Malta offers a robust legal and regulatory regime for investment services. Investment Services are regulated under the Investment Services Act, with four different license categories:
Category 1
- Category 1a – Licence holders authorised to receive and transmit orders in relation to one or more instrument and, or provide investment advice and, or place instruments without a firm commitment basis; but not to hold or control clients’ money or customers’ assets.
- Category 1b – Licence holders authorised to receive and transmit orders, and, or provide investment advice in relation to one or more instrument and, or place instruments without a firm commitment basis solely for professional clients and, or eligible counterparties; but not to hold or control clients’ money or customers’ assets.
Category 2
Licence holders authorised to provide any investment service and to hold or control clients’ money or customers’ assets, but not to operate a multilateral trading facility, or deal for their own account or underwrite, or place instruments on a firm commitment basis.
Category 3
Licence holders authorised to provide any Investment Service and to hold and control clients’ money or customers’ assets.
Category 4
Licence holders are authorised to act as trustees or custodians of collective investment schemes.
Investment funds
Malta offers fund managers a variety of vehicles which may be structured as follows: with variable share capital or with fixed share capital, or as a unit trust, or a contractual arrangement or a partnership. These legal structures serve as vehicles for different fund types, including Professional Investor Funds (PIFs) which are the most popular, UCITS funds, retail funds and private collective investment schemes.
Professional Investor Funds (PIFs), are highly flexible, providing fund managers with a product which is generally subject to no leverage and investment restrictions. A PIF can thus be used as for innovative investment strategies. Malta has also been attracting a number of UCITS schemes, whereby funds can be freely distributed throughout all EU Member States without the need for a license in any other state.
Malta has also been attracting a number of UCITS schemes, whereby funds can be freely distributed throughout all EU Member States without the need for a license in any other state.
Freedom to Use Foreign Administrators
Funds licensed in Malta are required to appoint at least one resident director but not required to appoint a local administrator, although a high percentage of funds still opt to have a Maltese administrator due to high quality and other cost issues.
Low Set-up and Operational Costs
The tax structure in Malta also provides a significant incentive. Malta is cost efficient with respect to registrar and listing fees, but also with respect to the renting of office space in prime areas, labour costs and other operational expenses.