The government has launched a consultation document with proposals for a law on small businesses.

The document was launched by Parliamentary Secretary Jason Azzopardi, who said that this sector was the backbone of the economy, with 97 per cent of companies employing less than 10 people.

The new law, he said, would continue to focus attention on this sector and further improve the business environment.

He recalled that the government had reduced registration fees for SMEs and introduced the MicroInvest scheme of tax refunds on investment.

Malta Enterprise had made available various schemes to help such small companies.

In 2009 alone, he said, 4,666 new businesses were set up.

The new law,written in a user-friendly manner, would consolidate existing legislation and thus reduce red tape for businesses, Dr Azzopardi said.

The law would impose on the government and its entities, measures to ensure that they were ‘small business friendly'. For example, all new laws would have to be assessed to ensure that they were SME-friendly.

There would be a ‘stand-still' period between legislation affecting SMEs and implementation.

A Business Consultative Unit would assist the government in the drawing up of policies in this sector while a ‘college of regulators' would advise on regulatory aspects, ways to reduce bureaucracy and ways to harmonise government services to SMEs.

The development was welcomed and described as historic by the director general of the Chamber of Small and Medium Enterprises, GRTU, Vince Farrugia.