Family Business Act seeks to extend incentives, benefits

The New Family Business Act was the theme of a business breakfast organised by the Gozo Business Chamber and Bank of Valletta in collaboration with the Ministry for the Economy, Investment and Small Businesses.  The event was held at the Grand Hotel, Mgarr Gozo.

In his address, Economy Minister Chris Cardona announced that the preparatory work on this bill has been concluded, and a White Paper is due to be published shortly.

Cardona said that family businesses are valuable to the economy and deserve the support of government. Through this legislation the government aims to address a problem which many family businesses face since only thirty per cent of such businesses complete a successful transition from the first to the second generation, while less than ten per cent make it to the generation after that.  

This Act seeks to extend various incentives and benefits to family-owned businesses, however eligibility for these incentives requires that the business has proper structures in place. This Act will make Malta the first EU member state to have a legislation in place specifically focused on family businesses.

Mark Scicluna Bartoli – head of EU and Institutional Affairs at Bank of Valletta – gave an overview of various financial instruments, and explained how these can help SMEs and family businesses tap into bank financing.

Speaking about Bank of Valletta’s offerings, he said that, “Bank of Valletta has been working hard over the past five years to consolidate its position as the Bank for SMEs in Malta. Its BOV Start Plus package gives start-ups and micro-enterprises access to financial instruments that are backed by an EU Guarantee, thereby enabling them to benefit from more favourable terms.”

He also spoke about the BOV4SME financial instrument, designed to assist SMEs in their financing needs and offering them a fixed interest rate of 4% for the first four years.

Gozo Business Chamber Michael Grech described the law as a very important one which should affect in a positive way all businesses especially SMEs when they are being passed on from one generation to the next.

“We hope that before the law is enacted there will be a continuous dialogue between the government, the business community and its representatives in order to come up with a law which not only provides comfort to those passing on the business to the next generation but which would also be used as an example to be followed by other EU states. This initiative is a first within member the states of the EU,” he said.

The Business Breakfast was also addressed by Nadine Sant, Legal Advisor at the Ministry of Economy, Investment and Small Enterprises.