Collective Investment Schemes | Malta The Fund Jurisdiction of Choice
Malta’s investment funds and collective investment schemes (CIS) have been growing at an unparalleled rate, with a 68% growth over a 24 month period. This is primarily due to Malta’s high adaptability, low costs and excellent regulatory services. Such growth has been registered throughout the entire scope of fund business in Malta, ranging from retail funds promoted to domestic savers, to the fast development of Professional Investment Funds, which of itself holds a variety of classes, including hedge funds.
SICAV is the basic structure for collective investment schemes. Uniquely set up for this purpose, it is a holding company with the precise aim of owning shares, bonds and other securities. In itself, it can be listed in the Malta Stock Exchange, although there is a separate list devoted to this type of security, allowing for liquidity. A SICAV’s variable capital nature means that new investors are simply and easily added. In addition, there is no need to wait for an existing investor to decide to liquidate his holding. An additional advantage of this type of structure is that it allows sub-funds to be set up within the SICAV, which in turns allows the pursuit of a range of specialized strategies, with investments in distinct asset types and classes.
Relatively new to the Maltese domicile are Professional Investment Funds (PIFs), which entail progressively lighter regulation, targeted at funds of increasingly financially literate investors. PIFs are not retail funds, but rather open the door to hedge funds, including property funds. PIFs can be found in three categories, each one with its different target market and separate rules. The most tightly regulated of the three are the PIFs targeting experienced investors. In order to enter the scheme for experienced investors, a minimum entry stake of €15,000 is needed. The two other fund classes, PIFs targeting Qualify Investors and Extraordinary Investors have no limit on the leverage they can adopt. However, they do raise the bar for participation whilst at the same time lowering the grade of regulation.
The Malta Financial Services Authority (MFSA) regulates this up-and-coming sector. Approval usually takes one week, and six weeks for the full licensing process. Additional advantages include:-
- Significantly lower professional and supervisory fees as compared to Western European levels;
- Significantly lower cost of office space and quality staff;
- Proximity and access to the regulator;
- Whilst a prerequisite of funds registered in Malta is that of appointing at least one resident director, there is no need to appoint a local administrator;
- Income arising out of a Malta registered collective investment scheme is not normally taxed. In addition, there are tax concessions on dividends from securities listed on the Malta Stock Exchange.
Our team at Argentus Corporate Services is flexible and business friendly, dedicated to offer an individualized customer service ethos. In addition, we are equipped with experienced multilingual staff, facilitating the development of fund administration and management, and giving us the edge to cater to the needs of our foreign investors.