The Malta Enterprise INVEST Incentive: A Practical Guide for Businesses Planning Capital Investment
Businesses seeking to expand, modernise or diversify their operations often face the challenge of securing the funding required to move ahead. To ease this burden, Malta Enterprise offers the INVEST Incentive, a measure that supports companies undertaking significant capital projects. This scheme is currently in force from 1 January 2024 until 31 December 2026 (applications close by 30 September 2026). The incentive helps reduce upfront costs, improve cash flow and strengthen long-term financial viability. The following overview explains how the scheme works, who is eligible and what forms of support are available.
- What Is the INVEST Incentive?
The INVEST Incentive applies to initial investment projects – that is, capital expenditure that brings about meaningful development within a business. This includes:
- creating a new establishment,
- expanding an existing operation,
- diversifying into new products or services, or
- introducing a fundamental change in operating processes.
Support may also be granted when a business acquires the assets of another establishment that has closed or would have closed had it not been purchased. The sole acquisition of shares does not qualify as an initial investment. The INVEST Incentive operates in line with the EU General Block Exemption Regulation (GBER). In particular, the measure is based on Article 14 (Regional Investment Aid) and Article 17 (Investment Aid to SMEs) of GBER.
Projects must have a Start of Works on or after 1 January 2024 and must result in qualifying activities as defined by Malta Enterprise.
- Who Is Eligible?
To qualify, a project must align with Malta Enterprise’s definition of an initial investment. The scheme is open to a wide range of sectors, including manufacturing, ICT, research and innovation, life sciences, logistics, environmental solutions, education and audiovisual activities. Undertakings engaged in gambling (requiring an MGA licence) or in the provision of financial services (requiring an MFSA licence) are excluded.
Enterprises must also meet a number of general conditions:
- They must be financially stable and fully compliant with tax, VAT and social security requirements.
- At least 25% of the eligible investment must be funded through the company’s own resources or external financing free from state aid.
- The supported activity must remain in Malta for five years (or three years in the case of SMEs) after completion of the investment.
- The undertaking must not have carried out a relocation to the aided establishment in the two years preceding the application and must commit not to relocate up to two years after completion of the investment.
SMEs may undertake initial investments in assisted or non-assisted areas. Large undertakings are eligible only for initial investments that create a new economic activity, and only in assisted areas.
- What Expenditure Is Eligible?
The incentive supports capital expenditure directly linked to the investment project.
Eligible tangible assets include:
- land and buildings (including fittings and furnishings),
- plant, machinery and equipment,
- vehicles (new; support may be limited to clean or zero-emission vehicles),
- ICT systems and digital infrastructure,
Eligible intangible assets include:
- software,
- licences and patents,
- technical know-how and related intellectual property.
- must be used exclusively in the aided establishment, be amortisable, purchased under market conditions from unrelated third parties, and recorded in the asset register;
- for large enterprises, intangible costs are eligible up to 50% of the total eligible investment; for SMEs, up to 100%.
An investment solely in intangible assets is generally not eligible; tangible assets are required for implementation of the initial investment project.
Certain costs are excluded, and key parameters apply:
• taxes (e.g., VAT) and government-induced charges (e.g., customs/vehicle registration) are not part of eligible costs;
• shipping, installation and commissioning may be eligible when directly related to the project;
• lease of plant/machinery must be financial leasing with an obligation to purchase;
• lease of land/buildings must be on emphyteusis with minimum periods (5 years post-completion for large undertakings; 3 years for SMEs), and aid is limited to the first 10 years;
• aid for energy-generation (including renewables), storage, transmission, distribution and related infrastructure is not granted;
• procurement of land to operate as a quarry or landfill is ineligible.
- Forms of Support
The INVEST Incentive offers several forms of financial assistance, allowing businesses to choose the option that best matches their funding needs.
- Tax credits: non-discretionary; awarded for eligible initial investments; usable while the supported activity is being carried out; can be carried forward if unused; applications based on assets procured may be submitted within 12 months from Start of Works.
- Cash grants: discretionary; must be approved in writing before Start of Works; applicants must demonstrate access to personal/private funds and how any shortfall will be covered.
- Loan Interest Rate Subsidy: up to 3% per annum; effective interest rate payable must not be less than 1% available up to the 10th year from initial drawdown; paid on eligible costs through a specific loan account.
- Loan Guarantees: available only to SMEs; guarantee cannot exceed €16,500,000 and may cover up to 80% of the supported loan (reduces annually per the loan schedule).
- Maximum Aid Intensities
The total aid (as gross grant equivalent) for a given project cannot exceed the following maximum intensities, which depend on applicant size and location:
- Small undertakings (excluding hospitality) — 30% in assisted areas; 35% in Gozo/Comino; 20% in other areas
- Medium-sized undertakings (excluding hospitality) — 20% in assisted areas; 25% in Gozo/Comino; 10% in other areas
- Large undertakings — 10% in assisted areas; 15% in Gozo/Comino; Not eligible in other areas
- SMEs operating in hospitality — 15% in assisted areas; 15% in Gozo/Comino; 10% in other areas
- Alternative Basis: Wage Costs of Jobs Created
Qualifying expenditure may alternatively be calculated on the basis of gross wage costs (before tax and compulsory contributions) of full-time jobs directly created by the investment:
- eligible value equals two years of wages for new roles filled within three years from completion;
- jobs must lead to a net increase in the establishment’s headcount over the previous 12 months;
- employees must be resident in Malta, registered with Jobsplus, and have an employment contract of at least 24 months;
- each job created must be maintained for three years (SMEs) or five years (large undertakings).
- Application and Compliance
Applicants submit requests through Malta Enterprise’s Client Portal. The scheme operates on a first-come, first-served basis and may close earlier if budgets are fully utilised.
Key timelines and documentation:
- Applications close on 30 September 2026; the Guidelines remain in force until 31 December 2026.
- Start of Works must occur between 1 January 2024 and 31 December 2027 (or later if delayed due to factors outside the beneficiary’s control, provided approval is issued during the validity period).
- Requests for tax credits based on assets procured may be submitted within 12 months from Start of Works; grant/loan-related requests should be submitted at least 12 weeks prior to commencement and require prior approval.
- Required documents typically include: recent CfR compliance certificates; details of directors/shareholders; audited accounts for the previous two years (or management accounts, if applicable); detailed expenditure lists and BOQs; site identification; for cash/IRS/LG, a CPA opinion and business plan; for bank-backed measures, a letter from the bank.
- Why the INVEST Incentive Matters
For businesses planning expansion, automation, digital transformation or diversification, the INVEST Incentive can significantly lower overall investment costs. It supports both immediate funding needs through grants and longer-term benefits through tax credits, making it particularly valuable for SMEs, high-growth companies and enterprises investing in innovation.
- How Our Firm Supports You
We guide clients through every stage of the INVEST process. Our support includes assessing eligibility, structuring and preparing the application, assisting with financial projections, coordinating with Malta Enterprise and ensuring compliance throughout the project lifecycle. A well-prepared submission increases approval success and helps businesses maximise the value of the incentive.
Disclaimer
The information provided in this article is for general informational purposes only and does not constitute legal, financial or professional advice. While every effort has been made to ensure accuracy, no liability is accepted for any errors or omissions. Readers should seek professional advice before making business or financial decisions based on this content.
