Malta's allure for startups: strong ecosystem and access to funding
As much as it is exciting to decide to be your own boss, germinate your very own ideas and start a business, startups typically face a myriad of challenges to get their ventures up and running. A sound business plan based on rigorous market research to gauge demand for services or products is the first one. Getting the right people on board with the appropriate skills and knowledge, and who share your same passion and energy, could also be a make or break. Entrepreneurs will also tell you that implementing target marketing is elemental to achieving brand awareness and position the company well against any competition, for the business to gain traction.
Considered the most crucial, however, is getting the funding to kick-start. Startups need money to hire people, purchase equipment, rent offices and go-to-market. The easiest and fastest way to do this is to use own funds. However, more often than not, founders need to source third-party finances. This is usually done by securing venture and seed capital or by taking out loans from financial institutions. Both hurdles have become even more challenging due to market and geo-political fluctuations as well as stringent regulation and compliance.
Unless you're considering launching your venture or scaling it in Malta and you are eligible for non-dilutive funding from Malta Enterprise.
Access to startup funding in Malta
Recognising the fact that funding significantly increases a startup's chances of success, Malta Enterprise, the government's economic development agency offers dedicated funding packages for startup ventures, backed by an agile team that handholds entrepreneurs throughout the business journey.
The Startup Finance scheme is a repayable advance of €400,000 which can reach up to a maximum of €800,000 for highly innovative startups. The funds can be used for wages and salaries, working capital, investment in tangible and non-tangible assets, funding for participation in accelerator programmes and the matching of investment from third parties. The interest rate for this scheme is 2% or 3% for working capital only, over and above the ECB base rate.
The Business Development Grant from Malta Enterprise is a grant of up to €200,000 for go-to-market or high value adding projects, which funds will go to cover legal fees to incorporate the company, relocation costs of key employees, office rent and wages and salaries up to two years, and tangible assets. It can also cover certification costs related to ISO, registering of patents and intellectual property and participation in sandboxes. The aid intensity of this grant is usually around 50%.
The Agency also runs research and development grants and grants for skills development that cover trainee and trainer wage costs, consultancy to develop training material and the rental of training facilities.
Malta Enterprise also helps entrepreneurs harness EU funding and also assists with their internationalisation journey via another government agency – Trade Malta. Investment and tax credits are also available, as are established incubators, accelerators and access to corporate service providers, which all make the startup's journey in Malta highly attractive.
Malta's strong pro-business environment
With small and medium sized enterprises being the backbone of its economy, Malta is strengthening its flourishing startup ecosystem, while promoting the country as a sound and competitive entry-point and base, for entrepreneurs to launch their innovative ventures and access the EU market and beyond.
The Mediterranean Island of Malta has one of the fastest growing economies in the European Union. Robust regulation, booming economies in a vast array of industries, a skilled talent pool and pro-business government policies have all ensured Malta's attractiveness as a jurisdiction of choice, both for investment and for economic migration.
English, along with Maltese, is a national language and the language for doing business. This means expats can communicate easily with no barriers – an advantage not many countries can boast of. The Island has nationwide 5G and hundreds of free public wifi hotspots, ensuring excellent connectivity. The country is well connected to Europe and the MENA region via daily air and sea links while due to its time zone, business hours easily coincide with many countries across the world.
Startup residency for non-EU founders
Non-EU startup founders considering Malta as a base have a straightforward migratory road to medium-term residence in the country. To facilitate the process for third country nationals, the Malta Startup Residence Programme grants a 3+5-year residence permit, during which beneficiaries are able to reside in Malta while launching or scaling their startup venture. This ensures a seamless residency period that gives entrepreneurs peace of mind so that they can put all their energy and focus on their venture.
The Programme is run by Residency Malta and Malta Enterprise, and is open to founders, co-founders, core employees and immediate family members. The Programme offers beneficiaries long term business and family stability as well as the opportunity to attract and retain international talent and reach business contacts around Europe with visa-free access to countries in Schengen.
The investment requirement for the Malta Startup Residence Programme is a minimum of €25,000 in a tangible investment or paid-up share capital. Beneficiaries would need to have a tangible presence in Malta and pay taxes locally. After completing five years in Malta, beneficiaries will be able to apply for long-term residency.
Malta: a safe, second home with an Island lifestyle
Malta as a place to live, work and settle in, has unique plus points. It is one of the safest countries in the world and boasts top notch educational institutions and world-ranking health care.
Residents then enjoy a pleasant Mediterranean lifestyle with a mild climate, hospitable people and numerous leisure activities. Malta has such a vibrant cultural scene with an array of performances and events all the way from pop to high-brow. Expats will also discover why Malta is called an open-air museum, as they get to feast their eyes on numerous heritage sights and historic architecture. For foodies, Malta is a haven for the tasting of different cuisines, from Mediterranean fare to the best of Asian fusion, Indian and Lebanese.
All this should seriously whet one's appetite enough to want to find out more about the opportunities Malta offers. More information about the Malta Startup Residency Programme, Malta Enterprise and funding can be found here [starinmalta].
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.