Foundations

Foundations provide a useful device for individuals and organizations in various structures and transactions. Individuals may use foundations in various situations such as to plan their financial affairs and provide for future generations in an efficient and practical manner. In an organizational context, foundations may be used in commercial transactions including as collective investment vehicles, as securitization vehicles or as shipping organizations. Foundations may be set up in Malta for the private benefit of one or more persons, or a defined class of persons in which the beneficiaries must be certain or for a particular purpose including a charitable purpose.

Once a foundation is established, a new legal person is created. Therefore, the foundation itself becomes the owner of the foundation property. Whilst the law on foundations is relatively new in Malta, foundations have been used in Malta for decades and we are at the forefront in this field with extensive experience.

The law on foundations provides an innovative development in that it caters for the creation of segregated cells within a foundation. Segregated cells allow assets and liabilities of an organization to be hived off and insulated from other assets and liabilities of the same organization. However, segregated cells are not vested with legal personality and do not constitute distinct persons at law.

Another considerably advantageous characteristic of the law on foundations is that it provides for the conversion of a foundation into a trust and vice versa. By allowing this conversion, the law grants the opportunity to individuals and organizations to benefit form the diverse characteristics of the both structures depending on the circumstances that may vary form time to time.

The foundation can also be used in a charitable or social context. Indeed, the spirit of corporate patronage and the laws on corporate philanthropy in certain states which encourage the creation of foundations by corporations with philantropic purposes is moving numerous corporations to create foundations. Moreover, a growing number of business organizations are using corporate philanthropy as major corporate strategy to improve their competitiveness in the international market. We are aware that many corporations are committed to underwriting worthy causes and raising awareness about important issues and this can be done very efficiently through a Maltese foundation.

We can provide a full spectrum of services in relation to all types of foundations, from giving advice, to setting up foundations to their on going administration through one of our affiliate companies.