The Micro Invest Scheme and its enhancements following Budget 2026

What is the Micro Invest Scheme?

The Micro Invest Scheme is a government incentive administered by Malta Enterprise, designed to encourage self-employed individuals and small to medium sized businesses to invest, expand and improve their operations.

Through the scheme, eligible businesses can benefit from a reduction in income tax through a tax credit that serves as a reward for making qualifying investments or improvements to their business.

These investments include: 

• • The purchase of new equipment, machinery or technology.
  • Upgrading to business premises or commercial vehicles
  • The hiring of new employees or an overall increase in wage costs
  • Investment in digital transformation, software or automation

The tax credit typically covers a percentage of eligible costs, generally 30% of vehicle-related expenses, and 45% on other qualifying costs for business based in Malta. For Gozo-based businesses, the rate increases to 65%.  

Micro Invest allows for a maximum limit of €50,000 in tax credits over a three-year period for businesses in Malta, and up to €70,000 for Gozo-based operations.

To apply, businesses must submit an online application through Malta Enterprise, providing evidence of eligible expenses and supporting documentation.  Once approved, the tax credit can be claimed against future Tax due over 3 basis years, as indicated in the tax credit certificate issued by Malta Enterprise.

What has changed

The Maltese Government has significantly upgraded the Micro Invest Scheme as part of the 2026 Budget, with the aim of stimulating business investment, productivity and digitalisation. Key changes include:

1. 1. Higher tax-credit cap
      

      • • The maximum tax credit for enterprises in Malta under Micro Invest has been raised to €65,000 per annum, valid for eligible investments. Additionally, the rate has been increased to 65% of eligible expenditure instead of 45%.
        • For enterprises based in Gozo, the scheme retains an additional “Gozo bonus” bringing the ceiling up to €85,000 for qualifying businesses.

2. 2. Broadening of eligible activities
      

      • • The scope of eligible investments has been expanded to explicitly include digital investments, such as software, digital solutions and automation. In other words, the scheme no longer covers only “classic” capital investment, but also the digital transformation of the business.
   3. New wage-support mechanism under the scheme
      

      • • This new measure allows employers to claim subsidy support for wage increases of long-serving employees: where an employee has been with the same employer for over four years, the Government will finance 65% of the wage increase (up to €780 per year) for a duration of two years. This applies for Malta-based firms.
        • For Gozo-based enterprises, the rate rises to 80% of the increase, up to a maximum of €960 per year per employee.
        • This mechanism is part of the Micro Invest scheme’s enhancements, signalling an emphasis not only on capital investment but also on people/productivity investment.
   4. Complementary investment incentives
      

      • • Parallel to the Micro Invest scheme enhancements, the Budget introduces a new Investment Tax Credit (ITC): a 60% tax credit on qualifying capital expenditure (e.g., machinery, IT, tools, cybersecurity) claimable over four years, provided the investment is made within the next two years.
        • Further, for research & development / innovation activities, a super-deduction of 175% of eligible expenditure is now available; investments in AI, digitalisation and automation benefit from accelerated depreciation treatment.

Why these changes matter

• • Encouraging digital transformation: By explicitly including digital investments, the Micro Invest scheme aligns with the government’s broader agenda of upgrading Malta’s enterprise base toward higher productivity, technology adoption and international competitiveness.
  • Stronger incentive for SMEs and Gozo-based businesses: The higher caps and Gozo bonus reflect a targeted effort to support smaller enterprises and island economy businesses which typically face greater challenges in scaling or investing.
  • Supporting workforce retention and quality jobs: The wage-support element sends a message that investments in people (especially long-serving staff) are valued and that productivity growth is multi‐dimensional (capital + labour).
  • Improved clarity for planning: With defined caps and eligibility expansions, businesses can more confidently plan investment projects, digital upgrades and workforce strategies knowing the enhanced incentive environment.
  • Alignment with national economic goals: These measures support Malta’s Fiscal Strategy for 2026, which aims to maintain steady economic growth of around 4.1% while keeping public debt and the fiscal deficit within sustainable limits. Practical considerations and next steps for businesses

• • Assess eligibility carefully: Businesses should review whether their planned investment qualifies under the enhanced Micro
  • Invest scheme — particularly verifying that digital solutions, software, automation tools meet the criteria.
  • Timing matters: Given the “next two years” window for certain investment tax credits and the increased caps, timing of investment decisions is particularly important.
  • Gozo differential: Firms in Gozo should pay special attention to the higher cap and higher wage-support rate — this may influence location or expansion decisions.
  • Integration with other incentives: The micro-investment enhancements should be considered alongside the ITC and R&D/innovation incentives — structuring investment to maximise combined benefit.
  • Documentation and compliance: As always with tax-credit schemes, maintaining clear documentation of eligible costs, investment dates, employee tenure and so on will be critical.
  • Strategic messaging: For businesses preparing communications (to stakeholders, investors, etc.), the upgrade to the Micro Invest scheme is a positive signal of Malta’s supportive business environment — emphasise digital and productivity upgrading, not just cost reduction.

For more information, kindly contact Apex Business Services on 21559999 or info@jcordina-andco.com