Services · Trusts & private foundations

Malta private foundation

The Second Schedule to the Civil Code, minimum endowment, tax and registers. Open pricing, with the quote fixed in writing before work starts.

A Malta foundation is a legal person set up to hold property for beneficiaries or for a stated purpose. Unlike a trust, where the trustee holds the assets, a foundation owns them in its own name: it has a name, a registered address in Malta, governing bodies and an entry in a register. It is governed by the Second Schedule to the Civil Code (Chapter 16 of the Laws of Malta).

Malta is a rare case where both instruments work properly inside one EU jurisdiction - the common law trust and the continental foundation - and one can be converted into the other without liquidation. Below: minimum endowment, who runs the foundation, how it is taxed, what shows up in registers, and when a foundation is the wrong tool. The trust route is covered separately on Malta trust.

What a Maltese foundation is in law

A foundation has no members and issues no shares. The founder endows it with property, the foundation becomes the owner and deals with it under the rules written into the founding deed. The law recognises two types.

Two features are worth singling out. The first is segregated cells: within one foundation you can ring-fence groups of assets for different purposes, so the liabilities of one cell do not reach the assets of the others, even though a cell has no separate legal personality. The second is conversion - a foundation can become a trust and a trust a foundation, without liquidation, which lets the form follow changes in the family or in where the beneficiaries live.

One firm limitation: a foundation may not be set up to trade or carry on commercial activity. It may, however, be endowed with income-producing assets - a shareholding in a trading company, commercial property, a trade mark, a franchise. The foundation stays a passive owner while a company underneath it does the trading.

Setting one up: endowment, documents, registration

A foundation is created by public deed before a notary during the founder's lifetime, or by will. The deed must contain a defined set of particulars:

• the name, which must include the word Foundation;
• a registered address in Malta;
• the purposes of the foundation;
• the property with which it is endowed;
• the composition of its governing bodies or the manner of their appointment;
• a local legal representative where the administrators are not resident in Malta;
• the term of the foundation;
• for a private foundation, the beneficiaries, or a reference to a separate beneficiary statement.

The deed then goes to the Registrar for Legal Persons - the Foundations and Associations Unit within the Malta Business Registry. Once registered, the foundation receives a certificate and exists as a legal person. Every year, on the anniversary of registration, an annual fee is paid together with a statement of net assets supported by an audited profit and loss account.

The EUR 1,164.69 minimum endowment is symbolic and should not be read as the real cost of entry. What determines the cost is the notary's work, the administrator's fee, annual reporting and audit. A foundation endowed with the bare minimum and with no real substance looks weak both to a bank and to the tax authority of the country where the founder lives.

Who runs the foundation and how much control the founder keeps

Foundations are run by administrators. A private foundation needs only one, and it may be an individual or a body corporate. Administrators acting in a professional capacity must be authorised under the Trusts and Trustees Act - the same MFSA supervision that applies to trustees. Where all administrators sit outside Malta, a local legal representative is required.

It is usually the degree of founder control that tips the choice towards a foundation. The founder may be an administrator and may be a beneficiary, may appoint a protector or a supervisory council, and may reserve powers to approve certain decisions and to appoint administrators. There is one sensible limit: you cannot be the sole administrator and the sole beneficiary at the same time, otherwise the endowment is a fiction.

Beneficiaries have fewer rights than people expect. They cannot instruct administrators on how to deal with the property. On the other hand, unless the deed says otherwise, beneficiaries are entitled to access the foundation's records and information, and their rights cannot be interfered with by their own creditors or heirs.

The practical point: a foundation suits people who are not psychologically ready to hand assets to a third party and rely on his discretion. But the more powers the founder keeps, the more likely it is that his own tax authority will look through the structure and attribute the income to him personally.

Malta tax for foundations: two regimes to choose from

By default a Maltese foundation is taxed as a company. Administrators may, however, make an irrevocable election for it to be treated under the rules applicable to trusts, under the foundation income tax regulations introduced in 2010. That election is available only where the income consists of dividends, interest, royalties, rents, capital gains and income from investments.

Under corporate treatment the foundation has access to the same mechanisms as Maltese companies, including the participation exemption. There is a nuance that is rarely spelled out, though: the effective 5% does not appear by itself. The refund is triggered by a distribution to beneficiaries, requires tax registration, filings and processing time. If the foundation distributes nothing, you live with 35% at foundation level.

On duty: endowing a foundation with Maltese immovable property is charged at 5%, and with marketable securities at 2%. Foreign assets fall outside that charge. The wider picture is on taxes in Malta.

Foundation or trust: how to choose

This is the first thing we work through on a call. The answer depends less on the elegance of the structure and more on where the founder and the beneficiaries live, and how their local law treats each form.

A rough rule: if the beneficiaries are connected to the United Kingdom, the United States or other common law countries, a trust is the calmer choice. If the heirs live in continental Europe or Latin America, a foundation explains itself more easily because local lawyers have a familiar analogue. Alternatives outside Malta are worth comparing with a Liechtenstein foundation, an Austrian Privatstiftung and a Panama private foundation. The full set of forms is in the trusts and private foundations section.

Confidentiality, registers and reporting

A Maltese foundation offers reasonable privacy, not anonymity. The difference is fundamental.

• Beneficiary statement. The deed need not name the beneficiaries. It may state that the foundation is constituted for their benefit, with the beneficiaries identified in a separate statement signed by the founder, addressed to the administrators and authenticated by a notary. That statement is not filed - only a note of reference mentioning the founder goes to the registry.
• How records are kept. The Registrar for Legal Persons is obliged to keep the records of private foundations private, with access for persons who can show a legitimate interest. Court proceedings concerning private foundations are heard in camera, with confidentiality preserved.
• Beneficial ownership register. None of that removes the duty to disclose ultimate beneficial owners to the Malta Business Registry. The updated beneficial ownership framework came into force on 10 July 2026: the data set was widened, a tiered access model with a legitimate interest tier was introduced, and entities were given a transitional period to align their records.
• Automatic exchange. For CRS purposes a foundation is normally a passive non-financial entity or a financial institution. Either way, data on the founder, administrators, protector and beneficiaries flows to their countries of tax residence. The expanded CRS and crypto-asset reporting apply from 1 January 2026, with first exchanges of that data in 2027, implemented in the EU through DAC8.
• Annual filings. The statement of net assets with an audited profit and loss account is filed on the anniversary of registration together with the annual fee.

Who a Maltese foundation does not suit, and what can go wrong

An honest list of situations where a Maltese foundation creates more problems than it solves:

• You want to trade through it. The law forbids it: a foundation may not be established to trade or carry on commercial activity. It can hold a stake in a trading company, but it cannot operate one itself. That means another layer - a Malta company or one elsewhere - and with it separate accounts and cost.
• You are counting on 5% but do not plan to distribute. The reduced effective rate arrives through a refund triggered by payments to beneficiaries. With no distributions you are left with 35% at foundation level and cash tied up until the refund comes through.
• Your country of residence attributes the income to you. Russia treats a foreign foundation as a structure without legal personality, with notification duties and controlled foreign company rules. In Germany, income of a foreign family foundation can be attributed to the resident founder or beneficiaries under the external tax relations rules. Similar mechanisms exist elsewhere, which is why the local law check happens before registration, not after.
• You want to keep everything in your own hands. A foundation does give the founder more room than a trust, but there is a limit. Sole administrator, sole beneficiary and sole signatory on the accounts is not a structure - it is the founder under a different name.
• The assets are small. Notary, administrator, annual reporting and audit are recurring costs. With a modest estate the job is usually done by a will, clean ownership structuring or a marital agreement.

A few more things to weigh. Reserved portion claims do not vanish: Maltese law limits the reach of its own forced heirship rules where the founder was not domiciled in Malta when the property was transferred, but the rules of his country of domicile continue to apply. An endowment made while creditor claims already exist, or in the middle of a dispute, is open to challenge. The trust tax election is irrevocable. And opening bank accounts for the structure takes longer than for an ordinary company: banks ask for the deed, the beneficiary statement and evidence of the source of the endowed wealth.

How we work, timing and fees

We start with a consultation: the assets, the residence of the founder and the beneficiaries, the succession objective, and a check on whether a Maltese foundation really beats a trust or a structure in another jurisdiction. If it does not, we say so. Then we prepare the founding deed and the beneficiary statement, agree the administrators and the founder's reserved powers, coordinate the notarial execution and registration with the Registrar for Legal Persons, and go through the administrator's compliance process. After registration we handle the ongoing work: administrator support, documentation, annual filings, beneficiary questions and coordination with banks.

On timing: preparing the documents and agreeing the structure take the bulk of the time; registration itself moves faster once the file is complete. Plan for several weeks to the certificate, plus additional time for bank onboarding.

Prices are indicative and cover our work on a typical case. We confirm the exact quote in writing after a short call - you know the final number before we start. Government fees and bank tariffs are billed separately unless explicitly included.

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