What is the purpose behind this Scheme?
SMEs form the backbone of the Maltese economy and the Maltese Government regularly demonstrates its determination to continue mobilising private investment to finance and support start-ups. The latest legal measure, being taken just last Friday, is the revival of the Seed Investment Scheme through Legal Notice 170 of 2019, which shall remain effective until the 31st December 2021. The chief objective of this scheme is to grant tax relief in the form of tax credits to natural persons resident in or operating in Malta investing in start-up businesses.
What are the eligibility criteria for an SME to qualify for such Scheme?
The SME must satisfy the following cumulative conditions:
What types of activities is an SME allowed to carry out in order for it to apply for such Scheme?
An SME shall be allowed to carry out any type of activity except for activities which involve:
a) dealing in immovable property, shares, securities and, or other financial instruments;
b) dealing in goods other than in the normal course of business;
c) carrying on banking, insurance or any other activity covered by the Investment Services Act, the Banking Act, and the Financial Institutions Act;
d) providing legal, accounting or other professional services;
e) activities relating to the development of immovable property;
f) receiving royalties or licence fees;
g) operating or managing hotels, hostels, guest houses or residential care homes;
h) carrying on activities in connection with the generation of electricity and other energy sources;
i) 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 (a) to (h);
What are the eligibility criteria for an investor to apply for such Scheme?
In order for a person to be eligible to qualify as an investor in terms of this Scheme, such person must be:
The investor must also continue to hold the investment in an SME (which qualifies for such Scheme in terms of the above) for a period of not less than 3 years and he must not be connected to the said SME prior to the subscription to the equity shares in the SME.
Who can be deemed to be connected to the SME (which qualifies for such Scheme) and thus would not be able to benefit from this scheme?
The Legal Notice indicates a number of instances where an individual can be deemed to be connected to the SME. These include cases where the individual is:
What is the Tax Credit Benefit offered to an investor under such scheme?
How can KSi Malta be of assistance?
At KSi Malta, our legal and tax team can help you determine whether this Scheme is applicable for your company (SME) or for you, as an investor. We can also offer all assistance which is required in the application process.Go Back
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