GTG provides assistance to companies in forming and administering corporate trusts. Such trusts are used for commercial transactions which under Maltese law may include any of the following:
- Securities offerings, whether to the public or for private placement, portfolio management and custody of investment instruments;
- Securitisation of assets;
- Grant of real or personal security interests including hypothecs, mortgages, privileges, pledges and guarantees;
- Collective investment schemes;
- Employee benefit or retirement schemes or arrangements;
- Syndicated loan agreements and other multi-creditor banking facilities;
- Insurance policies and the payment of proceeds thereunder; and
- Timeshare and multi-property structures.
Benefits under Maltese Law
The fundamental principle of a trust is to create a separate patrimony from that of the trustee so that it is exempt from seizure by the creditors of the trustee-debtor. Therefore the first advantage conferred by setting up a trust is that the trust property does not form part of the trustee’s assets upon its insolvency or bankruptcy.
The second advantage relates to resultant tax benefits, which under Maltese law revolve around the concept of “tax transparency”. This effectively means that income attributable to a trust is not charged to tax in the hands of a trustee if it is distributed to a beneficiary. On the other hand, income attributable to a trust that is not distributed to beneficiaries is charged to tax in the hands of the trustee at the rate of 35%. If all the beneficiaries are non-resident and all the income does not arise in Malta, there is no taxation under Maltese law.
Our expertise and services
GTG helps its clients better understand the advantages of trust formation in the light of the Trusts and Trustees Act (Chapter 331 of the Laws of Malta) and other relevant legislation, and provides a range of services in relation to:
- Setting up trusts, including their creation according to the specific demands of the client and registration with the competent Authority, that is, the Malta Financial Services Authority (MFSA); and
- Providing the services of trustee, administrator or executor of trusts through Finac Limited, a sister company of GTG, which is licensed by the MFSA to act as a trustee and to provide fiduciary services in terms of the Trust and Trustees Act.
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