Covid-19 Temporary State Aid Measures : Rent and Electricity Subsidies and Extensions

by , on Sep 14, 2020 01:54:38 PM

In order to support business undertakings impacted by the restrictions imposed in light of the Covid-19 pandemic, Malta Enterprise will be administering an incentive to subsidize rent and electricity expenses for undertakings operating from business premises. Business premises are defined as physical locations through which business functions and processes are conducted, including commercial sites, industrial setups and offices. The legal basis for this scheme is the Covid-19 Temporary Support Measures Regulations 2020 which came into force by virtue of Legal Notice 345 of 2020. The Regulations state that Malta Enterprise may provide assistance to eligible undertakings to support such undertakings in the regeneration of their economic activity. Such assistance must be in conformity with the Temporary Framework for State aid measures which was adopted by the European Commission in March 2020. This incentive seeks to alleviate operating expenditure for undertakings which had to cease or limit operations, while still paying fixed operation costs, with the Government allocating €45 million for this scheme. The undertakings which may benefit from this scheme are those which were eligible for the Wage Supplement Scheme under Annex A, Annex B or Annex C.

Rental Subsidy

In order to benefit from the rent subsidy, a rent agreement signed prior to 9th March 2020 must be provided or else a renewal of an agreement which was active prior to 9th March 2020. The premises must also be rented from third parties and be used specifically for economic activities. Eligible undertakings may claim rental costs as per the table below:
Employees receiving wage supplement Eligible rental agreements Maximum Support
1 to 9 1 €2,500
10 to 19 2 €4,000
20 to 29 3 €5,500
30 to 39 4 €7,000
40 and over 5 €7,500

Electricity Subsidy

Eligible undertakings are entitled to a grant of maximum €1,500 per electricity account which comprises 50% of the electricity costs incurred in July, August and September 2020. Applicants will be required to submit the last energy voucher. Eligible undertakings may claim electricity costs as per the following table:
Employees receiving wage supplement Number of distinct electricity accounts Maximum Support
1 to 9 1 €1,500
10 to 19 2 €3,000
20 to 29 3 €4,500
30 to 39 4 €6,000
40 and over 5 €7,500

Maximum Aid

The support provided must be in conformity with Section 3.1 of the Temporary Framework, which establishes that state aid is compatible with the internal market if the following conditions are met:
  • The overall aid does not exceed €800,000 per undertaking;
  • The aid is granted on the basis of a scheme with an estimated budget;
  • Aid may not be granted to undertakings that were already in difficulty within the meaning of the General Block Exemption Regulations, except for micro or small enterprises which were already in difficulty on 31st December 2019 provided they are not subject to collective insolvency procedure, that they have not received rescue aid or restructuring aid;
  • Aid is not granted later than 31st December 2020;
  • Aid granted to undertakings involved with agricultural products cannot be passed on to primary products and cannot be fixed on the basis of the price or quantity of products purchased from primary producers or put on the market by such undertakings. The maximum amount which can be granted to undertakings involved in the primary production of agricultural products is capped at €100,000 while that granted to undertakings in the fishery and aquaculture sector is capped at €120,000.
Malta Enterprise will be publishing a call for undertakings to enrol in this scheme, and payments will be disbursed by the end of 2020.

Extension of Wage Supplement Scheme

The Wage Supplement Scheme administered by Malta Enterprise as well as the €100 Economic Stimulus Vouchers have been extended to the end of October. Both incentives were due to expire at the end of September. More information may be found on the Malta Enterprise dedicated webpage. Should you have further questions, get in touch with us on [email protected] to find out more.