3.9 Start-up funding for young entrepreneurs
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The Malta Enterprise is the agency responsible for the promotion of foreign investment and industrial development in Malta
The Erasmus for Young Entrepreneurs is a programme that enables aspiring entrepreneurs, whether they wish to create a new venture or expand an existing one to international markets to gain valuable skills and experience. Erasmus for Young Entrepreneurs provides practical and financial assistance to new entrepreneurs, who get to spend time with experienced host entrepreneurs in another EU country and learn first-hand how to manage a small or medium-sized business (SMEs). The programme's specific objectives are to promote on-the-job training, exchanges of experience and information between partners, and to enhance market access, identification of potential partners, and networking. In this manner, new businesses may be created whereas existing ones may become more robust, competitive, and sustainable.
MCAST Entrepreneurship Centre was set up in collaboration with Kordin Business Incubation Centre (KBIC) and Malta Enterprise. The Centre offers a framework for ideas to thrive and encompasses a series of activities that address the needs of MCAST students and alumni. Through this close collaboration, MCAST students and alumni who demonstrate an entrepreneurial flair are provided with space within KBIC where they can nurture, grow and launch their business ideas. The possibility of developing further ideas is also made available to alumni of the College.
MITA Innovation Hub forms part of the Malta Information Technology Agency, which is responsible for the implementation of the Government’s ICT policy, programmes, and initiatives in Malta. The Hub supports students, start-ups, and innovators and creates the environment to transform their ideas into products or services through digital technologies. It supports start-ups by presenting them with a problem that requires solutions and financing the start-up which comes up with the best proposition.
The Takeoff program, based at the University of Malta, delivers a tailored package of benefits and guidance to entrepreneurs, most of whom are young people, from inside and outside of the University of Malta. The programme aims to help entrepreneurs transform their ideas into market and investor-ready ventures. The programme is specifically designed to help innovators and aspiring entrepreneurs create successful science, technology, engineering, creative media, and knowledge-based start-up business. Takeoff brings together innovators, entrepreneurs, mentors, and investors and aims to close the skills and resources gap experienced by entrepreneurs as they embark on their start-up ventures.
Microsoft Innovation Centre supports students and start-ups through its facilities and offers training courses ranging from development to gaming. The MIC start-up programme is targeted towards start-ups in the early stages of business and offers incentives such as office space, hardware, and technology skills. Students are encouraged to explore and develop their interest in technology and build technology-related skills.
Junior Achievement-Young Enterprise (JA-YE) complements classroom learning by offering learning-by-doing programmes at primary, secondary, post-secondary, and tertiary levels. The most popular are the Company Programme (post-secondary level) and Start-Up Programme (tertiary level). JA-YE also offers group coaching and mentoring for youths through these programmes.
The Business First service provides information and assistance regarding administrative procedures. The service also offers information for those seeking to improve their business or even close their business. Young people can have access to this information, which is made available via the ‘Business First’ website, telephone number, email, and one-to-one meetings.
The Get Qualified 2017-2023 is an initiative that supports the personal development of individuals for the achievement of qualifications and certifications required by the industry. The incentive is applicable to individuals following a course of studies leading to a certification, diploma, degree, or post-graduate degree courses.
The Skills Development scheme falls under the remit of the Malta Enterprise. It supports business undertakings to provide training to develop and update the skills and knowledge of the workforce. Support is provided in the form of training and knowledge transfer initiatives that will support employees to acquire new skills, know-how, and knowledge).
The Ministry for Economy, Investment and Small Business (MEIB), and the Centre for Entrepreneurship and Business Incubation (CEBI) of the University of Malta, together offer the TAKEOFF Seed Fund Award (TOSFA) at the TAKEOFF Business Incubator, situated at the University of Malta. The award distributes up to 100,000€ in seed funding to groups of innovators and entrepreneurs.
Innovative start-ups in specific sectors may benefit from the B.Start scheme offered by Malta Enterprise, which offers a seed fund of up to 10,000€ and an additional fund of up to 15,000€ calculated upon the full-time employment with the start-up.
Malta Enterprise offers a Micro Invest Scheme and encourages undertakings, including start-ups, to invest in their business, so as to innovate, expand and develop their operations. Undertakings benefitting from this measure will be supported through a tax credit calculated as a percentage of eligible expenditure, which also covers increases in wage costs). Malta Enterprise may approve a tax credit equivalent to 45% of eligible expenditure in favor of each undertaking. An additional bonus of 20% (that is a total of 65% tax credit) applies to undertakings operating from Gozo. Aid intensity is capped at €50,000 over any period of three consecutive fiscal years which shall be increased by €20,000 (to a total of €70,000) for undertakings: a) operating from Gozo; b) registered as a Family Business; and c) having more than 50% of the ownership attributed to a female person.
The Business Start 2021 offers seed and growth funding for small start-ups. Start-ups undertakings that are still in their early development phase may receive an initial grant of up to €10,000 to help them develop their business proposal. Start-ups that present a viable business plan may receive additional support linked to full time employment which may reach up to €20,000 per quarter. The maximum value of the aid that may be provided to an undertaking is capped at €200,000. The scheme expires in December 2023.
The Start-up Finance 2020 is a measure to support small start-up undertakings that demonstrate a viable business concept and that exhibit commitment to expand and further develop their economic activity. The Corporation may provide support not exceeding €400,000 which may be increased to up to €800,000 if the Start-up is an Innovative Enterprise.
The ZAAR Crowdfunding Platform is a crowdfunding platform, aimed as an alternative access to finance for start-ups, business projects, and ideas. Aspiring entrepreneurs in Malta can crowdfund their business ideas through ZAAR. ZAAR is a project spearheaded by Promotion of Entrepreneurial Initiatives (PEI) Limited, which was set up jointly by the Malta Business Bureau (MBB) and the University of Malta (UoM). This initiative is also supported by the Ministry for Economy, Investment & Small Business and the Arts Council Malta.
Go Beyond offers early-stage business angel investment to start-ups in five industry categories, including technology, internet, and cellular phones.
Bank of Valletta offers two financing packages for entrepreneurs in Malta:
The BOV Start Plus package is a business loan aimed at start-ups and micro-enterprises that require funding of up to 25,000€ for investment purposes and initial related working capital requirements. This package offers advantageous interest rates, involves no advance-related fees, and, most importantly, requires no collateral as it is secured by a guarantee issued under the European Commission’s Competitiveness and Innovation Framework Programme.
The BOV JAIME (Joint Assistance Initiative for Maltese Enterprises) Financing Package provides SME with up to 50,000€ for capital investment and related working capital at advantageous interest rates and reduced collateral obligations.
The annual National Enterprise Support Awards (NESA), which offer cash prizes of up to 48,000€ in recognition of initiatives that support entrepreneurship and enterprise growth in six categories, including in ‘Responsible and Inclusive Entrepreneurship’. Although these prizes are awarded to entities supporting entrepreneurship and not directly to entrepreneurs, the latter still benefit indirectly from the projects and initiatives being recognised.
In addition, a small number of initiatives are targeted at specific groups. There are two funding schemes that are a targeted at female entrepreneurs:
Malta Enterprise offers a Micro Invest Scheme, which was recently amended so that self-employed women (including young women) and businesses owned in their majority by females are granted a maximum tax credit of up to 50,000€ instead of 30,000€.
Malta Microfinance Ltd., which is a non-profit financial institution, offers loans to people struggling financially. Three main types of loans are offered, one of which is a Business Loan to provide funding and support to start or expand one’s business.
The Access to Finance (Loan Guarantees for Initial Investment) is a measure that supports SMEs with a guarantee to be used against a bank loan required for the setting up of new establishments or for the extension of the capacity of an existing establishment.
The Access to Finance (Soft Loan) is a measure designed to support undertakings engaged in a manufacturing or service activity, accelerate their plans in establishing new products or entering a new geographic market, addressing environmental concerns and digitise processes. Such undertakings may be supported through a soft loan covering part of the funding requirements of up to €1,000,000.
EUREKA supports the development of rapidly marketable innovative products, processes, and services across all technological sectors through collaborative Industrial Research or Experimental Development projects up to 36 months in duration involving partners from Malta and other EUREKA countries. Participation in Network projects, Eurostars and Clusters amongst other EUREKA instruments raises participants’ international profiles through EUREKA label award, facilitates growth and access to finance for companies involved, offers a high degree of flexibility and bottom-up approach to project generation with a greater chance of project proposal success. Malta participants in collaborative projects endorsed by EUREKA Network are supported through the Research and Development 2020 incentive. The Research and Development 2020 incentive aims to assist industrial research and experimental development activities required by the industry for the acquisition of knowledge leading to the development of innovative products and solutions. The measure also encourages cooperation between undertakings by providing additional assistance for industrial research and/or experimental development projects. Approved projects will mainly be supported through a tax credit but Malta Enterprise may also consider approving support in the form of a cash grant.