A trust is an obligation, which binds a person or persons (trustees) to deal with property over which they have control (the trust property) for the benefit persons ( the beneficiaries), or for a charitable purpose in accordance with the terms of the trust. The beneficiaries can be any born or unborn persons, minor or incapable, and also the trustees or settlers (founder of the trust) themselves, as long as they are not resident in Malta at the time of incorporation of a Maltese trust.
The procedure of setting up a trust in Malta is relatively straight forward, and recognizes all main forms of trusts, which one normally find in other jurisdictions. A Maltese trust, which is regulated by the Trust and Trustees act, chapter 331 of 2004 (act) is often used as an efficient vehicle for asset and family wealth protection, estate, wealth or tax planning, discretion purposes, or as a commercial tool for testamentary usage. The act incorporates the Hague Convention on the law applicable to the trusts and is in full compliance with all European regulations. The MFSA, (Malta Financial Services Authority) an autonomous public authority of Malta, is responsible for the authorization of licenses, regulation and supervision of trustees in Malta. The MFSA also supervises the banking sector and financial institutions, and investment services business. It has to be noted that since 2018 MFSA, all banks and all financial service providers inclusive fiduciaries and trustees have to register all ultimate beneficial owners of any company, trust or any other structure. These registers are not public, but can be accessed by any “ interested “ party.
Income attributable to a trust is not charged tax in the hands of the trustee, if it is distributed to a beneficiary. In case all beneficiaries are not resident in Malta, and the income does not arise in Malta too, there is no taxation in Malta. Under certain circumstances a holder of a foreign resident permit can be beneficiary of a Maltese trust with the same benefits too.
A trust remains valid for 100 years, except it is for a charitable purpose.
Trustees and Maltese trusts have to be duly licensed by the MFSA
There is the option to convert a Maltese trust into a Maltese foundation if desired so, with continuity of existence, which gives Malta as a location for a trust a great advantage towards other jurisdictions, where such circumstances would cease the trust, which could lead to undesirable tax charges.
For Maltese trustee, and foundation services, SSCI partners up with established partners, specialized in this sector, and fully licensed, supervised and authorized by the MFSA, the Maltese regulator for Financial Services.