The rise of the side hustle

In Malta, the side hustle is no longer a hobby — it's a second track. Stephen Mallia unpacks the rise of the "employee-owner": professionals building businesses after hours while juggling tax, mortgages, and the fear of betting personal savings on an unproven idea. The takeaway is practical: Malta's support schemes — Digitalise Your SME, the Business Development Grant and Micro Invest — are built to lower the risk and turn a 5-to-9 grind into a credible new beginning.

---

The Maltese professional landscape is undergoing a quiet revolution. It is no longer defined strictly by the 9-to-5, but by what happens between 5-to-9. Across the island, accountants are coding apps, engineers are prototyping devices, and researchers are commercialising data, all while keeping their day jobs.

But for many, this "New Beginning" stalls at the psychological and financial precipice: the fear of draining personal savings to fund a dream that might fail.

For decades, the Maltese narrative of success was linear: graduate, secure a stable job, buy a property, and retire. Entrepreneurship was a separate track, reserved for those with family businesses or significant capital. Today, that line is blurring. We are seeing the rise of the "Employee-Owner", a hybrid professional who uses the stability of employment to fuel the volatility of a startup.

Yet, this hybrid state comes with a unique anxiety; a feeling of "Imposter syndrome." You are a manager by day, but a novice founder by night. You have a salary, yes, but you also have a mortgage. You have an idea, but you lack the €10,000 for the high-end workstation or the specialised software license needed to build it. This is where the "armour" goes up; we protect ourselves from risk by staying small.

The reality, however, is that specific government instruments are designed precisely to lower the stakes for this vulnerability. They are not just for the "unicorns"; they are for the side-hustlers. Among the dizzying array of funds, three stand out not just for their value, but for their accessibility: Digitalise Your SME, the Business Development Grant, and the Micro Invest scheme.

The immediate toolkit: Digitalise your SME

In the language of habit formation, your environment is the invisible hand that shapes your behaviour. If your "5-to-9" involves fighting with a slow computer or pirated software, the friction is too high, and the habit of building your business will fail.

If you are building a tech-enabled side hustle, whether it's an architectural rendering service, a new e-commerce platform, or a data consultancy, your first barrier is usually hardware and software. You need a powerful laptop, a cloud subscription, or a Customer Relationship Management (CRM) system.

Buying these out of your taxed salary hurts. This is where the Digitalise Your SME scheme becomes your first line of defence.

Unlike complex R&D grants that require scientific whitepapers, this scheme is pragmatic. It acknowledges that to compete, you need digital tools. Managed by the Measures and Support Division (MSD), it offers non-repayable grants to part-finance investment in digital technologies.

• The Respite: It typically covers 50% of eligible costs (up to 60% for investments in Gozo).

• The hustler's edge: If you need to spend €6,000 on a specialised workstation and software suite to start your evening business, this grant effectively puts €3,000 back in your pocket. It does more than save money; it optimises your environment. It lowers the barrier to entry from "impossible" to "inevitable," allowing you to professionalise your setup without depleting your savings account.

The growth engine: Business development grant

Once your side hustle moves past the "bedroom phase" and starts looking like an honest company, you face a new set of costs: relocation, hiring your first employee, or engaging professional consultants to help you scale. This is the "Valley of Death" for many startups, where you are too big to be a hobby but too small to be profitable.

This is where you must shift your mindset from "doing everything" to "buying leverage."

The Business Development Grant by Malta Enterprise is the bridge across this valley. While often overlooked by early-stage hustlers who assume it's only for factories, this scheme is explicitly designed to facilitate "value-added projects," including new business initiatives and startups.

• The respite: This is not just about buying things; it's about funding growth. It can support costs related to relocating industrial operations, wage costs for new jobs created, and even costs associated with business re-engineering.

• The hustler's edge: For the employee-owner ready to leap, this grant acts as a strategic partner. It allows you to buy speed. If your side hustle requires you to finally rent a small office or hire a junior developer so you can focus on revenue-generating activities (sales and marketing), the Business Development Grant helps absorb those structural costs. It signals that the government is willing to bet on your transition from "freelancer" to "employer."

The safety net: Micro Invest

If there is one scheme that every Maltese side-hustler should have on their radar, it is Micro Invest. Think of this less as a grant and more as a reward for your courage.

Taxation is often the silent killer of early-stage motivation. You work all day, pay tax on your salary, earn a little extra from your business, and then pay tax on that too. Micro Invest changes this calculus. It offers a 45% tax credit on eligible expenditure (rising to 65% for undertakings in Gozo).

• The respite: Eligible costs include furnishing your business premises, purchasing machinery, investing in new technologies, and even the wage costs of new employees.

• The hustler's edge: This is the ultimate "cash flow" tool. If you spend €10,000 setting up your business this year, you could receive a €4,500 tax credit. This credit doesn't just disappear; it can be used to offset your income tax bill for future years. For an employee-owner, this is a massive psychological safety net. It validates your risk. It means that nearly half of every Euro you invest in your dream is effectively returned to you in the form of tax relief, allowing you to reinvest that money into growing the business.

To truly understand the value of these funds, one must look beyond the generic label of "startup support." These instruments are not new experiments; they are established pillars of the Maltese industrial strategy, operating primarily under the De Minimis Regulation. This legal framework is crucial for the "employee-owner" because it simplifies the bureaucracy. Unlike major GBER (General Block Exemption Regulation) funds, which require complex state-aid audits, De Minimis aid (recently capped at €300,000 over three years per undertaking) allows for faster processing and greater flexibility in how funds are used.

Beyond tech: A tool for every trade

While often associated with software, these funds are sector-agnostic.

• Manufacturing & Artisans: A carpenter starting a bespoke furniture business uses Micro Invest to purchase a computer-guided machine or a modern edge-bander.

• Retail & Commerce: A boutique owner in Valletta uses Digitalise Your SME to integrate an AI-driven inventory system that syncs their physical stock with a new online store.

• Professional Services: An architect or engineer uses the Business Development Grant to fund the relocation to a larger office as they hire their first draughtsman.

In a crowded market, trust is your most valuable currency. Becoming a "Key Person of Influence" in your niche requires that you operate at a higher standard than the "cowboys."

A frequently overlooked aspect of these schemes is their role in product safety and evaluation. For entrepreneurs developing physical products, from food items to electronic devices, compliance with EU regulations is a massive financial hurdle.

This effectively de-risks the regulatory compliance process. A founder can invest in ensuring their product is safe and legal for the European market, knowing that a portion of that compliance cost will be recovered. This transforms "compliance" from a burden into a competitive asset.

These are not flash-in-the-pan incentives. Micro Invest, for instance, has been a staple of the Maltese business ecosystem for over a decade. It has been repeatedly reinstated and amended to reflect economic realities, most recently extended to cover costs incurred through 2026, providing a stable planning horizon. Similarly, Digitalise Your SME is part of the robust European Regional Development Fund (ERDF) operational programmes, ensuring its availability through rolling calls until funds are exhausted or the programme cycle ends (typically 2026/2027). This longevity gives the "employee-owner" the confidence to plan a multi-year transition, knowing the safety net won't disappear overnight.

While the three schemes above represent the most accessible entry points, they are not the only tools in the shed. The Maltese ecosystem is deep, but the deeper you go, the more effort it takes to swim.

• Xjenza Malta's TDP (Technology Development Programme): If your side hustle involves genuine scientific innovation, like a new chemical compound or a proprietary engineering mechanism, the FUSION TDP is the gold standard. It offers significantly larger funds (up to €300,000+), but it demands rigorous "Technology Readiness Level" (TRL) assessments and scientific validation. It is not for a simple app; it is for deep tech.

• Business Enhance (ERDF Schemes): These are larger, EU-funded heavyweights. They are excellent for substantial capital expenditure, such as buying industrial machinery or retrofitting a hotel. However, the administrative burden is higher. They require detailed business plans, strict compliance with EU procurement rules, and a level of reporting that can be overwhelming for a solo founder working evenings.

The narrative of the "starving artist" or the "broke entrepreneur" is a romanticised myth that benefits no one. It is an excuse to stay in the comfort zone. In Malta, the infrastructure exists to ensure you don't have to starve to build.

The Digitalise Your SME scheme buys you the tools to remove friction. The Business Development Grant helps you leverage. Micro Invest ensures you survive the risk.

For the Maltese professional staring at the ceiling at 2 am, wondering if their idea is worth the risk, the answer from the ecosystem is a resounding "Yes." The financial precipice is not as steep as it looks. The government has already built the bridge; you just have to be brave enough to walk across it.

---