Fabian Demicoli

Family Business Act: Half-Day Seminar and Discussion Workshop


The Malta
Association of Family Enterprises (MAFE) 
in collaboration with Bank of Valletta has organised a ‘Family Business
Act': ‘Half-Day Seminar and Discussion Workshop' where the challenges of family
businesses were outlined and discussed in line with the incentives of the
proposed Family Business Act.

The seminar focused mainly on the launched Family
Business Act consultation process, and the manner in which it should facilitate
matters for family businesses particularly in relation to succession. Hon. Dr
Cardona, Minister for the Economy, Investment and Small Businesses said that
the new government strongly believes that family businesses are the backbone of
the Maltese economy and the catalyst for economic growth and job creation. He
announced that the government will be legislating in favour of a Family
Business Act. Hon. Chris Cardona also discussed the consultation process which
has been ongoing since work on the creation of a Family Business Act commenced
earlier this year.

Mr.
Mario Duca, President, Malta Association of Family Enterprises (MAFE) explained
that the majority of family businesses fail as a result of internal factors and
not due to business factors and how they differ substantially from those in
other companies due to the interlocking relationships between the family,
business and ownership structures. Mr Duca informed that MAFE was recently
accepted as a member of the European Family Businesses as a result for being an
active role, by voicing and lobbying such interests both on a national and
international level.

Mr
Albert Frendo, Chief Officer Credit, Bank of Valletta, spoke about the
development and transition of family businesses over time, their resilience
which is one of their key attributes and the characteristics that banks look at
for a sound banking relationship with such businesses.

Dr. Jean
Philippe Chetcuti, MAFE Secretary said that Maltese law, lacks clear
legislation and imposes financial burdens upon family businesses. He said that
legislating in favour of family enterprises would provide the structural
support that enable family enterprises to grow and flourish through
generations. He also explained how family businesses should benefit from the
same incentives as Groups of Companies in respect of stamp duty and other tax
incentives during share transfers taking place between family members.

From a
European perspective, Dr. Joanna Drake, DG Enterprise, explained how the EU
recognises the special nature of family businesses and that it strives to
actively fight for a European policy which does not negatively affect family
businesses but rather, creates a level playing field.

Mr.
Darius Movaghar, Policy Director at European Family Businesses, described
Malta's initiative as ground breaking and the Family Business Act will be a
unique piece of legislation as no other Member State of the EU has, to date,
enacted a formal law specifically addressing family businesses.

The
panel discussion also highlighted the importance of supporting the family
enterprises structures through different mediums and through the provision of
funding for further investment in training, governance and growth.

The
Seminar and Discussion Workshops were moderated by Ms. Vanessa Macdonald.

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