Malta: REITS – A Global Comparison Of Legal Structures

Last Updated: 4 June 2019
Article by Priscilla Mifsud Parker

Several jurisdictions worldwide have implemented a framework that allows investors, be they small or large, the possibility to invest directly in the rental property market through a financial instrument offered on the capital markets.

These frameworks are generally referred to as Real Estate Investment Trusts (REITs). However, different jurisdictions have employed highly diverse legal structures to regulate them.

While the legal framework established for these investment vehicles varies considerably from one jurisdiction to another, REITs have gained popularity due to the fact that there is an obligation to distribute the vast majority (generally up to 90 per cent) of their annual profits to their shareholders in the form of dividends.

Although REITs have long been established in several countries, Malta's interest in this investment regime arose relatively recently.

In the 2019 Budget speech, the Maltese government announced that it would establish the regulatory, fiscal and administrative processes that will enable REITs to launch and trade on the Malta Stock Exchange (MSE).

This development is welcome and will make available to the public a new asset class that derives rental income, as opposed to other instruments on the market that have, to date, targeted speculative capital gains in property.

Such a move will permit those investors who are unable to acquire real estate directly to benefit from the rental returns in the local property market. The REIT structure will also provide liquidity to the real estate market which is notoriously illiquid.

How do REITs differ from property companies?

Unlike a listed property company, REITs aren't created to develop real estate properties and resell them. Their main objective is to acquire real estate properties with the sole aim of renting such properties and to manage them as part of an investment portfolio.

Generally, REITs are listed entities with their shares being freely transferable on the main market. To avoid abuses and mitigate the inherent risks of the property market, most jurisdictions require that REITs must hold more than one property, and no single property in their portfolio can constitute more than 40 per cent of the value of the total properties owned by the REIT.

Common features among foreign REIT regimes

Market research by one of the larger auditor companies revealed that the number of countries which offer REITs as investment vehicles has increased substantially in the last decade to 37. Despite differences in structure and nomenclature, identifying REIT frameworks worldwide is a matter of substance over form, since different jurisdictions have developed different frameworks, but key constant features can be identified in each regime.

Legal structure of REITs

A number of jurisdictions allow significant flexibility with respect to the legal structures available to REITs and allow REITs to be structured in various ways under their local frameworks. By way of example, the US, which was the first jurisdiction to enact a framework for REITs back in the 1960s, allows these investment vehicles to be set up as a corporation, a trust or an association.

Japan also allows REITs to set up as investment trusts or investment corporations, but market practice shows that all Japanese REITs have been set up as corporations. Greece also allows REITs to be set up as real estate investment companies or as unit trusts in the shape of real estate mutual funds.

Belgium, which allows REITs to be set up as regulated real estate companies through a public limited company or a partnership with limited shares, has also introduced a new regime known as the specialised real estate company.

It is also highly common for regulators to require REITs to be listed on stock exchanges, although certain foreign REIT regimes do allow flexibility in this respect.

By way of example, Singapore has interestingly given companies the possibility not to list their shares publicly on stock exchanges, however, only listed REITs may benefit from the beneficial tax regime open to them – the aim clearly being to facilitate participation in the real estate market by the public.

A number of jurisdictions have opted for a trust structure, namely Australia, Hong Kong, India, Malaysia and Mexico. Some jurisdictions have opted to structure REITs as funds or fund-like structures such as Canada, which has opted for a mutual fund trust, while Luxembourg and Singapore utilise the unit trust structure.

However, the vast majority of jurisdictions, including France, Germany, South Korea, Spain and the UK, favour a public limited company or a joint stock company.


Compared to its peers, Malta is late in implementing its own REIT regime. However, this allows the regulator the benefit of the ability to research in depth the successful regimes adopted by global REIT hubs such as the US, the UK and Hong Kong, as well as to improve upon and adapt these regimes to the local scenario.

From a local perspective, all of the entity types mentioned above may be set up in Malta, including companies, trusts, unit-trusts or associations. A listed public limited company incorporated and governed by the Companies Act may be the ideal option.

This entity type has been taken up by a significant number of jurisdictions that have implemented REIT regimes, most importantly the UK, which has significant influence in Maltese corporate law.

Such public companies, which would need to be tax resident in Malta, can then elect to be regulated under the future REIT regime through a notification or an application with the designated competent authority.

Moreover, imposing a requirement upon REITs to list a relevant portion of their shares on the regulate MSE would be a sound choice from an investor protection perspective since listed companies are required to abide with enhanced reporting and transparency requirements and would permit the participation of all investors, from those with a little saved up to larger institutional investors.

Click here for more information on REITs across leading countries!

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions