• Formalities and Proper Law

Our Act specifically provides that every trust must be created either by will or by a unilateral declaration of trust or by other written instrument.  The Act defines a unilateral declaration of trust as a declaration in writing made by a nominee company acting as trustee stating that it is the trustee of a trust, giving the name of the trust and containing all the terms of the trust as well as the names or the information enabling the identification of all the beneficiaries. 

Both the settlor and the beneficiaries of a trust must not be residents of Malta.  Besides, the trust property shall not include immovable property situated in Malta, or shares, stock or debentures of a company which is either registered in Malta or whose assets include immovable property situated in Malta.  Trust property may, however, include shares, stock or debentures in or of an offshore company registered in Malta. 

The proper law of a trust is determined in accordance with the Hague Convention on the law applicable to trusts and on their recognition which provides for the free choice of the applicable or proper law by the settlor and for the most closely connected law to apply if the settlor makes no valid choice. 

A trust may adopt either the law of Malta as its proper law, thereby its validity, construction, effects and administration shall be governed by the Maltese rules on trusts contained in the Trusts Act or else it may adopt the law of another trust jurisdiction, in which case it shall be governed by the proper law of the jurisdiction chosen and shall be interpreted and be enforceable accordingly.  These latter trusts are referred to in the Act as foreign trusts.  The proper law of a trust may, at any time, be changed from the law of Malta to the law of another jurisdiction.