Malta Fires up its Start-up engine

Anyone who pegs Malta as a mere holiday destination is entirely missing out. The island has become the location of choice for start-ups and entrepreneurs in a kaleidoscope of sectors such as tech, finance, gaming and now blockchain & cryptocurrencies. Malta has been working hard to create an environment for young businesses to grow and thrive. The country has seen the creation of numerous incubators, co-working spaces and seed-financing schemes, as well as the arrival of venture capital firms. Malta’s main draw-card is the ease of doing business and the cost of operations on the island. Research has shown that Malta is generally 20 to 30% cheaper than the more established European centres, while a company’s seed capital may last three to five times longer. Start-ups, especially those in tech, finance and gaming, also find Malta a particularly attractive place due to the concentration of industry players, talent and suppliers on the island, while still being affordable. Entrepreneurs are also attracted to Malta due to the island’s drive to nurture new industries by providing dedicated regulations.

For instance, Malta’s decision to regulate online gaming two decades ago meant it has become the global capital of iGaming, the place to be for the largest and most innovative players in the industry. In 2018, blockchain start-ups began to move into Malta after the island introduced the world’s first holistic regulatory framework for Distributed Ledger Technologies (DLTs), and now the line-up of companies is a veritable who’s who of the industry.

Fostering Innovation

Start-ups in Malta can find many helping hands, including a soon to be launched dedicated start-up agency that will focus exclusively on helping entrepreneurs from anywhere in the world to make their business plan a reality. The Malta Investment Management Company Limited (MIMCOL) has introduced a Seed Investment Scheme to help start-ups raise equity finance. The scheme, capped at  €5 million, grants tax credits to individuals residing or operating in Malta who are investing in start-up businesses. The next building block in reinforcing Malta’s credentials as a start-up hub is to attract an International Accelerator, and MIMCOL is currently establishing links with foreign accelerator programmes to lure a big-hitter to the island. MIMCOL is also looking at other initiatives that could be pursued to bolster Malta’s start-up ecosystem, one of them being a dedicated national centre for start-ups. It is also entertaining the idea of so-called start-up exchanges, where incubators from different countries cooperate to give entrepreneurs the opportunity to explore markets abroad. Start-ups, which are part of a participating incubator, can benefit from free office space for a certain period of time, as well as from introductions to key players in the local ecosystem.

Partnering Up

Malta’s move to regulate and oversee products such as gametech, fintech and blockchain technologies means start-ups in those sectors are also looking at Malta as regulators demand safer IT solutions to protect consumers. But that’s not all. Due to its small size, the island is also an ideal research and innovation test bed. There are numerous areas of opportunity for industry players to get involved in, either through research and development projects or innovative ideas that could help Malta address some of its very own challenges in sectors such as energy, transport and health. The Maltese authorities are willing to work with innovators developing new technologies and solutions in partnership with the private sector.