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.