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Dip.Tax, B.A., LL.M.(Warwick), LL.D., MIT, TEP

International Tax & Legal Counsel

MALTA

 

 

 

 

Business Advisory  ::  Company Formation  ::  Trusts  ::  Residency  ::  Tax   ::  Intellectual Property

   

MALTESE TRUSTS

Maltese Registered Trusts

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.

Trusts
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 trust.

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 such transactions.

Trustees are bound to follow the Code of Conduct issued by the MFSA.

Confidentiality

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 involved.

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.

 

 

 

 

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