Malta: When It Comes To Funds, Why Choose Anywhere Else?
Malta’s accession to the European Union in May 2004 has brought with it a growing reputation as a hedge fund domicile of choice. Malta was voted as Europe’s most favoured fund domicile by Hedge Fund Review’s 2013 and 2014 service provider rankings.
Flexible regulation, transparency and good governance are just some of Malta’s advantages, as well as its status as a cost-effective domicile for funds, asset managers, fund administrators and for custodians catering to the thriving fund industry.
Malta hosts around 600 investment funds with a combined net asset value of almost €10 billion, and the sector is growing and attracting sophisticated asset management activities all the time.
EU membership has enabled Malta to introduce rights so that investment services and UCITS schemes may be registered in Malta and passported to any EU country.
Alongside the advantages of EU membership and access to a market of over 500 million people in 28 EU economies, Malta also enjoys excellent relations outside of the EU, specifically with other Mediterranean nations in North Africa and the Middle East, making it an attractive base for European, American or Asian companies wishing to enter markets to the south. In addition, Malta is a signatory to more than 70 double-taxation treaties, covering most of the world’s high-growth markets facilitating international business.
Malta has established a comprehensive regulatory framework for the registration and marketing of funds and investment vehicles. Malta’s financial services framework and tax laws are in line with EU directives and requirements and regulated by the Malta Financial Services Authority (MFSA). The licensing process with the MFSA is quick, efficient and thorough.
That said, the MFSA does not accept just any type of investment funds into Malta, but will readily assist those funds carrying a seal of quality. The MFSA carries out regular due diligence on the fund manager, the board of directors and the members of the investment committee, and regulatory and statutory issues may be discussed with the regulator, even at the earliest stage.
What funds does Malta offer?
Collective investment schemes may come in the form of the SICAV, with its variable capital nature and the possibility of establishing sub-funds. This is the most widely used vehicle, particularly in the non-retail sector, and it can be structured to include master feeder funds and umbrella funds with segregated sub-funds.
Professional Investment Funds (PIFs) are targeted at increasingly experienced investors. PIFs target 3 main types of investor: the experienced investor, the qualifying investor and the extraordinary investor. The regime is designed to fast track regulatory approval with a reduced level of ongoing regulation and supervision, but the type of investor, and therefore the ongoing regulation, is determined by qualifying criteria.
The creation of a new regime for Alternative Investment Funds (AIF) is one of the biggest recent additions to Malta’s fund market after the coming into force of the Alternative Investment Fund Managers Directive (AIFMD) in 2014. Malta was one of the first EU member states to transpose the AIFMD into law and the AIF regulatory regime was specifically set-up to cater for this new fund category.
Malta’s legislation also provides for the setting up of UCITS (Undertakings for Collective Investment in Transferable Securities) and non-UCITS retail funds.
A new vehicle was established in 2012, called the Recognised Incorporated Cell Company (RICC). Directly targeting fund platform providers, this structure allows the RICC to provide, in exchange for payment of a platform fee, certain administrative services to its Incorporated Cells.
What about the Benefits & Costs?
The tax structure in Malta provides a significant incentive. Companies that list securities on the Malta Stock Exchange are not charged with capital gains tax and no stamp duty is due on the transfer of such shares or securities.
Malta’s regulatory and ongoing costs are extremely competitive and, when taken together with the various funds options, regulation and passporting rights, makes it a very attractive proposition.
How can Amicorp Fund Services Malta help?
Amicorp Fund Services Malta Limited forms part of Amicorp Group and is recognised as a fund administrator by the MFSA and offers a complete package of support services. These services allow our clients to focus on their core competencies of investment management and capital-raising. We achieve these goals by focusing on the following factors:
- Fully automated fund administration services, based on state of the art, globally recognised technology, which integrates NAV calculation, investor administration, general ledger and KYC/AML features
- Establish automatic feeds of financial data whenever possible, whether it concerns broker information or market data
The reporting package is carefully reviewed by a team of highly experienced fund administrators. As an ISAE-3402 Type II certified fund administrator, our internal control process is accredited by one of the reputable ‘Big 4’ firms. Using our state-of-the-art PFS Paxus software and online web reporting, we provide accurate and timely information to fund operators and investors.