The Family Business Act : two years on : an investigation of its impact on family businesses operating in Malta

Abstract

Family businesses are an important element of any country’s economy and should, therefore, be the focus of policy attention for all governments. The absolute majority, 99.9%, of the business population in Malta is made up of small to medium sized enterprises (SMEs) (National Statistics Office - Malta, 2019b); 70% of which are family run businesses (European Family Businesses, 2018). This is precisely why this topic has been at the forefront of both research and policymaking. José Manuel Barroso himself stressed the importance of this sector when he stated that “Family businesses are as important for Europe as Europe is for family business.”

In view of the pressing challenges faced, ranging from talent management to the increasing rate of poor succession planning, family businesses are in need of sound policy from governments. Policymakers around Europe should seriously consider the introduction of legislation that recognises family businesses as such whilst opening doors for them to gain the help needed.

By enacting the Family Business Act (FBA) in 2017, Malta has become the first country in the European Union (EU) to introduce, and implement, specific legislation which seeks to address the needs of family businesses. However, having legislation alone is not enough. Constant monitoring and evaluation of emerging trends in the sector and improvement of the effectiveness of applicable legislation must be undertaken as necessary. This is to ensure the existence of the right environment whilst continuing to offer family businesses the best help possible. This study discusses the impact of the FBA and the local Family Business Office (FBO) set up by law as the one-stop-shop for all family business needs. Feedback from relevant local stakeholders is also analysed throughout. This data was collected through semi-structured and structured interviews with professionals working in relevant organisations within the private and public sectors, the Minister for the Economy, Investment and Small Business, the FBO and family businesses themselves.

Given that feedback received from participants was of a detailed nature, the author could undertake an interesting discussion on the present situation for family businesses, as well as what the future may hold for the FBA and the FBO. The study concludes with some recommendations which encompass the main research objectives of this dissertation and which are the result of an analysis of the findings.