Press release -

Advantages of Malta Private Foundations for Polish Nationals



After 1989, Poland embraced the ideals of an open market economy. Affirming a once long-suffering entrepreneurial desire and spirit, eventually birthed many prosperous businesses and successful family enterprises. The Polish business class, over the last few decades, has managed to catch up with the rest of the developed Western world, and has even started to accumulate private wealth.

Presently, many are seeking effective ways of managing and protecting their legacy, and sequentially passing it over to next generations. The Malta private foundation has taken a lead in Europe as an efficient and safe legal tool for asset protection, wealth management and succession planning. In recently years, due to this, the Malta private foundation has become one of the most popular solutions amongst international investors and businesses.

Asset Protection & Wealth Management

A Malta private foundation is set up for the benefit of a named person or persons, or a class of persons known as beneficiaries. The foundation has a separate legal personality and thus, can go on to be the legal owner of assets endowed on it by the founder or other persons. The assets owned by a Malta private foundation are administered for the benefit of existing and/or future beneficiaries, by specially designated persons called administrators.

The legal personality of a Malta private foundation allows for a creation of a different patrimony, as well as complete segregation of assets from the private wealth of the founder. Assets endowed into the foundation are therefore out of reach for potential creditors. Thus, a Malta private foundation can effectively safeguard any assets that the founder wishes to protect from liabilities.

The careful oversight employed by the foundation’s administrators, in turn, ensures safety and peace of mind. The statute of the foundation, nevertheless, grants its founder solid supervisory powers over the foundation and its administrators. The founder is therefore always certain of how his assets are being managed, as he has the final say as to how this is done.

Succession Planning

A Malta private foundation is one of the most efficient tools of wealth allocation and distribution between beneficiaries – which are usually the heirs, after the founder’s death or at any other time set by the founder themselves. Upon endowment of the foundation, as aforementioned above, the assets no longer form part of the founder’s estate and are therefore not subject to obligatory legitim (zachowek) under inheritance laws. The founder may, instead, precisely distribute the foundation assets between beneficiaries who may, but do not, have to form part of their immediate family.

Using the Malta private foundation set up may very well prevent the splitting up of estates. This is particularly important for owners of family businesses who want to suppress any potential legal disputes between heirs. In such a situation, it is essential that a smooth process of post-mortem transition is guaranteed, as not to paralyze the company’s operations and go on to adversely affect the goodwill carefully established with the passage of times.

A Viable Alternative to a Trust

While well-grounded in common law jurisdictions, trusts have never been too present in the civil law doctrine countries of Continental Europe, such as Poland. Subsequently, wealthy Polish individuals and successful business often prefer to use legal entities recognised under Polish laws.

A Malta private foundation, therefore, is an ideal solution for effective and compliant wealth-management and succession planning. Even though Polish laws only cater for non-profit foundations, Maltese law recognises all foundations – including foreign private foundations such as entities with a separate legal personality and patrimony, which has its own rights and obligations, and can in turn be sued or sue.

A Polish client, effectively, when choosing to opt for a Malta private foundation over a trust, will be granted a higher degree of legal certainty. 

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Topics

  • Corporate Information

Categories

  • asset protection
  • succession planning
  • corporate

Chetcuti Cauchi Advocates is an International law and professional services firm, with offices in Malta, Cyprus, London, Zurich and Hong Kong, advising high net worth international families and their businesses on residency & citizenship, wealth management, acquisition of property, fintech and more.

Contacts

Mr Steve Muscat Azzopardi

Senior Manager, Corporate and Fintech +356 22056608

Dr Priscilla Mifsud Parker

Senior Partner Corporate and Trusts +356 22056603

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