Malta’s new family office rules ‘give speed and clarity international families expect’ – Karl Micallef

Recent changes to regulatory and administrative frameworks related to single family offices (SFOs) make Malta a “particularly compelling jurisdiction” for high-net-worth families, according to investment professional Karl Micallef.

Mr Micallef, who serves as Sparkasse Bank Malta’s Head of Private Banking and Business Development Investment Services, was speaking during a panel discussion at an event hosted by the Malta Business Network, dedicated to the updated framework.

The panel of experts explained that Malta has developed a “fit-for-purpose, light-touch” regulatory framework tailored specifically to the needs of SFOs.

Mr Micallef highlighted that Malta’s strong trusts and foundations ecosystem is grounded in both civil and common law traditions, adding that the framework “finally puts structure around work Malta has been doing for years, but now with the speed, clarity and competitive edge that international families expect.”

The changes are understood to constitute a significant step toward Malta’s positioning as an attractive jurisdiction for family offices at a time when tens of trillions of euros are expected to pass from one generation to the next over the coming two decades.

Against this backdrop, “family offices are increasingly emerging as a solution for preserving, growing and transitioning wealth across generations,” explained Elena Grima Tortell, Senior Associate at Deloitte Legal, the moderator of the panel discussion.

The panel included experts representing Malta’s regulatory, legal and banking sectors: Apart from Mr Micallef, they included Gerd Sapiano, Deputy Head within the Strategy, Policy and Innovation function at the MFSA; and Kirsten Debono Huskinson, Partner at Camilleri Preziosi.

Mr Sapiano of the MFSA outlined the structure and objectives of the revised regime, noting that it builds on and enhances the existing rules for private trust companies and a Notified Professional Investor Fund (Notified PIF) specifically tailoring the ruleset for SFOs.

The changes come on the back of a proposal put forward by the Malta Financial Services Advisory Council (MFSAC), and offer greater legal certainty, faster time to market and a framework tailored to the needs of wealthy families, all while upholding robust safeguards for the integrity of Malta’s financial system.

The regime requires a minimum €5 million investment and minimum aggregate family wealth of €50 million, while also allowing, in certain instances, key employees of the single family office to be recognised as beneficiaries of the family trust: a feature available in the US and now accessible in Malta.

“This allows the family office to retain talent by offering investment opportunities provided by the family office, while at the same time aligning the key employees’ interests with the family without disqualifying the family office from the light touch framework” explained Dr Grima Tortell.

Mr Sapiano emphasised that the framework provides regulation that is “strong where it needs to be, and agile where it makes sense,” enabling families to centralise governance, investment management, and succession planning in Malta with both clarity and speed.

Against the backdrop of a great intergenerational wealth transfer (the largest wealth shift in modern history), Dr Debono Huskinson of Camilleri Preziosi emphasised the urgency of sophisticated planning.

She also highlighted that for Maltese family businesses, good governance and long-term planning are critical, pointing out that 75 per cent fail to transition successfully to the next generation, not because of weak business performance but due to insufficient succession planning.

From a policy perspective, Joseph Zammit Tabona of the Malta Financial Services Advisory Council, and Chairman of the MBN, underscored that family offices were identified early in Malta’s financial services reform programme as a sector with strong growth potential.

The Malta family office proposition, he said, reflects Malta’s commitment to cultivating high-value, high-governance niches that align with global trends while strengthening the island’s competitiveness as a European wealth management hub.