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Case Study: How a U.S. Tech Company Entered Malta Using €1.8M in Funding Support — and Secured a €3M Investment Round

As global companies look for a strategic, low-risk entry point into the EU market, Malta has emerged as a powerful launchpad — especially for organisations operating in AI, digital platforms, MedTech, and high-growth technology sectors.


This case study outlines how a start-up U.S. tech company used Malta’s funding ecosystem to build its European base, deepen R&D capabilities, secure external investment, and accelerate product deployment.


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1. Objective: Establish an EU Base With Reduced Financial Exposure


The company developed an AI-driven online platform combining:

  • Machine learning

  • Behavioural analytics

  • Automated decision-making

To expand into Europe, they needed:

  • An EU headquarters

  • A structured R&D environment

  • Lower upfront risk

  • Access to tech talent

  • A compliant environment for scale

Malta offered the ideal combination of funding + regulatory clarity + tax efficiency.


2. Phase One: Business Development Scheme (€300,000 at up to 75% Aid Intensity)


The first step was Malta’s Business Development Scheme, an ideal tool for companies establishing early operations in Malta.


Eligible Costs Covered

  • Wages and employment (OPEX)

  • Operating costs (OPEX)

  • Digital and physical infrastructure (CAPEX)

  • Commercialisation and market development

  • Early-stage R&D and innovation


Funding Terms

  • Up to €300,000

  • Up to 75% aid intensity (company contributes as little as 25%)

  • Streamlined process and fast deployment

This enabled the company to build its initial Malta footprint — hiring staff, adapting its platform to EU markets, and forming early R&D partnerships.


3. Phase Two: Start-Up Finance (€1.5M Soft Loan → Catalysed €3M Investment Round)


Once the foundation was secured, the company advanced to the Start-Up Finance soft loan, receiving €1.5 million for deep R&D, AI development, and scaling operations.


Soft Loan Benefits

  • Below-market interest

  • Grace periods on capital and interest

  • Flexible repayment structure

  • Zero equity dilution


What it funded

  • AI model development & optimisation

  • Cloud and data infrastructure

  • Machine learning engineers

  • R&D experimentation

  • Building a scalable EU-ready platform


Investment Impact

The soft loan didn’t just finance development — it validated the company’s innovation and scale potential.This credibility directly enabled the startup to secure a €3 million private investment round from international venture partners and corporate investors.

In other words, public funding de-risked the company enough to attract private capital on favourable terms, making the investment cycle significantly more efficient.


4. How AI Qualifies as Innovation


AI qualifies strongly under Malta’s R&D eligibility because it includes:

  • Algorithm development

  • Dataset creation & optimisation

  • Model training experimentation

  • Predictive analytics

  • UX personalisation engines

  • Continuous learning systems

Malta funds innovation that leads to measurable technological advancement — making AI a natural fit.


5. Establishment & Scaling From Malta


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With funding secured and operations in place, the company:

  • Incorporated locally

  • Built a hybrid U.S.–Malta engineering team

  • Connected with AI researchers and universities

  • Onboarded early EU clients

  • Benefited from an effective 5% corporate tax through the Maltese regime

  • Licenses and permits obtained in Malta are valid throughout the EU market


Malta became its core R&D and commercial base for the region. Malta's key USP is the pro-business approach - the ability to bring all stakeholders together to get decisions and move quickly.


6. Sequencing: The Key to Success


The company’s success was driven by a layered funding sequence:

  1. €300,000 Business Development Scheme→ market entry, wages, operations

  2. €1.5M Start-Up Finance soft loan→ deep tech R&D and innovation

  3. €3M investment round→ enabled by public funding validation

  4. Ongoing tax credits (up to 15%)→ further expansion & infrastructure

This sequencing reduced risk and accelerated scale.


7. The Business Diagnostics Approach


Business Diagnostics structured the entire process by:

  • Designing a funding-ready business plan

  • Identifying and sequencing optimal schemes

  • Aligning R&D outputs with innovation definitions

  • Managing applications and compliance

  • Ensuring funding secured before major spend

  • Accessing public and private investment funds


Fees remain primarily success-based, ensuring alignment with client outcomes.

Through a partnership with Sheltons, all tax, legal, accounting, and incorporation matters were handled seamlessly. This forms a solid base as you scale up into different territories.


In Summary


This case demonstrates how international tech companies can leverage Malta to:

  • Enter the EU market with reduced risk

  • Access more than €1.8M in early funding

  • Build a deep AI-driven R&D base

  • Unlock external capital — including a €3M investment round

  • Scale efficiently through a competitive tax environment


With the right structure, Malta becomes a funded launchpad for EU expansion.

 
 
 

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