Setting up a Trust in Malta – Tax Advantages

Setting up a Trust in Malta - Tax Advantages

Establishing a trust in Malta can provide significant tax advantages for both settlors and beneficiaries. Malta’s trust legislation offers a range of benefits, including asset protection, confidentiality, and flexibility in the administration of trusts. Additionally, Malta has a favorable tax regime for trusts, with the potential for tax exemptions on certain types of income. In this blog post, we will delve into the various tax advantages of setting up a trust in Malta, exploring how individuals can leverage these benefits to optimize their wealth management strategies.

Legal Framework for Trusts in Malta

The legal framework for trusts in Malta is highly developed and offers numerous advantages for individuals looking to set up a trust in the country. The Malta Trusts and Trustees Act provides the foundation for the regulation and operation of trusts in Malta, while the country’s strong legal system and political stability further contribute to the appeal of establishing a trust in Malta.

The Malta Trusts and Trustees Act

Trusts established in Malta are governed by the Malta Trusts and Trustees Act, which provides a comprehensive legal framework for the creation, administration, and regulation of trusts in the country. The Act ensures that trusts are established and maintained in accordance with best practices and international standards, providing a high level of transparency and security for settlors and beneficiaries.

Classification of Trusts under Maltese Law

Malta offers a flexible classification of trusts, allowing for various types of trusts to be established under Maltese law. These include discretionary trusts, fixed interest trusts, charitable trusts, purpose trusts, and more. The ability to choose the most suitable trust structure based on individual circumstances and objectives is a key advantage of setting up a trust in Malta.

Plus, Malta’s recognition of foreign trusts and adherence to the Hague Convention on the Law Applicable to Trusts and on their Recognition ensures that trusts established in Malta are widely recognized and respected internationally.

Setting up a Trust in Malta

Assuming you are considering setting up a trust in Malta, it is important to understand the process and requirements involved. Malta offers an attractive option for setting up a trust due to its tax advantages and robust legal framework.

Steps to Establish a Trust

Trust establishment in Malta involves several key steps. The first step is to appoint a trustee, who will be responsible for managing the trust assets and carrying out the intentions of the settlor. Next, the settlor must determine the beneficiaries and the terms of the trust. Once these decisions are made, the trust deed must be drawn up and executed. Finally, the trust must be registered with the Malta Financial Services Authority to ensure compliance with regulatory requirements.

Required Documentation and Legal Formalities

The establishment of a trust in Malta requires the submission of various documentation and compliance with legal formalities. These include the trust deed, identification documents for the trustees and beneficiaries, and evidence of the initial trust property. Additionally, the trustees must ensure that the trust is compliant with anti-money laundering regulations and obtain any necessary licenses or permits.

A thorough understanding of the required documentation and legal formalities is essential for a smooth and successful establishment of a trust in Malta. Working with experienced legal and financial professionals can help navigate the complexities of the process and ensure full compliance with all regulatory requirements, maximizing the benefits of setting up a trust in Malta.

Tax Advantages of Maltese Trusts

Your decision to set up a trust in Malta can be greatly influenced by the tax advantages it offers. Malta has a beneficial tax regime for both trusts and their beneficiaries, making it an attractive jurisdiction for individuals seeking efficient tax planning and asset protection strategies.

Taxation of Trusts and Beneficiaries

Beneficiaries of Maltese trusts enjoy favorable tax treatment, as they are only taxed on income actually received from the trust, and are exempt from tax on income retained in the trust. Furthermore, trusts established in Malta are not subject to capital gains tax, wealth tax, or inheritance tax, making it a highly favorable environment for wealth preservation and succession planning.

Specific Tax Incentives for Foreign Beneficiaries

To encourage the use of trusts in Malta, foreign beneficiaries of Maltese trusts can benefit from specific tax incentives. These include the possibility of claiming relief from double taxation, as well as the option to benefit from Malta’s extensive network of double tax treaties. Such incentives make Malta a strategic choice for individuals seeking to minimize their global tax liabilities while ensuring compliance with international tax regulations.

Incentives such as these position Malta as a leading jurisdiction for tax-efficient wealth management and succession planning.

Case Studies: Successful Tax Planning through Maltese Trusts

Beneficiaries of Maltese trusts have successfully utilized the tax advantages offered by the jurisdiction to achieve efficient tax planning and wealth preservation. Some examples include:

  • Case study 1: A foreign beneficiary minimized their global tax liabilities by establishing a trust in Malta, leveraging the country’s beneficial tax regime.
  • Case study 2: A high-net-worth individual successfully protected their assets and minimized tax exposure by utilizing a Maltese trust structure.
  • Case study 3: An international family achieved seamless succession planning and wealth preservation through the establishment of a trust in Malta.

Advantages such as these demonstrate the effectiveness of Maltese trusts in facilitating successful tax planning and asset protection strategies for individuals and families with global interests.


So, setting up a trust in Malta offers significant tax advantages for individuals and families looking to protect and grow their wealth. By taking advantage of Malta’s reputable tax regime and flexible trust laws, individuals can minimize tax liabilities, preserve assets for future generations, and benefit from a secure and well-regulated financial environment. With its strategic location, stable economy, and attractive tax incentives, Malta continues to be a preferred jurisdiction for setting up trusts and managing wealth effectively.


What are the key advantages of establishing a trust in Malta?
Malta offers tax advantages, asset protection, confidentiality, and flexible trust administration.

What legal framework governs trusts in Malta?
Trusts in Malta are regulated by the Malta Trusts and Trustees Act, ensuring transparency and security.

How flexible is the classification of trusts under Maltese law?
Malta allows various trust types, including discretionary, fixed interest, charitable, and purpose trusts.

What steps are involved in setting up a trust in Malta?
Key steps include appointing a trustee, defining beneficiaries, drafting the trust deed, and registration.

What tax advantages do Maltese trusts offer to beneficiaries?
Beneficiaries enjoy favorable tax treatment, with exemptions from certain taxes and specific incentives for foreign beneficiaries.


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