S.L. 325.6 ст. 3Definition of small and medium-sized enterprises.

(1) Subject to the other provisions of this sub-regulation -

(a) a medium-sized enterprise is an enterprise which -

(i) has fewer than two hundred and fifty employees;

and

(ii) has either an annual turnover not exceeding fifty million euro (50,000,000.00) or a balance sheet total not exceeding forty-three million euro (43,000,000.00);

(b) a small enterprise is an enterprise which -

(i) has fewer than fifty employees; and

(ii) has either an annual turnover not exceeding ten million euro (10,000,000.00) or a balance sheet total not exceeding ten million euro (10,000,000.00);

(c) a micro enterprise is an enterprise which -

(i) has fewer than ten employees; and

(ii) has either an annual turnover not exceeding two million euro (2,000,000.00) or a balance sheet total not exceeding two million euro (2,000,000.00).

(2) Notwithstanding sub-regulation (1), except in the cases set out in the proviso to sub-regulation (4)(b), an enterprise shall not be considered a medium-sized, a small or a micro enterprise if twenty-five percent or more of its capital or voting rights are directly or indirectly controlled, jointly or individually, by one or more public bodies and, for this purpose, a public body means and includes:

(a) the Government of Malta;

(b) any Government division or department;

(c) any local council set up under the Local Government

Act;

(d) any corporation or authority set up by an Act of Parliament;

(e) any foreign entity similar to a public body referred to in the foregoing paragraphs.

(3) In determining the headcount and the financial ceilings of an enterprise for the purpose of this regulation, the following provisions shall apply:

(a) in the case of an autonomous enterprise the data, including the number of staff, shall be determined exclusively on the basis of the accounts of that enterprise;

(b) in the case of an enterprise that is not an autonomous enterprise, the data, including the number of staff, shall be the aggregate of:

(i) the data determined on the basis of the accounts and other data of the enterprise or, where they exist, the consolidated accounts of the enterprise or the consolidated accounts in which the enterprise is included through consolidation;

(ii) the data of any partner enterprises of the enterprise in question, which aggregation shall be made in proportion to the percentage of the capital or voting rights, whichever is the greater, held directly by each such partner enterprise in the enterprise in question or by the enterprise in question in each such partner enterprise, as the case may be: Provided that in the case of cross holdings reference shall be made to the greater of the holdings;

(iii) one hundred percent of the data of any enterprise which is linked directly or indirectly to the enterprise in question, unless already included through consolidation in the accounts;

(c) in the application of paragraph (b)(ii), the data of a partner enterprise shall be the aggregate of the data determined on the basis of its accounts and its other data, consolidated if they exist, and one hundred percent of the data of any enterprises which are linked to that partner enterprise, unless already included through consolidation;

(d) in the application of paragraphs (b)(iii) and (c), the data of linked enterprise shall be the aggregate of the data determined by reference to its accounts and other data, consolidated if they exist, and a percentage of the data of the partner enterprises of that linked enterprise, if any, which percentage shall be established as provided in paragraph (b)(ii) unless already included, at least to the extent of that percentage, through consolidation;

(e) where in the consolidated accounts no staff data appears for a given enterprise, staff figures are calculated by aggregating proportionally the data from its partner enterprises and by adding the data from the enterprises to which the enterprise in question is linked.

(4) In this regulation -

(a) an "autonomous enterprise" is any enterprise which is not a partner enterprises or a linked enterprises;

(b) two enterprises are partner enterprises of each another if they are not linked enterprises and if one of them holds, either solely or jointly with one or more linked enterprises, twenty-five percent or more of the capital or voting rights of the other: Provided that an investor which is not linked, either individually or jointly, to an enterprise shall not be deemed to a partner enterprise of that enterprise, even if the said twenty-five percent threshold is exceeded, if that investor falls within any of the following categories:

(i) public investment corporations, venture capital companies, individuals or groups of individuals with a regular venture capital investment activity who invest equity capital in unquoted businesses ("business angels"), provided the total investment of those business angels in the same enterprise is less than one million and two hundred and fifty thousand euro (1,250,000.000);

(ii) universities or non-profit research centres;

(iii) institutional investors, including regional development funds;

(iv) autonomous local authorities with an annual budget of less than ten million euro (10,000,000.00) and fewer than five thousand inhabitants;

(c) two enterprises are linked enterprises if there is between them any of the following relationships:

(i) one of them has a majority of the shareholders’ or members’ voting rights in the other;

(ii) one of them has the right to appoint or remove a majority of the members of the administrative, management or supervisory body of the other;

(iii) one of them has the right to exercise a dominant influence over the other pursuant to a contract entered into with that other enterprise or to a provision in its memorandum or articles of association: Provided that investors listed in the proviso to paragraph (b) shall not be deemed to exercise a dominant influence if they do not involve themselves directly or indirectly in the management of the enterprise in question, without prejudice to their rights as stakeholders;

(iv) one of them, being a shareholder in or member of the other enterprise, controls alone, pursuant to an agreement with other shareholders in or members of that other enterprise, a majority of the shareholders’ or members’ voting rights in that enterprise;

(v) one of them has any of the relationships mentioned above with the other through one or more other enterprises or any one of the investors listed in the proviso to paragraph (b);

(vi) one of them has any of the relationships mentioned above with the other through a natural person or a group of natural persons acting jointly and the enterprises engage in their activity or in part of their activity in the same relevant market or in an adjacent market, that is to say, the market for a product or service that is situated directly upstream or downstream of the relevant market.

(5) The determination of whether the conditions referred to in sub-regulation (1)(a) and (b) and in sub-regulation (2)(a) and (b) are satisfied shall be made by reference to the enterprise’s last approved financial statements:

Provided that where the company’s last approved financial statements do not refer to any of the enterprise’s last two financial periods or where financial statements have not yet been approved, the determination of whether or not a company satisfied those conditions shall be made by the Corporation on the basis of information provided by the company and any other information available to the Corporation: Provided, moreover, that an enterprise may or, at the request of the Corporation, shall, make a declaration of status as an autonomous enterprise, partner enterprise or linked enterprise, including the data regarding the ceilings set out in this regulation. The declaration may or, as the case may be, shall be made even if the capital is spread in such a way that it is not possible to determine exactly by whom it is held, in which case the enterprise shall state in good faith whether or not it can legitimately presume that it is not owned as to 25% or more by one enterprise or jointly by enterprises linked to one another. Any such declarations shall be without prejudice to the checks and investigations provided for in the Act, in these regulations or in any other regulations made under the Act.

(6) For the purpose of determining whether an enterprise satisfies the conditions set out in sub-regulations (1) and (2) -

(a) the annual turnover of that enterprise shall be stated in euro; and

(b) the total assets of that enterprise shall be stated in euro:

Provided that the amount to be taken into account for determining the turnover shall be calculated excluding value added tax and other indirect taxes.

(7) If, in respect of an enterprise, it has already been established by reference to its financial statements for a period of at least twelve months whether or not it qualifies as a medium-sized enterprise, a small enterprise or a micro-enterprise, it shall only acquire or lose such a status if the conditions set out in sub-regulations (1) and (2) are satisfied or are no longer satisfied, as the case may be, for two consecutive accounting periods.

(8) For the purpose of this regulation -

(a) the following shall be deemed to be employees of an enterprise:

(i) employees of the enterprise;

(ii) persons working for the enterprise being subordinated to it and deemed to be employees in terms of the law regulating their employment;

(iii) owner-managers;

(iv) partners engaging in a regular activity in the enterprise and benefiting from financial advantages from the enterprise;

(b) apprentices or students engaged by an enterprise in vocational training with an apprenticeship or vocational training contract shall not be deemed to be employees of that enterprise;

(c) the number of full-time employees shall be arrived at by dividing the number of employees who worked full time for the enterprise at the end of each whole month comprised in an accounting period by the number of months in that accounting period.

(9) For the purposes of sub-regulations (1) and (2), the number of employees shall be determined by adding to the number of full-time employees the result obtained from dividing the number of hours worked by employees, who are not employed on a full-time basis, by one thousand and seven hundred and sixty: Provided that employees who are on maternity or parental leave shall not be deemed to have worked for the duration of that leave.

(10) For the purposes of this regulation, if a financial period of a company, other than the first financial period, is less or more than twelve months, the amounts referred to in sub-regulation (1)(b) and in sub-regulation (2)(b) and the number of hours worked by employees who are not employed on a full-time basis referred to in sub-regulation (9) shall be divided by three hundred and sixty five and then multiplied by the number of days comprised in that accounting period.

(11) For the purposes of this regulation, "enterprise" shall mean an enterprise which carries on a trade or business in Malta: Provided that this sub-regulation shall not be applicable for the purpose of determining whether or not an enterprise is a small, medium-sized or micro enterprise in order to establish:

(i) the tax benefits such enterprise will be entitled to in year of assessment 2004 and subsequent years of assessments;

(ii) the other benefits such enterprise will be entitled to as from 1 January 2003.