Malta is distinguished as a serious and extremely adaptable jurisdiction in the field of financial services. The development of Malta as the jurisdiction of choice for various types of funds has been greatly aided by the efforts of the local financial services authority and the MFSA, which adopts a prudent but flexible approach, providing a solid regulatory framework whilst encouraging progress and innovation.
A Scheme which does not actively spread its risk may still be allowed to operate if its units are offered only to license holders and/or persons who deal in similar investment instruments or property as part of their ordinary business, or who are themselves exempt from an investment services license.
Licensed Funds Regimes
Malta benefits from three types of Licensed Funds Regimes. These are the:
- Professional Investor Fund (PIF)
- Alternative Investment Fund (AIF)
- Undertakings for Collective Investment and Transferable Securities (UCITS)
Attractiveness of Maltese Jurisdiction
- Respected EU jurisdiction
- Flexible fund structures using different legal forms (SICAV/INVCO, SICAV ICC, SICAV)
- Fast time to market period
- Passporting of UCITS and AIF’s in terms of EU directives
- Availability of professionals
- Other factors such as low costs, approachability of regulator, language, IT infrastructure
Taxation of funds
Taxation depends on whether the fund is a prescribed or non-prescribed fund. A prescribed fund is a fund of a Malta based scheme that has declared that, the value of its assets situated in Malta allocated to that fund for the purposes of its operations, is expected to be at least 85% of the value of its total assets that will be so allocated. All other funds are classified as non-prescribed funds.
AIFs and PIFs are typically considered non-prescribed funds. A full exemption is given in respect of gains or profits accruing to a non-prescribed fund. Income received by a non-prescribed fund from immovable property situated in Malta is taxable at the rate of 35%.
Non-resident unit holders are exempt from Malta tax on dividends paid by a non-prescribed fund, and on gains or profits arising upon the disposal of units in non-prescribed funds.