Maltese private foundation
The Maltese private foundation is a legal entity that is separate from its members and consists of a set of assets that are intended for a specific purpose.
It is similar to a trust in many ways, but it is more flexible. This tool is used to protect an individual or family's wealth by separating it from potential creditors.
It can also be used to facilitate the transfer of wealth between generations.
The foundation is managed based on the wishes of the founder and its stated purpose, as outlined in its articles of association.
It can carry out a variety of activities, including investing and managing assets, and its beneficiaries are those individuals or organizations that are designated to receive the benefits of the foundation.
In comparison to a trust, the Maltese private foundation has more flexibility in terms of its management and the ability to make changes to its structure.
It is also subject to different tax considerations.
The foundation must be set up while the individual or family has no outstanding debts in order to be effective in protecting their assets.
One unique aspect of the Maltese private foundation is that it can have non-resident administrators. This can be beneficial for individuals or families who wish to manage their assets from abroad.
It is important to note that the foundation must still comply with Maltese laws and regulations, regardless of the location of its administrators.
In terms of tax considerations, the Maltese private foundation is subject to a flat rate of tax on its income and capital gains.
It is also exempt from tax on any foreign-sourced income that is not remitted to Malta.
This can make it an attractive option for individuals or families with international assets or businesses.
It is worth noting that the foundation's beneficiaries may still be subject to tax on the benefits they receive from the foundation, depending on their personal tax situation.
When considering the use of a Maltese private foundation for asset protection, it is important to carefully consider the specific goals and needs of the individual or family.
It may be advisable to seek the advice of legal professional in order to determine the most appropriate course of action.
The Maltese private foundation can be a useful tool for segregation of assets and intergenerational wealth transfer, but it is important to carefully consider all of the potential implications before proceeding.