The Family Business Office in Malta offers various incentives to support and empower family businesses.
At the forefront is the Family Business Act, a 360-degree act ranging from financial aid, reduced stamp duty for business transfers, governance support, education, training, and mediation services.
These incentives support businesses that are at the heart of the local economy — family-owned businesses — by fostering growth, long-term business sustainability, and a seamless succession process.
In this blog, we give an overview of the incentives the Family Business Act includes, while highlighting the advantages it brings to Maltese family businesses.
Which Incentives Are Offered by the Family Business Act?
The Malta Family Business Act offers various incentives, tailored specifically to the diverse needs of family businesses.
More specifically, these include:
Bank Financing
The SME Guarantee Scheme enhances SME access to bank credit for new investments and working capital related to business growth.
Fiscal Incentives
Family Business Transfer
Parents who transfer their family businesses to their children enjoy a significant reduction in stamp duty rates, of 5% to 1.5%. This reduction is applied without any cap on the transferred amount.
Immovable Property
During the transfer of a family business, duty on immovable property will be charged on the initial €500,000 of the property’s value, benefiting from a favourable rate of €3.50 per €100.00.
Shares Interest
The first €150,000, or a higher sum, will not be considered in the assessment of transfer of shares, interests within a partnership, trust, or foundation.
Governance Incentives
Lease Renewal
The renewal of leases for government premises is viewed positively for registered family businesses. If the business fulfils the tenancy agreement conditions, the Regulator will propose lease renewal to Malta Enterprise Corporation or Malta Industrial Parks.
What are the Advantages of the Family Business Act?
Improved Financial Resilience
The Family Business Act supports businesses by providing them with a robust financial base for growth, resilience, and long-term family legacy. Schemes like the SME Guarantee, boost credit accessibility, while reduced stamp duty helps make transitions easier, while providing a strong financial base for legacy leadership.
Optimised Tax and Succession
Tax efficiency strategies are at the heart of the Family Business Act and are intricately linked with seamless succession planning. Reduced stamp duty rates at 1.5%, for example, facilitate smooth generational transitions, respecting the family heritage and ensuring business continuity.
Governance Support
Enhanced governance allows for better stability and prosperity within family enterprises.
More Innovation and Enhanced Skills
Innovation and upskilling help businesses thrive and maintain a competitive edge.
Conciliatory Conflict Resolution
The Family Business Act promotes smooth conflict resolution, maintaining stability and family unity. Mediation grants ensure uninterrupted operations, while sustaining business skills and success.
Considering the Family Business Act?
Making the most out of the Family Business Act incentives requires an in-depth knowledge of both the process, as well as the criteria.
That is where TACS comes in. Our dedicated team of experts can provide the necessary support and streamline the process for your business.
Contact us via our email at [email protected], call us at +356 21 470 473 or + 356 99 265 894, or visit us directly at TACS MALTA, 1, Tal-Providenza Mansions, Main Street, Balzan, BZN1254, Malta.
