Malta Start-ups Ecosystem Powers Ahead

Malta is rising and taking steps to increase the growth of early-stage businesses and to attract new sorts of talent from all over the world.

The last decade has seen the country’s start-up ecosystem rapidly developing, with the creation of incubators, seed-financing schemes, the arrival of venture capital firms and co-working spaces. Malta’s convenient access to European markets and North African markets, complete understanding of the English language, excellent climate, and good technical workforce, are other reasons why Malta is one of the best places to start-up a company.

Best Industries in Malta for Start-ups

Malta’s tech sector is booming with the rise of successful start-ups together with another powerful industry, that is iGaming. This is seen clearly in with the numerous iGaming licences issued in Malta to major international iGaming operators. Blockchain, artificial intelligence, life sciences and healthcare are more recent industries that are gaining traction in popularity with start-ups in Malta.

Start-ups in Malta: Success Stories

Malta has attracted some of the most promising start-ups, most especially in the tech and iGaming field. An example is Altaro, founded in 2009 as a small business and today becoming an award-winning software company servicing over 40,000 worldwide. Another success story of a start-up founded in Malta is Hotjar, founded in 2014 and today having its software used by over 900,000 websites worldwide.

Malta’s Business Environment for Start-ups

Malta’s start-up ecosystem fared well when compared to most European countries. While the ecosystem is shown to be the smallest in terms of value, the country’s growth rate outranks the European average. The latter shows Malta’s capability to boost both the number and the value of start-ups over the coming years.

This has been significantly aided by the well-regulated jurisdiction, government support, approachable authorities, a safe business environment present on the Islands, and qualified human talent, just to name a few.

In April 2021, Malta Enterprise and the University of Malta announced a new collaboration to provide support and mentoring for start-ups in order to provide business newcomers with adequate knowledge to access funding. This initiative gives the start-up environment a boost towards further enhancement and success.

One of the initiatives aimed at provided incentives and support are TAKEOFF, the first-ever technology business incubator based at the University of Malta. This endeavour is aimed at offering know-how, tools and mentoring to turn ideas into great businesses.

Another initiative is the Microsoft Innovation Centre and the Innovation Hub that is run by Malta’s national IT agency. This endeavour targets early start-ups and aspiring entrepreneurial students and is aimed at supporting them by providing access to software and hardware while offering training to promote tech skills.

Funding Available

If you are looking to start up a business in Malta, you should make sure to look at the funding available. Malta Enterprise is a national economic development agency that provides a wide range of support and funding to facilitate your start-up process. Whether you are starting up an enterprise or looking into expanding your current business, you can choose from the following programmes for assistance.

Micro Invest

Micro Invest encourages start-ups to invest in their business to promote innovation, expansion, and development of their operations. Support is given through a tax credit calculated as a percentage of eligible expenditure and wages cost.

Business Re-Engineering and Transformation Scheme

This scheme was developed to support small to medium sized businesses so that they can have the capacity to realign their business activity, restructure and enhance their products and/or services. This aid is awarded in the form of a cash grant that will cover 50% of the costs to a maximum of €5,000 per advisory service per undertaking.

Change to Grow 2021

This is the latest scheme that enhances the above funding of the Business Re-Engineering and Transformation Scheme. Change to Grow 2021 is set to include self-employed and micro enterprises. The aid offered towards this grant has been doubled from €5,000 to €10,000.

Malta Start-up Visa & Human Resources

A start-up visa framework is being proposed to facilitate immigration policies and be in a better position to attract entrepreneurs and talent from all over the world. It will also filter slow administrative procedures that might create significant barriers for innovative entrepreneurs to start their business.

How to Start a Business in Malta

Malta has a pro-business mentality and caters for any requirements that a start-up might need to look into. If you wish to start a business in Malta, here are some of the main steps that you need to take into consideration:

• Decide whether you need to set up a limited liability company, partnership or sole-trader.
• Prepare the registration documents.
• Deposit the minimum share capital.
• Present the filled-in company registration form, together with the memorandum and articles of association, and the share capital deposit slip to the Malta Business Registry.
• Obtain the necessary licenses.
• Get a tax identification number.
• Inform the VAT department that you will be starting a business in Malta.
• Obtain a PE number by filling in a form by the Inland Revenue Malta.
• Register with JobsPlus.
• Search for any business premises suited for your business.
• Search and recruit the right talent and comply with all employment legal obligations.
• Find the right residential property if relocating from outside of Malta.

Corporate Tax in Malta

Tax in Malta is very favourable for businesses and definitely a main incentive to start-ups or companies interested in relocating to the country. Corporate tax is of a flat rate of 35% which can be reduced to a net effective tax rate of 5% following the distribution of a divided to the shareholder through the Malta tax refund system.

As a leading corporate service firm in Malta, CSB Group can assist you to benefit from Malta’s full imputation and refundable tax credit system and assist you with applying for double taxation relief when applicable.

Malta has a strong framework in Malta to put start-ups on the right track to success. The significant initiatives and access to funding that are constantly being rolled out only means that its start-up ecosystem will only become stronger and will keep powering ahead.

CSB International Ltd is authorised to act as a Company Service Provider by the Malta Financial Services Authority. Its diverse yet specialised service portfolio also ensures that anyone interested in setting up in Malta will have all requirements met by one trusted supplier. For any additional information or assistance required, you are invited to contact our corporate team on [email protected].