Malta has introduced another important update to its beneficial ownership framework – this time focusing on trusts and trustees. For families already using a Maltese trust, or considering one for succession, asset protection or long-term wealth planning, there is no reason to panic. Malta has had its Trusts Ultimate Beneficial Ownership Register (TUBOR) for years.
What has changed is the level of attention given to one simple question:
Who actually controls the Trust?
And increasingly, the answer depends not only on what title a person holds, but on what that person is actually allowed to do.
It is no longer enough to look only at the names in the trust deed
The beneficial owners of a trust generally include:
- the settlor;
- the trustee or trustees;
- the protector, where one exists;
- the beneficiaries or class of beneficiaries; and
- any other natural person who ultimately exercises control over the trust.
The last category is particularly important.
Someone does not necessarily need to be called a “trustee”, “protector” or even “beneficiary” to be relevant for beneficial ownership purposes. A person may still exercise ultimate control if important decisions cannot effectively be taken without their consent or if their instructions are binding.
Think of a family trust where an adviser, family member or other individual has the right to approve major decisions. For example, the trustee may technically administer the trust, but another person has the power to prevent the trustee from changing beneficiaries, replacing a protector, transferring substantially all of the trust assets or terminating the trust. In that situation, simply saying, “but this person is not formally a trustee” may no longer be enough. The regulator is increasingly interested in substance over title.
What kind of control matters?
The amended rules look particularly closely at individuals who can influence major decisions concerning the trust. This can include consent, veto or binding-direction rights relating to amendments to the trust instrument, changes to beneficiaries, appointment or removal of trustees or protectors, acceptance of an additional settlor, changes to the trust’s governing law, major transfers of trust assets, or termination or revocation of the trust.
For a straightforward family trust, this may make little difference. But it becomes much more relevant where the trust deed has been deliberately designed with reserved powers, veto rights or additional control mechanisms. And this is exactly where we would recommend reviewing the structure carefully rather than assuming that the existing TUBOR declaration remains correct simply because nobody’s formal title has changed.
Does this mean Maltese trusts are becoming public?
No, and this is an important distinction. TUBOR is not becoming an unrestricted public register where anybody can simply search for a family trust and see its beneficiaries.
Authorities dealing with AML/CFT, criminal investigations and related matters can obtain direct access. The new framework also facilitates access by relevant authorities in other EU Member States and certain EU bodies through interconnected beneficial ownership registers. Regulated or “obliged” entities can also obtain access where the information is necessary for customer due diligence. There is also a clearer framework for access based on legitimate interest.
Certain categories – including journalists, civil society organisations and persons likely to enter into a business relationship with a trust – may qualify for access under the circumstances specified by the legislation. Other applicants may need to demonstrate a genuine AML/CFT-related legitimate interest and provide supporting information to the MFSA. So the direction is certainly towards greater transparency. But greater transparency is not the same thing as unrestricted public disclosure.
What information may be available?
Depending on the basis on which access is granted, information may include details such as the beneficial owner’s name, nationality, country of residence, date or month of birth and the nature of their beneficial interest.
For certain categories of authorised access, historical information can also become relevant, including information relating to trusts that ceased to exist during the previous five years and information describing the ownership or control structure. Again, this is one reason why trust records should not be treated as something that is prepared once and then forgotten.
There is still privacy protection
The new rules recognise that transparency cannot come at the expense of personal safety. The MFSA may restrict access, fully or partially, in exceptional cases where disclosure would expose a beneficial owner to a disproportionate risk of fraud, kidnapping, blackmail, extortion, harassment, violence or intimidation.
Special protection may also apply where the beneficial owner is a minor or otherwise legally incapable. Each case is assessed individually rather than receiving an automatic exemption. For private families and international wealth structures, this is an important safeguard.
Accuracy now matters even more
Perhaps the most practical message from the reforms is this: TUBOR information needs to reflect reality – not simply the structure as it looked when the trust was first established.
The MFSA has stronger powers to investigate information which it believes may be inaccurate or out of date. The regime also provides mechanisms for discrepancies identified between registered information and information available elsewhere to be reported and addressed.
Imagine, for example, that a trust was created several years ago. Since then, a protector has changed, new beneficiaries have been added, one family member has acquired significant consent rights and the practical decision-making arrangements have evolved. The trust itself may still be perfectly valid. The problem arises if the beneficial ownership information filed with the authorities still describes the old reality. That is why beneficial ownership should increasingly be seen as an ongoing compliance exercise, rather than an annual box-ticking exercise.
And the penalties are no longer something to ignore
The new framework also strengthens enforcement. Where the MFSA has to update beneficial ownership information itself following a reported discrepancy, an administrative penalty of up to €100,000 may be imposed on the trustee concerned.
Providing information or documentation which is knowingly or recklessly false or misleading can lead to significantly more serious consequences. The message is therefore quite clear: an outdated or poorly analysed beneficial ownership position can now become considerably more expensive than simply carrying out the review properly in the first place.
What should trustees and families do now?
For many well-administered trusts, the answer is reassuringly simple: review rather than restructure. There is no automatic reason to redesign a trust simply because the legislation has changed. Instead, look again at the trust deed and at how the structure works in practice.
Who can veto important decisions? Who must give consent? Can anyone direct the trustee on material matters? Have beneficiaries, protectors or decision-making arrangements changed? And does the information currently held on TUBOR still give an accurate picture?
That exercise is particularly important for more sophisticated family structures where control has intentionally been divided between trustees, protectors, family members and professional advisers.
Malta trusts remain an important tool for succession planning, family wealth structuring, asset protection and long-term ownership arrangements. What is changing across Europe is the regulatory expectation surrounding them. A modern trust can still provide separation of legal ownership, continuity across generations and a structured governance framework. But privacy should no longer be confused with anonymity.
The regulatory direction is clear: authorities want to understand who ultimately owns, benefits from and, most importantly, controls the structure. For properly structured and professionally administered trusts, that should not be a problem. It simply means that the legal documents, the real-life governance of the trust and the beneficial ownership information reported to the MFSA need to tell the same story.
We assist international families with Malta trust and private foundation structures, including establishment, administration, compliance and coordination with professional advisers. Where an existing structure is already in place, we can also review whether its governance and beneficial ownership position remain aligned with the current Malta regulatory framework.