What is a Family Business?
A family business is an enterprise that is owned, managed, or controlled by members of the same family. Under Malta’s Family Business Act (Cap. 565), businesses that meet specific criteria — such as family ownership, active family management, and registration with the Family Business Office (FBO) — can be officially recognised as family businesses.
These businesses form a cornerstone of Malta’s economy, contributing significantly to employment and long-term economic stability. The Family Business Act and related incentives were established to support continuity between generations, encourage good governance, and promote business growth and sustainability.
A business may qualify as a family business if it meets criteria such as:
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- The majority ownership or control is held by members of the same family (by blood, marriage, or adoption).
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- At least two family members are actively involved in the operation or management of the business.
- The business is registered with the Family Business Office (FBO) within the Malta Enterprise framework.
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Family businesses can take many forms — from sole traders and partnerships to limited liability companies — and they play a crucial role in Malta’s economic fabric, making up a significant share of local enterprises and employment.
The Family Business Act was designed to:
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- Facilitate succession planning, helping businesses transition smoothly between generations.
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- Promote long-term stability and governance, ensuring sustainability beyond the founder’s lifetime.
- Provide access to incentives, such as reduced stamp duty on intra-family transfers, tax credits for restructuring, and grants for training, digitalisation, and advisory services.
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Typical benefits available to registered family businesses include:
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- Reduced stamp duty (1.5%) on the transfer of a family business or shares between family members.
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- Tax credits and grants to assist with succession planning, business restructuring, and advisory services.
- Support for training, digitalisation, and professional governance improvements.
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Recent Changes Announced in Budget 2026
The 2026 Budget reaffirmed the government’s commitment to strengthening family businesses through continued and extended support measures.
Key updates include:
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- Extension of existing benefits: The 1.5% stamp duty concession on the transfer of family businesses has been renewed for another year, maintaining reduced costs for intergenerational transfers.
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- Ongoing support measures: Grants and advisory assistance for succession planning, governance, and digital transformation will continue under Malta Enterprise and the Family Business Office.
- Focus on continuity: While no new financial thresholds were introduced, the government has emphasised policy stability, ensuring family businesses remain central to Malta’s SME strategy and long-term economic resilience.
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Why These Changes Matter
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- Encouraging long-term succession: Extending these benefits provides reassurance to families planning to pass on their business, reducing the financial burden of ownership transfers.
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- Strengthening governance and professionalism: Continued access to advisory and training grants helps family businesses modernise, adopt good governance practices, and remain competitive.
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- Promoting economic stability: By maintaining these incentives, Malta continues to support one of its strongest business sectors — small and family-run enterprises that drive local employment and community growth.
- Providing predictability for planning: The renewal of measures offers clarity and confidence for business owners preparing for future growth or generational transition.
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For more information, kindly contact Apex Business Services on 21559999 or info@jcordina-andco.com
