TCSP

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A TCSP, short for Trust or Company Service Providers, are mainly regulated by two legislative frameworks, the Trusts and Trustees Acts and The Company Service Providers Act.

TCSP: Licensing of Trustees in Malta

A trustee or corporate trustee is a person or persons holding property or in whom the property is vested in trust for the beneficiaries. The Trusts and Trustees Act establishes that the role of a trustee may be carried out in one of two ways, either in a professional capacity or a personal capacity. In both cases, the law requires that a trustee abides by the criteria laid down in the law for the authorisation of trustees.

Except for a small number of exceptions which are laid down in the law itself, any person, whether resident in Malta or operating in Malta who receives any property upon trust or accepts to act as a trustee of a trust will require authorisation by the Malta Financial Services Authority (MFSA) in the form of a licence. This is particularly the case where the trustee receives or may be entitled to receive remuneration for providing the TCSP service of a trustee and acts as trustee on a habitual or regular basis. This stands, irrespective of which law governs the trust and where the property is located.

To attain authorisation, a prospective trustee must submit an application in writing to the MFSA. The MFSA is the ultimate authority for trustees which grants a person or entity the authorisation to act as trustee as long as it is satisfied that the conditions laid down by the law have been fulfilled.

The law further specifies that authorisation may be granted as general, or it may be restricted to certain activities.

Qualifications to act as a Corporate Trustee in Malta

For a company to offer trustee services, it must satisfy a number of conditions:

  • its objects must include the capacity to act as trustee;
  • the company’s other objects must not include any activities which are incompatible with the function of acting as trustee;
  • its directors must be a minimum of three (3) approved persons;
  • the maintenance of records must be kept in adequate systems;
  • only approved persons are to have a direct or indirect interest in the company;
  • the company’s name must not be inconsistent with the activity of the trustee;
  • in the event where the company is not registered in Malta, such registration must be in an approved jurisdiction.

TCSP: Licensing of Corporate Service Providers in Malta

The Company Services Providers Act defines a Company Service Provider (CSP) as any natural or legal person which, by way of business, provides any of the following services to third parties:

  • Formation of companies or other legal entities,
  • Acts as or arranges for another person to act as director or secretary of a company, a partner in a partnership or in a similar position in relation to other legal entities.
  • Provision of a registered office, a business correspondence or administrative address and other related legal services for a company, a partnership or any other legal entity.

Similarly to trustees, prospective CSPs will be subject to the “fit and proper” test to ensure such person or entity can guarantee a full professional service to its clients. If the MFSA believes the prospective CSP is compliant with the rules as per the Company Service Providers Act, the prospective CSP will need to register by means of a notification letter which includes details regarding the type of licence /authorisation already held, the company services to be offered, the target market for such services and the expected level of company service business , and a prescribed application fee.  

TCSP: Licensing of TCSP in Cyprus

Trusts in Cyprus are regulated by Trustee Law (Chapter 193 of the Laws of Cyprus) which is based on the English Trust system and the International Trusts Law of 1992. The International Trusts Law was enacted to bring Cypriot Trust law in conformity with modern law and promote Cyprus as an offshore financial hub and a serious trust jurisdiction.   

A trust may qualify as a International Trust where:

  • The settler is not a permanent resident of Cyprus
  • At least one trustee is a permanent resident in Cyprus
  • No beneficiaries are permanent residents in Cyprus
  • The trust property does not include any immovable property in Cyprus.

In Cyprus, trustees are appointed by the settlor and there is no limit as to how many trustees should be appointed in respect of each trust, but it is recommended to appoint more than one trustee.

In December 2012, a law was enacted regarding TCSPs entitled Regulation of Fiduciaries, Administration Businesses and Company Directors. This law required all individuals and companies offering trustee, administration or related services to be authorised as ‘fit and proper’ and licensed by the Cyprus Securities and Exchange Commission.

Our TCSP Practice

As part of our Financial Services practice group, we are fully geared towards helping prospective TCSPs in attaining their license from their respective regulatory authority. We cater for our TSCP client’s legal requirements at pre-licensing stage and make sure their application is fully compliant with the law.

 



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