Professional Investment Funds in Malta
Many hedge fund managers have already chosen Malta as their domicile based on two overriding factors:
1. The recognition that legislation has been put in place by the country’s lawmakers.
2. The professional expertise and quality of service that Maltese service sector providers offer.
The country's reputation as a well managed and stable jurisdiction has made its own contribution too.
In fact, a number of Professional Investor Funds (PIFs) were licensed by the MFSA with promoters originating from various countries including Canada, UK, Switzerland, Czech Republic, Turkey and the U.S. who have set up a parallel EU operation onshore to continue to market their products to EU investors. And seasoned fund managers from offshore jurisdictions such as the Cayman Islands and Switzerland are now opening offices in Malta.
A more cost competitive fee base
Malta is cost competitive when compared to other EU-based jurisdictions, both in terms of setting-up fees as well as on-going fees. Set-up fees for a PIF that consists of only one sub-fund does not exceed €20,000.
A standard audit service fee can range from €3,500 to €4,000 per annum with audit services provided by ‘big four’ firms as well as mid-tier audit firms. Custody and safekeeping fees are also very competitive.
More fiscal advantages
Malta’s strong regulatory framework and a competitive, transparent tax regime are approved by the EU and the Organisation for Economic Co-operation and Development (OECD).
- There is no income tax or capital gains tax in Malta at either the level of the Fund or at the level of non-Maltese resident investors.
- Malta currently has 70 64 double taxation treaties with EU and non-EU countries.
- Asset managers registered in Malta can also benefit from a very favourable tax regime.
The regulatory approach adopted by the MFSA on the licensing of Professional Investor Funds (PIFs) is based on key criteria tailored to allow a fast and practical response to applications for the registration in Malta.
Considerable emphasis is placed on Disclosure and the MFSA places heavy reliance on Fit and Proper Status of the PIF's Directors and Service Providers.
The nature of the PIF lays an increased onus on the investor. And the Avoidance of Prescriptive Regulation enables considerable flexibility for promoters. Licensing is rapid, depending on the type of PIF sought.