Trusts under Maltese law

• Possibility of no tax liability in Malta

• Robust trust legislation and regulation of trustees

• Low annual costs

Recent amendments to the laws governing Trust and Trustees in Malta has widened the use of this vehicle. Under Maltese law settlors of a trust may also be a beneficiary under the trust while a trustee is normally precluded from being a beneficiary of a trust (apart from specific trusts used in a financial services context). The law also provides for protectors in a trust relationship, normally appointed by the settler to supervise the operations of the trustees in terms of the trust. The terms of the trust may identify the law applicable to the trust. Legislation has also given force of law to the Hague Convention on the Law Applicable to Trusts and on their Recognition, thereby enabling Malta to recognise trusts whose proper law is not Maltese.

In terms of Maltese tax law trusts are considered to be transparent where income attributable to a trust consists of income arising outside Malta and the beneficiaries are persons not ordinarily resident in Malta or not domiciled in Malta, it is considered that such income has been directly derived by the non resident beneficiaries and there is no tax impact under Maltese tax laws.