It is a nation known for its historic sites, a multitude of fortresses, megalithic temples and the Ħal Saflieni Hypogeum, a subterranean complex of halls and burial chambers dating to circa 4000 B.C.

But it is not only the history of Malta that puts it on the map. Within the idyllic 300 square kilometres sits an up-and-coming startup scene that is bursting with innovation. StartupBlink’s Startup Ecosystem Report found that Malta’s startup scene saw an increase in 2023 and had jumped three spots from 2022. In Western Europe, Malta ranks 20th in the startup ecosystem, and worldwide, the country ranks 56th.

Malta encourages its population to build startups in the area and continues to implement policies that attract foreign investors and entrepreneurs, so it’s no wonder the area is an up-and-coming startup hotspot.

Start in Malta

Start in Malta is a governmental initiative aimed to supercharge the Maltese startup ecosystem, aiming to make Malta the birthplace of many more startup success stories.

Start in Malta is working on making the country one of the world’s best places for startups, by partnering with and uniting startups, incubators, and accelerators, from both the public and private sectors.

Its aim is to strengthen the startup ecosystem in Malta, uniting and building the community through different events and activities, creating, and executing unified marketing and branding strategies, and assisting regional development. It also co-organises impactful startup events with the community, advocating diversity in age, gender, culture, and background. It also works on educating local investors and attracting foreign investors to Malta, ensuring that resources and vital know-how are able to reach startups and the community at large.

Malta Enterprise

Malta Enterprise is the country's economic development agency, tasked with attracting new foreign direct investment as well as facilitating the growth of existing operations.

Malta Enterprise has been in operation since the 1950s, which means that is has been around since almost the beginning of Malta’s industrial development. This longevity means the corporation has a great deal of accumulated experience within the field. Malta Enterprise is also the national contact point for the Enterprise Europe Network through which companies based in Malta can develop links with counterparts in over 60 other countries.

Malta Enterprise, to help its clients further improve their competitive edge, has developed various incentives for the promotion and expansion of the industry.

Investment Aid

The Investment Aid Scheme aims to sustain the regional industrial and economic development of Malta. This measure facilitates initial investments by encouraging the setting up of new startups, as well as the expansion and development of existing businesses. The aid awarded under these guidelines amounts to a percentage of qualifying expenditure incurred and may take the form of tax credit (which may be claimed against future tax bills) and/or a cash grant.

Research, Development, and Innovation

The Research and Development initiative may be awarded to businesses that aim to achieve economic growth through innovation, and that require industrial research and development to address uncertainties. This incentive is in place to assist industrial research and experimental development activities in the industry, to allow for the development of innovative products and solutions. Projects approved are supported through a tax credit, but Malta Enterprise also consider providing support in the form of a cash grant.

Soft Loan

The ‘Soft Loan’ financial offering was designed to support businesses engaged in manufacturing or services accelerate their plans in establishing new products, entering new geographical markets, addressing environmental concerns, and digitising processes. These processes may be supported through this soft loan, which can cover up to 75% of the funding requirements and be up to €1 million. The soft loan is to be repaid over a period of five years and has low interest rates to help startups out further.

Business Development

The Business Development Scheme is intended to facilitate value-added projects that are expected to contribute to the regional development of Malta. Supported initiatives should lead to the development of new business opportunities, an increase in employment, and an increased market base or competitiveness. Malta Enterprise may award tax credits or cash grants to startups that carry out a project aimed at expanding their business operation or consolidating their current operations. The aid shall be awarded to support eligible costs incurred, including payroll costs, rental costs, acquisition of tangible assets, and support and advisory costs amongst others, subject to various conditions and criteria.

This scheme primarily targets undertakings engaged in prescribed qualifying activities such as manufacturing, research and development activities, digitisation of processes and the development of digital services and systems. This incentive scheme is regulated under the European Commission’s De Minimis Regulation and, as such, the aid awarded is subject to a maximum capping of €200,000 over a three-year period.

Kick START

Kick START is a scheme that supports startups that are considered economically feasible and innovative, by participating in an accelerator programme recognised by Malta Enterprise. Kick START supports startup ventures that have a viable business concept based on technical and scientific know-how and that are in the process of developing the technology into a market-ready offering.

Startups eligible for the Kick START scheme need:

• To be registered with the Malta Business Register no longer than 60 months
• Do not have a single corporate shareholder that owns or controls more than 50% of the company
• Engaged in qualifying activities (manufacturing and software development, amongst others)
• The activities of the startup are linked to the knowledge or experience of the key persons.

These are just a few of the incentives that Malta Enterprise offers the startups in the country, that allow these businesses to thrive and encourage more startups in the area.

Startup Residence

More than 25% of people working in Malta are expats that come from all over the world. During the last few years, The Government of Malta has adopted an open approach towards startups, and this has resulted in the attraction of various highly innovative startups in the area.

The Malta Startup Residence Programme grants a three-year residence permit, extendable for an additional five years, during which beneficiaries are able to reside in Malta while launching their startup venture. The scheme is intended for non-EU nationals and has been specifically designed to facilitate the setting up of innovative startups and scaleups in Malta whilst supporting the immigration process of their Founders/Co-Founders.

With so many incentives for startups in Malta, the startup ecosystem is sure to expand rapidly. The country may already attract a lot of tourism but is surely attracting more and more founders to startup in the area. The stats don’t lie, and when an area is growing in the same way as Malta, it will experience further growth.

This article originally appeared in the November/December issue of Startups Magazine. Click here to subscribe