With its ever-growing reputation as an interdisciplinary financial services centre, Malta is establishing itself as an attractive jurisdiction for family business governance. Financial services practitioners in Malta service clients and their future generations via the wealth of legal institutes available both under domestic law, as well as via the adoption of apposite solutions in appropriate jurisdictions which are combined with local instruments. Matters such as structuring of assets, transference of family assets, succession planning and wealth protection are considered in a comprehensive manner to devise an effective governance structure.
This is achieved by the adoption of tailor-made solutions: holding companies; trusts or foundations; investment funds; registered office services; company directorships and the plethora of other options available under the Maltese legal regime. The benefits range from fiscal incentives, to secure legal structures, all in view of the robustness of the domestic legal environment, together with the attractiveness of Malta as a financial centre.
The importance of governance of family wealth is continuing, and it ultimately ensures not only the success of the family business but also, in the long run, the pacific co-existence of business with blood relations, a link which tends, at times to be susceptible to easy ruptures. Governance is ultimately intended to render accountable the performance of the family business, in the process binding together the family, as there is thus a forum for resolution of conflict that can arise between family members, and at worst, can create a situation of impasse, detrimental to the family weal in all possible ways.
By way of example, one can hereby refer to a particular moment in the lifetime of family businesses which has maximum potential to result in discord, i.e. the demise of key players in the family business –this inevitably represents a crucial moment whereby the smooth continuation of the family business is at risk. Succession issues inevitably come into play, and oftenmost, the rightful heirs of a business are not the best-suited individuals to manage and administer the same. A proper governance structure will spell out clear roles and responsibilities for family members, which becomes even more important after contingencies like demises, create an upheaval in this regard.
It is only when professional advice combines both an appreciation for the business dimension with the particularities specific to the family unit, that a proper family governance solution can arise, where the client becomes the family as a unit, and the ultimate beneficiaries, the constituent members thereof.
Dr. Annalise Micallef