MALTA TRUSTEES & the New Trusts and
Trustees Act, 2004
‘The Trustee’ or ‘Corporate Trustee’
The trustee is the person or persons holding or in whom the property
is vested on trust for the beneficiaries. Trustees are usually appointed
by, or as provided in, the trust instrument and in such number as may be
so provided. A trustee may be a natural person provided he is of full age
and legal capacity and not under any legal impediment to so act.
A trustee may also be a juridical person the objects of which include
acting as trustee. A corporate trustee can be defined as a trustee which
is any legal person wherever incorporated.
Authorisation of Trustees
Persons may carry on the activities as trustees either in a
professional or in a private capacity.
Any person, whether an individual resident or operating in Malta, or a
corporate trustee, registered or operating in Malta, who receives property
upon trust or accepts to act as a trustee or co-trustee of a trust and
receives or is entitled to remuneration for so acting, or
does so on a regular and habitual basis, or
holds himself out to be a trustee;
shall require authorisation by the MFSA in terms of the Act irrespective
of the proper law of the trusts they hold and whether or not at all or
part of the trust property is in Malta. Any person, whether individual or
a company may apply in writing to the Authority to be authorised as a
professional trustee. The Authority may grant authorisation upon being
satisfied that the conditions laid down at law have been met. Such
authorisation may be general or may be restricted to particular specified
An application for authorisation shall be made in the form and manner
required by the MFSA and shall furthermore:
contain or be accompanied by such information and particulars, in addition
to those required by law, as the Authority may require as may be
be verified in the manner and to the extent required by the MFSA, or as
may be prescribed;
contain the address in Malta for service on the applicant of any notice or
other document required or authorised to be served on him by or under the
be accompanied by such fee as may be prescribed in respect of the
The Duties of Trustees
The duties of trustees can be particularly onerous. As a matter of
fact, trustees shall in the execution of their duties and the exercise of
their powers and discretions act with prudence, diligence and shall
observe the utmost good faith. Trustees should treat the interests of
beneficiaries as paramount subject to their legal obligations to other
persons or bodies. Trustees are also bound:
to carry out and administer the trust according to its terms;
to safeguard the trust property from loss or damage;
to keep accurate accounts and records of the trusteeship and shall, upon
request by any beneficiary, disclose such accounts and records to such
beneficiary and provide copies thereof;
to provide full and accurate information as to the state and amount of the
to keep the trust property distinct and separate from their own property
as well as from any other property held by them under any other trust or
title, and separately identifiable therefrom;
to act jointly in the performance of their duties and powers in the case
to act impartially in the interests of all the beneficiaries;
not to delegate powers unless permitted to do so by law, by the terms of
the trust or by the court;
inform third parties with whom it is dealing that it is acting as trustee.
Trustees shall not without the authority of the court:
directly or indirectly profit from the trusteeship; or
cause or permit any person to profit directly or indirectly from the
on his own account enter into any transaction related to the trust
delegate his powers.
Trustees do not enjoy any benefits under any trust of which they are sole
trustees without the prior authority of the MFSA (where the trustee is
authorised by the MFSA) or the Court (in any other case). Furthermore
unless authorised by the terms of the trust, or by the consent in writing
of all beneficiaries or by any order of the court, a trustee is not
entitled to remuneration for services rendered. A trustee may reimburse
himself or pay out of the trust all expenses properly incurred by him in
connection with the trust.
Trustees are bound to follow the Code of Conduct issued by the MFSA.
The powers of trustees
A trustee shall, in relation to the trust property, have all the
powers of a natural person having the absolute title to such property. The
trustee shall exercise his powers in the interest of the beneficiaries and
according to the terms of the trust.
Establishing a trust company in Malta
Companies that provide services related to trusts may be incorporated and
managed in Malta in compliance with Maltese statutory requirements. These
companies usually provide administrative services in relation to trusts.
The MFSA may issue rules to establish which activities constitute
administrative services in relation to trusts and to establish the
criteria for the conduct of these activities.
Where such companies carry out or intend to carry out trustee services
along with routine administrative services, they would have to obtain
prior authorisation to act as corporate professional trustees from the
Redomiciliation of Trust Companies
The Continuation of Companies Regulations apply in that it is possible
for foreign trustee companies to relocate to Malta and effectively to
continue their operations from Malta without having to wind up their
operations in the original country as long as such foreign companies are
established in an approved jurisdiction.
Trustees must act in accordance with the regulations made under the
Prevention of Money Laundering Act, 1994 and follow the relative
Guidelines issued by the MFSA.
Taxation of Trust Companies
Companies that provide trust-related services and that are ordinarily
resident and domiciled in Malta are subject to the normal company tax rate
of 35% on their worldwide income. Where they are involved in international
activity it is possible for non-resident shareholders on a receipt of a
dividend to claim a refund of the tax paid by the company on the profits
out of which the dividend is paid.
Tax is paid in the currency in which the share capital of the company is
denominated. Any refund of tax is made in the same currency. Any tax
payable by the company with respect to profits derived from international
activities is not payable before the earlier of the date of distribution
of such profits or eighteen months after the end of the relevant
accounting period of the company.
This Section does not apply to income that is attributable to trusts in
respect of whom such company acts in its capacity as trustee.
Chetcuti Cauchi at IFA Paris 2011 the 65th
Congress of the International Fiscal Association | 09/09/2011
Malta Trust Law