The Ministry of the Economy, Investment and Small Business in Malta launched a new legislative project for the protection of small and medium sized family businesses. The new Family Business Act addresses the risks these companies have to face on the market. The Ministry of Economy also contemplates the possibility of allowing small family business outside the country to be relocated to Malta. The new legislation has the role of protecting family businesses due to their importance for the Maltese economy.
The new Family Business Act aims to resolve the problems small family businesses have to face in Malta by introducing specific regulations that would address the governance and transfers between family members in a way that does not affect the companies’ survival chances. The Ministry of Finance announced the new law will be developed starting from the idea that more and more third generation members are interested in continuing running family businesses in Malta.
The Family Business Act will most likely provide financial aid and tax exemptions in the first place, but will also offer support and dispute resolution alternatives when it comes to the transfer of interests. The law will also address issues arisen from the Maltese Civil Law with respect to succession, but the most beneficial effects would be when consolidating the assets and transfer of ownership. However, the Family Business Act will encourage the transfer of assets to a reduced number of owners.
One of the most interesting parts of the law will be that it also addresses family business registered outside Malta. A sound legislation allowing for company re-domiciliation in Malta is already in place; however the Family Business Act will also provide incentives for those moving their businesses to the country. The Family Business Act will not be limited to certain structures only, but will extend to trusts, foundations and partnerships which are the most common types of family businesses. The law will provide an excellent wealth management tool for foreign family companies moving to Malta.
For information about the development of the Family Business Act project, you may contact our specialists in company registration in Malta.