Special Purpose Vehicles and Trusts

At the centre of Malta’s offering to the Islamic finance community is the Special Purpose Vehicle, which has become a key element in Islamic finance transactions.

Malta is attracting increasing numbers of investors and high-net-worth-individuals from the Middle East and North Africa, enticed by the country’s geographical proximity, EU membership and, more importantly, its excellent wealth management, estate planning and corporate finance offering.

Special purpose vehicles (SPVs) can take the form of a limited liability company or a trust in Malta. There are numerous benefits in establishing SPVs in Malta. In fact, Malta’s competitive tax regimes for companies, and for trusts, make the country the ideal location to establish SPVs.

Coupled with the country’s wide network of double taxation treaties, the island offers an advantageous EU and eurozone location for the structuring of various transactions, ranging from purchasing and holding property to other corporate and financing solutions.

Where a Malta SPV is used in an Islamic finance transaction, it can be particularly useful when combined with a Malta trust holding the shares in the SPV. Malta trusts are effective and reliable, and can offer customised solutions for wealth management as well as succession planning. In the trust deed settlors can define how assets are distributed to the beneficiaries so that they are in accordance with Islamic rules of succession.

SPVs and trusts are regularly used for Islamic finance transactions through Malta. As the island develops its Islamic finance infrastructure and expertise further, other vehicles of Malta as an International Finance Centre can be adapted to the Islamic moral order that governs finance.

Types of Trusts

  • Discretionary trust
  • Accumulation and maintenance trust
  • Fixed interest trust
  • Spendthrift trust
  • Charitable trust
  • Unit trust