The setting up of trusts in Malta is regulated by the new Trusts and Trustees
Act of 2004. The Act provides for the
creation of trusts and authorisation and supervision of trustees. In this
regard, the MFSA is the competent authority for the purposes of the Act.
The Act incorporates within its provisions the Hague Convention on the Law
Applicable to Trusts and on their Recognition which Malta has ratified.
The Maltese Regulatory Environment
The Malta Financial Services Authority (MFSA) is responsible for the
authorisation, regulation and supervision of trustees. The MFSA also
licenses, regulates and supervises banking and financial institutions, and
investment services business.
The MFSA requires the highest standards of probity and honesty. Every
licence is issued subject to standard conditions which may be adapted to
suit certain circumstances so long as standards are not compromised.
The MFSA is an autonomous public authority constituted and regulated by
the Malta Financial Services Authority Act (MFSA Act). The MFSA aims to
provide a seamless regulatory function for financial services. It also
houses the Registry of Companies.
A trust is an obligation which binds a person or persons (called the
‘trustees’) to deal with
property over which they have control (called ‘the trust property’) for
the benefit of
persons (called the beneficiaries) or for a charitable purpose in
accordance with the terms
of the trust.
Creation of Trusts
A trust can come into existence in any manner. A trust may come into
existence by an instrument in writing including by a will. A unilateral
declaration of trust is also possible. A unilateral declaration of trust
is a declaration in writing made by a trustee stating that it is the
trustee of a trust, containing all terms of the trust as well as the names
or information enabling the identification of all beneficiaries.
A trust may also come into existence by oral declaration, with the
exception of a unit trust which must be created by a written instrument.
Also in the case of an inter vivos trust, the trust must be created by
notarial trust deed. A trust may also come into existence by operation of
law or by a judicial decision.
Where assets are held, acquired or received by a person for another on the
basis of oral arrangements of a fiduciary nature, express or implied,
there shall be presumed to be mandate or a deposit rather than a trust,
unless there is evidence of the intention to create an oral trust.
A trust may continue until the 100th anniversary of the date on which it
came into existence, and, unless sooner terminated, shall terminate. This
limit does not apply to a trust for a charitable purpose or to a unit
Legal Effects and formalities
The effects of any transactions related to property under trust are
regulated by the Act and other laws that apply specifically to trusts. The
formalities required with respect to such transactions are as a general
rule regulated in the normal manner. Transactions relating to the transfer
of ownership or other rights to or in property under trust shall therefore
be carried out in the form and manner required by the law applicable to
Trustees are bound to follow the Code of Conduct issued by the MFSA.
Under the Professional Secrecy Act 1994, lawyers, bankers, stock brokers and
accountants cannot divulge any information about their clients unless
international criminal activity (money laundering, drug dealing, etc.) is
Moreover, Licensed Nominee Companies fall under the Malta Financial Services
Centre Act 1988 which also requires such companies to protect the
confidentiality of the beneficial owners they represent. All our services are
covered by these strict
professional secrecy provisions.