Malta attracts numerous foreign investors and most of them are interested in the financial services industry in this country. One particular area in the financial services industry is represented by hedge funds in Malta. Since Malta’s accession to the European Union, the number of hedge funds registered in the country have increased spectacularly because of the regulatory regime of collective investment schemes.
The Investment Services Act in Malta
All collective investment schemes fall under the regulations of the Investment Services Act (ISA), while the type of business vehicles employed to register investment funds are subject to the provisions of the Maltese Companies Law.
According to the Investment Services Act, a collective investment scheme is a fund registered with the purpose of investing a certain amount of capital acquired through “offers of units for subscription, sale or exchange”. Collective investment schemes in Malta function according to the risk spreading principles and all contributions to the fund are consolidated.
All collective investment schemes are licensed and supervised by the Malta Financial Services Authority. Our company incorporation agents in Malta will offer you all the information about investment fund licensing requirements.
What are the available types of collective investment schemes in Malta?
Maltese collective investment schemes may be registered as corporate or non-corporate entities. The corporate forms of Maltese collective investment schemes are:
- – Maltese investment company with variable share capital (SICAV),
- – investment company with fixed share capital (INVCO),
- – commercial partnership.
The Maltese unit trust and the mutual fund are the non-corporate forms of collective investment schemes.
The most employed types of collective investment schemes in Malta are the investment companies with variable or fixed share capital.
What are the advantages of Maltese collective investment schemes?
The legislation provides several choices for investors setting up collective investment schemes in Malta. Among these are: the Professional Investor Funds (PIFs), the private collective investment schemes and the Undertaking for Collective Investments in Transferable Securities (UCITS). According to a report released by Bloomberg, it is less costly to open a collective investment scheme in Malta than in Luxembourg, which is another famous hedge fund destination in Europe. Moreover, collective investment schemes are exempt from paying taxes in Malta.
For other tax advantages of collective investment schemes, we invite you to contact our Maltese company formation agents.