At a glance: how the two schemes compare
SME Enhance and Digitalise your SME are both non-repayable EU grants administered by the Measures and Support Division (MSD) in Malta under the ERDF 2021 to 2027 programme. Applications go through the same portal at sfd.gov.mt, the same biweekly cut-off schedule applies, and both share a final programme deadline of 30 June 2029. The grant parameters, aid intensity structure, financial standing requirements, procurement rules, and advance payment arrangements are identical across the two schemes. What differs is scope: SME Enhance is broader, Digitalise is narrower but more specific about digital investment.
| Feature | SME Enhance | Digitalise your SME |
|---|---|---|
| Investment scope | Tangible and intangible assets: equipment, machinery, IT, software, vehicles, fit-out | Digital technologies: hardware, software, cloud, cybersecurity, IoT, AI, networking |
| Eligible investment types | Expansion, diversification, innovation of operations, initial investment | Digital investment to improve efficiency, productivity, and customer experience |
| Min grant | €10,000 | €10,000 |
| Max grant | €128,400 (incl. 7% flat rate) | €128,400 (incl. 7% flat rate) |
| Aid intensity (micro/small, Malta) | 20% to 35% (GBER); 50% to 60% (De Minimis) | 20% to 35% (GBER); 50% to 60% (De Minimis) |
| Implementation period | Up to 24 months from Grant Agreement | Up to 24 months from Grant Agreement |
| Cut-off schedule | Biweekly through December 2026 | Same biweekly schedule |
| Application portal | sfd.gov.mt | sfd.gov.mt |
| Start-up sub-track | Yes (60% Malta, 70% Gozo) | Yes (60% Malta, 70% Gozo) |
The overview above is a starting point. Before structuring a project budget, download the current Practical Guidelines for each scheme from fondi.eu to confirm the rules in force for the relevant call period.
What SME Enhance covers
SME Enhance funds investment in tangible and intangible assets across four eligible categories:
- Expansion: investment that increases productive capacity, opens a new market segment, or scales existing operations
- Diversification: investment that moves the business into new products, services, or business lines not previously produced
- Innovation of operations: investment in processes, technologies, or methods that materially change how the business operates
- Initial investment: start-up or early-stage capital for a new productive activity
Eligible cost categories under SME Enhance are structured as follows. The main component is Equipment and Machinery, which includes furniture, fixtures and fittings (with exclusions), production equipment, IT hardware, intangible assets such as software licences and IP, and vehicles where directly related to the economic activity and where primary use is not general transport. Two-year software subscriptions count as eligible. Ancillary items are eligible up to 10% of the Equipment and Machinery eligible cost, capped at a €10,000 grant contribution. Private operational premises lease costs are eligible for up to two years, capped at 10% of the Equipment and Machinery eligible cost (20% for start-ups). A 7% indirect cost flat rate applies on all three direct cost components combined.
Items excluded from SME Enhance include repair and maintenance, VAT and duties, insurance, used or refurbished equipment, land, buildings and construction works, fees for design or general consultancy (except through the 7% flat rate mechanism), mobile phones, M&E works such as plumbing, electrical and air conditioning unless specialised for the economic activity, and solar panels. The full exclusion list is in the scheme's Practical Guidelines on fondi.eu.
One formal rule worth noting: projects focused primarily on digitalisation should be submitted under Digitalise your SME rather than SME Enhance. This is not a matter of preference — it is built into the GBER framework governing the scheme. If the core investment is digital in nature, assess Digitalise your SME first.
For a full guide to SME Enhance, including the financial standing tests, aid intensity breakdown, and step-by-step application process, see the SME Enhance Malta guide.
What Digitalise your SME covers
Digitalise your SME funds investment specifically in digital technologies and related processes. The scheme is designed to improve efficiency, productivity, and customer experience through digital transformation. The eligible cost list is explicit and digitally focused:
- Commercial off-the-shelf (COTS) software and custom-developed software
- Hardware: laptops, docking stations, monitors, and tablets
- Analytical tools, combining hardware and software components
- Cybersecurity systems
- Cloud computing solutions
- Internet of Things (IoT), artificial intelligence (AI), Big Data, and Quantum Technology
- Routers, switches, and WiFi equipment
- Other hardware, software, or digital solutions approved under the scheme
- Installation and training on specific acquired items, provided these are included in the purchase price and delivered by the same supplier
- Two-year software subscriptions
- 7% indirect cost flat rate on eligible direct costs
The scheme does not cover non-digital physical assets such as production machinery, vehicles, or general fit-out. If the investment includes these alongside digital items, SME Enhance is likely the more appropriate route.
The ancillary items cap, premises lease provisions, and 7% indirect cost flat rate work on the same basis as SME Enhance. The financial standing requirements, procurement routes, advance payment structure, and reimbursement claim rules are identical. For the full Digitalise your SME scheme guide, including eligible costs in detail and the application process, see the Digitalise your SME Malta guide.
Eligible costs: what each scheme funds
The table below maps specific cost types against both schemes. Items labelled "Conditional" require verification against the current Practical Guidelines on fondi.eu before inclusion in a project budget.
| Cost type | SME Enhance | Digitalise your SME |
|---|---|---|
| Production machinery and industrial equipment | Yes | No |
| IT hardware (laptops, monitors, tablets) | Yes | Yes |
| COTS and custom software | Yes | Yes |
| 2-year software subscriptions | Yes | Yes |
| Cloud computing | Conditional | Yes (explicit) |
| Cybersecurity systems | Conditional | Yes (explicit) |
| IoT, AI, Big Data, Quantum Technology | Conditional | Yes (explicit) |
| Routers, switches, WiFi equipment | Conditional | Yes (explicit) |
| Vehicles (directly related to economic activity) | Conditional | No |
| Private operational premises lease (up to 2 years) | Yes | Yes (same rules) |
| Ancillary items (up to 10% of main eligible costs) | Yes | Yes (same rules) |
| 7% indirect cost flat rate | Yes | Yes |
| Installation and training (from same supplier, in purchase price) | Conditional | Yes (explicit) |
| Repair and maintenance | No | No |
| Salaries and staff costs | No | No |
| VAT and duties | No | No |
| Land, buildings, and construction works | No | No |
Aid intensity and grant amounts
Both schemes apply the same aid intensity rates and the same grant ceiling. The maximum grant under either scheme is €128,400, which includes the 7% indirect cost flat rate applied to eligible direct costs. The minimum eligible investment is €10,000.
Aid intensity under the Investment Aid track (GBER framework):
| Enterprise size | Malta (other areas) | Malta (assisted areas) | Gozo |
|---|---|---|---|
| Micro and small enterprise | 20% | 30% | 35% |
| Medium enterprise | 10% | 20% | 25% |
| Start-up (micro/small, up to 5 years old) | 60% | 60% | 70% |
Under the De Minimis track, the rate is 50% for businesses in Malta and 60% for businesses in Gozo, subject to the cumulative De Minimis ceiling of €300,000 across the current and two preceding fiscal years. The choice of track affects your eligibility based on sector and State Aid history. Confirm which track applies to your business before building a grant budget.
Advance payments are available under both schemes: up to 40% of the approved eligible grant in total, paid in two stages following the signing of the Grant Agreement and at a mid-implementation milestone. The reimbursement model applies to both: you fund the investment, and the grant reimburses the approved portion after expenditure verification.
Grant rates can be confirmed in the current Practical Guidelines on fondi.eu.
Financial standing requirements
Both schemes apply the same financial standing tests. These are assessed at the application stage using your most recent set of accounts.
The primary test: the ratio of total eligible cost to net assets must be at least 2%. A project costing €100,000 in eligible costs requires net assets of at least €2,000. This is a low threshold designed to screen out businesses with no asset base at all.
The secondary test applies to businesses that are not start-ups: net assets must represent at least 40% of the total eligible cost. If they do not, MSD does not reject the application outright — instead the total eligible cost is capped downward to the level that brings it into compliance. This can materially reduce the grant amount.
Negative net assets are not acceptable, with one exception: start-up enterprises under three years old can have negative net assets provided the deficit does not exceed €120,000.
These tests apply equally under SME Enhance and Digitalise your SME. If your business is close to the 40% threshold, model the impact before submitting — a capped eligible cost can change the grant calculation significantly.
Which scheme fits your project
Three questions help narrow the choice.
Is the investment purely digital?
If the project consists entirely of hardware, software, cloud infrastructure, cybersecurity, or other technologies from the Digitalise your SME eligible cost list, that scheme is the appropriate route. The scheme is specifically designed for this type of investment, and its Practical Guidelines address digital cost categories with more granularity than SME Enhance does.
Does the project include non-digital assets?
Production machinery, specialised equipment, vehicles, manufacturing fit-out, and non-digital operational assets do not fall within Digitalise your SME. If these form part of the project, SME Enhance is the correct scheme. Where a project combines digital and non-digital elements, SME Enhance covers the full scope, provided the investment rationale links clearly to one of the four eligible investment categories.
Is the project borderline?
Some investments sit at the edge: an IT-heavy operational overhaul that also includes physical infrastructure, for instance. In these cases, the deciding factor is whether the core investment activity maps more naturally to Digitalise your SME's explicit eligible cost list or to SME Enhance's broader investment categories. SME Enhance's formal exclusion of "projects focused on digitalisation" means that a predominantly digital project should not be submitted there; Digitalise your SME's scope does not extend to non-digital physical assets. If neither scheme clearly fits the full project, splitting cost categories across separate applications to each scheme is permitted, provided the same cost item is not claimed under both.
Both schemes are open for applications now. Budget availability is finite under each, and the schemes close when their respective budget envelopes are exhausted. For a full overview of all six EU schemes available in Malta or to discuss which applies to your specific project, see our EU Funding Advisory service or get in touch directly.
Frequently asked questions
Can I apply for both SME Enhance and Digitalise your SME at the same time?
You can apply under both schemes if you have two separate projects, each with its own eligible investment. The same cost item cannot be funded under more than one scheme. Each application is assessed on its own merits, subject to the relevant scheme's eligibility rules and the cumulative De Minimis ceiling of €300,000 over three fiscal years.
My project includes both new machinery and new software. Which scheme applies?
SME Enhance is generally the more appropriate choice for mixed digital and non-digital investment. It covers a broader range of tangible and intangible assets, including equipment, machinery, and IT hardware or software. Digitalise your SME is specifically designed for projects focused on digital technologies. If the digital element is the primary driver, check whether the full project scope fits within Digitalise your SME's eligible cost list before defaulting to SME Enhance.
Does choosing Digitalise your SME give a higher grant than SME Enhance?
No. Both schemes use the same aid intensity structure and the same maximum grant of €128,400 including the 7% indirect cost flat rate. The grant amount depends on enterprise size, location, and the applicable State Aid track, not on which scheme you select.
Are the cut-off dates and application deadlines the same for both schemes?
Yes. Both operate on the same biweekly cut-off schedule and share the final programme deadline of 30 June 2029. Both are administered by MSD through sfd.gov.mt. Current cut-off dates are listed on fondi.eu.
I applied for SME Enhance for a previous investment. Can I apply for Digitalise your SME for a new project?
Yes, provided the new project has its own eligible costs, the costs are not the same items previously funded, and the cumulative State Aid received does not breach the applicable ceilings. Each scheme has its own budget envelope, but the De Minimis aggregate cap of €300,000 over the current and two preceding fiscal years applies across all De Minimis funding from any source.
Is the financial standing test the same for both schemes?
Yes. Both apply the same tests: total eligible cost to net assets must be at least 2%; net assets must cover at least 40% of total eligible cost for non-start-ups (otherwise the eligible cost is capped); negative net assets are only acceptable for start-ups under three years old where the deficit does not exceed €120,000.