We have extensive experience in the Fund industry and we have licensed a number of funds, ranging from private equity funds to hedge funds and AIFs. Malta offers a vast choice of legal structures that may be used as bases for collective investment schemes, including UCITS, AIFs, PIFs and Recognised Incorporated Cell Companies (“RICCs”).
We will not only advise you on the most suitable structure for your needs but we will guide you throughout the application process, we will assist you in your daily compliance and anti-money laundering needs and would be more than willing to introduce you to local service providers. We have no affiliations with any entities and therefore we would be able to guide you from an objective point of view.
Malta has proven to be an attractive jurisdiction for the setting up of any type of Funds. Local expertise, spurred onwards by a solid Financial Services sector provides the perfect setting for your business.
Zerafa Advocates can provide you with:
Setting up and aiding in the process of licencing of Collective Investment Schemes;
Drafting any required Agreements or documents;
Contacting the Malta Financial Services Authority (“MFSA”) and liaising with the authority on your behalf;
Drafting of official documentation;
Drafting the Memorandum and Articles of Association of the fund;
Negotiation agreements with service providers;
Providing company secretary service; and
Providing compliance and regulatory advice.
Alternative Investment Funds (“AIFs”) are non-retail collective investment undertakings which are regulated by the Investment Services Act, Chapter 370 (“Act”) of the Laws of Malta, following the transposition of the Alternative Investment Funds Managers Directive (“AIFMD”). The Act defines an AIF as an entity raising “capital from a number of investors to invest it according to a defined investment policy, for the benefit of those investors, and which does not qualify as a UCITS Scheme in terms of the UCITS Directive.”
Whilst having similar attributes to PIFs, AIFs are more strictly regulated. They target professional investors, retail investors and where permitted qualifying investors, which include large undertakings, national governments and others whose main activity is investing in financial instruments.
An AIF can either be managed by an Alternative Investment Fund Manager (“AIFM”) or else it can be self-managed. For the first, an EUR 1200 initial capital requirement is imposed and as for self-managed AIFs, there is a EUR 300,000 initial capital requirement.
Additional sub-funds of an existing AIF can also be constituted as an umbrella fund subject to the submission of a number of documents. Marketing activities in relation of such funds are also regulated in the Act, where the latter imposes a number of criteria to be followed.
Additionally, the framework for AIFMs opens up the EU as a single market place for alternative funds, creating a single marketplace within the EU for the marketing of AIFs, known as a marketing “passport”. Marketing under the AIFM Directive includes “any direct or indirect offering or placement at the initiative of the AIFM or on behalf of the AIFM, of units or shares in a fund it manages to or with investors domiciled in the EU”. Also, once the AIFM is authorized in one EU member state, it does not require further authorization in any other EU member state to market its EU AIFs to professional investors in other member states.
If you would like any further information on what types of AIFs exist, details on its setup and whether setting up an AIF could help you with your enterprise, please do not hesitate to contact us for any assistance.
Professional Investor Funds (“PIFs”) are another special class of collective investment schemes which are however less regulated than AIFs. PIFs are not set up for the general public but rather for qualifying investors. In fact, the minimum investment threshold in the PIFs is EUR 100,000 or its currency equivalent, and such investment may not be reduced below such a minimum at any time. PIFs are considered to be more flexible and have less restrictions. The underlying assets normally include a number of traditional and non-traditional investments for instance; derivatives, real estate and collectibles such as art.
A qualifying investor is a person who:
Declares in writing to the fund manager and the PIF that it is aware of and accepts the risks associated with the proposed investment; and
Satisfies at least one of the following :
It is a body corporate which has net assets in excess of EU 750,000;
An unincorporated body of persons or association which has net assets in excess of EUR 750,000 or the currency equivalent;
A trust where the net value of the trust’s assets is in excess of EUR 750,000;
An individual whose net worth or joint net worth with that of the person’s spouse exceeds EUR 750,000; or
A senior employee or director of a service provider to the PIF.
Ordinarily, the main service providers required by a PIF are a manager, an administrator, an investment adviser and/or a custodian/prime broker. A PIF can either be self-managed or it may appoint a third party manager. The appointment of a custodian or an investment adviser are not a strict requirement. Service Providers need not be established in Malta, and therefore promoters of PIFs set up in Malta can continue to make use of their services regardless.
As for the granting of a collective investment scheme licence itself, the MFSA will only grant it if it is satisfied that the scheme will comply with the provisions of the Investment Services Act and the MFSA rules on PIFs. A PIF promoted to qualifying investors may be established as an investment company with variable share capital (“SICAV”), an investment company with fixed share capital, an incorporated cell company (“ICC”) or an incorporated cell of a recognised incorporated cell company, a limited partnership, a unit trust or a contractual fund.
A PIF that has been granted or has applied for a collective investment scheme licence in terms of the Act may apply for admissibility to listing with the Listing Authority (MFSA).
The Application fee is payable on submission of the application for a PIF licence and it is not refundable. In respect of an application for a PIF licence, the application fee is EUR 2000 with an annual supervisory fee of EUR 2000.
PIFs are also commonly used as hedge funds, private equity funds and real estate funds.
A Notified Professional Investor Fund (“NPIF”) is a specific category of collective investment scheme under the Investment Services Act. NPIFs are a subset of Professional Investor Funds (“PIFs”), their key difference lies in the regulatory framework that governs their establishment and ongoing operation.
NPIFs are subject to a simplified notification process. Fund managers only need to submit a notification to the MFSA, rather than undergoing the comprehensive approval process required for PIFs. Once the notification is made, the NPIF is added to the List of Notified PIFs, allowing the fund to operate within a matter of days. Importantly, NPIFs are not licensed by the MFSA, meaning they are subject to less regulatory oversight compared to PIFs.
To qualify as a NPIF, the fund must meet certain criteria:
NPIFs can be established in the following forms, offering flexibility for fund managers:
Like PIFs, NPIFs are designed to cater to Qualifying Investors (including individuals or entities who invest a minimum of EUR 100,000 and meet certain financial thresholds, such as having net assets of over EUR 750,000) and Professional Investors (investors defined under MiFID II who are either automatically classified as Professional Clients or can request such classification).
The Maltese regulatory framework allows for the conversion of a PIF into a NPIF. However, this process involves de-licensing the PIF and submitting a new notification to the MFSA for NPIF status. Fund managers who initially set up a PIF but later wish to take advantage of the more streamlined regulatory process associated with NPIFs can do so through a straightforward conversion process. The conversion process involves submitting a notification to the MFSA, along with the necessary documentation to demonstrate that the fund meets the requirements for NPIF status. Once the conversion is approved, the fund will benefit from the faster approval times, while maintaining the flexibility and tax advantages of the PIF structure.
In February 2025 the MFSA announced key amendments to the Notified Professional Investor Fund (“NPIF”) framework, now allowing self-managed NPIFs alongside previously permitted third-party managed funds. These changes aim to increase flexibility allowing experienced investors to directly manage their own fund without appointing a third-party management company, while maintaining lighter regulatory oversight compared to fully licensed funds.
Key Amendments:
Key Applications:
These updates to the NPIF framework significantly enhance Malta’s competitiveness in the global investment fund market, offering more control, less regulatory burden, and greater flexibility for professional investors.
UCITS is a regulatory framework of the European Commission that creates a harmonised regime throughout Europe for the management and sale of funds. UCITS funds providers who meet the standards are exempt from national regulation in individual European countries. These funds are flexible and have tax efficient features in Malta in turn making Maltese UCITS schemes quite popular. UCITS funds are exempt from income and capital gains tax (excluding investment in immovable property) as long as they do not invest in Malta.
UCITS offer the highest possible levels of investor protection and in fact, this category of investment funds accounts for a large percentage of all collective investments by small investors in Europe.
Management of this fund can be carried out internally, or otherwise a UCITS management company may be appointed. The minimum capital requirement for self-managed UCITS is EUR 300,000.
A Retail Alternative Investment Fund is a fund promoted to investors who are not professional investors. In this case, the Retail AIF is still subject to the Investment Services Rules. The same licensing procedure applies as an AIF however a number of supplementary conditions to AIFs sold exclusively to retail investors then apply.
Due to the fact that retail investors are deemed to be less experienced than professional ones, the AIFMD imposes some investment and borrowing restrictions on retail AIFs, as opposed to AIFs marketed to professional investors.
Retail AIFs may not be marketed automatically throughout the European Union and each member state and each has the right to impose its own restrictions on marketing of retail AIFs within its jurisdiction.
In Malta rules establishing and regulating loan funds were launched in 2014 enabling collective investment schemes to invest through loans. Fund Managers can establish loan funds either as PIFs or as AIFs, depending on whether the fund manager is a de minimis AIFM or and AIFM licensed in terms of the Investment Services Act. In fact, laws, regulations or standard licence conditions which already apply to PIFs and AIFs also apply to these loan funds.
Units of these collective investment schemes shall only be marketed to professional investors, as defined by MiFID and investors who on request, elect to be treated as professional clients and who commit to investing a minimum of EUR 100,000. A Fund manager, custodian, auditor, compliance officer, a money laundering reporting officer, a valuer and a Local Director are all required service providers.
A number of investment restrictions of such a scheme include not investing more than 10% of its capital in another loan fund, and not investing more than 10% of the fund’s capital in a single undertaking, amongst other restrictions.
NAIFs which stands for Notified Alternative Investment Funds were introduced by the MFSA in 2016, and some of their advantageous characteristics include the fact that new funds will be able to come into the market faster, where such NAIFs need not be licensed, authorised or approved by the MFSA unlike existing Maltese fund regimes, nor will they be subject to any ongoing regulation. Therefore AIFMs can establish these notified AIFs without MFSA’s authorisation, subject to a notification mechanism and subject to the AIFM retaining all reporting and obligations.
Previously, under the AIFMD, fund managers were facing a ‘double regulatory burden’ since both the fund managers as well as the funds were subject to intense regulation, leading to inefficiencies and irregularities. Therefore the NAIFs were created, in line with the AIFMD, but with an innovative twist.
NAIFs can offer their units to professional investors as according to Directive 2004/39/EC and/or qualifying investors; be it either open-ended or closed-ended. Both must need to invest a minimum of €100,000 in the NAIF and satisfy particular criteria. They can also be established in any form permitted under Maltese law, therefore they can be either SICAVs (investment companies with variable share capital), INVCOs (investment companies with fixed share capital), limited partnerships, unit trusts, common contractual funds or incorporated cells.
NAIFs are quicker, easier to understand and they allow increased flexibility especially since the time frame within which an AIFM markets its funds has been reduced. Additionally, NAIFs have access to other EU jurisdictions through the European passport. One particular restriction is that NAIFs cannot be self-managed but require an AIFM.
NAIFs take approximately 10 working days to set up from notification date to the MFSA.
In June 2021 the MFSA published a revised set of rules for Notified Alternative Investment Funds (“NAIFs”) to streamline the fund registration process, enhance investor protection, and increase operational flexibility and market access. Key changes included:
The European Long-Term Investment Funds (“ELTIF”) regime, established by the EU in 2015 under Regulation (EU) 2015/760, aims to promote long-term investments in the continent’s real economy. Part of the Capital Markets Union (“CMU”) strategy, ELTIFs mobilise capital for infrastructure, real estate, and small and medium-sized enterprises (SMEs), thus supporting sustainable economic growth and job creation.
One of the notable features of the ELTIF regime is its accessibility to both institutional and retail investors. By setting clear rules and protections, the regime aims to offer retail investors a safer way to engage in long-term investments.
ELTIFs are structured to manage risk and liquidity prudently. They are subject to stringent regulatory requirements, including diversification rules, limits on leverage, and restrictions on derivative use. These measures are intended to ensure that ELTIFs can withstand market fluctuations and protect investors’ interests over the long term.
In 2021, the European Commission proposed amendments to the ELTIF framework to address certain limitations and enhance its attractiveness. Regulation (EU) 2023/606 (the “ELTIF 2 Regulation”) amending Regulation (EU) 2015/760 of 29 April 2015 was published in the Official Journal of the European Union on 20 March 2023, and entered into force on 10th January 2024. The ELTIF 2 Regulation introduces a number of amendments to the original regime, notably regarding the requirements pertaining to the investment policies and operating conditions of the ELTIFs and the scope of eligible investment assets, portfolio composition, diversification requirements and the borrowing of cash, as well as other fund rules. Key changes to the ELTIF regime include the following:
By providing a robust regulatory framework that balances investor protection with the need for substantial capital in long-term projects, ELTIFs play a pivotal role in Europe’s economic development. As the regime continues to evolve, it holds the potential to significantly boost the availability of long-term financing, thereby contributing to a more resilient and sustainable European economy.
The European Long-Term Investment Funds (“ELTIF”) regime, established by the EU in 2015 under Regulation (EU) 2015/760, aims to promote long-term investments in the continent’s real economy. Part of the CMU strategy, ELTIFs mobilise capital for infrastructure, real estate, and small and medium-sized enterprises (“SMEs”), thus supporting sustainable economic growth and job creation.
One of the notable features of the ELTIF regime is its accessibility to both institutional and retail investors. By setting clear rules and protections, the regime aims to offer retail investors a safer way to engage in long-term investments.
ELTIFs are structured to manage risk and liquidity prudently. They are subject to stringent regulatory requirements, including diversification rules, limits on leverage, and restrictions on derivative use. These measures are intended to ensure that ELTIFs can withstand market fluctuations and protect investors’ interests over the long term.
In 2021, the European Commission proposed amendments to the ELTIF framework to address certain limitations and enhance its attractiveness. Regulation (EU) 2023/606 (the “ELTIF 2 Regulation”) amending Regulation (EU) 2015/760 of 29 April 2015 was published in the Official Journal of the European Union on 20 March 2023, and entered into force on 10th January 2024. The ELTIF 2 Regulation introduces a number of amendments to the original regime, notably regarding the requirements pertaining to the investment policies and operating conditions of the ELTIFs and the scope of eligible investment assets, portfolio composition, diversification requirements and the borrowing of cash, as well as other fund rules. Key changes to the ELTIF regime include the following:
By providing a robust regulatory framework that balances investor protection with the need for substantial capital in long-term projects, ELTIFs play a pivotal role in Europe’s economic development. As the regime continues to evolve, it holds the potential to significantly boost the availability of long-term financing, thereby contributing to a more resilient and sustainable European economy.
EuSEF funds are only allowed to invest in certain types of assets, such as equity or debt instruments issued by or loans granted to qualifying portfolio undertakings. The latter are undertakings not admitted to trading on a regulated market with the primary objective of achieving positive social impacts, whilst using their profits to reach their primary social objective such as providing commodities to vulnerable or marginalised, disadvantaged or excluded persons or providing financial support.
Similar to EuVECAs, these funds must invest at least 70% of their capital contributions in qualifying investments and not use more than 30% for the acquisition of assets other than qualifying investments.
More precisely EuVECAs are funds which place a percentage of the investments supporting young and innovative companies. In fact every fund wanting to use this label must show that a minimum of 70% of the capital received from investors will be spent in supporting these companies – qualifying investments, and consequently not use more than 30% for the acquisition of assets other than qualifying investments. This satisfies the objective that economic growth takes place throughout Europe through the financing of such SMEs. Qualifying portfolio undertakings imply permitted investment in unlisted undertakings which employ up to 499 persons or SMEs listed on a SME growth market.
EuVECA venture capitalists can market their funds to investors across the EU through a voluntary EU-wide passport without having to meet all AIFMD requirements. Recently, in 2018, amendments to the original EU Regulation addressed issues to promote greater flexibility on potential investments as well as reducing costs.
There are mainly two aspects to a re-domiciliation process: ensuring that all the requirements are met from a legal and corporate point of view and ensuring that the Fund can keep its track record, net asset value (“NAV”) and performance history.
The Investment Services Act, Cap. 370 of the Laws of Malta, lays down the whole process required for the re-domiciliation of a fund to Malta. As long as the set up of the body corporate fits within the requirements of a collective investment scheme under the Act, subject to the MFSA’s authorisation, the foreign body corporate could then be continued as a collective investment scheme in Malta.
Such continuation would require all investments as well as investors to stay the same following the re-domiciliation. One must note that if the fund to be re-domiciled is an AIF, any agreements with custodians or depositories not residing in Malta must be discontinued.
Malta has been a pioneer in several aspects of financial services due to local expertise especially in the fund industry. This is coupled with good governance, favourable taxation schemes (by obtaining access to Malta’s extensive double taxation and benefiting from the Participation Exemption) and tried and tested legislation regarding re-domiciliation of companies from many countries worldwide. The fact that that the foreign company need not wind-up and set up newly in Malta is also a considerable advantage, where the same Memorandum and Articles of Association can be utilized.
Private Collective Investment Schemes in Malta are regulated by the Recognition of Private Investment Schemes Regulations under the Investment Services Act in Malta. The main characteristic of this Fund is that it limits the total number of participants to 15 persons, as long as they are close friends or relatives of the promoters, the scheme is private in nature and purpose, and it does not qualify as a Professional Investor Fund. It is good to note that one of the participants may be a company, subject to a number of restrictions, which include the requirement that the company is not connected to the management of the scheme in any way and the ultimate beneficial owners of the company are still close friends or relatives of the promoters.
Unlike other Funds this Scheme is not subject to an MFSA licence, but it must simply apply for recognition by the MFSA. Nonetheless, due to their nature, such Schemes cannot be listed on the Malta Stock Exchange.
Several benefits for setting up a Private Scheme include the absence of investment or borrowing restrictions except as may be specified in the recognition certificate and the relatively quicker procedure to obtain registration rather than licensing.
Under Maltese Law, a Private Scheme may be set up as a Contractual Fund, a Unit Trust, a Commercial Partnership, a Public or Private Limited Liability Company (plc/ltd), a SICAV or an INVCO.
Malta’s Special Limited Partnership Funds (“SLPF”), introduced under the Investment Services Act (Special Limited Partnership Funds Regulations), offers a unique structure for investment funds that does not confer a separate legal personality. This means the SLPF is not recognised as an independent entity apart from its partners, aligning Malta with other leading asset-management jurisdictions. Legal Notice 30 of 2025 introduced the SLPF framework under the Investment Services Act, ensuring alignment with international standards.
The structure is designed for collective investment schemes and may be adopted by Professional Investor Funds, Notified Professional Investor Funds, Alternative Investment Funds, and Notified Alternative Investment Funds.
The SLPF is ideal for funds that seek tax efficiency and flexibility in their operations. It is particularly suited for private investors or institutional investors looking for a tailored investment structure with clear risk allocation and limited exposure to liability.
Key Features of SLPFs:
Advantages of SLPFs:
Incorporated Cell Companies (“ICC”) are a relatively recent addition to the fund industry in Malta and provide a unique facility whereby the promoter can establish a fund platform for his clients and they can each be allocated an Incorporated Cell within the ICC. First there was the launch of the SICAV ICC, which was very much in demand and then there was the development of the Recognised ICC (“RICC”).
An ICC is very similar to a protected cell company, except that each separate cell within an ICC is a separate legal entity. The Board of the Company has ultimate responsibility for all cells and assets. The ICC is a secure structure to segregate assets and liabilities within each cell.
An incorporated cell is created by virtue of a resolution of the Board of Directors which approves the name of the incorporated cell being established, the terms of the memorandum and articles of association and authorises, if applicable, the subscription by the incorporated cell company of a share or shares in the incorporated cell. Once the resolution has been passed the memorandum and articles of association adopted by the resolution of the Board are filed with the Registrar of Companies and a certificate of registration is issued in terms of the Companies Act.
Additionally, an ICC or a similar structure domiciled outside Malta may continue as a SICAV ICC or RICC in Malta. A limited liability company (“Ltd”), may, by extraordinary resolution and provided it is authorized to do so by its memorandum and articles of association, go through a transformation. An Ltd can be transformed from a non-cellular company into an ICC or into an incorporated cell, from an ICC having no incorporated cells or from an incorporated cell into a non-cellular company. Such transformations must take place with the prior written consent of the MFSA.
The directors of an ICC are duty bound to keep the assets and liabilities of the ICC separate and separately identifiable from the assets and liabilities of its incorporated cells.
The RICC just provides administrative services to incorporated cells licensed as collective investment schemes (CIS) within the platform structure. Therefore in terms of the RICC Regulations, the latter is required to obtain a recognition certificate to operate as a pure platform not carrying out any activity amounting to a licensable activity. On the other hand, the SICAV ICC, operates as a collective investment scheme and carrying out activities accordingly.
The RICC is not a Recognised Fund Administrator and the range of activities that may be carried out by an RICC include providing administrative services related to the establishment of incorporated cells, negotiating service provision agreements and providing ancillary services as may be approved by MFSA, amongst other activities. Additionally, the Rules require that the Board of Directors of the RICC and the Board of the Incorporated Cells have a director in common.
Differences between the two include that the SICAV ICC must structure the ICC itself and has to be in possession of a CIS licence and must actually function as a fund. As an RICC, the ICC can only be a limited liability company and cannot perform licensed activities.
The Maltese regulatory framework provides the possibility for the Professional Investor Funds (“PIFs”) to invest in Virtual Currencies (“VCs”). The Investment Services Act (Cap. 370 of the laws of Malta) regulates this flexible investment vehicle, where the PIFs investing in VCs may only be constituted in the form of (i) an investment company, generally in the form of investment company with variable share capital (SICAV); (ii) limited partnership; or (iii) unit trusts.
As for the key legal requirement of the PIFs, this fund must be promoted only to those individuals or entities which are classified as a Qualifying Investors and the latter always need to maintain a minimum investment amount of €100,000 . Moreover, in order to operate as PIF investing in VCs, a licence shall be issued by the Malta Financial Services Authority (“MFSA”) which authority requires to fulfil further criteria in relation to VCs investment.
In that case, the licence holder of the PIFs must ensure that their parties and the service providers have the relevant knowledge and experience in the field of information technology and VCs as well as its underlying technology. Furthermore, applicants must also include adequate risk warnings associated with both direct and indirect investment in VCs.
