Over 70% of Maltese Business Owners are family owned and employ about 40,000 people. From this 70% only a mere 30% of these businesses manage a successful transition to the second generation and less than 10% progress to the third.
The Ministry for the Economy, Investment and Small Business has launched a white paper on the Family Business Act which seeks to provide this sector
with the essential legal framework to allow business owners to pass their companies on to the next generation. Through the successful implementation of this legislation it will aim to reduce the risks of transfers and will also provide better access to finance for family businesses. This legislation will also encourage companies to make the necessary plans for succession and initiate the interest of planning the process from the early stages of new business.
The Ministry also plans to provide legal advice and assistance from regulators to any family business owners that would require assistance in the case of transfers.
The white paper has also addressed main issues such as dependence on its owner and nepotism. On this note, the Honourable Chris Cardona explained that the act was not trying to ignore emotions but it will prioritise business practices. He continued to state that the act should be an enabler not a restriction as it is also part of an agenda to reduce bureaucracy.
GRTU has been calling for such legislation which should seek to support and further family businesses particularly in the case of inter-generational transitions. GRTU shall be reviewing the white paper launched and welcomes contributions and concerns by its members in order to formulate its feedback on this document to ensure the best for family business.