Fund Types in Malta

According to the Investment Services Act, the main law regulating investment schemes in Malta, those interested in the financial services industry and mainly in establishing funds benefit from various incentives. Among these, passporting options, a favorable tax regime and several choices when it comes to the type of investment funds they can set up in Malta. The law provides for two large categories of Maltese investments funds, each one with its subtypes. These are:

• -          the professional investment funds (PIFs);
• -          the alternative investment funds (AIFs).

Our Maltese lawyers can provide you with more information about the Investment Services Act.

Professional investment funds in Malta

PIFs are non-retail investment funds which can be set up by professional investors only. PIFs can be incorporated in Malta as companies with fixed or variable share capital, limited liability companies, limited partnerships or unit trusts. The following criteria must be respected in order to open this type of investment fund in Malta:

• -          the minimum amount to be invested is 10,000 euros;
• -          the investor must have at least one year of experience in finance;
• -          the fund must have a custodian.

Alternative investment funds in Malta

AIFs in Malta must be constituted under the Investment Services Act, the Maltese Companies Law and the Alternative Investment Fund Managers (AIFM) Directive. Maltese alternative investment funds may be retail or non-retail funds. The last category is also known as undertakings for collective investment schemes (UCITS) and fall under the EU Directive with the same name.

These types of Maltese investment schemes may be established as open-ended or closed-ended investment vehicles. They may also be listed on the Malta Stock Exchange provided they meet the qualifying requirements. Both types of funds must be licensed by the Malta Financial Services Authority (MFSA).

Foreign investors opening one of these types of investment funds in Malta must provide the following documents:

• -          a prospectus;
• -          the incorporation documents;
• -          information about the investors.

AIFs can be managed by a managed by a company offering investment services in Malta provided it has obtained the AIFM license.

For assistance in setting up an investment fund, do not hesitate to contact our Maltese law firm.