The registration of
professional investor funds (PIFs) is on the increase in Malta. This is
mainly due to the efficiency of the Regulator, Malta's EU membership, local
and international listing options and the
(exemption from income tax and capital gains tax at fund level and at
non-resident investor level).
However it has been our experience that new
registrations might not always be suitable for an existing fund. On the
other hand, in these situations, managers would usually look at
continuation/redomiciliation with all its assets, liabilities, rights and
duties under Maltese law as the best route.
The Continuation of Companies Regulations came into
force on 26 November 2002 and redomiciliation is allowed from all the EU,
EEA and OECD states, the Bahamas, Bermuda, the British Virgin Islands, the
Cayman Islands, Gibraltar, Guernsey, the Isle of Man, Jersey and Mauritius,
which have appropriate provisions in their laws.
In addition, the redomiciliation must also be provided
for in the charter, statutes or memorandum and articles, or other instrument
constituting or defining the foreign company.
The foreign company that is seeking redomiciliation must
have existed for at least one year in the approved jurisdiction and be
“similar in nature” to a Maltese company.
The typical corporate form of a Maltese fund is the
company with variable share capital or SICAV, a tried, tested and flexible
formula for the past 10 years for both retail and non-retail funds. In
addition, the law also allows an investment company with fixed share capital
Needless to say, foreign funds constituted as investment
partnerships or unit trusts do not qualify for redomiciliation as companies
and it would be necessary (and still worthwhile) to reconstitute the fund in
Malta afresh, whether as a SICAV or INVCO or, indeed, as a new investment
partnership or unit-trust.
In this preliminary stage of adapting the foreign fund
to the Maltese corporate structures, and for present purposes, we shall
concentrate mainly on the more popular SICAV structure. A number of issues
need therefore to be considered.
A Maltese SICAV must contain the word ‘SICAV’
in its name, followed by ‘p.l.c.’ to designate its
status as a public limited company that can offer
its shares for sale to the public.
The objects of the SICAV, being a type of collective
investment scheme, must be the collective
investment of capital acquired by means of an
offer of units for subscription, sale or exchange.
Indeed, the scheme must operate according to
the principle of risk spreading and either (i) the
contributions of the participants and the profits or