Malta Foundations
The law on foundations adopts principles from the Maltese Companies Act, although it is largely based on Italian and French civil code provisions. The Maltese law on Foundations was introduced on the 1st of April, 2008 where the Second Schedule of the Civil code now dedicates an entire sub title to foundations.
It is possible to set up a private or a public foundation in Malta. A private Malta foundation is set up by the founder for the private benefit of one or more persons, or a defined class of persons in which the beneficiaries must be certain. On the other hand, a public foundation may be set up for a particular purpose, provided that it is a lawful purpose.
Once a foundation is established (in writing, via public deed inter vivos or a public or secret will), a new legal person is created. Therefore, the foundation itself becomes the owner of the foundation property. This is a significant variation from the trust concept as a trust does not constitute a separate legal person. As a result, with foundations there is no need to be concerned about the segregation of foundation property from property belonging to the administrators of the foundation.
The foundation board of administrators has powers of administration, representation and disposition vested in it by law, the deed of constitution or the beneficiary statement. The board of administrators is accountable for the management of the foundation. However, the founder may have a considerable amount of discretion in the administration of its foundation, since the law allows for it to be an administrator itself. This is not generally true of a trust, as it is the trustee which controls and administers the trust assets; the settlor plays no part in the day-to-day administration of the trust assets and it is the protector who may have the power to oversee the trustee in his administration of the trust fund.