On the 1st of April, 2008, through the enactment of Act XIII of 2007, a new schedule to the Civil code (Chapter 16 of the Laws of Malta) was introduced, which deals specifically with foundations, thereby complementing and refining the long established Maltese jurisprudence and doctrinal writings on the institute.

A foundation consists of a group of assets (such as money or other property) which are pooled together to achieve those aims which the founder has established in the deed of foundation through the services of administrators. The term ‘foundation; includes all organisations, institutes or similarly titled patrimonies which are set up through a bequest, an endowment or appropriation of assets, however named, but does not include trusts.

Maltese legislation allows for the set-up of two types of foundations:

(a) Private Foundations: These are set up for the benefit of a named person or class of persons called beneficiaries. The foundation’s patrimony is owned by the foundation itself (due to its separate legal personality) and is administered by designated persons (known as ‘administrators’) for the benefit of such beneficiaries.

(b) Purpose Foundations: Such foundations have no ascertained or ascertainable beneficiaries but are established exclusively:

  • For any charitable, philanthropic or other social purpose;
  • As a non-profit making organisation;
  • For any other lawful purpose (not necessarily a social purpose and can be a private purpose).

A foundation can only be constituted either by a public deed or by a will. If a public deed is used as the means to establish a foundation then it would have to be published by a public notary and subsequently registered in the Public Registry. Unlike any other type of organisations, foundations must be registered for the purposes of legal personality.

Whilst foundations are used for similar purposes as trusts, foundations may prove particularly attractive to continental Europeans since they allow the founder to continue to maintain a level of control on the direction of the estate. Unlike trusts, foundations have a legal personality and the foundation itself becomes the legal owner of the foundation estate.