Family business legislation in Malta
” Family firms are crucially important for Europe. They make a significant contribution to Europe’s GNP and employment, and tend to be great innovators, with a longer-term vision. They also tend to be firmly rooted in their regional and national culture, displaying the sort of European values that we all share.”
José Manuel Durão Barroso, Former President of the European Commission
The Family Business Act, 2017 is an innovative Maltese legislation and the first of its kind within the EU.
The new Family Business Act has four main objectives:
- creating a legal definition of the term “family business”;
- encouraging the regulation and governance of family businesses;
- establishing a regulatory framework to facilitate transfers and succession of family business from one generation to the next during the lifetime of family members; and
- encouraging and assisting family businesses to enhance their internal organisation and structure with the aim of effectively operating an efficient and profitable businesses.
Eligible family businesses are required to register with the purposely set up Family Business Office to benefit from incentives launched by the Family Business Act, in particular, fiscal incentives on transfers of particular assets.
Foreign family businesses established outside Malta may also access and benefit from the incentives offered by the new legislative framework. Tapping into the fiscal and other incentives would require foreign family businesses to re-domicile part or all of the business to Malta either by setting up a head office, agency or branch or part of a business in Malta. Foreign businesses may qualify for incentives even if the family business is a permanently present in Malta.
The enactment of the new Family Business Act is expected to consolidate and facilitate the operations of family business in Malta which account for 70% of enterprises in the Maltese economy.
Contact us to find out how we can help you register your local or foreign business under the family business framework. We can also assist you finding the most effective and efficient legal solution to any challenges you may come across in your sector or industry.