A foundation in Malta can be easily registered, helped by one of our local specialists. Those interested in registering a Maltese foundation can get in touch with our company formation agents in Malta who can manage the formalities and procedures implicated for incorporation of such a structure
| Quick Facts | |
|---|---|
| Definition of Maltese foundation | An organization created with specific purposes, assets, and liabilities apart from the founders and for the benefit of a person or group of persons |
|
Applicable legislation for foundations in Malta |
– Maltese Civil Code, Article 26 of the Second Schedule, – Voluntary Organisations Act, the Foundations Regulations |
|
Types of foundations in Malta |
Public or private |
| Purposes of foundations in Malta |
– charity, – philanthropy, – social purposes involving education, science, health, environment, – raising funds, etc. |
| Formalities for setting up a Maltese charity |
– registered address in Malta, – board of administrators, – local representative, – the purpose of the foundation through a deed of foundation |
| Minimum assets for a foundation in Malta |
At least EUR 1,160 |
| Type of assets for Maltese charity |
Money or properties |
| Can a foundation in Malta have commercial activities? (YES/NO) |
NO |
| Local bank account for a charity in Malta |
Required |
| Tax benefits | No withholding taxes, no stamp duties |
| Income tax for foundations in Malta |
35% |
| Redomiciliation permitted |
Yes, foreign foundations can be redomiciled in Malta |
| Obligations of a Maltese charity |
– at least 3 administrators with specific responsibilities, – raising funds for different social projects |
| Managing personal assets through Maltese foundation |
Yes, a very useful tool for estate planning and better control of assets |
| Services provided by our Maltese representatives |
– drafting the documents of the Maltese foundation, – support for registration, – collaboration with the relevant institutions |
The Maltese legislation on foundations
Foundations fall under the regulations of the following:
- Maltese Civil Code or Chapter 16.
- The Voluntary Organization Act part of the Maltese Law on Foundations.
Foundations may be established by natural persons or corporations in Malta. The law recognizes two types of foundations in Malta:
- the public foundation established with a specific scope,
- the private foundation established for a person or a group of individuals, called beneficiaries.
General requirements for foundations in Malta
A Maltese foundation can be established by public deed or by will. The first one must be published by a notary and be registered with Public Register in Malta. The conditions to set up a foundation in Malta are:
- • The minimum worth of assets when setting up a Maltese foundation must be of EUR 1,160 for foundations established for social purposes.
- • The name of the establishment must include the word “foundation”.
- • The assets of the foundation may consist of money or property.
- • The foundation must have a registered address in Malta.
The following information must be provided when setting up a foundation in Malta:
- • The purpose or beneficiaries of the foundations must be declared upon registration.
- • The assets constituting the foundation.
- • The board of administrators and the way it will be constituted.
Foreign corporations or individuals must appoint Maltese local agents who will represent the foundation. When setting up a foundation in Malta, the duration of the establishment must also be declared. The maximum validity term for foundations is 100 years, except for Maltese collective investment companies for which the validity term may vary.
You can ask our company incorporation agents in Malta about the registration of collective investment schemes as foundations.
Private foundations in Malta
In order to establish a private foundation in Malta, the name of the beneficiaries must be written in the deed of foundation. If the beneficiaries have not been mentioned in the deed, a declaration that the foundation is constituted for the benefit of others must be drawn. In this case, the beneficiaries must be indicated in other documents signed by the founder or founders.
Then, these documents must be addressed to the foundation’s administrators. In case of Maltaprivate foundations, the beneficiary statement may not be filed, the legal person being registered in its stead with the Maltese Companies Registrar.
Other facts about Malta foundation
Charitable foundations can have well-defined objectives. Some may raise funds for projects related to education, poverty alleviation, science, environment, religion, animal welfare, health, and medicine. There are also human rights foundations that raise money to help vulnerable people.
On the other hand, the Maltese foundation can register for a number of benefits, including those related to the tax system. Here are some other details about the foundation in Malta:
- It cannot have commercial activities unless the foundation owns a company.
- Malta Foundation can be involved in legacy planning strategy and wealth protection.
- It can also organize philanthropic events for fundraisers.
- Segregation of patrimony and opening a bank account are other benefits of the Malta foundation.
- Foundations in Malta are protected by the services of the supervisory council.
Understanding the purposes of a Maltese foundation
When you want to open a foundation in Malta, you must clearly establish its objectives. The founders are the ones who know exactly what they want to do with a Maltese foundation, and these things should be found in the documents of this entity. Here is other information:
- • A Maltese foundation can be used as a vehicle for securitization operations purposes.
- • It can be involved in charitable actions, fundraising in fields such as education, science, health care, social activities, etc.
We recommend those interested in company incorporation in Malta contact one of our specialists who can handle both the preparation of the documents and their registration with the relevant authorities. We are here if you want to set up a company in Malta.
How is a foundation administered in Malta?
Keeping accurate records of the charity’s assets is the first thing that a foundation administrator in Malta must consider. His or her attention also includes maintaining the control and possession of properties of a foundation and ensuring fulfillment with the charity ruling and applicable laws in Malta.
Also, everything related to the administration of a foundation in Malta involves keeping a clear line between the assets of the charity and the ones of the founders and beneficiaries, when it comes to liabilities and responsibilities.
What does the taxation of a foundation in Malta entail?
Probably a serious reason to set up a foundation in Malta is its taxation, which is quite advantageous. In this sense, income earned by a Maltese foundation is subject to a 35% corporate tax rate. However, around 5% of the paid tax returns to the beneficiaries as a refund.
Moreover, foundations in Malta may be subject to the same taxation regime as trusts. However, there are exceptions to this rule, and here we refer to assets of Maltese foundations located outside the country, as well as the generation of incomes.
We advise you to discuss all these aspects with one of our local specialists who can also deal with company formation in Malta, including foundations.
What are the benefits of a Malta foundation?
A foundation in Malta has many advantages. One of them is related to the rather attractive tax system, with certain tax exemptions. Here are some other benefits of a foundation in Malta:
- Are protected by laws and regulations imposed by the European Union.
- The administrators have the responsibility to respect the legal framework and to protect the foundation of which they are part.
- There are no stamp duties or withholding taxes for Maltese foundation.
- These entities may also open bank accounts in countries other than Malta.
- Segregation of patrimony is another benefit.
- The Supervisory Council has the power to change or remove the administrators of the foundation, if necessary.
- The redomiciliation of foreign foundations in Malta is possible.
Certainly, foundations in Malta that do not generate income in this country are advantageous from a tax point of view. On the other hand, the founders of charities can be both administrators and beneficiaries, which represents another benefit.
Foundations can also be registered for structuring estate planning or other financial projects. And last but not least, the assets, responsibilities, and liabilities of a charity in Malta are separate from those of the founders.
These are some of the advantages of a Maltese foundation that you should consider if you want to register such an entity.
How we can help you open a foundation in Malta
Our company formation agents in Malta have experience in this field. They can explain the formalities for opening a foundation in Malta. They can handle the application form on your behalf and create a foundation deed according to the established objectives. Then, they will proceed to draft the documents with relevant institutions, as well as to register from a legal point of view.
In addition to these formalities, our local agents can offer tax advice, real estate advisory, and family business review. Also, if you are a foreign national who wants to open a foundation in Malta, our agents will take care of the immigration formalities.
Why invest in Malta?
Malta is a small island state with several business advantages. Geostrategic position, international financial center status, and experienced workforce are other strengths of Malta’s business climate.
We also present some interesting statistics about the economic direction of Malta:
- Malta ranked 21st out of 132 economies in the world, according to 2022 Global Innovation Index.
- Around USD 231 million was the total FDI stock for Malta in 2021.
- According to the 2020 Doing Business report, Malta ranked 88th out of 190 world economies in terms of business climate and conditions.
For complete information about how to set up a foundation in Malta, you can contact our company formation agents in Malta.