A memorandum of understanding was signed this morning between the economy and social solidarity ministries ahead of the Social Enterprise Act.
The act is intended to help social enterprises to help disadvantaged people that want to work and assist.
Economy Minister Chris Cardona said the new act would regulate the sector and put it on a par with other EU states.
Social Solidarity Minister Michael Farrugia said those who work in the social field and who register as a Social Enterprise of Social Cooperative will now be operating under a transparent framework.