Malta AI & Digital
Transformation Funding
2025–2026

The flagship ERDF scheme for Maltese SMEs commissioning bespoke software or AI systems. Call 1 continues to run with rolling cut-off dates through 30 June 2026. Call 2 is expected to open on 1 July 2026 with a first cut-off at the end of that month.

Who qualifies

• Micro, small and medium enterprises registered in Malta or Gozo.
• Start-ups up to 5 years old are eligible on the micro / small tracks.
• Business must be in an eligible economic activity and not in financial difficulty.

What it funds

• Custom AI systems and bespoke software development.
• Off-the-shelf software (COTS) and SaaS subscriptions.
• AI, big data and cloud tools.
• Cybersecurity and IoT deployments.
• Hardware — servers, laptops, networking.
• Training tied directly to the acquired technology.
• Automatic +7% flat rate on indirect costs.

Funding rates

• 50% base rate for Malta-based businesses.
• 60% base rate for Gozo-based businesses.
• +10% uplift for AI, IoT, cybersecurity, cloud and quantum work.
• +€107,000 AI top-up — the €128,400 base grant climbs to €235,400 when the project is AI-focused.

The 85% headline rate is only reachable by stacking eligibilities (Gozo location, start-up status, advanced technology uplift, digital intensity gains). Most applicants land in the 50–70% support band. The de minimis cap of €300k in state aid over any three-year rolling window applies.

Best fit: if you are commissioning a custom AI build or a bespoke platform, this is usually the first scheme to model. The AI top-up materially changes the economics of a serious implementation.

A broader innovation grant that sits alongside Digitalise Your SME. Where Digitalise Your SME is squarely about digital and AI spend, SME Enhance funds a wider set of productive and sustainability-linked investments — including the digital elements of them.

Focus areas

• Productive investments that improve competitiveness.
• Innovation and smart economic transformation.
• Digital innovation embedded inside operations.
• Sustainability-linked digital investments.

Evaluation

Projects must score ≥50% against risk, project excellence, impact and sustainability, and quality of implementation. Financial viability is assessed separately.

Excluded

• Repair and maintenance costs.
• Used or refurbished equipment.
• Agriculture, tobacco and gambling activities.

Best fit: SMEs applying AI to productivity, sustainability or competitiveness gains — particularly where the project touches operations more than pure software.

A small but useful lump-sum measure — €4,000 covering 80% of the cost of an externally-prepared business report. It is a low-friction way to fund a structured read on where AI and automation belong in the business before committing to a full build.

What it covers

• Business plans.
• Process and systems reviews.

Best fit: a first, low-commitment step. A process review here often turns into the scoping document that anchors a later Digitalise Your SME or Business Development application.

A tax credit rather than a cash grant. Micro Invest lets eligible businesses claim back a percentage of qualifying expenditure against future income tax. Documentation is lighter than an ERDF application and it stacks with other schemes subject to de minimis limits.

What it covers

• Software licences and subscriptions (including AI tools).
• IT equipment with a minimum three-year useful life.
• Wage increases above 3%.
• Other eligible business investments.

Current caps (2025 expenditure)

• 45% credit rate.
• €50,000 over three consecutive fiscal years.
• €70,000 for Gozo-based, family-run or female-majority-owned businesses.

Budget 2026 enhancements

• 65% rate and €65,000 cap for Malta-based businesses.
• Up to 85% rate and €85,000 cap for Gozo-based, family-run or female-owned businesses.

Enhanced limits apply to 2026 expenditure and are expected to be claimable in 2027.

Best fit: the cleanest way to subsidise recurring AI software spend — Copilot, ChatGPT Enterprise, Claude for Work — and the sort of thing you would enable across a whole team.

A merit-based scheme aimed at projects that meaningfully add economic value to Malta — new ventures, expansions, transformations and digital innovation. Open to SMEs and larger enterprises. The project must have started after 1 January 2024. Gambling, real estate and financial services activities are excluded.

Supported activities

• Digital transformation initiatives.
• New or innovative business models.
• Environmental and sustainability actions.
• Collaborative and cross-sector projects.
• Operational expansion.

What is evaluated

• New business opportunities created.
• Skilled employment generated.
• Increased market competitiveness.
• Expanded market reach.

Best fit: the €300k ceiling makes this the right route for AI programmes that materially change the operating model — not a single tool, but a redesign of how the business works.

A cluster of complementary R&D instruments, useful where the project is developing something novel rather than adopting an existing pattern.

The streams

• Feasibility Studies (FONDI.eu) — up to €100k for SMEs and small mid-caps. €2M programme budget. December 2026 deadline.
• MDIA MARG — up to €40k for AI research, plus a €1.2M seed fund.
• R&D Incentive (Malta Enterprise) — industrial research targeting scientific or technological uncertainty. Deadline 30 September 2026.
• FUSION Programme (Xjenza Malta) — national R&I funding streams for research performers and industry partnerships.

What is covered

• Researcher and developer wage costs.
• Contractual research and technical services.
• Patents and IP registration (up to 90% via the IPR Voucher).
• Technical knowledge acquisition.
• Feasibility work for novel AI products or services.

Best fit: genuine invention — training your own models, building proprietary AI architectures, or exploring an untested application. Not the right route for standard integration work.

A research grant for a 24-month digital innovation project. AI is named as Priority Area 1 of the programme. The current call was published on 7 May 2026, with a submission deadline of 1 July 2026.

Grant structure

• €200,000 base grant.
• +€25,000 sub-grant for projects enrolled in TARF or the MDIA Sandbox.
• Effective maximum: €225,000.

Who qualifies

Enterprises and research performers in Malta undertaking applied research with a clear digital innovation focus.

What is covered

• Researcher and developer time across the project.
• Applied AI research and experimental development.
• Technical services and research inputs.

Best fit: multi-year AI research with a partner or in-house team, where the deliverable is genuinely new capability rather than a production system.

A stack of startup instruments, all currently active. Government has publicly increased allocations for AI-first ventures across most of them.

Business Start (seed grant)

Up to €10,000 for small start-ups with a viable early-stage concept. Software development is explicitly eligible. Non-repayable. Open through 2026.

Start-up Finance (repayable advance)

Covers payroll, asset procurement, technical services and setup costs. Support starts from €500k. Repayable advance, not a grant. Open through 2026.

Malta Venture Capital Fund

Equity investment of up to €500,000 per start-up, from a €10M fund. Targets high-growth tech ventures, AI included. Government-backed co-investment model.

YouStartIT & TAKEOFF

• YouStartIT (MITA Innovation Hub) — accelerator with a dedicated AI track for early-stage AI businesses.
• TAKEOFF Seed Fund — seed funding for researchers and entrepreneurs, with a specific uplift for AI ventures.

Best fit: AI is the product, not a supporting tool. If you are building the company around a model, an agent, or an AI-native workflow, this is the pathway designed for you.

Not a grant — a set of free supports and infrastructure that strengthens both your operating capability and any subsequent grant application.

Malta EDIH (European Digital Innovation Hub)

Free, open services for SMEs, small mid-caps and the public sector: technology testing, training, business support and access-to-finance guidance. Run by MDIA, MCESD and the University of Malta.

“AI for Everyone” (Budget 2026)

Free AI training, certifications and tool access — the national effort to raise baseline AI literacy across the workforce.

Digital Innovation Hub & HPC access

Malta's first High Performance Computer, hosted at the Digital Innovation Hub. SMEs and start-ups get complimentary access to AI infrastructure, cloud resources and compute capacity.

€100M Technology Investment Fund

Malta Budget 2026 commits €100 million to accelerate adoption of AI, cybersecurity, AR/VR, blockchain and HPC across the economy. This is the parent envelope that flows into the schemes above over the next few years.

Best fit: use it as the warm-up. Free HPC access and EDIH expert support reduce pre-project costs and produce evidence of feasibility — which materially strengthens a subsequent Digitalise Your SME or Xjenza application.