Despite the massive disruptions being caused, we are optimistic Malta will be able to come through. Our local economy is strong enough to weather the storm and the Maltese are known for their perseverance and resilience. If we all act as responsibly as we have done over the past months with the implementation of preventive action, we will see the sun shine again, hopefully sooner than expected.
The situation being faced by family business communities worldwide is unprecedented.
The incentives that have been created with the objective of assisting businesses through these difficult times are all supported by other Government entities and ministries, with the majority being administered by Malta Enterprise. All these incentives are also available to family business owners. Further information about these incentives can be found at http://covid19.maltaenterprise.com or by sending an email to [email protected] or calling the helpline 144 for more information.
Like any other process, the development of the Family Business Office takes place in phases. The first phase was a challenging one for the family business office: incentives and support measures had to be created whilst at the same time family businesses had to be encouraged to register. But, by the end of 2019, more than 150 eligible entities had registered with the FBO and many of them are already reaping the fruit. By the end of this year we predict that we will have a register containing more than 200 local Family Businesses all potentially availing of the incentives offered.
When it comes to incentives offered to registered Family Businesses, 2019 was a strong take-up year. Collectively, the global value received by family businesses over 2019 in benefits and savings exceed the €3 million figure. This means that between 2018 and 2019 alone, family businesses have had more than €32 million left in their pockets. This value comprises all the incentives available to these entities in effecting business transfers, fiscal incentives, tax credits and governance incentives.
Incentives range from fiscal and governance to bank financing. The first incentive launched by the FBO in collaboration with the Ministry for Finance, in 2017 was a fiscal incentive, whereby businesses opting to transfer their family business to family members would benefit from a stamp duty rate that was reduced from 5 per cent to 1.5 per cent on the uncapped value of the business.
This was not only offered to family businesses registered with our office. However, those eligible had to fit particular criteria established by the law. This incentive was due to expire in April 2018. However, in view of its success and take-up, the FBO promoted its continued extension. This incentive has been extended by the Ministry for Finance during each year’s Budget since, year on year, and during this year’s budget speech it was announced that this incentive will be now available until the end of the year 2021.
As the new regulator, Dr Gerada set out a public engagement and marketing plan, which kicked off with an event that took place in Gozo at the start of the year. Held in collaboration with the Gozo Business Chamber, the initiative included a presentation on the FBO’s role, and on the incentives available to local family businesses.
The year 2020 also saw the launch of an effective Facebook campaign, through which the entity engaged with the public at large. In his efforts to keep the Office current, Dr Gerada also saw to the launch of an Instagram page: familybusinessoffice_mt.
And, these platforms have become increasingly useful in the current quagmire. Due to the current COVID-19 situation, the most effective way to reach out to the public has, in fact, been through television programmes, social media and other forms of media such as printed media.
Yet, looking ahead, we must remain positive. We hope to be able to get back soon to the implementation of our outreach programme for 2021 which should also take us to service providers’ offices where we can continue sharing information with their employees who are, most often, the first point of contact to their clients and other business owners.
The Family Business Office acknowledges that many professionals – lawyers, accountants, auditors and corporate service providers – are the first point of contact to which business people turn when they require assistance.
Indeed, we realise that these could be ambassadors to the FBO and, by keeping an open channel of communication with them, as well as providing them with information and knowledge, we would be able to exponentially increase our reach to the Maltese public – especially those who are already in business.
To this end, during 2020, the entity has already started providing inhouse presentations and meetings at various corporate service providers and professional firms where it provides employees with any relevant information they would be able to pass on to their clients.
Over the past months, the Family Business Office, in collaboration with Malta Enterprise, has been working on tweaking and ameliorating the current incentives on offer. New Family Business support incentives for 2021 shall be launched in the coming weeks as the current incentives are now being phased out. Through these incentives, we hope to be able to alleviate some of the extra burden Family Businesses have had to carry over the past months.