Malta is rapidly winning on reputation and is proving to be a safe, well-regarded portal for global investment. Malta, a jurisdiction with over 25 years of trust legislation as well as an emerging wealth management centre, has included an interesting development to its trust legislative framework. With the amendments to the Trust and Trustees Act, Cap 331 of the Laws of Malta (the “TTA”), Malta now provides for the setting up of “family trusts”. The TTA defines a family trust as “a trust created to hold property settled by the settlor or settlors for the present and future needs of family members or family dependants”.
As a jurisdiction, Malta recognises foreign trust laws, whilst allowing settlors to establish trusts regulated by foreign laws.
A ‘family trust’ is set up as a company whose objects and activities are limited to acting as a trustee to specific settlors in respect of the family estate, for the benefit of the family members. Certain restrictions on the activity of the family trustee apply; the trustee company cannot hold itself out as a trustee to the public or act habitually as a trustee (to more than five settlers at a time).
One of the main advantages offered by such an instrument is that a ‘family trust’ need not be subjected to the rigorous authorisation process as a professional trustee. The ‘family trust’ is subject to less regulation. In principle, when a company is set up to act as a trustee for a family trust, there exists no requirement to be authorised in terms of the TTA, but rather the company is only required to apply for registration with the Malta Financial Services Authority. Nonetheless, the trustee would still be subject to ongoing supervision.
Such a notion of ‘family trust’ under the Maltese legal framework offers a more suitable way in which families manage their wealth and patrimony, whilst also ensuring the protection of selected family assets from claims or any creditors.
Why use a Family Trust in Malta?
Malta is emerging as a leading wealth management centre in Europe, providing for innovative products, experienced professionals as well as personal and cost-effective services. A wide range of investment vehicles is available, among them investment funds, companies, trusts and foundations. Equally important, the country has excellent fiscal and legal infrastructure.
Furthermore, Malta’s service providers have built up a reputation for personalised services and tailored solutions that integrate every aspect of a client’s wealth management needs. Malta’s private bankers and asset managers cater to all levels of wealth from the mass affluent to the ultra-high-net-worth individual, and its banking system has been ranked as the 10th soundest in the world by the World Economic Forum’s Competitiveness Index 2014-2015.
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