Funds

Malta has been gaining ground in establishing itself as a jurisdiction of choice for collective investment schemes, not least thanks to the efforts of the Malta Financial Services Authority (MFSA), which is the regulatory body governing the financial services sector in Malta. The MFSA adopts a prudent but flexible approach to business, providing a solid regulatory framework whilst at the same time encouraging progress and innovation. Of course, a robust legal framework and sound legislation compliant with EU regulations, all contribute towards the success of Malta’s financial services sector.

Collective investment schemes or funds (Schemes) are regulated by the Investment Services Act, 1994. A scheme may be set up either as a:

• SICAV: an investment company with variable share capital
• INVCO: an investment company with fixed share capital
• Unit trust
• Mutual fund: established by means of contractual agreement
• Limited partnership

Promoters may generally set up the following types of Schemes in Malta, each of which offers particular benefits, depending on the nature of the investors concerned:

• Professional Investor Funds (PIFs);
• Alternative Investment Funds (AIFs) – Malta was one of the first EU jurisdictions to formally implement the Alternative Investment Fund Managers Directive (AIFMD);
• Private Schemes;
• Retail Schemes; and
• Undertaking For Collective Investments in Transferable Securities (UCITS);

Benefits associated with funds in Malta include:

• passporting rights within the EU applicable in respect of UCITS and AIFs;
• cost-effective regulatory and professional fee structures;
• the option of having various service providers (such as the fund manager, investment advisor, prime broker, administrator or custodian) operating outside Malta;
• the facility of having separate and segregated sub-funds with different investment objectives;
• an efficient, pro-active and responsive regulator;
• the high quality of professional services;