LOAN INTEREST RATE SUBSIDY (GUEST HOUSES, HOSTELS, HOTELS, FARMHOUSES AND RESTAURANTS) REGULATIONS

LOAN INTEREST RATE SUBSIDY (GUEST HOUSES,

HOSTELS, HOTELS, FARMHOUSES AND RESTAURANTS)

SUBSIDIARY LEGISLATION 463.06

LOAN INTEREST RATE SUBSIDY (GUEST

HOUSES, HOSTELS, HOTELS, FARMHOUSES

AND RESTAURANTS) REGULATIONS

1st October, 2010 *

LEGAL NOTICE 531 of 2010.

The title of these regulations is Loan Interest Rate Subsidy

(Guest Houses, Hostels, Hotels, Farmhouses and Restaurants)

Regulations.

In these regulations, unless the context otherwise requires

"the Act" means the Malta Enterprise Act;

"bank" means a bank in terms of the Banking Act;

"the Corporation” means the Malta Enterprise established under

the Act;

"eligible costs" means expenditure of a capital nature, incurred

as part of an eligible investment project;

"eligible investment project" means a project for the

refurbishment or upgrading of a guest house, hostel, hotel,

farmhouse or restaurant, or for the acquisition of new machinery,

apparatus or instrument to be used in the operation of a guest

house, hostel, hotel, farmhouse or restaurant, such project being

approved by the Corporation under these regulations and as may be

prescribed in the Guidelines, in respect of which project eligible

costs have been incurred and which new machinery, apparatus or

instrument are retained within the business for at least five years or

such other shorter period as the Corporation may deem appropriate

in view of the nature of the project

Provided that an investment project shall not be treated as

an eligible investment project if it is linked to

(a) purchase of land or property;

(b) wages;

(c) operating expenses;

"farmhouse" means a holiday premises which is constructed and

finished to represent a typical Maltese farmhouse, located in an

area compatible with a farmhouse environment;

"financial institution" means financial institution as defined in

the Financial Institutions Act;

"Guidelines" means such guidelines as may be published by the

Corporation from time to time in terms of the Act;

*see regulation 1(2) as originally promulgated.

LOAN INTEREST RATE SUBSIDY (GUEST HOUSES,

HOSTELS, HOTELS, FARMHOUSES AND RESTAURANTS)

"guest house" means a guest house as defined and licensed to

operate as such in terms of the Malta Travel and Tourism Services

Act;

"hostel" means a hostel as defined and licensed to operate as

such in terms of the Malta Travel and Tourism Services Act;

"hotel" means a hotel as defined and licensed to operate as such

in terms of the Malta Travel and Tourism Services Act;

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

undertaking" shall have the meaning attributed to them by Annex I

of Commission Regulation (EC) No 800/2008 of 6 August 2008

declaring certain categories of aid compatible with the common

market in application of Articles 87 and 88 of the Treaty (General

Block Exemption Regulation);

"restaurant" means a catering establishment as defined under the

Catering Establishments Regulations, and licensed to operate as

such in terms of the Malta Travel and Tourism Services Act;

"undertaking" means an undertaking as defined in the Act.

(1) Where the Corporation is satisfied that an undertaking

which carries out, in Malta, a trade or business consisting mainly of

the operation or management of a guest house, hostel, hotel,

farmhouse or restaurant, intends to carry out an eligible investment

project, as shall have been approved by the Corporation, the

Corporation may subsidise the rate of interest payable by the

undertaking on loans which the said undertaking may take out in

order to finance eligible costs to be incurred as part of such an

eligible investment project

Provided that this benefit shall be calculated on the eligible

costs incurred as from 1st June 2010 till the 31st December 2013.

(2) The subsidy referred to in subregulation (1) shall be such as

t o e n su r e t h a t t h e r a t e o f i n t er e st eff e c t i v e l y b o r n e b y t h e

undertaking shall not exceed the rate of interest that shall be

arrived at by deducting between one and three percentage points

from the rate of interest charged by the bank or the financial

institution.

(3) The loan interest rate subsidy that may be granted in terms

of this regulation shall be applicable only to interest payable during

the first five years of a loan period on a loan amount that shall not

exceed the sum of seven million euro (€7,000,000) in the case of an

undertaking operating as a guest house, hostel, hotel or a farmhouse

and on a loan amount that shall not exceed the sum of five hundred

thousand euro (€500,000) in the case of an undertaking operating as

a restaurant.

(4) Loans which qualify for the interest rate subsidy

contemplated by this regulation shall be loans provided by banks

and other financial institutions.

The assistance granted in terms of regulation 3 shall not

exceed fifty per cent (50%) of eligible costs in the case of small

undertakings, forty per cent (40%) of the eligible costs in the case

of medium-sized undertakings and thirty per cent (30%) of eligible

LOAN INTEREST RATE SUBSIDY (GUEST HOUSES,

HOSTELS, HOTELS, FARMHOUSES AND RESTAURANTS)

costs in the case of large undertakings.

Applications for assistance under these regulations shall

reach the Corporation by not later than the 31st December, 2013.