Invest (2024) Regulations, 2024

L.N. 52 of 2024

MALTA ENTERPRISE ACT

(CAP. 463)

Invest (2024) Regulations, 2024

IN EXERCISE of the powers conferred by article 5(2) of the

Malta Enterprise Act, the Minister responsible for Malta Enterprise,

with the concurrence of the Minister responsible for finance, has made

the following regulations:-

(1) The title of these regulations is the Invest (2024)

Regulations, 2024.

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

on 1st January, 2024.

(3) These regulations shall apply in respect of an eligible initial

investment in favour of carrying out of a qualifying economic

activity.

In these regulations, unless the context otherwise requires

"Act" means the Malta Enterprise Act;

"aid intensity" means the gross amount expressed as a

percentage of the eligible costs before any deduction of tax or

other charge;

"Corporation" means the Malta Enterprise as established

by article 7 of the Act;

"eligible costs" means that expenditure that may qualify for

assistance in terms of these regulations and as shall be further

established in the Guidelines;

"Guidelines" means the Guidelines as may be published by

the Corporation from time to time in accordance with the Act,

establishing the parameters of implementing the aid granted

by virtue of these regulations;

"initial investment" shall have the same meaning as

assigned to it in Article 2(49) 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, as amended from time to time;

"initial investment that creates a new economic activity"

shall have the same meaning as assigned to it in Article 2(51) of

the 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, as

amended from time to time;

"large undertaking" means any enterprise that does not

qualify as a small undertaking or a medium sized undertaking;

"medium-sized undertaking" shall have the same meaning

as assigned to it 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, as amended from time to time;

"small undertaking" shall have the same meaning as

assigned to it 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, as amended from time to time;

"start of works" shall have the same meaning as assigned to

it in Article 2(23) 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, as amended from time to time;

"qualifying activity" means an economic activity as

prescribed in the Guidelines;

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

in the Act.

The Corporation shall support an initial investment

Eligible

projects.

(a) carried out by a small or medium sized undertaking

that results in a qualifying activity related to the setting up of a

new establishment, the extension of the capacity of an existing

establishment, the diversification of output of an establishment

or a fundamental change in the overall production process;

(b) carried out by a large undertaking that results in a

new qualifying economic activity consisting of the setting up of a

new establishment or the diversification of the activity of an

establishment, provided that the new activity is not the same or a

similar activity to the activity previously performed in the

establishment;

(c) consisting of the acquisition of assets belonging to an

establishment that has closed or would have closed had it not

been purchased, provided that

(i) the establishment shall be utilised for carrying

out a qualifying activity;

(ii) the activity carried out in the establishment

following the acquisition by a large undertaking is not the

same or a similar activity than the one caried out in the

establishment before the acquisition;

(iii) the sole acquisition of the shares of an

undertaking does not qualify as initial investment;

(d) for which start of works occur within the period

established in the Guidelines;

(e)

which conforms to all the terms and conditions

established in the Guidelines;

(f) an undertaking availing itself from the benefits of

these regulations shall provide a financial contribution of at least

twenty five per cent (25%) of the eligible costs, through its own

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

public support; or

(g) any investment supported in terms of these

regulations and the qualifying economic activity, shall be

retained in Malta after the completion of the investment project

for a period of not less than three (3) years and not more than

five (5) years in the case where the said qualifying economic

activity is carried out by a small or medium-sized undertaking.

An undertaking that carries out an eligible initial

investment as defined in terms of these regulations and the Guidelines

shall be assisted by means of either one or a combination of the

following

(a)

tax credit;

(b)

cash grant;

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

access to debt finance required for the initial investment.

The aid intensity may not exceed the percentage

established in the Guidelines and shall be calculated as a percentage

of

(a) the qualifying eligible expenditure as established in

the Guidelines; or

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

eligible project as shall be further specified in the Guidelines.

(1) An undertaking benefiting from tax credits in Utilisation of

accordance with these regulations and the respective Guidelines shall tax credits.

be entitled to deduct from the amount of income tax, which is due on

its chargeable income derived from its trade or business in the year of

assessment immediately following the granting of the tax credit, an

amount equivalent to the tax credits granted.

(2) An undertaking that in any year of assessment does not

utilise any tax credit granted to it or deducts a value from the amount

of income tax which is due on its chargeable income derived from its

trade or business that is less than the tax credit granted to it, shall carry

forward the unutilised tax credit for the subsequent years of

assessment.

(3)

Tax credit granted in accordance with these regulations

and the respective Guidelines shall not give rise to a right to a refund

of tax.

(4) Where an undertaking has benefited from a tax credit

granted in accordance with these regulations, the tax credit shall be

deemed to have relieved from tax that part of the undertaking’s

chargeable income which, when multiplied by the rates of tax at which

it was chargeable in that year, is equal to the tax credit, and where the

undertaking is a company and such undertaking or any subsequent

company distributes the income which is so deemed to have been

relieved from tax, such undertaking shall state in the dividend warrant

pertaining to any such tax distribution that such income has been

relieved from tax by a tax credit in accordance with this regulation.

(5) (a) In the case of an undertaking which is a company, the

chargeable income which is deemed to have been relieved from tax in

accordance with sub-regulation (4) shall be, for the purposes of the

Income Tax Act, allocated to the respective tax accounts of the Cap. 123.

company in question in accordance with the Tax Accounts (Income S.L. 123.101.

Tax) Rules and any dividends, or part thereof, distributed from such

income shall be exempted from income tax in the hands of the

members of the company on receipt of such distribution;

(b) Where a dividend referred to in paragraph (a) is distributed

to a member which is also a company, in this sub-regulation referred to

as "the second company", the said dividend shall likewise be

distributed by the second company to its members in the form of

dividends exempt from income tax in the hands of the recipients, and

where a member of the second company is also a company, the

preceding provisions shall apply mutatis mutandis as though

references to the first company were references to the second

company, and as though references to the second company were

references to that member, and the principle set out in this sub-

regulation shall continue to be applied for as long as such income, or

part thereof, to which this regulation applies are distributed by way of

dividends.

(6) A tax credit shall not be due to an undertaking under this

regulation unless it is claimed in the appropriate section of a tax return

submitted by not later than the relative tax return date.

(1) The Corporation shall establish in its Guidelines a

deadline for the submission of applications for assistance.

(2) Assistance shall not be granted in accordance with these

regulations by the Corporation after the 31st December 2026.

In the eventuality that a new scheme is issued, the

provisions in respect of which the assistance was granted prior to the

issuance of the new scheme shall continue to apply thereto.

€0.45