TCSPs are Trust or Company Service Providers which are regulated by the Trusts and Trustees Act and the Company Service Providers Act.
Various services fall under the remit of the TCSP, including the formation of companies and bodies corporate, acting as a Director or Secretary of a company under an arrangement with a person other than the company, or arranging for another person to act as a Director or Secretary of the company. TCSPs also act, or arrange for another person to act, as a partner in a partnership or as a trustee of a trust or even as a nominee share holder for a person other than a company whose securities are listed on a regulated market. A TCSP can also provide various services to a partnership or body corporate, including providing it with a registered office, a business address or a correspondence or administrative address.
Through Claris Trustees, Chetcuti Cauchi's fully authorised Trust company, our firm is in a position to offer TCSP services and help prospective Trustees and Corporate Service Providers with the attainment of a licence from the local regulator.
TCSP: Licensing of Trustees in Malta
Trustees, or corporate trustees, are sought by individuals who require their property to be held or vested in a trustworthy third party for the benefit of the beneficiaries. As per the Trust and Trustees Act, the duties of a trustee may be carried out in a professional or personal capacity. In either case, the law requires that a trust respects a number of criteria set by the law for the authorisation of trustees,
With the exception of certain persons as laid down in the law, any person, irrespective if such person is a Maltese resident or a person operating in Malta, who receives property upon trust or accepts to act as a trustee of a trust, must acquire a licence from the local regulator, the MFSA, particularly if a TCSP is entitled to receive remuneration for providing its trustee services and acting as a trustee on a regular basis. A licence is to be held, irrespective of which law governs the trust and where the property is located.
A written application must be submitted to the MFSA by prospective trustees who want to be authorised. A trustee will be granted authorisation if the MFSA is satisfied that all conditions laid down in the law have been fulfilled and the trustee can guarantee a high-level of professionalism to its future clients.
The law also indicates that authorisation may be granted as general, or it may be restricted to certain activities.
Qualifications to act as a Corporate Trustee
There are a number of conditions which must be satisfied for a company to offer trustee services:
- its objects must include the capacity to act as trustee;
- the company’s other objects must not include any activities which are incompatible with the function of acting as trustee;
- its directors must be a minimum of three (3) approved persons;
- the maintenance of records must be kept in adequate systems;
- only approved persons are to have a direct or indirect interest in the company;
- the company’s name must not be inconsistent with the activity of the trustee;
- in the event where the company is not registered in Malta, such registration must be in an approved jurisdiction.
TCSP: Licensing of Corporate Service Providers in Malta
The Company Services Providers Act defines a Company Service Provider (CSP) as any natural or legal person which, by way of business, provides any of the following services to third parties:
- Formation of companies or other legal entities,
- Acting as or arranging for another person to act as director or secretary of a company, a partner in a partnership or in a similar position in relation to other legal entities.
- Provision of a registered office, a business correspondence or administrative address and other related legal services for a company, a partnership or any other legal entity.
Prospective CSPs are also subject to a ‘fit and proper’ test to ensure that they can guarantee a fully competent service to their future clients. Once the MFSA is satisfied that a prospective CSP is fully compliant with the rules found in the Company Service Providers Act, the CSP must register by means of a notification letter which includes details regarding the type of licence /authorisation already held, the company services to be offered, the target market for such services and the expected level of company service business, along with a prescribed application fee.