Certainty and Security.
Malta is, as a civil law country within the European Union with a distinct Anglo-Saxon heritage, well placed to offer the benefits of both systems in a trust and foundation context.
The Maltese Trusts and Trustees Act, together with the relevant provisions in the Maltese Civil Code, offers a robust framework for both trusts and foundations. Together with the Maltese Companies Act which regulates limited liability companies and partnerships, Malta can provide the legal entities and structures needed in international financing, wealth management, trading and other areas of business.
International Finance Centre
Malta has quietly emerged as one of Europe’s most stable and innovative finance domiciles. Malta is a full member of the EU and has a strong banking, insurance, fund and wealth management sector that continue to attract investment from the world’s leading financial institutions, blue-chip multinationals and high net worth individuals.
English is an official language in Malta and is the language of legislation, education and business on the Island. The economy is knowledge-based with focus on ICT, life sciences, education and financial services. The financial services sector is diversified and includes Investment Funds, Holding and Trading Companies, Asset Management, Maritime and Aviation, Insurance, Trusts, Foundations, Banking, Family Offices, Financial Institutions, International Pensions, Capital Markets and Expat Residency Programmes.
Infrastructure
Malta has overcome its geographical limitations by building up a state-of-the-arts telecoms infrastructure. International connectivity is ensured by two satellite stations and four submarine fibre optic cable links to mainland Europe.
The excellent air and sea links with the rest of Europe, North Africa and elsewhere provide a network of worldwide connectivity.
Regulation and Legislation
Malta has a sound regulatory framework and an accessible regulator. The country’s legislation is in line with EU requirements and is built on best practices from other finance centres from around the world. All financial services, including trusts and foundations, fall under one regulator, namely the Malta Financial Services Authority (MFSA). The MFSA is recognised as a serious, yet accessible, regulator.
Cost Competitive Environment
Malta offers cost advantages when compared with other financial services jurisdiction in Europe, making Malta a competitive alternative.
Advice and Assistance
Malta’s workforce is generally multilingual and highly educated. The professional firms in Malta have been at the forefront of the growth in the sector and employees and service companies are usually quick, effective and have developed wide ranging experience and expertise.
Trusts in Malta
Ongoing market volatility is a constant reminder of how important it is to protect and/or enhance the value of assets. From income tax to succession planning, holding of company shares, donating property to children, etc, etc, Maltese trusts are ideal financial instruments for persons seeking solutions to their wealth management requirements.
Malta is established as a reputable trust jurisdiction and the number of authorised trustees is steadily increasing. Malta is one of a very few civil law jurisdictions that have developed its own domestic trust law, which apart from regulating Maltese trusts also caters for the recognition of trusts set up under non-Maltese laws.
Advantages of using Maltese trusts include the fact that all relevant rules, regulations and laws are published in English, that Malta is within the EU and Eurozone and that the Maltese government is traditionally a pro-business government.
A Maltese trust may be set up as a fixed interest or a discretionary trust and as protective, charitable, accumulation and maintenance trusts (to mention a few examples).
Foundations in Malta
Malta is one of the few jurisdictions that cater for both trusts and foundations. While trusts are peculiar to systems of law based on common law (and generally not found in civil law countries), Malta (a civil law country) is an exception.
Maltese foundations can benefit from a number of advantages, including low or no income tax and low set-up and management costs, which is proving attractive to both corporate entities and high net worth individuals.
Private foundations can hold assets and liabilities separate from the founder and/or beneficiaries and can therefore be used very well for asset protection purposes. A high level of confidentiality is provided and a foundation can have more than one founder (who can be an individual or a legal entity). A foundation can be set up with a protector and/or a supervisory council, thus creating checks on the administrators of the foundation.
Protection and Asset Security
Malta is a highly regulated and sophisticated jurisdiction in the EU. A high level of protection is built in to the relevant regulations which offers a high level of assurance to the settlor/founder. Trustees and Administrators require a licence issued by the MFSA.
Maltese trusts and foundations are commonly used for income tax and estate/succession planning, asset protection planning and assistance to charities.
Taxation
When all the beneficiaries of a trust are non-Malta domiciled and resident, and where the trust assets are situated outside Malta, no Maltese income tax or any other transfer duties, should be payable in Malta.
A foundation may be treated in the same way as a trust or in the same way as a Malta company. Maltese companies can benefit from a participation exemption regime that exempts the Maltese entity from income tax in Malta on income and gains derived from an underlying subsidiary.
