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moreAccording to research at a European level, family-owned enterprises represent roughly 65–80% of all companies in Europe and account for around 40–50% of total employment. In Malta, studies show that approximately 75% of local businesses are family-owned.
Family businesses in Malta are regulated primarily through the Family Business Act (Chapter 565 of the Laws of Malta). To qualify as a registered family business, ownership and control must be substantially held by members of the same family. The family must retain effective strategic control, and no single family member may hold more than 80% of the share capital.
Business demography studies show that fewer than one-third of family enterprises survive the transition from the first to the second generation, and fewer than 30% successfully reach the next. Succession planning is therefore critical to ensure continuity, preserve family wealth, and maintain long-term competitiveness.
Family businesses therefore, need a robust structure covering succession planning, ownership, financial management, and governance. However, only 36% of local family businesses have a formal strategic plan, while 36% base decisions on research and data analysis. Around 52% report having a board of directors, including independent and non-family members.
Corporate governance remains a key weakness in many Maltese family businesses. While most have a board in place, many do not meet regularly or lack independent members. Decision-making is often influenced by dominant family figures rather than structured, data-driven processes. Many also lack formal governance tools such as family constitutions, employment policies, dividend frameworks, and strategic plans. This increases the risk of internal conflict and reduces resilience during transition periods.
From a succession and transaction perspective, family businesses should also consider the transfer of a going concern (TOGC) rules for VAT purposes. Where a business is transferred as a going concern and continues uninterrupted, the transfer may fall outside the scope of VAT, subject to statutory conditions. Malta does not apply an equivalent TOGC concept for income tax; treatment depends on the assets and structure involved, with potential exposure to capital gains or balancing charges unless specific reliefs apply. Proper planning can help achieve VAT neutrality while managing income tax exposure through appropriate structuring.
Family businesses may also benefit from tax deferrals or exemptions on generational transfers, subject to conditions. Registration with the Regulator for Family Businesses is mandatory to access official recognition and incentives.
As of 2026, the 1.5% reduced stamp duty regime for intra-family transfers remains in force. The Malta Budget 2026 confirmed that the 1.5% reduced rate on qualifying intra-family transfers continues to apply in 2026, supporting lifetime succession planning. The measure applies to genuine donations to close family members and is subject to standard anti-abuse rules, including a three-year retention requirement.
Malta also provides several incentives and advisory schemes for family businesses, particularly those registered under the Family Business Act. These include support for succession planning, ownership structuring, governance, and investment activity, as well as enhanced tax credits under Micro Invest of up to €20,000 for qualifying family businesses.
Non-registered family businesses may still benefit from other schemes as outlined below.
Schemes if registered as a family business | ||
Scheme | Purpose | Eligible costs |
Succession planning, ownership, financial management and governance. | Advisory services | |
Mediation Services | ||
A reduction in duties incurred when transferring properties or shares. | Immovable property | |
Shares/ interests | ||
Other Schemes for a non-registered family business | ||
Scheme | Purpose | Eligible costs |
Investments carried out in the previous year. | Increase in wage costs | |
Furbishing and refurbishing of business premises | ||
Investment costs | ||
Motor vehicles | ||
Certification costs | ||
Support value‑adding initiatives, including the establishment of new businesses, start‑ups, expansions, and business transformation activities. | Wage costs | |
Lease and Rental of industrial and non-residential properties | ||
Shared industrial or business facilities | ||
Advisory services | ||
Procurement of Tangible and Intangible Assets | ||
Digital technologies | ||
Construction and related services of industrial sites, hotels and artisanal workshops | ||
Relocation of employees | ||
Facilitating initial investments for new establishments, business expansion or diversification, process transformation, or asset acquisition from closing businesses.
| Tangible Assets: Lands, Buildings, Plant, Machinery & Equipment | |
Intangible Assets: patents, licences, know-how or other intellectual property | ||
Supporting productive investments in tangible and intangible assets related to operational expansion, diversification, innovation, and initial investment activities. | Equipment/ machinery | |
Ancillary items related to the project | ||
Lease of private operational premises | ||
Supporting digitisation investments that enhance productivity and improve customer experience through the adoption of new digital capabilities.
| Digital solutions | |
Installation costs | ||
Training costs | ||
If your objective is to grow and safeguard your family business over the long term, obtaining the right guidance is essential. We are well-positioned to support you by applying the right frameworks, while a significant portion of advisory, restructuring, and governance costs can be supported through existing government-backed funding schemes
RSM Malta supports family businesses in strengthening governance, structuring succession planning, and accessing available incentives with confidence. To discuss your situation or explore the most suitable support available for your business, please contact our team at RSM Malta.