Licensed Collective Investment Schemes may choose between 2 alternative fiscal regimes, namely:
1. They may choose to be exempt from income tax and tax on capital gains in Malta but, in that case, they cannot avail themselves of Malta’s vast network of Double Taxation Treaties. This structure is ideal for CISs that intend investing in various Maltese securities which can, therefore, invest in a tax-free environment; or
2. CISs set up as SICAVs (but not as unit trusts or partnerships), may elect to be liable to income tax at the favourable rate of 25% (as opposed to the standard corporate tax rate of 35%) and benefit from Malta’s Double Taxation Treaties. These CISs would likewise be exempt from capital gains tax which means that profits from the disposal of any investments, assets or liabilities would remain exempt in the hands of the CIS. For obvious reasons, this fiscal regime is more suitable for CISs that intend investing internationally.