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Offshore Trusts Report: Malta

The Trust and Trustees Act 2004

In September, 2004, a bill to update Maltese legislation on trusts and trustees was published in the Government Gazette. Under the new Act, Maltese residents and companies were, for the first time, permitted to use local trusts. The Trusts and Trustees Act 2004 became effective in January 2005.

"The purpose of this new law is to continue the process started in 1994 where the offshore laws are eliminated and Malta re-directed to the development of an onshore financial centre," said MFSC chairman Joe Bannister at the time.

Mr Bannister added that the bill eliminated the nominee company regime, and furthered Malta's international obligations on non-discrimination, transparency and prevention of money laundering.

According to Bannister, the bill aimed to make Malta an attractive jurisdiction for trust administration. Another purpose of the legislation is to ensure that trusts will not create any anomalies in the taxation of income.

“The tax implications have been worded in such as a way that the new law may be used as a tax planning tool but not for tax avoidance. Any transfer of assets into a trust or any change of beneficiaries within the trust will be treated as taxable," stated Kevin Valenzia, chairman of the Financial Services Consultative Council and partner at PricewaterhouseCoopers.

In April, 2005, the Maltese government said it expected the new trust laws to bring about an increase in employment and foreign earnings and make Malta more competitive as an international financial services jurisdiction.

In May 2007, the Bank of Valletta announced that it had launched a new account based on the concept of a trust which, the bank said, would not only provide customers with discretion and confidentiality, but also a flexible and useful estate and inheritance planning vehicle.

"By opening a BOV Trust Account, customers would not only be ensuring that their money is in safe hands but will also be benefiting from the most exacting standards in terms of discretion and confidentiality,” said Paul Gauci, Head of BOV’s Trustee Services Unit.

“Discretion and confidentiality are key features that result from having the account opened in the name of the Bank that acts as Trustee and that is responsible to hold the funds for the benefit of the named beneficiaries selected by the depositor (the Settlor),” explained Dr. Andrew Chetcuti Ganado, Legal Advisor at BOV’s Trustee Services Unit.

“Unlike any other bank account, upon the Settlor’s death, the designated beneficiary/beneficiaries of the BOV Trust Account will have immediate access to the funds in the account. As a result, this account is ideal to avoid any formal, lengthy and cumbersome succession procedures,” he added.

Dr. Chetcuti Ganado explained further that, unlike a will which is, effectively, a public document, the BOV Trust Account ensures that upon the Settlor’s death nobody needs to know who the designated beneficiaries are and how much each beneficiary is entitled to. He concluded that Malta is rapidly establishing itself as a centre of Trust Administration.

Indeed, in 2008, the Malta Financial Services Authority reported that there had been steady growth in the number of licences it had issued in the first seven months of that year, including in the trust sector. Five trustee services companies were registered during the period, with two of these companies offering fiduciary services.

The Report

Offshore Trusts Guide: Introduction

Offshore Trusts Guide: Jurisdictions

Bahamas Barbados Bermuda British Virgin Islands Cayman Islands Cook Islands Cyprus Gibraltar Guernsey Isle of Man Jersey Liechtenstein Madeira Malta Mauritius Monaco Nevis New Zealand Panama Seychelles Turks & Caicos Vanuatu

Malta News

Malta Reports Finance Sector Growth For 2017
Friday 6/4/2018
The Malta Financial Services Authority has released figures showing continued growth in the island's financial services sector during 2017, particularly in the areas of insurance business, investment services, investment funds, and trusts.

Malta Legislates To Adopt EU Anti-Money Laundering Standards
Wednesday 20/12/2017
Malta has transposed the EU's Fourth Anti-Money Laundering Directive into its domestic law, strengthening the island's anti-money laundering and countering the financing of terrorism regime.

International Support For Beneficial Ownership Info Exchange
Wednesday 27/4/2016
More than 20 jurisdictions have signed up to a pilot project to exchange data held on beneficial ownership registers and registers of trusts, according to UK Chancellor George Osborne.

Barclays Warns Expats Of Possible Account Closures
Thursday 23/7/2015
Barclays Bank has disclosed that it may close expat's accounts in Cyprus if they do not maintain a minimum balance of GPB100,000 (USD156,000).

DeMontford Bell Expands Malta Operations
Wednesday 15/7/2015
DeMontford Bell, the UK-headquartered financial introducer, has announced that it is to expand its permanent operations in Malta to support the high volume of business migrating there.

Guernsey Named Europe's Top Captive Domicile
Wednesday 28/1/2015
Guernsey has been named European territory of the year for captive insurance business for the third year running at the UK Captive Services Awards.

Malta Financial Services Sector Reports Strong Growth
Tuesday 8/7/2014

The Malta Financial Services Authority has reported that 2013 has been another successful year for the financial services industry, with strong growth in the number of registered funds and retirement schemes.

Malta Increases Oversight Of Corporate Service Providers
Wednesday 9/4/2014
The Malta Financial Services Authority has announced that it has received an overwhelming response to the introduction this year of licenses for Corporate Service Providers.

Malta Adapting Trusts Legislation, Regulations
Monday 10/3/2014
Maltese Minister for Finance Professor Edward Scicluna has outlined a raft of legislation to support the development of the island's trust sector.

Liechtenstein, Malta Sign DTA
Friday 4/10/2013
Liechtenstein's Foreign Minister Aurelia Frick and her Maltese counterpart George Vella have recently signed in New York a bilateral double taxation agreement between the two countries in respect of taxes on income and on wealth.