Trusts

Since Malta joined the EU in 2004, the country became a top jurisdiction for corporate holding structures with different ends such as multinational groups and asset holding for high net worth individuals. In the last few years, the authorities have been active in renewing the laws and regulations regarding trusts and foundations.

Choosing the best trust jurisdiction is tough. It depends on many factors, such as the regulatory legal framework, the competence of service providers, operational costs, and the judicial system. The reforms conducted since 2014 has turned Malta into a trust-worthy jurisdiction for those wanting to protect their legacy.

The Maltese law provides the primary trusts available in most common law jurisdictions:

Ø  Discretionary trusts

Ø  Accumulation and maintenance trusts

Ø  Fixed interest trusts

Ø  Spendthrift trusts

Ø  Charitable trusts

Ø  Unit trusts

What benefits does setting up a trust have for those who want to provide trust services and those who want to set up trusts? There are plenty of them, let’s just mention a few:

Ø  It incentivizes existing trust companies to be registering in Malta as continued operations. That means they can redomicile on the island without dissolving their structure in its home jurisdiction and being reincorporated in Malta. Re-domiciling allows continuing the legal personality of the company from one jurisdiction to another, which means that the business and assets don’t have to be transferred to the new entity.

Ø  Foreign trust companies can set up branches or subsidiaries in Malta. If they’ve obtained a trustee license by the regulatory authority in their home jurisdiction and want to set up a Maltese branch can obtain authorization in Malta is as little as 45 days with fewer costs.

Ø  Foreign trusts don’t have to be registered in Malta even if they are administered from there

Ø  Low registration fees in comparison to other European jurisdictions

Ø  Under the tax transparency model, Maltese trusts can be treated as companies for tax purposes. Thus, income from the trust cannot be taxed on the trustee if distributed to the beneficiary.

Ø  Exemption from annual registration fees, death, stamp, or customs duty regarding property imported into the country

Ø  Top-level confidentiality rules regarding the identity of the beneficiaries