The law regulating foundations in Malta is contained in Act XIII of 2007.
In reality, foundations are not new to the Maltese legal sphere: they have been employed by various sectors of society in a multitude of contexts but this use had, prior to the enactment of Act XII of 2007, been done in a somewhat disorganised fashion being dependent on judicial pronouncements.
There are various types of Foundations including governmental or private ones, those intended for a social purpose or otherwise and those that are non-profit making and those that are intended for profit.
In essence, the Act makes various amendments to the Civil Code and particularly creates a schedule to the Code that specifically deals with the various issues appertaining to organisations.
The Government of Malta also enacted a separate Act of Parliament -- the Voluntary Organisations Act, 2007 (VOA) -- that specifically regulates voluntary organisations and their administration. The VOA will work in conjunction with the Civil Code for those cases where the particular organisation qualifies as a ‘voluntary organisation’ (or non-profit making) as defined in the Law.
Accordingly, profit-making foundations are regulated by Civil Code whereas those foundations that also qualify as voluntary organisations are regulated further by the VOA.
Private Foundation: definition
The foundation is defined as follows:
an organisation consisting of a universality of things constituted in writing, including by means of a will, by a founder or founders whereby assets are destined either (a) for the fulfilment of a specified purpose; or (b) for the benefit of a named person or class of persons, and are entrusted to the administration of a designated person or persons. The patrimony, namely assets and liabilities, of the foundation is kept distinct from that of its founder, administrators or any beneficiaries .
When a foundation is established exclusively for a charitable, philanthropic or other social purpose or as a non-profit organisation or for any other lawful purpose it is referred to as a Purpose Foundation. When it is established for private benefit it is referred to as a Private Foundation.
This fact-sheet is concerned principally with Private Foundations though, in reality, most of the rules apply regardless to both categories of foundations.
Assets of the Foundation
These may originate from any lawful business or activity and may consist of present or future assets of any nature.
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