[e.g. Maltese]

Attractive foundation law

While foundations have been recognized and regulated in Malta for almost 200 years through Maltese case law and doctrinal writings, in 2007 Malta enacted specific legislation to clearly define their legal framework. Maltese foundations are today regulated by the Second Schedule of the Civil Code (Chapter 16 of the Laws of Malta), which dedicates an entire sub-title to foundations. The legislation allows for the set-up of two types of foundations: private and purpose foundations, which have particular uses and benefits for certain clients.

Private Foundations:.

These are set up for the benefit of a named person or class of persons called beneficiaries. The foundation's patrimony is owned by the foundation itself (due to its separate legal personality) and is administered by designated persons 9known as 'administrators') for the benefit of such beneficiaries.

Purpose Foundations:rycerz2

Such foundations have no ascertained or ascertainable beneficiaries but are established exclusively:

  • For any charitable, philanthropic or other social purpose;
  • As a non-profit making organization;
  • For any other lawful purpose 9not necessarily a social purpose and can be private purpose).

Separate legal identity

Unlike trusts, foundations have a legal personality and the foundation itself becomes the legal owner of the foundation property. Based on Maltese company law principles and Italian and French civil law provisions, Maltese foundations require the appointment of administrators who are responsible for the administration of the foundation's property and these are regulated under the Trusts and Trustees Act. The public deed crating a foundation must be registered. However, only a minimum of information is available to the public and confidentiality is retained.

Beneficial tax refunds

A foundation is treated as a company for tax purposes and subject to the normal corporate rate of tax and can benefit from the full imputation system, whereby the foundation would pay taxat the normal corporate rate of 35 per cent. Distributuons to the beneficiaries of a foundation are treaded as dividends, on which they can claim a 6/7ths refund of the corporate tax already paid, subject to certain conditions. Foundations may also opt to be taxed in the same manner as a trust, in which case the relevant provisions governing the taxation of trusts will apply.

Key Features of Foundations

Means of establishment:

A foundation can only be constituted in writing, either by a public deed or by a will.
The foundation deed must be registered with the office of the Registrar of Legal Persons.


  • The assets of a foundation may originate from any lawful business or activity and may consist of present of tfuture assets of any nature. The minimum endowment of money or pro0perty to set up a foundation must be worth at least 1,165 euro (and 233 euro for a foundation established exclusively for a social purpose or as non-profit making).

Foundation deed:

The foundation deed must contain the following information:

  • The name of the foundation, which name must include in it the word 'foundation';
  • The registered address in Malta;
  • The purposes or objects of the foundation;
  • The constitutive assets with which the foundation is formed;
  • The composition of the board of administrators and if not yet appointed, the method of their appointment;
  • The legal representation (a local representative is necessary, if the administrators of the foundation are non-Maltese resident); and
  • The term for which is established.


  • In the case of a private foundation, the deed of foundation must contain the names of the beneficiaries, or in the absence of such indication, a declaration that the foundation is constituted for the benefit of the beneficiaries. In the latter case, the beneficiaries must be indicated in a separate written instrument, which must be signed by the founder and addressed to the administrators. In order to protect confidentiality, the beneficiary statement need not be filed, in its stead a note of referring only to the founder is filed with the Registrar of legal person.

Legal Form:

Once the foundation is established and the deed is filed, a new legal person is created and the foundation itself becomes the owner of the foundation property.







Except when foundation are used as collective investment vehicles or in securitization transactions or in the case of purpose foundations (which may be established for an unlimited term), foundations are valid for a maximum term of 100 years from their establishment.


Rights of the founder:

  • The founder may exercise supervision over administration of the foundation, obtain copy af accounts, inventory and descriptive notes of property;
  • She/he may intervene in court proceedings concerning the appointment of administrators or the disposal of assets.

Conditions for the founder:

  • The founder may also be an administrator;
  • The founder may be a beneficiary during his lifetime, but cannot then act as sole administrator of the foundation.


Duties of the administrator:

  • The administrators (whether natural or legal persons) are responsible for maintaining possession and control of the property of the foundation, safeguarding such property and ensuring compliance with the statute of the foundation and the law;
  • They are bound by fiduciary obligations stipulated in the Civil Code. Any fiduciary who breaches such obligations shall be bound to return any property, together with all other benfits derived by him, whether directly or indirectly, to the person to whom the duty is owed.


Conditions for the administrator:

  • The administrator can be based outside Malta. However, a person resident in Malta must be appointed to act as the local representative of the foundation in this case;
  • The administrator may be the founder; however, in such situation, the founder cannot be the sole administrator.

Supervisory Protector:

The deed can provide for a supervisory council, or the office of protector. They usually exercise supervision over the acts of the administrators, and may be vested with powers of appointment or removal of administrators.