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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