S.L. 463.10 Art. 5Additional rules.

(1) To be considered as qualifying expenditure the assets acquired shall be new, except in the case of micro, small and medium-sized undertakings and in the acquisition of an establishment.

(2) Costs related to the lease of tangible assets may be taken into account under the following conditions:

(a) for land and buildings, the lease must continue for at least five years after the expected date of completion of the investment project for large undertakings or three years in the case of micro, small and medium-sized undertakings;

(b) for plant and machinery, the lease must take out the form of financial leasing and must contain an obligation for the undertaking to purchase the asset upon expiry of the term of the lease.

(3) In the case of the assets of an establishment in an initial investment or in an initial investment in favour of a new economic activity, only the costs of buying the assets from third parties unrelated to the buyer shall be taken into consideration. The transaction shall take place under market conditions. If the aid has already been granted for the acquisition of assets prior to the purchase, the costs of those assets shall be deducted from the eligible costs related to the acquisition of an establishment:

Provided that where a member of the family of the original owner, or an employee, takes over a small undertaking, the condition that the assets be bought from third parties unrelated to the buyer shall be waived. The acquisition of shares does not constitute initial investment.

(4) The investment shall be maintained in Malta for at least five years, or at least three years in the case of micro, small and medium-sized undertakings, after completion of the investment: Provided that plant or equipment that has become outdated or broken within this period may be replaced as long as the economic activity is retained in Malta for the relevant minimum period.

(5) In the case of aid granted for a fundamental change in the production process, the eligible costs shall exceed the depreciation value of the assets linked to the activity to be modernised in the course of the preceding three fiscal years.

(6) In the case of aid granted for a diversification of an existing establishment, the eligible costs shall exceed by at least two hundred per cent (200%) the book value of the assets that are reused, as registered in the fiscal year preceding the start of works.

(7) An undertaking wishing to avail itself from the benefits of these regulations must provide a financial contribution of at least twenty-five per cent (25%) either through its own resources or by external financing, in a form which is free from any public support.