Collective Investment Scheme for Accredited Investors

Switzerland hedge funds

01 Dec 2011 Collective Investment Scheme for Accredited Investors

Funds for Accredited Investors

Malta

(Experienced Investor Funds

Malta

(Qualifying Investor Funds)

Malta

(Extraordinary Investor Funds)

 

Regulator

Malta Financial Services Authority  (MFSA) Malta Financial Services Authority (MFSA) Malta Financial Services Authority (MFSA)
 

Approval Process

A license must be applied for and obtained from the MFSA A license must be applied for and obtained from the MFSA A license must be applied for and obtained from the MFSA
 

Eligible Investors

An experienced investor is a person who:

• has worked in the financial sector for at least one year in a professional position;

• has reasonable experience in the acquisition and/or disposal of funds of a similar nature, risk profile, or property (or a substantial part thereof) to which the PIF in question relates;

• has carried out investment transactions in
significant size at a certain frequency; or

• can provide any other appropriate justification that he has the requisite expertise, experience and knowledge to be in a position to make his own investment decisions and understand the
risks involved.

A qualifying investor must satisfy at least one of the following criteria:
•  a body corporate having net assets (either alone or as part of a group) in excess of EUR
750,000;
•  an unincorporated body of persons or
association having net assets in excess of
EUR 750,000;
• a trust with assets having a net value
exceeding EUR 750,000;
• an individual/the majority of the board of directors (in the case of body corporate)/ the general partner (in the case of a partnership)
has reasonable experience in the acquisition or disposal of funds of a similar nature, risk profile or property (or a substantial part thereof) to which the PIF in question relates;
• an individual whose net worth (or joint net worth with that person’s spouse) exceeds EUR750,000;
• a senior employee or director of service
providers to the PIF; • relations or close friends of the promoters, limited to a total of 10 persons per PIF;• an entity (either alone or as a group) having EUR3.75 million or more under discretionary management, investing on its own account;
• qualifying or extraordinary PIFs; or
• investment vehicles wholly owned by persons or entities satisfying any of the above criteria.
An extraordinary investor must satisfy at least one of the following criteria:
• a body corporate having net assets (either alone or as part of a group) in excess of EUR 7.5 million;
• an unincorporated body of persons or association having net assets in excess of EUR 7.5 million;
• a trust with assets having a net value of EUR 7.5 million;
• an individual whose net worth (or joint net worth with that person’s spouse), exceeds EUR 7.5 million;• a senior employee or director of service providers to the PIF;• extraordinary PIFs; or• investment vehicles wholly owned by persons or entities satisfying any of the above criteria.
Minimum Capital EUR 15,000 or equivalent in another currency per
individual investor, although this is set to be decreased to EUR 10,000 in the coming months.
EUR 75,000 or equivalent in another currency per
individual investor.
EUR 750,000 or equivalent in another currency per
individual investor.
Structure of the fund PIFs may be structured as:
• an investment company with variable
share capital (SICAV);
• an investment company with fixed
share capital (INVCO);
• a limited partnership;
• a unit trust; or
• a common contractual fund.
PIFs may be structured as:
• an investment company with variable
share capital (SICAV);
• an investment company with fixed
share capital (INVCO);
• a limited partnership;
• a unit trust; or
• a common contractual fund.
PIFs may be structured as:
• an investment company with variable
share capital (SICAV);
• an investment company with fixed
share capital (INVCO);
• a limited partnership;
• a unit trust; or
• a common contractual fund.
lnvestment / borrowing restrictions Borrowing for investment purposes or leverage via
the use of derivatives is
restricted to 100% of NAV.
None (other than those which may be specified in
their offering document).
None (other than those which may be specified in
their offering document).
Offering Document / Marketing Document Offering Document. Offering Document. Offering Document.
Service Providers Experienced investor funds must have a:

1. custodian, which must be:
• established and regulated within a “recognised jurisdiction” (i.e. within an EEA Member State
or in a State which is a signatory to a
multilateral or bilateral memorandum of
understanding with the MFSA);
• the subsidiary of a firm that is regulated in a recognised jurisdiction and the MFSA gives its approval thereto; or
• the MFSA considers that the custodian is subject to a comparable level of regulation and has given its approval thereto.
2. local representative in those cases where the  service providers are all based outside Malta and where the fund has not appointed:

• a local resident director (in the case of a PIF set up as an investment company);
• a local general partner (in the case of a PIF set
up as a limited partnership); or
• a local trustee (in the case of a PIF set up as a unit trust or a common contractual fund);
3. compliance officer (who may be the manager or trustee, as the case may be);
4. money laundering and reporting officer; and

5. an independent auditor approved by the
MFSA.

Qualifying and extraordinary investor funds must have a:

1. local representative in those cases where the service providers are all based outside Malta and where the fund has not appointed:
• a local resident director (in the case of a PIF set up as an investment company);
• a local general partner (in the case of a PIF set up as a limited partnership); or
• a local trustee (in the case of a PIF set up as a unit trust or a common contractual fund);

2. compliance officer (who may be the manager or trustee, as the case may be);

3. money laundering and reporting officer; and

4. an independent auditor approved by the
MFSA.A non-prescribed fund is not subject to withholding tax. On the other hand, a prescribed fund is subject to 10% withholding tax on all investment income other
than local bank interest, the latter being subject to 15% withholding tax.

Qualifying and extraordinary investor funds must have a:

1. local representative in those cases where the service providers are all based outside Malta and where the fund has not appointed:
• a local resident director (in the case of a PIF set up as an investment company);
• a local general partner (in the case of a PIF set up as a limited partnership); or
• a local trustee (in the case of a PIF set up as a unit trust or a common contractual fund);

2. compliance officer (who may be the manager or trustee, as the case may be);3. money laundering and reporting officer; and

4. an independent auditor approved by the MFSA.

Reporting Annual report must be submitted to the MFSA. No obligation to produce a half-yearly report.
Taxation:
Income Tax The income, other than income from immovable property, of a non-prescribed fund (i.e. a fund which has less than 85% of its assets situated in Malta or is an
overseas-based fund) is exempted from the payment of income tax in Malta. Dividends from a non-prescribed fund to non-resident unit-holders are also
exempted from tax.
Capital Gains Capital gains derived by non-residents from the disposal of their units in an investor fund (prescribed or non-prescribed) are exempted from tax.
Withholding Tax A non-prescribed fund is not subject to withholding tax. On the other hand, a prescribed fund is subject to 10% withholding tax on all investment income other
than local bank interest, the latter being subject to 15% withholding tax.
Benefit from Double Taxation Treaties Malta benefits from a vast network of double taxation treaties.
See: http://www.mfsa.com.mt/pages/taxation/taxation%20treaties/taxation%20treaties.asp
Fees and Expenses:
 

Company Registry

 

EUR 1,750 EUR 1,750 EUR 1,750
 

Application Fee

EUR 1,500 and EUR 1,000 for each sub-fund EUR 1,500 and EUR 1,000 for each sub-fund EUR 1,500 and EUR 1,000 for each sub-fund
 

Annual Supervisory Fee

EUR 1,500 and EUR 500 for each sub-fund. EUR 1,500 and EUR 500 for each sub-fund. EUR 1,500 and EUR 500 for each sub-fund.
 

European Passport

No No No
 

Listing

An investor fund licensed in Malta may be listed on the Malta Stock Exchange. An investor fund licensed in Malta may be listed on the Malta Stock Exchange. An investor fund licensed in Malta may be listed on the Malta Stock Exchange.
 

Promotion Outside Malta

Yes, if fund complies with applicable rules in such jurisdictions. Yes, if fund complies with applicable rules in such jurisdictions. Yes, if fund complies with applicable rules in such jurisdictions.

 

Our Experience

 

lecocqassociate provides a full range of financial regulatory, corporate and commercial advice in relation to the structuring and incorporation of entities.

This newsletter is for information purposes only. It does not constitute professional advice or an opinion. Please contact Mr. Dominique Lecocq on moc.e1508628008taico1508628008ssaqc1508628008ocel@1508628008lrd1508628008 for any questions.