Trusts are determined in Malta with the law on trusts of 2004 (previously it was the Law of 1988). Law determines the possible authorization and establishment of the trust; activities are supervised by the Maltese competent authority, with extracts from the Hague Convention on recognition and operations of trusts.
Under the law of 1994, all trusts in Malta are divided into two types: Trusts of Malta (governed by the law of 2004 on trusts) and trusts governed by other countries jurisdiction that the founder has chosen.
Trust managers in Malta could be divided into two classes:
Private- who is recognized as the natural person who is a relative of the founder or during long period of time (10 years) knows him, but he does not claim to any reward for his work, and does not become a systematic manager.
Professional- offering services as a manager and receives reward for this activity. The manager must obtain a work permit in Malta Financial Services Authority. The Manager may be a natural person who is a resident of the island, or a legal person registered in this jurisdiction.
For trust registered in another jurisdiction, there is no registration requirement in the Financial Services Authority, but it is desirable and advantageous, because the registered foreign trust receives tax exemptions. In the properly registered trust must work at least one Maltese professional manager.
Trust legislation requires maximum term of trust activities- 100 years, the charitable trusts have unlimited duration. Malta does not recognize fixed heritage arrangements within the Trust.
If the income from the trust is distributed to the beneficiaries who do not live in Malta, and a trust receives income in foreign countries, there is no tax base on the island. By contrast, beneficial owners pay tax on income earned from trust activities.
The Law of Trusts guaranteeing the confidentiality of information about the founders, beneficiaries, financial assets and trust activities, and the person who manages the following information, and disclose it is punished according to the law, including imprisonment.