As a civil law jurisdiction, Malta is unusual in that it acknowledges and embraces the common law concept of equity and therefore trusts.

Trusts vs Civil Law Jurisdictions

Trust law developed from common law principles of equity and the majority of civil law jurisdictions do not recognise trusts. Malta is different in that it is a civil law jurisdiction that does recognise the trust concept. Trusts can be established in Malta and are regulated by The Trust and Trustees Act 1998, amended 2004.

Trusts can be established for a variety of purposes and are commonly used for confidentiality, asset protection, estate planning, asset holding and charitable purposes.

Maltese Legislation

Malta’s legislation recognises all types of trusts you would find in other jurisdictions including discretionary trusts, interest in possession trusts, accumulation and maintenance trusts, fixed interest trusts and charitable trusts. Maltese legislation also allows more commercial types of trust such as unit trusts or collective investment schemes to be established. Furthermore existing Malta trusts can be converted into Malta Foundations and vice versa giving added flexibility to the client.

Malta’s favourable tax regime makes it an attractive jurisdiction in which to establish a trust. Whilst the tax liability of the trust will depend on a number of factors including the type of asset, status and residence of the beneficiaries, where the beneficiaries of a trust are not resident in Malta and the income of the trust does not arise in Malta, there is no taxation in Malta.

Establishing a trust in Malta gives the settlor the peace of mind that comes with a highly regulated EU Member State that remains up to date with all legislative and regulatory changes enacted by the EU. All legislation is published in English and the professional standards in Malta are very high with many accountants, bankers, lawyers and investment advisors holding overseas qualifications and having international experience.

If you would like any further information or if you are interested in establishing a Malta trust please contact me by email rkelly@boston.co.im or by phone 01624 692769.

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