Thanks to their characteristics and efficacy, Trusts are instruments that are increasingly recognized and sought out for planning and tax purposes, succession planning, shareholdings or for protecting other assets.
Malta is one of the few civil law jurisdictions that have maintained the Anglo-Saxon concept of Trusts, while also developing its own legal framework, which allows recognition of Trusts created in accordance with foreign legislation, together with the creation of new Trusts, within a highly regulated, trustworthy and secure environment.
Regulation and security are in fact key aspects in the management of these instruments. A Trust exists when a trustee holds certain property with the obligation of administering it for the benefit of a third party (beneficiary), or for philanthropic or charity purposes. The trustee’s activity is highly regulated and controlled by the Malta Financial Services Authority (MFSA).
As such, a Trust is not an entity, but rather a legal relationship that does not have an independent legal personality. The property that makes up the Trust is independent from the assets of the settlor, trustee and beneficiaries, thereby ensuring greater protection.
Because a Trust is a legal institution with no legal personality it is not subject to registration or maintenance formalities, which results in very competitive administrative costs in comparison with those applied in other jurisdictions.
Download our Trusts in Malta Guide to get to know these instruments better and their advantages.
The amount of the minimum salary to be applicable in Madeira from the 1st October 2014 has now been approved.
The Autonomous Region of Madeira, in order to offset the constraints arising from the insularity costs and continuing its policy of increasing 2% compared to the minimum salary in force in mainland Portugal, determined that the amount to be applicable from October 2014 will be of € 515,10
This figure is important since it is used as a reference in various cases.
NEWCO is available to analyze what impact this update has on its clients.
In a statement recently released, rating Agency Fitch has affirmed Malta’s rating at ‘A’ with Stable Outlook.
The affirmation and the Stable Outlook reflect the fact that GDP growth is outperforming the eurozone average and Fitch expects it to continue, with above potential growth averaging 2.5% in 2015-16. The unemployment rate has also been below both the ‘A’ median and the eurozone average (5.7% in July), while the employment rate has risen, underpinned by the increasing female labour market participation rate.
With regard to public finances, Fitch considers that they remain a sovereign rating weakness but are on an improving trend. While public debt/GDP continues to exceed the ‘A’ median, Fitch’s public debt sensitivity analysis has marginally improved. Fitch forecasts that general government gross debt (GGGD) peaked at 72% of GDP in 2013 (73% in 2014-15 previously) and will decline marginally in the medium term, reaching 70% of GDP by 2020. Malta brought its general government deficit (GGD) under control during 2013. Deficit reduction in 2013 reflected strong increases in income tax and indirect tax receipts.
Malta’s sovereign credit profile benefits from a deep pool of domestic savings. Public debt is predominantly held by domestic investors and financing capacity is underpinned by a liquid banking sector. Despite its size, at seven times GDP in 2013, the banking sector is strong and has proved resilient to the eurozone crisis. The core domestic banks have a loan/deposit ratio of only around 66% and have not been drawing on any significant amount of ECB liquidity facilities. Banks are well-capitalised and the government has not had to provide capital or liquidity. Malta also has a robust net external creditor position relative to rating peers and positive international investment position.
Finance Minister Edward Scicluna said that “with this report the Maltese could put their mind at rest that the Government had achieved a sustained economic turnaround and that the country could optimistically look forward to higher economic growth and employment”.