S.L. 463.3 Art. 3Qualifying activities.

(1) A qualifying activity in terms of these regulations shall be an economic activity carried on or intended to be carried out by an undertaking in Malta which consists solely of -

(a) (i) the production, manufacture, improvement, assembly, preservation, processing of any goods, materials, commodities, equipment, plant machinery;

(ii) the rendering of any industrial services analogous to the activities mentioned in sub-paragraph (i); or

(iii) the repair, overhaul or maintenance of pleasure crafts, yachts not having more than thirty berths, aircraft, engines or equipment incorporated or used in such vessels or aircraft;

(b) I.C.T. developmental activities, software development, IT enabled business services including call centres and IT business solutions as may be prescribed in the Guidelines, but excluding telecommunications service providers;

(c) research and development, and innovative start-up projects as may be prescribed in the Guidelines;

(d) eco-innovations, waste treatment and environmental solutions as may be prescribed in the Guidelines;

(e) biotechnology, comprising the production or development of intellectual property or goods or the rendering of services resulting from, or related to, the study, research, discovery, application, modification or development of living organisms or materials derived from them;

(f) the provision of facilities directly required in the development and production of feature film, television programmes or commercials as may be prescribed in the Guidelines;

(g) the provision of science and technology private tertiary education as may be prescribed in the Guidelines;

(h) the provision of private health-care services through the setting up of new projects carrying out an investment of not less than 2.5 million euro in medical equipment, excluding land or buildings:

Provided that an undertaking carrying out the activities set out in this sub-regulation shall only qualify for the benefits provided by these regulations if the project is approved by the Corporation, and, in giving its approval, the Corporation may impose such conditions as it deems fit:

Provided further that an undertaking shall not qualify for any of the benefits provided by these regulations if -

(a) the undertaking sells by retail and, for this purpose, an undertaking shall be deemed not to sell by retail if its sales of goods or services are made to -

(i) a person who carries on a trade and the goods or services so sold to such person are either resold by such person or are used by such person for the purpose of his trade; or

(ii) a person, other than an individual, who uses those goods or services for the purpose of trade carried on by such person;

(iii) a person through e-commerce activities resulting in online transactions effected through a secure payment system;

(b) the undertaking’s trade or business includes any one of the following activities:

(i) dividing, sorting, packaging, mixing without changing the character of the good, drying, labelling, or other similar processes or any combination of such processes to goods which are acquired in bulk merely to prepare those goods for sale or distribution, excluding goods in respect of which the said company carries on any other activity referred to in sub-regulation (1)(a)(i);

(ii) the assembly of any goods where -1. the final assembled good is clearly recognisable from the individual components or parts from which it is assembled without regard being had to any exterior casing of the good; and 2. the components and parts from which the good is assembled are such that the good is nearly complete and the assembly work and the supervision of such assembly work only require the employment of almost exclusively unskilled workers, such that the assembly operation is of a spurious nature when considered in the light of manufacturing activities;

(iii) without prejudice to sub-regulation (1)(a)(i), the repair, maintenance, preservation, improvement, reconditioning, refurbishing or restoration of any good or any combination of such activities where such activities do not impose on such goods a change in their character;

(iv) without prejudice to sub-regulation (1)(a)(ii), the installation, commissioning or assembly of goods on site, where the said goods have not been manufactured by the undertaking which is installing, commissioning or assembling the goods on site: Provided that the provisions of this paragraph shall not be applicable to an undertaking which carries on only any one or more of the activities set out in sub-regulation (1)(b) to (h);

(c) the trade or business of an undertaking includes the preparation or production of "food in the course of catering" including -

(i) meals or snacks including -1. hot and cold dishes including antipasto and dessert; 2. sandwiches, toast, potato chips, sausage rolls, pizza, and similar pastizzi, qassatat snacks; 3. biscuits, cakes, confectionery and similar items but excluding those sealed in a package by the manufacturer and supplied in that original sealed package, and those items which individually weigh 500 grams or more; 4. food supplied in restaurants, cafeterias, canteens, bars and other similar establishments; 5. food prepared or produced for parties, functions, weddings and similar events; 6. food prepared or produced for consumption by persons pertaining to a particular location or organisation, including patients in hospitals or homes, residents of hotels or guest houses, workers in a particular workplace and the preparation or production of food in similar circumstances;

(ii) milk, milkshake, tea, coffee and chocolate supplied in liquid form, excluding milk and milkshake supplied by the manufacturer thereof in bottles and containers for distribution to retail outlets but including any form of drink which is merely produced by adding liquid to powder or substance and where such drink is produced in order that it may be served in a bar, restaurant, canteen, cafeteria or other establishment or place to individuals for consumption.

(2) A small or medium-sized undertaking not carrying on a qualifying activity in terms of sub-regulation (1) may still qualify for assistance in terms of these regulations if it carries out activities or projects that lead to process, product or service innovations.

(3) A start-up undertaking not intending to carry out a qualifying activity in terms of sub-regulation (1) may still qualify for assistance in terms of these regulations if it intends to carry out activities or projects that lead to process, product or service innovations.

(4) A small or medium-sized undertaking not carrying on a qualifying activity in terms of sub-regulation (1) may still qualify for assistance in terms of regulations 6 and 10 provided that its activities are compatible with the State Aid rules of the European Union.