Here is a detailed overview of the measures, initiatives, and schemes targeting businesses:

1. Investment in Digitalisation, Innovation, and Research

A critical component of the budget is the unprecedented commitment to technological advancement and skills improvement:

• Digitalisation Investment (€100 Million): An investment of €100 million is allocated to foster digitalization and the adoption of advanced technologies. These technologies include Artificial Intelligence (AI), Internet of Things (IoT), cybersecurity, Augmented Reality/Virtual Reality (AR/VR), blockchain, and robotics. The ultimate goal is to increase productivity and reduce dependence on foreign workers.
• Accelerated Tax Deduction for Technology: Investment specifically related to AI, digitalization, modernization, automation, and cybersecurity will benefit from an accelerated tax deduction over two years.
• Research and Innovation (R&I) Tax Deduction: Companies investing in Research and Innovation will receive a 175% tax deduction on eligible expenditure. This initiative aims to encourage businesses of all sizes to invest consistently in technology, knowledge, and innovative development to strengthen their competitiveness both domestically and internationally.
• Free Access to High-Performance Computing (HPC): The new European Digital Innovation Hub, which incorporates Malta’s High Performance Computer, offers free access to AI, HPC, and cloud computing for SMEs and start-ups. Accessing HPC previously required travel to Italy at costs of approximately €25,000.
• “AI for All” Programme: This initiative aims to place the power of AI into everyone’s hands through free courses, national certification, and practical sessions targeted at parents, students, workers, and the elderly. Upon course completion, participants will receive a free subscription to an AI service (such as ChatGPT or Gemini) to ensure they continue using these future tools daily. This work is in an advanced stage and is expected to start early next year.

2. Capital Investment and Start-up Support

The budget introduces new capital investment incentives and strengthens the existing support framework for start-ups:

• New Tax Credit for Investors: Enterprises that invest in capital assets over the next two years will be eligible for a 60% tax credit on the value of the investment, distributed over four years. Eligible investments include the purchase of machinery, tools, equipment, IT software, electronic machinery, and cybersecurity solutions. For example, a company investing €100,000 in machinery can benefit from €60,000 in tax credits over four years.
• Enhanced Micro Invest Scheme: This popular scheme is strengthened by including investment in digital solutions as eligible expenditure.
  • The maximum tax credits under Micro Invest will increase to €65,000 (up to 65% of the eligible expense).
  • The total aid limit for specific existing categories of enterprises is set to rise to a maximum of €85,000.
  • The maximum annual benefit is increased from €45,000 to €65,000 for Malta and €80,000 for Gozo. The additional 20% bonus for enterprises in Gozo will be maintained.
• Start-up Support Ecosystem: Malta Enterprise continues supporting new businesses through schemes like B-Start (for initial capital), Start-up Finance (for reimbursable loans), and Accelerate (to boost early-stage businesses via world-class accelerators). The Business Development Scheme will also be extended to assist enterprises in expanding, transforming, and creating specialised jobs.
• Other Malta Enterprise Schemes: Existing initiatives include the iSmart & Sustainable Investment Grant (reducing waste and strengthening energy/water efficiency), Green Mobility (promoting clean technologies for transporting goods and people), and the iSkills Development scheme (raising worker competence levels).

3. Incentives for Human Resources, Wages, and Talent

Measures are introduced to encourage businesses to invest in their workforce, retain talent, and improve employee welfare:

• Wage Improvement Incentive (via Micro Invest): A new mechanism under Micro Invest offers direct financial assistance to the private sector linked to wage increases and talent retention.
  • For employees who have been with the same company for more than four years, the government will finance 65% of the wage increase for two years, up to a maximum of €780 per year.
  • For Gozo, this support is increased to 80%, up to a maximum of €960 per year.
• Mental Health Incentive: A new incentive will be introduced specifically for mental health in the workplace, following consultation with constituted bodies.
• Youth Entrepreneurship: Legal amendments are planned to allow youths aged 16–18 to become entrepreneurs in a safe, regulated manner. This includes establishing a legal framework that permits them to conduct commercial acts and operate bank accounts under an age-appropriate structure.
• Skills Development and Training: The iSkills Development scheme continues. The Get Qualified and Higher Educational Qualifications schemes are extended to help workers attain higher qualifications.
• National Talent Register: Jobsplus plans to create the Malta National Talent Register (a database of qualifications, skills, and experience) to better inform training programs and assist employers.
• Remote Work Promotion: A collective effort, involving various organised fora, will be made to expand remote working in all feasible sectors, thereby strengthening work-life balance.

4. Regulatory and Financial Environment

Efforts are underway to reduce bureaucracy, simplify data processes, and strengthen the legal and financial services sector:

• Co-operatives: Co-operatives will be exempted from the obligation to submit audited accounts for tax purposes, simplifying their administrative burdens.
• Banking Access (Legal Right): Consultations are ongoing with banks to grant businesses the legal right to open a bank account next year.
• Credit Review Office (CRO): The CRO has been inaugurated to facilitate dialogue regarding commercial loans and provide a clear avenue for companies that believe they received an unjust refusal of credit from a bank to appeal to the Financial Services Arbiter.
• Data Simplification: A Central Common Data Repository and updated due diligence processes will be introduced to minimise the documentation required from businesses, adhering to the “once-only” principle.
• Gaming and Indirect Taxation: The government is looking into measures to ensure a reliable legal framework concerning indirect taxation for value-added industries like Gaming. The Gaming industry is noted as one of the largest economic sectors, contributing approximately 8% of GDP.
• Financial Services and Fintech: Ambitious reforms are continuing in the asset/wealth management and fintech fields. Malta is positioning itself as an efficient and specialised jurisdiction, particularly following the implementation of the Markets in Crypto-Assets (MiCA) framework, which has seen operators like Bitpanda, Crypto.com, and Gemini consolidating their presence in Malta.

5. Land, Industry, and Infrastructure

The budget focuses on major land and infrastructure projects to support industrial growth and future logistical needs:

• Industrial Garage Purchase Scheme: Self-employed individuals and small businesses can purchase an industrial garage, with the government covering half the expense, up to a maximum of €300,000.
• New Industrial Spaces (INDIS): INDIS is developing a new complex for SMEs in Ħal Far (work has begun, expected completion within two years). Modern facilities are also being developed for enterprises in health, pharmaceuticals, light industry, and biotechnology, including marine biotechnology.
• Industrial Land Regulation: A new law will be presented to regulate the operation of INDIS and Malta Enterprise, specifically addressing how industrial land is allocated.
• Solar Panel Policy (INDIS): INDIS will publish a new policy governing the optimal use of industrial rooftops and open spaces for photovoltaic panels to encourage alternative energy investment and reduce industrial energy consumption.
• Logistics Hub (Free Zone): The government is considering an international call for the establishment of a free-zone logistics hub near the airport, with the potential for a direct connection to the Freeport. This is intended to enhance supply chain connectivity and attract high-value maritime and aviation activities.
• Land Reclamation: A process will be launched next year for a large-scale land reclamation project outside the Freeport perimeter. This space will be designated for industrial use, including attracting maritime activity and relocating certain commercial operations from other areas.
• Digital Identity Wallet Nazzjonali: A public call will be issued soon to establish a secure national Digital Identity Wallet for citizens and businesses, which will reduce bureaucracy and simplify access to services.

6. Family Businesses and Young Entrepreneurs

• Family Business Extension: Existing benefit schemes designed to ensure stable succession and sustainable growth will be extended. These include:
  • Reductions in duty on intra-family transfers.
  • Consultation grants for governance and succession planning.
  • Training vouchers for the next generation.
  • Aid for digitalization and financing.
• Youth Entrepreneurship: Legal amendments are planned to allow youths aged 16–18 to become entrepreneurs in a safe, regulated manner, enabling them to conduct commercial acts and operate bank accounts under an age-appropriate structure.