Local legislation defines a foundation as “an organisation consisting of a universality of things constituted in writing, including by means of a will, by a founder or founders whereby assets are destined either:
- for the fulfilment of a specified purpose; and, or
- for the benefit of a named person or class of persons, entrusted to the administration of a designated person or persons.
The patrimony, namely assets and liabilities, of the foundation is kept distinct from that of its founder, administrators or any beneficiaries”
There are two types of foundations that can be set up in Malta. These are:
- Purpose Foundation – for the fulfilment of a specified purpose, charitable or philanthropic purposes as well as a non-profit organisation;
- Private Foundations – established for the benefit of a beneficiary or a group of beneficiaries.
An interesting feature of a Maltese foundation is that a foundation can have segregated cells. The segregated cell does not have separate legal personality; however the assets and liabilities of the cell are ring-fenced from other assets and liabilities of the foundation and/or other cells.
Why set up a foundation?
- Asset Protection;
- Securitisation vehicle;
- Succession planning;
- Family planning;
- Administrators subject to fiduciary obligations.