The Government has started a month-long public consultation process aimed at getting feedback for draft legislation on family business.

Economy Minister Chris Cardona said Malta was aiming to become the first EU member state to legislate in order to facilitate and incentivise the transfer of family businesses from one generation to the other.

Some 75 per cent of Maltese businesses, employing 40,000 employees, are currently considered to be in the category of family businesses.

The new law, expected to be presented to Parliament later this year, is designed to encourage financial responsibility by businesses and reduce administrative bureaucracy by the Government. The draft law defines what is a “family” and a “family business” and how a succession should take place.

The draft law defines what is a family and a family business

Early preparation is described as fundamental to ensure a smooth transfer of the family business, ensuring its continuity through successive generations.

The draft law states that developing clear and formal family governance structures, family agreements and protocols, and establishing how the family business is organised and governed plays a pivotal role in this regard.

The Family Business Act will allow for an immediately recognised business to be registered as a Family Business.

Minister Cardona said that the drafting of this Act was a priority for this administration and another sign that this was a business friendly government. Feedback can be given online at www.economy.gov.mt.