Despite Europe’s recent financial crisis, Malta retained its reputation as a financial hub as it proves to be a favorable jurisdiction for those seeking fund and asset management. The numerous licenses granted by the MFSA for collective investment schemes are processed expediently and provided at low rate servicing costs. Malta’s advantageous corporate tax regimes and schemes encourage employment, further attracting clients worldwide. In order to take its financial market a step further, Malta also seeks to attract Middle Eastern investors through the establishment of Sharia-compliant funds and operators.
Investment services in Malta are generally regulated by the Investment Services Act (Chapter 370 of the Laws of Malta), which together with subsidiary legislation provides for the setting up of funds. Malta boasts of a variety of Investment Funds and in fact, it was the first EU Member State to introduce UCITS III in November 2007 and has fully implemented MIFID.
UCITS funds are retail funds marketed to the general public. This means that unlike Professional Investor Funds (PIFs), they are regulated by more stringent rules. Conversely, PIFs are aimed at more experienced investors with a very high net-worth, and thus, with the exception of PIFs investing in immovable property, are not subject to restrictions on their investment and borrowing powers. They made available with minimal share capital requirements and low maintenance costs.
PIFs are generally divided into three categories, these being:
- PIFs promoted to ‘Experienced Investors’, with a minimum investment of €10k or equivalent;
- PIFs promoted to ‘Qualifying Investors’, with a minimum investment of €75k or equivalent; and
- PIFs promoted to ‘Extraordinary Investors’, with a minimum investment of €750k or equivalent.