Trusts in Malta

Trusts in Malta

Trusts in Malta are regulated by the Trust and Trustees Act, although the principles have been long enshrined in Malta’s Civil Code through fiduciary obligations. Trustees operating in or from Malta require authorisation from the Malta Financial Services Authority (MFSA). We offer trust and trustee services through the duly authorised Claris Capital Ltd for over 15 years.

Malta Trusts

Those clients who choose to engage the services of a professional trustee in Malta may be reassured that the Act poses stringent obligations on trustees to act always in the best interest of the beneficiaries of the trust on which they act.

Trusts established under Maltese law offer you with a sound and flexible footing as part of your overall long-term wealth protection and/or generational planning strategy. A Trust does not lend itself to engage in operational activities except perhaps the rental of immovable properties although in most cases it is advisable to carry out any commercial activity through a company owned by the trust.

A Trust may therefore be used for several holding activities including both tangible and intangible assets. Trusts remain popular as effective succession planning tools, since the person settling assets into the trust may determine which people are to benefit from the trust assets, to what extent and when such benefit may occur during or after their lifetime.

Benefits of a Malta Trust include flexibility in tax treatment, rapid establishment and the possibility to acquire assets and set up bank accounts or, investment portfolios without the need to visit Malta in person. through Claris Capital Ltd, we settle the trust and look after its ongoing administration, providing you peace of mind that your assets are in capable hands.

Malta Trusts – An Overview

Settling a Malta Trust at a glance:

  • A trust may be established in as little as 24 hours
  • Settlement may be done remotely – there is no need to visit Malta
  • The trust and trustees act governs trustees in Malta
  • A trust requires at least one Trustee and one beneficiary as well as trust assets
  • Malta offers several types of trust including discretionary, interest in position, Accumulation and maintenance.
  • Trusts may be revocable or irrevocable
  • Malta Trusts are registered with the MFSA
  • A trust may appoint a protector to oversee certain trustee actions

Benefits of a Malta Trust

Segregation of Assets from Personal Patrimony

  • Choice of tax treatment on trust income and gains
  • Qualifying holdings of a Malta trust may be tax exempt
  • There are no withholding taxes or stamp duties in Malta on trust distributions to beneficiaries
  • The settlor may add, remove or change the trust beneficiaries as well as their beneficial interest during the settlor’s lifetime
  • Malta is an EU Country, trusts in Malta enjoy all the benefits and protections of EU legislation.
  • Malta is signatory to the Hague Convention that ensures recognition of trusts
  • Malta trusts may hold accounts in banks outside Malta
  • the settlor or protector, if appointed may replace the trustees at any point
  • the trustees are subject to stringent regulation that requires them to safeguard the trust assets with extreme care and diligence,
  • It is possible for a Maltese trustee to act on a trust that maintains a foreign governing law
  • a Maltese Trust may uniquely be converted to a Foundation and vice versa

The Process for Malta Trust Formation

The procedure to Establish a trust in Malta is simple:

Free Consultation with our Advisor

Client Onboarding Process

Complete Trust Application Form

Detailed review of your position and objectives

We draft all the necessary Documents

Your Trust is ready to accept assets

Malta Trusts Services

Apart from the Trust settlement and administration, we may assist you with all the other services you may require for your personal or family wealth protection strategy:

  • Tax advice and tax compliance
  • Corporate support for any group companies
  • Tax efficient ownership of high value assets such as yachts or jets
  • Family business review and governance
  • Real Estate investment advisory
  • Personal immigration options

Overview of Tax relating to a Malta Trusts

Malta Permits a trust the choice of being treated for tax either as a company or through the tax transparency model that “sees through” to the beneficiary.

Trust treated as a company for tax purposes:

  • All worldwide income and gains may be liable to tax
  • Relief may be available for tax paid abroad
  • A trust that owns one or Malta companies may be treated as a single fiscal unit thus qualifying for the income tax consolidation
  • Dividends from Participating Holdings in subsidiaries do not attract tax
  • Capital Gains received from the disposal of participating Holdings are not liable to tax

When a trust elects for the transparency model:

  • All income and gains within the trust are deemed to arise directly in the hands of the beneficiaries
  • Therefore, no tax is liable at the level of the trust however it may be liable to tax at the personal level of the beneficiary

Whichever tax model trust elect’s the following always apply:

  • Anti-abuse provisions must be met – these provide certainty
  • No tax is applied on Capital remitted to Malta
  • Participation Exemption for holding assets
  • Double Tax Treaties in force
  • Distributions too beneficiaries do not give rise to tax in Malta

We specialise in providing tax advice to clients of every size at any stage of their Wealth and asset protection planning, be it pre-setup, specific to a transaction, or in relation to disposal of any family or business asset.

Our Private Wealth Team

We offer trust and trustee services through the duly authorised Claris Capital Ltd. On matters of Private Wealth, we have a depth of experience: our 3 Directors and Senior Manager are all TEP, the global benchmark qualification for Trust and Estate Practitioners, and between them offer some 80 years’ experience in the field. We invest continually in our team at all levels and are committed to continuous professional development to benefit our clients.

We have been involved with mainstream assets such as family business, financial portfolios and real estate investments as well as new age holdings such as virtual and digital assets.

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