Offshore trusts under Maltese law : a comparative study

Abstract

The trust, as developed in courts of equity in common law jurisdictions and adopted with some modifications in other jurisdictions, is a unique legal institution. The vital role which this institution plays is epitomized by Maitland's celebrated statement that "if we were asked what is the greatest and most distinctive achievement performed by Englishmen in the field of jurisprudence I cannot think that we should have any better answer to give than this, namely the development from century to century of the trust idea." Indeed, the trust has witnessed its creation and evolution within the English legal system, and subsequently in other common law jurisdictions such as the United States, Canada, and Australia. Despite minor practical differences, the theory of the trust in pure common law jurisdictions is the same because the idea of the trust was conceived in one place, England, and in subsequent generations it was the British Empire (and later the Commonwealth) which perpetuated the concept fashioned and as developed in England. On the other hand, in civil law countries which consider ownership as an abstract concept in absolute terms, there is no institution comparable to the trust. However, this has not prevented certain civil law countries from introducing trusts into their legislation through the adaptation of the common law trust. Thus, comprehensive trust statutes are to be found, inter alia, in the legislation of Quebec, Louisiana, Liechtenstein, Panama, Puerto Rico, Mexico, Venezuela. Scotland and Ceylon. Malta, which has a predominantly Romano-Germanic civil law system, has followed suit, albeit in a limited manner, with the enactment of the Offshore Trusts Act in 1988. This Act follows closely United Kingdom Law on the matter and, in many respects, as codified in Jersey by the Trust Jersey Law of 1984. Jersey Law was chosen as the model for Maltese legislation following an examination of the trust laws of Liechtenstein, Jersey and two American States - Virginia and Delaware.