Technical article

Liechtenstein, Malta, Cyprus, Mauritius: Four European and Island Rules That Look Alike and Are Not

They look at four names on a list: Liechtenstein, Malta, Cyprus and Mauritius.

By Neil Solomon · 4 min read

Picture a couple from Canada with three grown children in three different countries. A friend tells them that smaller places make good homes for a family trust. They look at four names on a list: Liechtenstein, Malta, Cyprus and Mauritius. On the surface the pitch for each sounds the same. Local trustee, light tax, heirs live abroad.

The rules underneath are not the same. Here is what the sources show for each.

Liechtenstein

A trust whose seat or effective management is in Liechtenstein owes a yearly minimum corporate income amount of CHF 1,800 (about US$2,000). A trust set up for more than 12 months is entered in the Commercial Register. Both points come from Grant Thornton Switzerland (tier B, 2023).

Transfers into the trust can bring a 3.5% endowment tax when the settlor is not subject to unlimited tax in Liechtenstein. Chambers (tier B, 2026) gives that rate for some cases. The same guide says distributions to beneficiaries abroad carry no withholding tax.

Malta

Malta taxes a trust when a trustee lives in Malta. Income that arises in Malta is always taxable. If all the income comes from outside Malta, or is exempt, and every beneficiary is a non-resident or non-domiciled, the trust can be treated as transparent, so there is no tax at trust level (Fenech & Fenech, tier B, 2026).

A trustee's firm factsheet (tier C) says a trust may choose to be taxed like a company at 35%, with relief for tax paid elsewhere, that the choice must be made within 30 days and that it cannot be undone. Malta has no inheritance, gift or wealth tax. Transfer duty of 2% applies to marketable securities, and 5% to Maltese property.

Cyprus

A Cyprus international trust pays no tax on income and gains from outside Cyprus. Worldwide income is taxed only if a beneficiary is a Cyprus tax resident. Two conditions apply: the settlor and the beneficiaries were not Cyprus residents in the year before, and at least one trustee lives in Cyprus for the whole life of the trust. The resident trustee registers the trust with the Cyprus securities regulator, the accountants' institute or the Cyprus Bar Association. The register is not public and leaves out the settlor and beneficiaries. One law firm (tier C) puts stamp duty at EUR 427.50 (about US$470). These sources date from 2018.

Mauritius

A non-resident trust pays 15% on Mauritius-source income only. A resident trust pays 15% on worldwide income, with an 80% partial exemption on some foreign income when it has local substance. A trust is resident only if it is run in Mauritius with a majority of resident trustees, the settlor lived there at creation, and most beneficiaries live there. An annual return is due within six months of year end. Distributions count as dividends with no withholding, and heirs are taxed at home.

Older articles say a trust with only non-resident beneficiaries was exempt by filing a declaration. A 2021 law repealed that route from 1 July 2021, with existing trusts kept on it to 30 June 2024. The sources differ because they come from different years.

Side by side

You might say: "These look like footnotes." For a family with heirs in three countries, they are the small print that decides which door fits. One place charges a yearly floor. Another asks you to pick a tax route within 30 days. A third needs a local trustee for the whole term. A fourth taxed non-resident trusts as exempt until 2021.

You could ask each trustee for the rule in writing, with its date, and ask what changes if an heir later moves to that place.

Which of these four rules surprised you most, and why? Share it here. Another family may be reading the same list.

Figures are estimates for planning, based on public data. Date read: October 2026.