, carried on or intended to be Cap. 123.

carried out by an undertaking in Malta which consists solely of one or

more qualifying activities, as may be prescribed in the guidelines.

(1)

An undertaking carrying on or intending to carry Form of aid.

out a qualifying activity that may contribute to the economic

development of Malta, shall be assisted by means of either one or a

combination of the following

(a)

a tax credit (which may be claimed against future tax

bills);

(b)

a cash grant;

(c) an interest rate subsidy or loan guarantee to facilitate

access to debt finance for funding the qualifying expenditure

subject to the terms and conditions of the guidelines.

The aid intensity may not exceed the percentage Aid intensities.

established in the guidelines. The value of the aid awarded shall be

calculated as a percentage of

(a) the qualifying eligible expenditure as established

in the guidelines incurred by an undertaking in respect of

eligible projects for the carrying out of a qualifying activity; or

(b) wage costs for jobs directly created as a result of the

eligible project as shall be further specified in the guidelines.

Any tax credits awarded may only be utilised by the Utilisation of

undertaking as long as the supported qualifying activity is still being tax credits.

carried out in the establishment. The undertaking shall give consent in

his tax return to the Commissioner for Revenue to extract tax credits

data from the Corporation. The Corporation shall annually provide the

undertaking with a statement of any tax credit balance until all

allocated tax credits are utilised.

Applications for aid to support eligible undertakings under

these regulations shall reach the Corporation by not later than 30

September 2023

Provided that no aid shall be granted under these regulations

by the Corporation after 31st December, 2023.

€0.36