Commercial & Private Uses
0% or 5% Taxation Rate
A Foundation is a legal entity combining the benefits of a company and a trust. A foundation can be used for a wide variety of benefits and purposes, including:
- asset protection
- consolidated asset management
- inheritance planning
- tax planning
- professional and impartial intermediary
Although a Maltese Foundation cannot itself have a commercial purpose, unlike a company, it can, however, be the passive owner of a commercial business, commercial property or other commercial asset.
Foundations provide a useful device for individuals and organizations in various structures and transactions. Individuals may use foundations in various situations such as to plan their financial affairs and provide for future generations in an efficient and practical manner.
The law on foundations provides an innovative development in that it caters for the creation of segregated cells within a foundation. Segregated cells allow assets and liabilities of an organization to be hived off and insulated from other assets and liabilities of the same organization. However, segregated cells are not vested with legal personality and do not constitute distinct persons at law.
In an organizational context, foundations may be used in commercial transactions including as collective investment vehicles, as securitization vehicles or as shipping organizations.
Personal & Social Uses
Foundations may be set up in Malta for the private benefit of one or more persons, or a defined class of persons in which the beneficiaries must be certain or for a particular purpose including a charitable purpose.
Once a foundation is established, a new legal person is created. Therefore, the foundation itself becomes the owner of the foundation property. Whilst the law on foundations is relatively new in Malta, foundations have been used in Malta for decades and we are at the forefront in this field with extensive experience.
Conversion to Trust
Another considerably advantageous characteristic of the law on foundations is that it provides for the conversion of a foundation into a trust and vice versa. By allowing this conversion, the law grants the opportunity to individuals and organizations to benefit form the diverse characteristics of the both structures depending on the circumstances that may vary form time to time.