Types of Investment Funds in Malta
Updated on Wednesday 30th August 2017
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Malta is a small jurisdiction which offers important investment opportunities and which is seen as an attractive business center for opening a hedge fund startup and similar types of investment companies. Local and foreign businessmen have registered so far more than 580 investments funds that hold assets (calculated at their net asset value) of approximately EUR 10 billion. In the last years, Malta received the title of “most favored domicile in Europe” for investment purposes, awarded by the Hedge Fund Review Service Provider Rankings. With a very flexible legislation in the field, Malta offers a wide range of investment funds, which can address the needs of various types of investors.
Retail funds in Malta
Foreign businessmen may set up retail funds in Malta, which can be registered under two main categories, as follows:
• retail funds following the regulations for Undertakings for Collective Investments in Transferable Securities (UCITS), established under the European Union’s Directive 2009/65/EC;
• non-UCITS retail funds.
The procedure on how to start a fund as a retail fund in Malta is given by the Malta Financial Services Act Rulebook. As it is the case in other European countries, the investment funds in Malta may be set up as open-ended or closed-ended vehicles, with the mention that most of the UCITS vehicles are set up as open-ended funds.
The legislation for non-UCITS funds stipulates that such vehicles may also be established as closed-ended funds, which refers to the fact the investors will be able to issue a limited amount of shares.
Professional investments funds (PIFs) in Malta
One of the manners through which foreign businessmen can start an investment fund in Malta is by registering a professional investment fund (PIF). The PIF is the most common type of vehicle incorporated in this country. Those interested in how to start an investment fund in Malta as a PIF will need to register the vehicle following the regulations provided by the Investment Services Act. It is important to know that this type of vehicle is generally used for opening a hedge fund startup.
There are other types of funds that can be registered in this jurisdiction and investors are invited to contact our team of affiliates in Malta for further information on this subject.