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Set Up an Investment Fund in Malta

Updated on Tuesday 03rd January 2023

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Set Up an Investment Fund in Malta
 
Maltese investment funds can be established with complete support provided by our company registration agents in Malta who can offer information on each type of funds available in this country. We can provide assistance in drafting the paperwork and we can collaborate with the relevant authorities for varied registrations in this sense. Below you can find information about Maltese hedge fund, and also about professional investor funds in Malta.
 

Who can establish investment funds in Malta?

 
The Maltese investment funds industry is one of the most profitable because it is highly regulated at local and EU level. The law provides for the following categories of investors who can open Maltese investment funds:
 
  • - experienced investors who have at least 2 years of experience and who have carried out transactions worth at least 50,000 euros;
  • - qualifying investors with net assets worth at least 750,000 euros;
  • - extraordinary investors with net assets worth a minimum of 7.5 million euros.
 
The last two categories of professional investors funds (PIFs) can also be Maltese companies or trusts.
 

How to establish an investment fund in Malta

 
The first step to open an investment fund in Malta, the PIF must select the type of company to be used to trade. The legal structures approved by the Company Act are:
 
  • - investment companies with fixed or variable capital;
  • - incorporated cell companies;
  • - limited liability partnerships.
 
Maltese investment funds can also be established as unit trusts and contractual funds.
 

Registering the Maltese investment fund

 
Once the type of structure has been determined and registered with the Maltese Companies Registrar, the investor must apply for the financial license with the MFSA. The following documents will be required by the MFSA:
 
  • - a key investor information document (KIID);
  • - the registration documents;
  • - the agreement signed with the service provider;
  • - the fund’s prospectus.
 
Depending on whether the investment fund will be listed on the Maltese Stock Exchange, other requirements may apply.
The main legislation providing for the establishment of investment funds in Malta is the Investment Services Act. According to this law, all Maltese investment funds are subject to applying for an investment services license prior to starting issuing financial instruments. The law also provides for several types of investment funds one can set up in Malta.
 
The three major categories of investment funds to be set up in Malta are:
 
  • -  Professional Investor Funds (PIFs);
  • -  Alternative Investment Funds (AIFs);
  • -  Undertakings for Collective Investment Schemes (UCITS).
 
Our company registration agents in Malta can assist foreign investors who want to set up any of the type of funds mentioned above.
 

PIFs in Malta

 
Professional Investment Funds are investment funds dedicated to qualified and experienced investors coming to Malta, as their name state. These types of funds are also categorized into:
 
  • -  PIFs for experienced investors who must put at least 10,000 euros in the assets of the fund;
  • -  PIFs for qualifying investors who must invest at least 75,000 euros in the fund;
  • -  PIFs for extraordinary investors required to invest a minimum of 750,000 euros in the fund.
 
The main advantage of this type of Maltese funds is the lack of restrictions on the investments and the swift approval procedure.
 

Alternative investment funds in Malta

 
Other types of investment funds to be established in Malta are the well-known AIFs. These types of funds are non-UCITS funds which can acquire capital from a large number of investors through a well-defined strategy. Maltese hedge funds and real estate funds can be set up as AIFs in Malta.
 
In order to set up such type of fund, an investor needs at least EUR 100,000. The fund must be managed by a AIF manager. Those self-managing the AIF must have an initial capital of 300,000 euros. Our Maltese company formation consultants can offer more information on the requirements for this type of funds.
 

UCITS funds in Malta

 
UCITS are investment funds constituted in a EU country which can operate throughout the European Union, therefore an UCITS fund can obtain a license in Malta and based on a specific notification process can market its products in other member states. UCITS funds are usually known as retail funds in Malta. Just like in the case of AIFs, the minimum capital requirement to set up a UCITS fund is around EUR 300,000.
 

Start-up hedge funds in Malta 

 
Early-stage investors can opt for start-up hedge funds in Malta due to the benefits offered. Thus, a Maltese hedge fund (also known as PIFs) is advantageous in terms of costs, development climate, and flexible regulation. As the financial sector in Malta is extremely developed and highly appreciated worldwide, a Maltese hedge fund can be the ideal solution in this sense. As in the case of other types of funds, the MFSA is the authority that regulates this type of Maltese investment fund. Among the formalities for registering a start-up hedge fund in Malta we mention:
 
  • A license is required, according to the Investment Services Act 1994, and where applicable, exceptions to this rule will apply.
  • Those interested in the Maltese hedge fund must prove that they have the necessary knowledge in the field and that they are qualifying shareholders. They must pass the "fit and proper" test.
  • It will be necessary to appoint a bottom manager in this direction, and here it is not mandatory for him/her to have a residence in Malta.
 
In addition to the above aspects, you should know that this type of investment fund can be promoted in the relevant jurisdiction, taking into account certain guidelines. But for more information in this regard, we invite you to contact our local agents. We can tell you more about professional investor funds in Malta.
 

Information about Notified Alternative Investment Funds or NAIFs

 
Interested in professional investor funds in Malta? You might be interested in Notified Alternative Investment Funds or, more briefly, NAIFs. This type of fund provides rapid access to funding managers seeking to promote their fund throughout the countries of the European Union, the regime also allows the Alternative Investment Fund manager to undertake full accountability for the NAIF and for the completion of its responsibilities. 
 
As such,  the AIF functions with a simple announcement to the supervisor. Once the respective notification of the AIF falls within the responsibility of this kind of administration, access to the market can be achieved quite fast, in about 10 days if the MFSA is convinced that the credentials offered with respect to the conditions and obligations imposed.
 
It can be said that NAIFs are adaptable financial instruments that can also be used to market securitization strategies and more. We invite you to contact us to discover more information about NAIFs in Malta. We are here to offer you the right solutions for the establishment of professional investor funds in Malta.
 

Some of the advantages of Maltese investment funds

 
Those interested in Maltese investment funds can enjoy a number of benefits in this regard, and among them, we list the most important ones:
 
  • The tax system is a favorable one, and Malta is among the countries that offer such an advantage, within the framework of the establishment of Maltese investment funds.
  • Access to European markets is easy, having in the portfolio an investment fund opened in Malta.
  • There are a number of investment strategies available to fund managers. Thus, the investment instruments can make a difference depending on the fund chosen for the development of the portfolio and not only that.
  • It is good to know that there are no restrictions regarding the manager of an investment fund, in the sense that he does not have to be from Malta. Thus, professional investor funds in Malta can be managed by foreign citizens, regardless of their country of origin.
  • And last but not least, the legislation is permissive regarding the establishment of Maltese investment funds and also offers protection to those interested in such financial instruments.
 
For assistance in opening an investment fund, please feel free to contact our Maltese company formation representatives.

 

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