Foundations have been operative in the Maltese legal regime for a long time, with case-law on the matter by the local Courts dating as far back as the 1930’s. However, ever since the enactment of Act XIII of 2007 which introduced the ‘Second Schedule’ to the Maltese Civil Code, foundations have received detailed formal recognition in Malta, with the possibility of being utilized as estate planning mechanisms in conjunction with other institutes provided for under Maltese law, such as trusts. Based on comparable Italian and French legislation, the law on foundations allows the founder to set up a ‘private’ foundation where the aim pursued by the founder is of private benefit to determined beneficiaries, or a ‘purpose’ foundation when charitable, non-profit purposes underlie the intention of the founder.
The institutes of trusts and foundations are somewhat analogous, sharing similar qualities, whilst also operating in a manner that is particular to each institute thereby making each institute specific to suit the needs of the particular case at hand. Thus, a foundation is set up when a founder settles assets therein, with the administrator/s managing the foundation and a supervisory council, if any, monitoring the running thereof, the foundation operating as a universality of assets administered in line with the terms of its constitutive deed. On the other hand, in a trust context, the idea is of the settlor placing assets in trust to be owned and controlled by the trustee in line with the trust deed.
Practitioners in the field must be adept at identifying the particular needs of prospective clients seeking to manage their estate via the adoption of these institutes and this in order to identify the arrangement best suited to the case at hand, whilst benefitting from the malleability and flexibility that the said institutes offer under Maltese law. In relation to this interesting sector of Maltese legislation, one must also consider the applicability of the Voluntary Organisations Act that provides for the registration of organisations including trusts and foundations with the Commissioner for Voluntary Organisations, applicable in cases when the organisation satisfies the legal requirements laid down by law in relation to being “non-profit making”, fulfilling a “social purpose” and being a “voluntary” organization in terms of law.
Our legal experts liaise with our clients to consider carefully the options that best suit their needs Thereafter our firm offers all the varied services that are required for the setting up of a foundation and its continued operation.