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Maltese Registered Trusts

Net tax liability: Lm200

 

Until very recently, trusts were unknown to Maltese law, but with the development of the country as a financial services centre, a special law was enacted to allow for the setting up of trusts.

The advantage of trusts in Malta are several:

favourable taxation,

confidentiality,

control of assets,

no probate (both in the country of citizenship and residence and also in the country where the assets are);

the investment income from funds can be accumulated tax-free.

Taxation

Trusts established in Malta benefit from the following favourable tax treatment:

exempt from succession duty and stamp duty;

the property forming the trust can be freely imported to Malta without customs duty;

no exchange control restrictions.

income tax and capital gains tax are fixed at LM200 each year.

The law also provides for a Governmental guarantee against future or retroactive revocation of rights and exemptions.

Formation

Trusts must be created in writing, either by will, by unilateral declaration of trust or other written instrument. A unilateral declaration of trust is made by a nominee company acting as trustee and containing all the terms of the trust as well as information enabling the identification of the beneficiaries.

Neither the settlor nor the beneficiaries of a trust may be resident in Malta. Moreover, the trust property shall not include immovable property situated in Malta or shares of a company registered in Malta unless it is an ITC or IHC company.

Registration is effected by a Nominee Company acting as a trustee. The trust instrument is a highly confidential document and no person may be ordered to divulge to any authority (including any court) any matter relating to a trust.

Confidentiality

Under the Professional Secrecy Act 1994, lawyers, bankers, stock brokers and accountants cannot divulge any information about their clients unless international criminal activity (money laundering, drug dealing, etc.) is involved.

Moreover, Licensed Nominee Companies fall under the Malta Financial Services Centre Act 1988 which also requires such companies to protect the confidentiality of the beneficial owners they represent. All the services of MALTA-TAX are covered by these strict professional secrecy provisions.
 

See also:

Holding Companies

Double taxation treaties

A Malta base for Internet Betting Operations

 

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