Investment Funds in Malta: SICAV and Fund Structures

Investment funds and investment services fall under the regulations of the Investment Services Act in Malta. According to the Investment Services Act, investment funds are also called Collective Investment Schemes (CIS) and can take the legal forms of companies with variable share capital (SICAV), companies with fixed share capital (INVCO), limited partnerships, unit trusts and mutual funds in Malta. Investment companies and partnerships.

Our Maltese lawyers can offer information on the legislation applicable to investment funds.

Types of investment funds in Malta

Maltese laws provide various investment funds depending on the investors who may register retail and professional investor funds (PIF) in Malta. Maltese retail funds are available for registration to the general public, while professional investor funds target investors who must fulfill certain requirements before being accepted as investors.

According to the Maltese laws, investment funds may also be re-domiciliated to Malta. Professional investor funds (PIFs) were historically available as follows (the regime is closed to new PIF licences; new funds are set up mainly as AIFs or notified AIFs):

– for experienced investors who will invest at least 10,000 euros,
– for qualifying investors interested in investing at least 75,000 euros,
– for extraordinary investors who will invest at least 750,000 euros.

Maltese retail funds are categorized into UCITS (undertaking for collective investment in transferable securities) and non-UCITS funds. UCITS funds may be established as unit trusts or open-ended investment companies in Malta. Licenses for non-UCITS funds are available for the local market. Non-UCITS funds may be registered as open-ended or closed-ended companies in Malta.

How to set up an investment fund in Malta

As mentioned above, Malta provides for specific structures for establishing an investment fund. Among these are the SICAV and the INVCO which are special types of structures used by professional investors and which are subject to specific criteria when it comes to the fund manager and the amount to be invested.

The other types of companies which can be used for the creation of a Maltese investment fund are the limited partnership and the trust which are regulated by the Companies Act and the Trusts and Trustees Act. These must first be registered with the local authorities, following which they must obtain the approval of the Malta Financial Services Authority (MFSA).

Documents required for setting up Maltese investment funds

The following documents are required upon the creation of an investment fund in Malta:

– the incorporation documents of the investment company, partnership or trust;
– the prospectus of the fund;
– the key information document for investors (PRIIPs KID, which replaced the UCITS KIID from 1 January 2023);
– a service provider contract.

No matter the type of structure chosen, our law firm in Malta can assist with its registration with the Trade Register.

The taxation of investment funds in Malta

Maltese investment funds are sought because of the advantageous taxation system applied. The taxation of investment funds in Malta depends of the category the fund falls into and whether the investment fund is prescribed or non-prescribed.

Prescribed funds have at least 85% of the value of their assets registered in Malta. Maltese prescribed funds are taxed with a 15% rate on bank interests, a 10% final withholding tax on interest for Maltese public companies and the capital gains tax on incomes derived from immovable property in Malta. Non-prescribed funds are exempt from taxation in Malta, unless they earn any income from immovable property in Malta.

If you want to register an investment fund, you can contact our lawyers in Malta for assistance or for trustee services.