Trust & Foundations - Fiduciary Services
Trusts were initially introduced into Maltese legislation in 1989 to be fully integrated into domestic law in 2005. Foundations have always been regulated by customary law until the legislator specifically catered for foundations in Maltese Law in 2008. CSL has an in-depth understanding and experience in this field and can assist you in finding commercial solutions through fiduciary structures in a flexible and confidential manner.
The trust is a relationship created through a private writing, where a trustee holds and controls assets for the benefit of beneficiaries. The trustee is usually a firm or company engaged professionally and customarily in the business of trustee services and in managing assets which are legally under the ownership of said trustee, but subject to the provisions of the trust instrument.
On the other hand, a foundation is an organisation. It can be regarded as an autonomous legal entity which belongs to itself. It has characteristics of a company, however, it acts more like a trust. The Maltese foundation obtains separate legal personality once the foundation is registered with the Registrar for Legal Persons. Both trusts and private foundations cannot be created for a period longer than 100 years.
The trust is established by the settlor who passes on full ownership of the property to the trustee and who should not be involved in the administration of the trust property. He may however write a letter of wishes addressed to the trustee in which he sets out his wishes in relation to the trust property and the trustee would keep those wishes in mind when exercising his powers.
A foundation is established by the founder through a public deed drawn up by a notary. The founder may retain a significant degree of control in the administration of the foundation. The founder may supervise the acts of the administrators and may even be an administrator himself or may decide to be the top organ of the foundation.
CSL is actively involved in the creation of both trusts and foundations in Malta and overseas and also provides ancillary consultancy and support through its other group companies. Such structures can be used in a great number of commercial situations such as security structures, collective investment schemes and securitisation transactions.
However, trusts and foundations may also be used to satisfy personal requirements. In fact one can create a trust or foundation to ensure that in the event of his death or in the event that he becomes incapable or unable to properly administer his wealth due to ill health, disability or age, the assets which he would have accumulated during his lifetime will not be dissipated carelessly and both his needs and those of his family or heirs will still be catered for. These needs could relate to, for example, medical treatment, accommodation, care subsistence or education. A trust may also be set up for the advantage of the settlor himself, such as for tax planning or asset protection purposes.
Asset structuring may also be carried out through a trust or foundation with the aim of keeping private and structured assets separate. The main advantages of this kind of structuring are estate planning, asset protection, mobility, flexibility and confidentiality.
HOW CAN WE HELP?
CSL is licensed under the MFSA (Malta Financial Services Authority) to act as trustees and through this licensed trust company, we provide specialised trustee and fiduciary services. We provide you with the highest level of protection and security. Any transactions in which a trust or foundation is being used should be handled in complete confidence. Our aim is to provide you with security and the necessary tax and legal framework to structure your assets to your best advantage.