Excellent response to the first BOV Family Business event
On Thursday, 22 February Bank of Valletta organised an event for local family businesses at the Malta Maritime Museum, Vittoriosa Waterfront.
The event, for which both BOV customers and members of the general public were invited, was fully subscribed. In his welcome speech, Albert Frendo, chief Credit Business Development officer, spoke about the importance of succession planning for family businesses. This is even more critical in view of the inherent characteristics of such businesses requiring the right balance and trade-off between family and business considerations constantly and consistently.
“Local family businesses distinguish themselves for their resilience and long-term planning. However, it is also true that where there is no effective succession plan in place, businesses find it harder to survive from one generation to the next. This puts significant responsibility on today’s entrepreneurs to plan for the continuity of the business after their personal retirement.”
The panel featured Dr Nadine Lia, Regulator for Family Businesses in Malta. She gave an overview of the Family Business Act, which was drawn up recently and is a first, both for Malta and Europe. Dr Lia explained how the Act was designed as an “enabling act” on the basis of which a number of incentives have been drawn up to support family businesses in moving forward beyond the lifespan of the present generation.
Mario Vella shared his experience both as a banker and as a consultant about the concerns of family businesses. He highlighted the fact that only 30% of family businesses survive into the sec- ond generation and merely 3% of them manage to operate into the fourth.
Taxation and the manner in which it impacts family businesses was the subject discussed by Anthony Pace, Tax partner at KPMG. Pace briefed participants about the income tax and duty implications of inter vivos transfers of family businesses.
“A good entrepreneur thinks and plans beyond his tenure to ensure that the business remains valid and competitive in the longer term. Effective governance and business continuity planning are necessary ingredients beyond the identification of one’s successor to achieve such aim,” concluded Frendo.
Following the session, participants were invited to attend a stand-up reception featuring a taste of the food of a bygone era during 18th century Malta. This was a unique experience created by a team of curators, historians and chefs at the Malta Maritime Museum.