Businesses operating in the local sector are adopting technology that is deployed in much larger setups, and which brings about the need for larger investment in support and specialised resources.
The evolution of methods of production generates a higher demand on key management to continuously assess the way local and foreign competitors are streamlining. This leads to the need for specialist support to take stock of current methods and reinvent processes to remain competitive and profitable.
One of the distinctive characteristics of PwC is that they understand our business and therefore add value to our decisions whilst making our working relationship more productive and meaningful.
We have worked with PricewaterhouseCoopers in Malta for just under 50 years [...] Their focus on adding value is an asset and they strive to build on their strong technical and personal consulting skills to offer their clients the solutions they need.
The various PwC teams have always been technically proficient, friendly and responsive. They have been flexible and where necessary have adapted their services to our needs.
Over the past 40 years, the Group has used the services of PricewaterhouseCoopers in several different areas [...] The professional approach adopted by PwC has been a key ingredient to the success of our business. The Group considers PwC as a professional partner to the Group.
The manufacturing sector is one of the main pillars of the Maltese economy. In fact, the entities operating in this sector employ a significant segment of Malta’s workforce and is one of the main contributors to the Maltese GDP.
Over the years, Maltese incentive legislation has included a wide range of fiscal incentives aimed at promoting economic activity and attracting foreign direct investment to Malta. Domestic incentive legislation has evolved in line with Malta’s economic development, with each change mirroring the economic and political climate of Malta at the time of its enactment.
Take a look at the main incentive schemes available to local companies operating in the manufacturing sector:
The Investment Aid Tax Credits 2014 - 2020 scheme grants tax credits to qualifying companies to encourage:
the setting up of a new establishment,
the expansion of an existing establishment,
a fundamental transformation in the overall production process of an existing establishment, and
a diversification of the output of an establishment into products not previously produced in the establishment.
Investment aid shall only be granted to companies which are involved in a specific trade or business - such as manufacturing and pharmaceutical companies - and aid shall only be granted in respect of specific expenditure incurred on an initial investment project. In the case of large enterprises, the initial investment should be made in favour of a new economic activity.
The tax credits awarded under this scheme are calculated on the basis of qualifying expenditure, being either the value of:
Qualifying tangible / intangible assets acquired in relation to an initial investment project; or
First two years’ qualifying wage costs relating to new jobs created as a result of the investment project.
The amount of Investment Aid that an undertaking can avail of depends on the size of such companies and on the date of the “start of works”.
% Aid intensity (Jan 2018 - Dec 2020)
10% (Large) 15% (SME)
This scheme is administered by Malta Enterprise Corporation and shall remain in force until 31 December 2020.
This scheme aims to support training and knowledge transfer initiatives helping employees acquire new skills, knowhow and knowledge. It is meant to deliver training when such training is not legally mandatory for the operation of a business.
At application stage, the company is required to employ at least five full-time employees and the training must bring knowledge that is relevant to the company’s activity.
The scheme has a budget of €30 million and in principle the aid shall be granted in the form of tax credits, which may be carried forward to subsequent years of assessment for a period of up to 10 years. However, for certain activities, the Malta Enterprise Corporation may consider awarding the aid in the form of a cash grant. Aid granted to any one undertaking shall not exceed €2 million.
The aid intensity shall be established according to the size of the undertaking and shall not exceed the following percentages of the eligible costs:
This scheme came into force on 1 September 2018 and applies until 31 December 2022.
Certify (Tax Credits) is a fiscal measure administered by Malta Enterprise Corporation which aims to encourage eligible companies to improve the quality of their products, services and processes by getting industry recognised certifications and quality marks.
Aid consists of tax credits of up to €25,000 per certification, subject to conditions and criteria as prescribed in the applicable guidelines issued by Malta Enterprise.
The deadline for submission of applications under this scheme is 30 November 2020.
The Malta Enterprise Corporation provides a number of incentive schemes relating to Research & Development.
The objective of these incentives is to support Industrial Research and Experimental Development projects within companies that aim to develop innovative products and solutions.
Some R&D incentives also encourage cooperation between companies by providing assistance for collaborative Industrial Research or Experimental Development projects.
The type of assistance granted under these schemes can take the form of:
tax credits; and/or
cash grants (subject to conditions)
The amount of tax credit depends on the size of the company and the type of project.
In some cases, R&D tax credits may be used together with investment tax credits claimed under the Investment Aid Tax Credits (2014 - 2020) scheme.
€51 million have been earmarked for ERDF Grant Schemes in aid of companies under Operational Programme I for Malta’s EU Cohesion Policy programme (2014-2020) .
There are seven ERDF Grant Schemes which aim to support investments made by SMEs as well as various initiatives to enhance SMEs competitiveness. These Grant Schemes provide assistance in the following areas:
1. Research, Development and Innovation
3. Start up investment
4. SME growth
5. SME diversification and innovation
6. SME internationalisation
7. SME consultancy services
The aid provided depends on the Scheme that an organisation considers applying for. However, in all cases, the company should not incur expenditure before receiving approval of the project to be undertaken from the relevant intermediary body.
The Measures and Support Division of the Ministry for European Affairs and Equality is the authority managing these schemes. They are administered through an open rolling call with scheduled cut-off dates and are currently available till 30 November 2020 till noon
We help a wide range of entities in the manufacturing sector find opportunities to operate profitably. Besides re-engineering processes, businesses are looking into data analytics that enable production and finance teams to understand relationships between various monetary inputs and outputs and which will identify areas that can be further streamlined. Other significant areas that Boards of Directors and stakeholders are looking into cover governance and internal control frameworks.
Our team of professionals in our advisory, accounting, audit and tax departments can help you create value for your business and develop solutions to face your challenges, with the support of our international network. We also cover additional areas such as data analytics, internal audit and governance.