Trust types and roles under Malta law

Trust categories and arrangements

The procedures name discretionary, testamentary, and bare trusts as examples of trust categories. They also refer to commercial arrangements such as employee benefit trusts and share option structures, unit trusts operating as collective investment schemes, and trusts used with syndicated loans or securities.

The procedures also refer to trusts established under testamentary arrangements and trusts set up for vulnerable persons, including people with special needs or disabilities. Purpose trusts and charitable trusts appear as possible categories of beneficiaries designated by class, and subject persons establish the purpose for which a purpose trust operates.^[2]

The procedures also recognize trusts with and without separate legal personality as possibilities across jurisdictions. For trusts governed by Maltese law, they state that a trust has no legal personality. In that setting, trustees acting in their capacity for the trust are treated as the customers for customer due diligence purposes.^[2]

Trust roles and beneficiaries

The procedures describe trustees as the persons vested with administration of a trust. Where the trust lacks separate legal personality, the trustees, acting in their trust capacity, are the customer for the procedures' due diligence purpose.^[2]

For identification, the procedures call for information about the trust's full name, nature, object and purpose, country of administration, and applicable law. Verification ordinarily may use the trust instrument or an extract of relevant parts. If a trust is created verbally and has no written deed or similar instrument, the procedures say verification can instead use a signed declaration by the trustee containing the specified information.^[2]

The procedures distinguish beneficiaries from the broader due diligence category called beneficial owners. Beneficiaries are people who can actually or potentially benefit from the structure. For the procedures' identification purpose, the beneficial owner category also includes the settlor and trustees, and may include a protector or other person exercising ultimate control.^[2]

A beneficiary may be identified by name or by characteristics that define a class. Where class members have not yet been determined and are not named, the procedures state that identification and identity verification take place at payout or when beneficiaries exercise vested rights. A beneficiary's benefit may depend on trustee discretion or a condition occurring.^[2]

A protector, supervisory council member, guardian, or enforcer may be relevant where applicable. The procedures also describe control powers that can include directing or withholding consent to certain powers, and explain that a protector may have powers under an instrument to approve or block decisions or to appoint or remove trustees.^[2]

Purpose and trust records

The procedures recognize that a trust instrument may not contain every relevant identity detail. A settlor may be unnamed in a unilateral declaration, and beneficiaries may be named in another written instrument. Those persons remain within the identification and verification process. It also allows risk-sensitive follow-up information where beneficiaries are named but unaware of an entitlement or where a distribution depends on discretion or a condition.^[2]

In more detail

The procedures include later contributors within the reference to the settlor. This covers a person who adds property to the trust settlement after its creation, as well as the original settlor.^[2]

For a trust registered in an official registry, the procedures allow the subject person to consult that registry as an alternative verification source. They also call for attention to registration limitations that may affect the quality and reliability of the information.^[2]

Key points

A beneficiary can be a body corporate, a body of persons or a legal arrangement. In that case, the procedures require the subject person to identify and verify that beneficiary's beneficial owners.^[2]

Related reading

Malta's Trusts and Trustees Act is Malta's principal statute governing trusts. See Malta reporting frameworks and U.S. trust forms for related reporting topics. Malta rules for trustees and fiduciaries addresses Malta's framework for professional trustees and fiduciaries. Malta trusts and U.S. reporting requirements connects these topics in a broader Malta guide for U.S. readers.

Questions and answers

Related resources

Related glossary terms

• Charitable trust: A charitable trust holds property for charitable purposes, and trust laws relate it to purpose trusts and to the other categories of trust used in planning.
• Trust: The Hague Convention describes a trust as a relationship in which a settlor places assets under a trustee's control for beneficiaries or a specified purpose.
• Financial account (CRS): The Common Reporting Standard defines accounts at financial institutions, including deposit and custody accounts, plus equity and debt interests and insurance.

Related articles and guides

• Malta's courts and legal system: Malta's court structure, the Constitution's role and the appeal routes, with the site where Maltese legislation is published, for U.S. citizens reading its law.
• Trust types and duration under Mauritius law: Mauritius's Trusts Act describes trusts for beneficiaries, purposes, or both, and defines who may benefit. Beneficiaries may exist or be identified later.

Tools and official documents

• Foreign trust reporting role finder: Tick the roles that describe a connection to a foreign trust or foreign account to see the forms the IRS and FinCEN instructions discuss. Roles can overlap.

Related pages

• Malta: overview: Start page for this jurisdiction.
• Trust legislation
• Trustee regulation and licensing
• Taxation of trusts
• Reporting and information exchange