Assistance to Family Businesses

Malta has recently introduced legislation to encourage good governance in the management of family businesses, to assist family businesses to operate their business in an efficient way and to assist such family businesses to transfer their business from one generation to the other.  Malta is the first European Union Member State to enact such a legislation, the incentives of which are not only applicable to Maltese businesses but also to foreign owned businesses which are established in Malta. 

Such incentives include:

(a)    Reduced stamp duty on the transfer of immovable property forming part of a business to be transferred from one generation to the other.  The first Eur500,000 will be charged to stamp duty at a rate of Eur3.5 for every Eur100 or part thereof instead of Eur5

(b)    Exemptions from the payment of stamp duty on the transfer of shares in a company from one generation to the other – the first Eur150,000 will not be taken into account

(c)    Parents transferring their business to their children during the year2017 will benefit from a reduced stamp duty of Eur1.5 for every Eur100 or part thereof

(d)    Loan guarantees – enhanced capping on maximum guarantee

(e)    Tax credits – enhanced tax credits

(f)     Positive consideration of lease renewal of property leased from the Government

(g)    Education and Training for owners and employees

(h)    Funding for professional advice relating to transfer of the business

(i)      Mediation through arbitration to establish the fair value of a business to be transferred

(j)      Investment aid – waiver of the condition that assets must be acquired from unrelated entities – this will allow greater access to family businesses.

For further information please contact the firm’s tax and corporate services partner Stephen Balzan by sending an email on sbalzan@act.com.mt.  We also suggest you read the following articles which we have written on assistance to family businesses by clicking on the following links to our website:

http://www.act.com.mt/articles-publications/Family-Business-Act.php

http://www.act.com.mt/articles-publications/Family-Business-Support-Services.php

http://www.act.com.mt/articles-publications/Family-Business-Transfer-Ownership.php

Apart from its offices in St. Julian’s Malta, ACT operates from a second office in Gozo, which is situated in the capital city of Victoria.  For an appointment in our Gozo office, please call on 00356 21378672 or send us an email on info@act.com.mt.

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