Budget 2024: Multi-million cash grants and investments announced

A number of government-led initiatives aimed at bolstering several industry sectors are to be launched in 2024 Finance Minister Clyde Caruana announced in his budget speech on Monday.

The initiatives target the manufacturing and financial services industries, as well as family businesses, aircraft leasing and green bonds.

€40 million cash grants for SMEs

A total of €40 million are to be disbursed as cash grants to small and medium sized enterprises (SMEs) under the Business Enhance scheme. These grants are aimed at startups, to help them develop, diversify and reach new markets. Small and medium size enterprises are to continue to benefit from free energy audits.

Financial instruments for EU funds will be invested to assist small and medium size Maltese businesses by facilitating their access to financing by local banks, by reducing interest rates and collateral requirements.

A €9.5 million allocation from the European Regional Development Fund and around €7 million in refunds from the JEREMIE (“Joint European Resources for Micro to Medium Enterprises”) scheme, means that a total of €16.5 million will be available to SMEs.

“Family businesses are the backbone of the economy,” Caruana said, announcing an extension on the tax concession reducing stamp duty from 5% to 1.5% when family businesses are transferred from parents to children during the parents’ lifetimes.

Family businesses that are registered as such will benefit from a higher capping in tax credits on investments made in their businesses. The minister promised to see that family charters are expressly recognised at law and suitably regulated as special contracts and that family businesses benefit from fiscal incentives as they internationalise, innovate and digitalise.

A number of other existing schemes aimed at strengthening enterprises, such as the Skills Development Scheme, the Rent Subsidy Scheme, the Innovate scheme and the Smart & Sustainable u Investment Aid for Energy Efficiency Projects schemes will also be extended.

ST Microelectronics to benefit from multi-million-euro investment

A further multi-million-euro investment in electronic component maker ST Microelectronics has been announced to increase its manufacturing capacity under the European Chips Act. Local microchip production is a €600 million industry, Caruana said, announcing that Malta has partnered with France and Italy to keep ST’s manufacturing operation inside the EU in response to a US bid aimed at attracting microchip manufacturers to relocate across the Atlantic.

Caruana described the microchip industry as a strategic one in the global economy. The sector employs over 1,800 workers in Malta and results in exports in excess of €600 million. Last June, the European Commission announced that a joint project by Malta Enterprise and ST Malta was one of 55 strategic projects selected as Important Projects of Common European Interest (IPCEI), which should lead to further investment and innovation in the microchip sectors in Malta, he said.

Next year the government will be building on the Malta Financial Services Strategy, a long-term plan, which was launched earlier this year, intended to revitalise and transform the financial services sector by building on the established foundations and Malta’s solid reputation in the sector.

“This strategy will lead us to make our country a sustainable financial jurisdiction, where it is easy to conduct business, manage growth and innovation in the sector,” Caruana said, adding that in the next 18 months, the government would be “working hard on the implementation of a number of priorities.”