Trusts fall under the regulations of the Trust and Trustees Act in Malta, which was enabled in 2004. Trusts are among the most flexible investment tools in Malta as they provide customized solutions to those deciding to choose this form of investment to protect their assets. The main components of the trusts are the settlor, the trustee and the beneficiary. Malta is among the few jurisdictions allowing trusts to be set up for a maximum period of time of 100 years.
Our law firm in Malta may provide you with more information about the Trust and Trustees Act.
What is a Maltese trust?
The definition of the trust is given by article 3 in the Trust and Trustees Act which establishes that this is a legal entity through which one can transfer assets for the benefit of others. The trustee will be in charge with the administration of a property for the benefit of third parties, also known as beneficiaries. Trusts are usually employed for charitable purposes. In Malta, the individual or company setting up a trust is called a settlor. The settlor is the one establishing the trustee, the beneficiaries and the property to be administered. In Malta, trusts are set up by drafting a trust deed.
Why set up a trust in Malta?
There are several reasons to be taken into consideration when deciding to establish a trust. In Malta, one must take into account the legal and the taxation aspects when setting up a trust. First of all, Maltese trusts represent an useful tax minimization tool. The beneficiaries of trusts will also be imposed lower taxes in Malta. With respect to the settlor, assigning a part of his or her estate to be administered by a trustee will ensure protection against creditors.
From a legal point of view, a Maltese trust may be employed to gather one’s investments in order to have the estate managed by professionals. Also, the Trust and Trustees Act provides flexibility when it comes to drafting the trust deed. Moreover, the distribution of the estate to heirs can be done more efficiently through a trust. Setting up a trust in Malta provides more privacy as there are no requirements to be registered with any public authority.
If you want to set up a trust, you may contact our Maltese lawyers for legal services.