The family business in Malta is the motor of the economy. Although this may seem like a platitude, it's an undeniable fact - as many as 98 % of all businesses in Malta are SMEs, and the vast majority are family-run; accounting for about 80 per cent of local jobs. However, their lifespan usually isn't very long. Due to a combined lack of succession planning and financial planning, many family businesses do not manage to transfer their family business beyond the second generation. Only around 20% of family businesses in Malta have a robust, documented and communicated succession plan in place, a figure which is actually higher than the global average of 15%. But when one considers just how much of Malta's economy hinges on successful family-run companies, it's undeniable that there's a lot of room for improvement.

Malta became the first country to create policy specifically to recognise and assist family business. Despite family businesses accounting for 70% of GDP globally, these have been pretty much ignored by legislators and policy makers across the board. The Maltese Government was quick to go down the road of creating legislation on family businesses so as to formally recognise the crucial role these economic players have locally, being consistently acknowledged as the backbone of Malta's economy. The Family Business Act now goes beyond recognising family businesses and provides fiscal and governance incentives to family businesses registered in Malta.

There are considerable benefits and attractions for registered family businesses of a governance and fiscal nature. First and foremost, family businesses are for the first time given an identity and platform. Having an identity through a definition will allow family business to develop further in the sector, lobby and grow to achieve its aim. Furthermore the legislation is intended to act as a complement to present legal and financial structures to local and foreign family business considering making Malta their jurisdiction of choice.

The key fiscal incentives are reduced stamp duty on the value of the immoveable property - the first €500,000 will be charged at the reduced rate of 3.5 per cent, and exemptions of stamp duty on a capped value of shares - the first €150,000 will not be taken into account.

This niche policy and financial sector dedicated to family businesses through the introduction of regulation has made Malta an attractive jurisdiction of choice for family businesses to be based. The new policy regulations provide for foreign family business having all or a part of the family business based in Malta to benefit from this policy which serves as further compliment to the country's attractive facilities.