ACCSPRING18_ONLINEVER

PROJECT MANAGEMENT
The Start-Up Journey in Malta –
how friendly is the framework for budding entrepreneurs?
CHRIS CACHIA
CHRIS CACHIA IS A SERVICE
MANAGER AT ALTER DOMUS. HE
IS A LAWYER AND CHARTERED
ACCOUNTANT
INTRODUCTION
It is common in literature nowadays to read stories of successful
start-ups. Occasionally this has unfortunately led to the idolisation of
entrepreneurship, giving it a sheen of glamour but glossing over the
hard hours of work and sacrifice. The latter are necessary if the business
is to succeed. Another consequence is that people are induced to
start their own business at the beginning of their career path.
The start-up phase can be as complicated as it is exciting, especially
when one considers the different building blocks, legal requirements
and interactions with different governmental entities to start off the
business.
In a local context, what is the state of play when launching a small
business? Is the environment, business friendly or is it mired by too
many strands of information which entrepreneurs need to grapple
with before seeing their project take off? This article will try to provide
a very brief overview of the landscape faced by an entrepreneur
when launching a start-up in Malta.
WHAT IS A “SMALL BUSINESS” OR “SMALL
ENTERPRISE”?
A definition of micro, small and medium enterprises
is found in Commission Recommendation 2003/361/
EC of 6 May 2003 . Under the recommendation, “An
enterprise is considered to be any entity engaged in
an economic activity, irrespective of its legal form.
This includes, in particular, self-employed persons
and family businesses engaged in craft or other
activities, and partnerships or associations regularly
engaged in an economic activity.”
The recommendation further applies two
benchmarks to define the category of small and
medium size enterprises, namely, staff headcount
and financial ceilings.
Broadly, enterprises considered to fall under
the grouping of micro, small and medium-sized
enterprises (SMEs) are those employing less than
250 persons, which have an annual turnover of not
more than EUR 50 million, and/or an annual balance
sheet total not exceeding EUR 43 million.
34 Spring 2018