“This incentive will ease the economic environment and legal structure, generating a climate where innovation pays off”

Hon. Chris Cardona MP – Minister for the Economy, Investment and Small Business

“The next stage in our economic strategy for improved competitiveness is the creation of a stronger framework for the funding of creative industries and other industries with significant IP. This scheme addresses this call to provide better access to finance”

Hon. Joseph Muscat – Prime Minister of Malta

“This scheme will support our entrepreneurs and make start-ups an alternative proposition”

Hon. Edward Scicluna MP – Minister for Finance

ABOUT US

Malta Investment Management Company Limited (MIMCOL) is a Government-owned consulting agency providing professional support to a wide range of public sector and parastatal corporations and entities.

Since its founding in 1988, MIMCOL has excelled at restructuring, privatising and generally promoting private sector business practices across various state-owned companies and government entities.

MIMCOL falls under the responsibility of the Ministry for the Economy, Investment and Small Business. Today it supports the Ministry in the latter’s efforts to ensure that all public entities within its remit operate within a sustainable and cost-efficient environment, enhance service delivery and improve organisational effectiveness.

ABOUT MALTA

Malta is strategically located at the heart of the Mediterranean with very close ties to mainland Europe, North Africa and the Middle East. The island is considered the best choice for investments in knowledge based sectors and high end manufacturing, which together with EU membership, makes the country a perfect gateway to the Euro-Mediterranean region and further.

Since gaining independence in 1964, Malta has fully transformed itself into a fully functioning open market economy. Joining the EU in 2004 was seen as a natural step towards securing the economic future of the country and the adoption of the Euro in 2008 ensured that the economy would not be vulnerable to currency fluctuations while simultaneously allowing the nation to be more competitive.

The country’s national language is Maltese but both the latter and English are official languages in Malta, which adds to the destination’s appeal for visitors, traders and investors.

The key points for what makes Malta an attractive destination are:

  • Strategic Location;
  • EU membership;
  • Fully functioning open market economy;
  • Safe and pleasant lifestyle;
  • Recognition as an international financial services hub;
  • Advanced ICT infrastructure;
  • Low corporate tax;
  • Fiscal and financial incentives;
  • Significant number of double taxation agreements;
  • Highly educated and flexible workforce;
  • Competitive labour costs;
  • Pro-business policies;
  • Excellent long-term sovereign debt rating:
    • Fitch: A (positive) (updated 26/08/2016)
    • Moody’s: A3 (stable) (updated 02/09/2016)
    • Standard & Poor’s: A- (stable) (updated 15/10/2016)

About SIS

The Seed Investment Scheme (SIS) has been introduced in order to help start-ups raise equity finance.

The Seed Investment Scheme offers incentives in the form of tax credits to individual investors resident in or operating in Malta, who invest in a qualifying Maltese start-up or early stage companies. The scheme offers young entrepreneurs a route to vital funding in the initial stages of their project by effectively minimizing the risk to investors.

Some important points to consider are:
  • SIS investors can receive a maximum of €250,000 tax credit in a single tax year,
  • A company can raise no more than €750,000 in total via SIS investment.
  • Investors can receive up to 35% tax relief in the tax year the investment is made.
  • The company seeking investment must be incorporated and based in Malta.
  • The company must not have more than 10 employees.
  • The company must be no more than three years old.
  • The company must have assets of less than €250,000.
Most commercial activities are acceptable for SIS funding, however there are some exclusions:
  • Dealing in immovable property, shares, securities and/or other financial instruments; Dealing in goods other than in the normal course of business;
  • Carrying on banking, insurance or any other activity covered by the Investment Services Act, the Banking Act, and the Financial Institutions Act;
  • Providing legal, accounting or other professional services;
  • Activities relating to development of immovable property;
  • Receiving royalties or license fees;
  • Operating or managing hotels, hostels, guest houses or residential care homes;
  • Carrying on activities in connection with the generation of electricity and other energy sources;
  • The holding of shares, whether directly or indirectly, in any company which carries out any of the activities listed in any one or more of paragraphs above.

Example: Jenny invests €20,000 in SIS shares in the 2016 to 2017 tax year in SIS. The relief available is €7,000 (€20,000 at 35%). The amount owed for the year (before relief) is €15,000 which she can reduce to €8,000 as a result of her investment.

Example: James invests €20,000 in the 2016 to 2017 tax year in shares. The relief available is €7,000 (€20,000 at 35%). The tax owed for the year (before relief) is €5,500. James can reduce his tax bill to zero as a result of his SIS investment, and carries the rest of the relief available until it is fully absorbed.

FORMS

Qualifying Investor

In order for a person to qualify as a ‘qualifying investor’ in terms of the Rules, an investment must be made by way of the subscription to a fresh issue of fully paid up, non-redeemable equity shares at par on the investors own behalf in a qualifying company.

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Qualifying Company

A company will qualify as a ‘qualifying company’ if it satisfies a number of conditions (as set out in the Rules) and provides the required documentation as part of the application process. It will then be issued with the relative compliance certificate by MIMCOL.

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Guidelines

The guidelines reflect legal notice 232 of 2016 and provide interested investors and companies with details on the application process.

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INVESTORS

SIS incentivises investors to place capital into the high-risk startup sector. By offering a generous tax break (35% of the original investment) and capital gains tax exemption, SIS allows investors to offset the risk associated with startup investment, while also having involvement in a potentially successful new venture.

NEWS

Malta’s attractiveness for investors confirmed in EY survey

Nine out of ten foreign investors interviewed in EY’s Malta Attractiveness Survey 2016 consider Malta as an attractive location to opearte in, while slightly more than half of them also have the intention of expanding their Maltese operation further in a year’s time. From a long-term perspective, four out of five respondents believe they will […]

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APS Bank to operate €12 million innovation facility for Maltese SMEs

Over the next two years, APS Bank in collaboration with European Investment Fund (EIF) will make available a loan portfolio of €12 million to support local SMEs in developing, streamlining and innovating their operations or products. The InnovFin Scheme is applicable to a wide range of business sectors and falls under the Horizon 2020 EU […]

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First Two Schemes Under Business Enhance ERDF Initiative Launched

The Parliamentary Secretariat for EU Presidency 2017 and EU funds has just released the first two schemes under the Business Enhance ERDF Grant Schemes initiative. These two schemes are: SME Growth Grant Scheme Start-up Invest Grant Scheme The schemes open on Wednesday 13th July 2016. Applications for project proposals under the first two schemes will […]

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Bank of Valletta introduces new financing tool for SMEs in Malta

BOV JAIME (Joint Assistance Initiative for Maltese Enterprises) Financing Package is the new financing tool being offered by Bank of Valletta, following the agreement that was signed between the European Investment Fund (EIF) and Bank of Valletta. This package makes use of EU Structural and Investment Funds resources contributed by the Government of Malta, and […]

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FAQS

What is SIS?

The Seed Investment Scheme (SIS) offers incentives in the form of tax credits to investors in return for investment in a qualifying Maltese start-up or early stage companies. The scheme offers young entrepreneurs a route to vital funding in the initial stages of their project by effectively minimising the risk to investors.

How long will the SIS last?

SIS will remain effective until the 31st December 2018 (unless extended by the Ministry for Finance) but shall also cease to be active upon the application of the scheme to €5 million.

AS AN ENTREPRENEUR

How should my company register for the SIS?

Companies wishing to obtain the status of ‘qualifying company’ must submit an application for determination of eligibility with MIMCOL. You can contact them for the documentation required and to discuss the application process.

Should my company be incorporated and registered in order to apply for SIS?

Yes, you will need to be incorporated in Malta in order to get the relative compliance certificate.

How much does the compliance certificate cost?

It is free of charge to get the compliance certificate.

What is the maximum I can receive by way of investments?

Investments in a qualifying company shall not, in aggregate, exceed €750,000.

AS AN INVESTOR

If I invest in a company under SIS, how can I guarantee success?

As with any investment, there are risks involved; however these risks are significantly reduced because of the tax benefits offered.

Can the SIS relief be granted on investment in a company which operates overseas?

No. The Scheme is for individual investors resident in or operating in Malta.

Is there a minimum amount required for investment? 

There is no minimum requirement.

What is the maximum tax credit I can receive?

The total tax credit applicable to any investor shall not exceed €250,000 per year. Provided the total threshold for the Scheme is not exhausted.

Do I still get relief if I invest in my family member’s business?

No. An investor does not qualify if he or she is connected to the qualifying company through direct lineage, whether it is their spouse, sibling, descendants or ascendants.

CONTACT US