Gozo Business Breakfast discusses the new Family Business Act
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The Gozo Business Chamber in collaboration with the Ministry for the Economy, Investment and Small Businesses and Bank of Valletta, organised a Business Breakfast at the Grand Hotel, Mgarr, to discuss the new Family Business Act.
Minister for the Economy Dr Chris Cardona, addressed the floor, explaining that the preparatory work on this bill is now finished, with a White Paper due to be published soon. This will be followed with it being presented in Parliament – a first draft law to regulate the family.
The Minister said that with the Family Business Act, Malta will be the first European Union Member State to have a formal law specifically addressing the family business. “The ultimate aim of this law is to address the obstacles and problems encountered by those operating family businesses, especially in situations where family members want to transfer a business between themselves and from one generation to another.”
The Minister explained the reason why the Government felt the need to have this law, which specifically addresses family businesses. He said that it is a fact that around 75% of businesses in Malta are family owned, or are controlled by them, a substantial majority of them are passed on to the second generation. But in the transition from the first to the second generation, only thirty percent of them succeed. On the other hand, less than ten per cent pass to the third generation.
“Therefore the Government wanted to have a legal framework in place, to enable the members of family businesses to plan and affect the transfer of their business,” said Minister Cardona.
He said that this law will also include a clear definition of what actually is a “family business,” to leave no room for doubt or abuse. This is an important fact, the Minister said, “given that this law is also intended to enable any family business registered under this Act, be then eligible for incentives that are intended to be tailored specifically to the needs of family businesses.”
The Business Breakfast was addressed by by Mr. Michael Grech, President of the Gozo Business Chamber and Dr Nadine Sant, Legal Adviser at the Ministry of Economy, Investment and Small Enterprises. Those present had the opportunity to put forward questions and suggestions. Mr Mark Scicluna Bartoli then delivered a presentation about the BOV SME Bank.
The Business Breakfast was very well attended and those present acknowledged the importance of such an act.