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Investment Services

MK Fintech Partners is a leading law firm in the investment services and funds industry. We offer comprehensive legal services including licensing, fund formation, and tax optimisation to fund managers, asset managers, and investment firms. Our team of expert lawyers has extensive experience in navigating the complex regulations of this industry and providing tailored solutions to meet our clients' unique needs.

Malta’s booming Investment Services Space

Discover Malta’s Thriving Investment Hub: Flexibility, Regulator Support, & Favourable Taxes

Malta is a highly regarded location for investment service providers, funds, and asset managers in Europe. In fact, as an EU member state, Malta boasts a significant number of fund managers and administrators, making it a popular choice among fund service providers. The island harbours approximately 114 Alternative Investment Funds (AIFs), 106 Notified AIFs, 218 Professional Investor Funds (PIFs), and 114 Undertakings for Collective Investment in Transferable Securities (UCITS), with a combined Net Asset Valuation of 21.2 Billion.

Additionally, Investment firms, fund managers, and promoters commend Malta for its flexible investment products, the introduction of the Recognised Incorporated Cell Company, and the MFSA regulator’s open-door policy. Furthermore, licensees find the MFSA licensing process to be quick, thorough, and highly efficient.

Malta offers various legal forms for setting up funds, giving providers the choice between self-management or outsourcing to a local or foreign administrator. Additionally, Malta’s favourable fiscal environment, including a strong network of double tax treaties and no tax at the fund level for non-resident investors, makes it an attractive option for individuals, including asset managers and senior MFSA-licensed financial operators who benefit from favourable tax rates on their employment income.

What are Investment Service Providers?

Understanding Licensed Investment Service Providers in Malta

Investment service providers (ISPs) are entities that offer a range of activities related to investments in financial instruments. These include banks, financial institutions, investment firms, investment intermediaries, and management companies. Consequently ISPs are specialised businesses that manage, sell, and market investment products to the public.

Furthermore, ISPs offer a variety of services, which can include portfolio management, underwriting, investments, record-keeping, custodial services, legal services, accounting services, and tax management services and are often referred to as investment companies or fund companies. Often times, these companies pool capital from investors and invest it in financial securities. They may also partner up with third-party distributors to sell mutual funds.

Legally, ISPs are defined and regulated entities. They must comply with specific regulations and standards to ensure the protection of investors and the integrity of the financial markets. It is important to note that investment service providers play a crucial role in the financial industry by facilitating investment opportunities and managing investments on behalf of individuals and institutions.

Investment service providers in Malta, including fund managers, brokers, custodians, MTFs, Market Makers, Portfolio Managers, and Investment Advisors, are licensed by the Malta Financial Services Authority (MFSA). The licensing is governed by the Investment Services Act, 1994 and MFSA regulations.

Licensing of PIFs, AIFs and UCITS Funds

Fund Structures and Regulations in Malta

In Malta, investment funds like PIFs, AIFs, and UCITS funds must obtain a license from the Malta Financial Services Authority (MFSA) under the Investment Services Act 1994 (ISA).

UCITS funds are created in compliance with the EU’s UCITS directive and are marketable to the public in all EU and EEA countries. AIFs can be marketed to retail investors, professional investors, and high-net-worth investors, while PIFs are only for high-net-worth investors, with a minimum investment of €100,000.

PIFs offer more flexibility and fewer restrictions than AIFs but are not automatically passportable to other EU countries. Funds can be structured as SICAV, INVCO, ICC, unit trust, or limited partnership and can be set up as umbrella funds, sub-funds, or multi-class funds.

Tax Advantages for Investment Service Providers, Funds and Fund Managers

Discover incentives for establishing in Malta

Malta’s tax laws offer numerous exemptions to encourage the establishment of funds and fund managers on the island. Key benefits include:

No dividend tax for non-resident investors.
No tax on investment disposal by non-residents.
Investment income from assets outside Malta is tax-free.
No stamp duty on share issues or transfers.
No tax on fund’s net asset value.
5% tax rate for Malta-licensed fund managers through shareholder refunds.
VAT-exemption for fund management and administration services.

How We Can Help You

applying our legal expertise to your projects

Our experienced team will undertake a review of your proposed activity and advise you of the appropriate class of license you are required to obtain.

We will also assist you with:

Incorporating a Maltese company.
Draft a statement of intent and legal opinion.
Business Plan guidance.
Preparation and submission of all license application documents.
Liaising with the MFSA and accompanying you to all preliminary meetings.
Filing all fit and proper tests for all key persons for the MFSA’s approval.
Drafting MFSA response letters as may be required.
Referrals to competent persons in our network to fill any needed roles (MLRO, compliance officer, systems auditor, etc.).
Any other legal support required throughout the license application process.

Key Contact

Dr Kelly Fenech

senior associate

Get in Touch