Set Up an Investment Fund in Malta

The main legislation providing for the establishment of investment funds in Malta is the Investment Services Act, while the main authority governing and supervising them is the Malta Financial Services Authority (MFSA). Establishing an investment fund is also subject to the Maltese Company Law which provides for the type of structures that can be used in register the fund.

Our company registration agents in Malta can offer information on the types of investment funds one can establish in this country.

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 investment funds in Malta:

• - 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 are the lack of restrictions on the investments and the swift approval procedure.

Alternative investment funds in Malta

Another type 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 125,000 euros. 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 amount to set up a UCITS fund is 125,000 euros.

For assistance in opening an investment fund, please feel free to contact our Maltese company formation representatives.