Incentives aimed at family businesses in Malta

That’s why governments all over the world support family-owned business ventures as by supporting such businesses, economic growth and stability will be further promoted. Through government incentives, such businesses will also be able to thrive and contribute economic growth while creating more jobs for the future generations, hence creating an element of continuity in the community.

In Malta, assistance to overcome difficulties is provided through the Family Business Office Incentives. These incentives, proposed by the Government are in the form of bank financing, fiscal incentives and governance incentives. Any family business established in Malta and recognized under the Family Business Act of the Laws of Malta can qualify for any of these incentives. Below is a brief overview of each of these incentives:

Bank Financing:

Through the Malta Development Bank, the SME Guarantee Scheme aims at enhancing access of small and medium enterprises to bank credit for new investments.

Fiscal Incentives feature family business transfers, immovable property, and shares interest.

Family business transfers: During a one-year period, parents who transfer their family business to their children can take advantage of a reduced stamp duty rate of 1.5% with no limit on the transfer amount, instead of the standard 5%.

Immovable property: When a family business is transferred, any immovable property included in the transfer will incur duty charges. However, the duty will only be charged on the first €500,000 of the property’s value, and at a reduced rate of €3.50 per €100.

Shares interest: The initial €150,000 or a larger sum will not be considered when transferring shares, interests in a partnership, trust, or foundation.

Governance Incentives feature advisory, MicroI nvest, mediation, investment aid, lease renewal, as well as education and training.

• Advisory: Professional advisory services to aid in the succession or transfer of registered family businesses. Compared to previous schemes, this program provides increased benefits, potentially providing up to €15,000 in support per family business within any rolling three-year period.

• Micro Invest: Micro Investment of a maximum tax credit of €70,000 over a three-year period.

• Mediation: Opportunity to access mediation services, which can help to address challenges that may impact the business’s continuity and succession.

• Investment aid: Only costs for acquiring assets from third parties unrelated to the buyer are eligible. However, family members or employees taking over a business are exempt from this condition.

• Lease renewal: Registered family businesses leasing government premises or land may have their tenancy renewed by Malta Enterprise Corporation and/or Malta Industrial Parks if they satisfy all conditions.

• Education & Training: Family business owners and their employees can enhance their skills and knowledge.

For further information about these incentives, or any other incentives related to business in general, you can visit our website: https://fairwindsmanagement.net/services/accountancy-services/funding-grant-schemes/.

Meanwhile, you can discuss your family business with our professionals who are available to guide you through the incentives mentioned in this blog and to start benefitting from them. For assistance, you can get in touch with our team on info@fairwindsmanagement.net.

Fairwinds Management Limited is a MFSA licensed firm offering Business Solutions in Malta. As part of our services, we offer Accounting, Administration, Corporate and Legal solutions.  Fairwinds Management also manages the brand Accounting Services. More information about us and our key services please visit our website. You may reach Fairwinds Management on +356 2704 0903 or info@fairwindsmanagement.net.

Article written by Ms Charlene Sciberras, B.A. (Hons), guest writer, a marketing and business administration specialist with a special focus on corporate, accounting, and legal matters.