Trusts and Foundations Malta
Trusts And Foundations Malta
About Trusts & Foundations in Malta
Despite spending nearly two centuries as a British colony, Malta is predominantly a civil law jurisdiction. However, Malta fully recognises both trusts and foundations, and both are available in Malta and can be established with Maltese Trustees or Administrators. Trustees or Administrators of Maltese trusts and foundations are required to be licensed to act as such by the Malta Financial Services Authority (MFSA).
Regulation of Malta Trusts and Foundations
The regulation of Malta trusts is provided for by the Malta Trusts and Trustees Act (Cap 331) and Malta Foundations by the second schedule of the Maltese Civil Code (Cap 16). These provide regulation and guidance with regards to the creation of trusts and foundations in Malta, ongoing maintenance and administration of trusts and foundations in Malta as well as setting out the rules with regards the licensing and supervisions of trustees and administrators of foundations.
Malta Trusts
Under the Trusts and Trustees Act, Cap 331, a Malta trust exists where:
“a person (called a trustee) holds, as owner or has vested in him property under an obligation to deal with that property for the benefit of persons (called the beneficiaries), whether or not yet ascertained or in existence, which is not for the benefit only of the trustee, or for a charitable purpose, or for both such benefit and purpose aforesaid.”
As stated by the Trust and Trustees Act, a Malta trust has three main parts:
1. Settlor – the person who makes the trust and includes a person who provides trust property or makes a disposition on trust or to a trust;
2. Trustee – concerning property, means the person or persons holding the property or in whom the property is vested on terms of trust in accordance with the provisions of this Act or, a person that is otherwise deemed to be a trustee under this Act;
3. Beneficiary – a person entitled to benefit under a trust or in whose favour a discretion to distribute property held in trust maybe exercised;
Malta Foundations
Under title three of foundations and association, a foundation is defined as an organisation consisting of the universality of things constituted in writing, including using a will, by a founder or founders whereby assets are destined either:
a) for the fulfilment of a specified purpose; and, or
b)for the benefit of a named person/class of persons, and are entrusted to the administration of the designated person/persons. Foundations can trade or continue with commercial activities, and can:
1. be endowed with assets including commercial property and shareholding in enterprises (i.e. intellectual property, trademarks or another asset which provides an income);
2. be used as a collective investment vehicle (CIV), and issue units to investors for the passive holding of a common pool of assets;
3. be used as a vehicle for securitisation transactions, borrowing monies against the issue of bonds and conduct related acts.
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Trust and Foundations Advisory Services
Papilio Services can offer local and international clients professional trust, foundation and fiduciary services through our associated company which is licenced by the Malta Financial Services Authority (MFSA) as well as all associated administration and back-office functions. The use of trusts by legal as well as natural persons has become increasingly popular in Malta and is used for both commercial and private purposes.
Therefore, if you need assistance navigating through trust law and foundations law, contact us today to arrange an initial consultation.
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