Since its inclusion into the European Union in 2005, Malta has attracted many foreign investors in the financial services sector, which enabled the country to become a fund domicile in a very short time span. Malta provides many advantages to foreign investors searching to set up an investment fund, among which:
- – the Maltese taxation system providing tax exemptions to funds owning 15% or more assets outside the country,
- – no capital gains tax applied to non-resident investors,
- – low set up and maintenance costs,
- – efficient licensing procedure,
- – a clear regulatory legislation.
Among the most employed types of investment funds, there are Maltese SICAV companies or open-ended investment funds and INVCO or closed-ended investment funds.
What is a Maltese INVCO fund?
The Maltese INVCO is a public investment company with fixed share capital compared to the SICAV company, which has a variable capital. INVCO companies are restricted to investments in securities or retirements funds, according to the Companies Law in Malta. Among the restrictions applied to an INVCO in Malta, there are:
- – the INVCO company’s investment value in other companies may not exceed 15%,
- – INVCO companies are not allowed to distribute the capital profits,
- – the company may only retain 15% of the income resulted from securities.
Closed-ended investment funds in Malta may, however, operate as umbrella corporations and can divide the share capital into different classes of shares. Umbrella funds allow an INVCO company to operate separate sub-funds employing different investment regulations and thus providing a high degree of flexibility to investors.
Registering an INVCO company in Malta
According to the Companies Act, Maltese INVCOs may be registered as public limited companies only. As INVCO companies must have a fixed share capital, according to the Collective Investment Scheme in Malta, their main purposes must be to spread the investment risk and to offer their shareholders the benefits of their investments. The shareholding requirement for this type of Maltese hedge fund is to have at least one founder. The INVCO company may also list its shares on the Stock Exchange in Malta.
If you need assistance in setting up an INVCO company, please contact our company registration agents in Malta.