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In today’s interconnected world, privacy in business ownership is increasingly valuable – especially for international investors and entrepreneurs. Malta, known for its investor-friendly environment, offers a highly respected mechanism to maintain confidentiality while ensuring compliance: fiduciary shareholding.
In this article, we’ll explore what fiduciary shareholding is, how it works in Malta, and why it’s a smart choice for those seeking discretion, asset protection, and tax planning efficiency.
What is Fiduciary Shareholding?
Fiduciary shareholding refers to the practice of holding shares in a company on behalf of another person or entity – the ultimate beneficial owner (UBO) – through a fiduciary (typically a licensed trustee or corporate service provider).
In this arrangement:
- The fiduciary is the registered shareholder.
- The UBO retains all economic rights and control over the shares.
- A fiduciary agreement ensures the Fiduciary Service Provider holds the shares only, without any beneficial interest.
⚠️ Important: A fiduciary is not a nominee shareholder. They carry legal responsibility and act based on a fiduciary obligation, not just a formal appointment.
Why Use Fiduciary Shareholding in Malta?
Malta offers a unique combination of confidentiality, regulatory compliance, and legal protection that makes it a preferred jurisdiction for fiduciary shareholding.
Confidentiality and Privacy
Malta’s public company registry lists registered shareholders, but not the beneficial owners in cases of fiduciary shareholding. This provides a layer of privacy for investors who wish to remain discreet – whether for personal security, competitive reasons, or strategic structuring.
Regulatory Compliance
Fiduciary arrangements in Malta must be conducted through licensed Corporate Service Providers (CSPs) – Fiduciaries, ensuring:
- Full compliance with anti-money laundering (AML) and counter-terrorist financing (CTF) regulations.
- Due diligence and Know Your Customer (KYC) processes are properly implemented.
Asset Protection
By separating legal ownership from beneficial ownership, fiduciary shareholding can:
- Protect assets from legal claims or political instability in the UBO’s home country.
- Enhance estate planning and cross-border asset management.
Ease of International Transactions
When dealing with mergers, acquisitions, or joint ventures, fiduciary structures allow for:
- Smooth transfer of control without public exposure.
- Simplified corporate governance, especially in family-owned or investor-backed businesses.
How It Works in Practice
- Engage a Licensed Fiduciary: Only authorized CSPs regulated by the Malta Financial Services Authority (MFSA) can act as fiduciaries. Pro Trust is here for you!
- Draft a Fiduciary Agreement: This legal contract details the terms under which the fiduciary holds the shares, including:
- No decision-making rights
- Obligation to follow instructions of the UBO
- Termination clauses and reporting obligations
- Register the Shareholding: The fiduciary is registered as the shareholder with the Malta Business Registry.
- Retain Ultimate Control: The UBO exercises control through private agreements and internal corporate documentation, such as powers of attorney or resolutions.
Common Use Cases
Fiduciary shareholding is often used in Malta by:
- International investors entering the EU market discreetly
- Family offices and private wealth managers
- HNWIs (High Net-Worth Individuals) seeking asset protection
- Crypto and fintech entrepreneurs needing privacy for early-stage ventures
- Yacht and aircraft owners using Malta entities for registration and tax planning
Legal and Tax Considerations
- Transparency obligations still apply under EU and international AML rules. UBOs must be disclosed to authorities (e.g., through the Beneficial Ownership Register), though not to the general public.
- Tax neutrality: Fiduciary shareholders are not taxed on dividends or capital gains; all tax obligations fall to the UBO.
- Trustworthy partners: Always work with reputable, MFSA-licensed fiduciaries to ensure legal compliance and peace of mind.
Discretion Meets Compliance in Malta
Fiduciary shareholding in Malta offers the best of both worlds: strong legal protection and privacy for business owners, along with full compliance with international standards. Whether you’re looking to safeguard your assets, maintain confidentiality, or simplify international business operations, this structure is a powerful tool in your corporate toolkit.
Backed by a stable jurisdiction and regulated fiduciary framework, Malta remains a top-tier destination for confidential, compliant, and efficient business structuring.
Want to learn more? Contact us today!
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