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TAX CREDITS FOR START-UP INVESTORS

Under the Seed Investment Scheme (Income Tax) Rules 2022, investors can obtain tax credits when making equity investments into start-up businesses.

For the purposes of these rules a start-up business should a Maltese company which is an SME and which satisfies all of the following conditions:

(a)  The start-up business has been in existence for a period which does not exceed 3 years (following its first commercial sale)

(b)  Is not listed on a recognised stock exchange

(c)   Does not have more than 10 employees

(d)   The value of the assets held by the company does not exceed 250,000 euro

Start-up businesses which can benefit from these rules are not limited solely to Maltese companies. A start-up business can be a foreign entity which is managed and controlled from Malta or has a place of business in Malta.

The start-up business can carry out any business activity as long as such activity is not an excluded activity for the purposes of these rules.

Excluded activities of a start-up business include:

  • Dealing in immovable property,  shares, securities and, or other financial instruments
  • Dealing in goods other than in the normal course of business
  • Carrying on banking,  insurance  or any other activity covered by the Investment Services Act,  the Banking Act, and the Financial Institutions Act
  • Provision of legal, accounting or professional services
  • Activities relating to the development of immovable property
  • Receiving royalties or licence fees

Tax Credit

An investor which qualifies for these rules can obtain a tax credit amounting to 35% of the aggregate value of the investment made subject to the maximum capping prescribed by the legal notice.

FF International Limited provides a vast range of tax services including tax advisory and tax compliance services.

For further information, please contact:

Franco Falzon C.P.A. LL.M (Managing Director)

E: info@ffinternational.com.mt

T: +356 2010 7771 (office)

M: +356 9989 5679 (mobile)

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