A number of old names in Maltese business have fallen by the wayside as the descendants of the original owners either sought pastures new or else were unable to carry on because of difficulties they met on the way.

The government has in mind rolling out policies aimed at trying to keep family enterprises in business, a positive move that may well pay good dividends to both the families involved and, also, to the country if the measures planned to be taken are effective enough. Its thinking is set out in a White Paper just published.

The incentives planned to be offered to help in the transition of business from one generation to another will eventually be incorporated in a family business law. It looks as if there is indeed good reason for going into this direction as, according to the White Paper, many family ventures do not succeed to transfer the business beyond their second generation.

The White Paper, which is well researched, says “this is due to, for the most part, liquidity difficulties and a lack of developed governance during the lifetime of the family business”. About 98 per cent of all businesses in Malta are micro, small or medium-sized enterprises, with the vast majority of them being family-run.

Ninety-five per cent of the SMEs are classified as micro enterprises, having fewer than10 employees. These SMEs provide about 80 per cent of all the jobs in the business economy and create 71 per cent of the overall value added. In all, they employ 40,000 people, quite a good chunk of the labour force, making it all the more important for the country to see that the entrepreneurial spirit that motivated the pioneers in setting up the businesses is passed on to new generations within the families involved.

Of course, this is not easy as it sounds because in a number of cases it is not simply a matter of passing on the original owners’ entrepreneurial spirit but of solving difficulties that often arise in the transition of a business. The government has in mind offering both governance and fiscal assistance, including a tax credit and legal and accountancy advisory services, undoubtedly a most welcome assistance to very young family concerns.

Equally interesting is a provision for the education and training of owners and the possibility of a renewal of tenancy for industrial government premises or land held on lease or emphyteusis.

The first measure could be of some tangible help to very young members of a family business who are eager to learn more about their trade and the second will obviously give peace of mind to the family.

Also on the table are fiscal incentives “to allow for a more effective and smoother transfer or retention of the family business within the family”.

While it is worth supporting family businesses, it will be wise too to give a greater push to those with a potential to expand and venture further afield. Through such help, they may well be able to expand to an extent that in time they could well decide to go public. Far too often, family firms tend to avoid taking on new partners when this could help them move ahead faster in their development.

Making life for small firms easier through less bureaucracy by, for example, reducing the volume of form filling etc. and reducing unnecessary costs will greatly add to the incentives that are planned to be offered.

Considering the contribution they give to the economy, small firms deserve a good helping hand.