Malta is increasingly becoming an attractive jurisdiction for setting up investment funds, especially professional investor funds - PIFs (which include hedge funds in Malta). Being an EU member state, Malta inevitably follows EU directives regarding the regulation of funds which henceforth guarantees high standard levels. In addition, this also means that collective investment schemes (funds) can operate freely throughout the EU on the basis of a single authorisation from one member state.
There are several reasons that have made Malta the number one jurisdiction for setting up Professional Investor Funds (PIFs):
Malta’s Tax Treatment specific to Funds
What is a PIF?
A PIF is the type of non-retail fund under which hedge funds are licensed in Malta. Such funds are generally designed to attract high net worth investors as they offer absolute returns with minimal regulations and supervision.
PIFs are generally established as investment companies which could be open-ended (SICAVs) or close-ended (INVCOs). It is also possible for funds to be established as limited partnerships or unit trusts.
Categories of Maltese PIFs
PIFs may be of three types:
All three types of categories need to adhere to minimum subscription (entry) thresholds, and unlike PIFs targeting experienced investors, PIFs targeting qualifying and extraordinary investors are restricted to maintain a minimum net asset value. In addition, unlike PIFs targeting experienced investors, PIFs targeting qualifying and extraordinary investors face no borrowing limits.
Parties involved in a Fund
Umbrella Fund or a Multi-Class Fund
PIFs may be constituted as an umbrella fund or a multi-class fund. An umbrella fund is a structure which includes sub-funds whereby the assets and liabilities of each sub-fund can be structured as a patrimony separate from the assets and liabilities of each other sub-fund.
Multi-Class structures would have multiple sub-funds, each having different characteristics but not a separate patrimony.
How we can help you?
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