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Malta as a Fund Domicile

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Visited Malta about two weeks ago to work on a fund setup and meet prospective service providers. Generally, the impression is very good. In terms of professionalism of lawyers, auditors, administrators etc. it looks and feels the same as in London. Particularly, Malta Financial Services Authority (MFSA) was represented by expierienced persons who acted in a highly professional and polite manner.

What one gets by registering in Malta, is a European Union domiciled fund. First, it means as little as possible restrictions when it comes to marketing in European Union. Second, potential investors consider EU, including Malta, as properly regulated and clean jurisdiction with little legal risks. Third, the fund is more acceptable counterparty for brokerage companies, banks, investees etc. if compared to funds registered in offshore jurisdictions.

Currently, there are  just a bit more than 400 funds registered in Malta, but the number is growing exponantially. As a fund domicile, Malta still looks tiny, if compared to Ireland or Luxembourg. I believe that the rapid growth of the Malta fund industry will accelerate. The reasons for choosing Malta are efficiency and costs.

Costs are a fraction of what you’d pay for similar setup in Ireland or Luxembourg, yet the fund structure you get are functionally the same.

Approximate setup costs are as follows:

1. Legal services: €9000-20000 (it should be noted that there is no regulatory requirement to engage local lawyer for the work).
2. Government fees: €6000.

Approximate annual costs:

1. Government fees: €2000.
2. Local director:  €6000.
3.  Company Secretary and Registered Office: €2500.
4. Audit fees: €8000.
5. Administration: up to 10 bp of assets, subject to minimum fee of at least €30000 per annum. It should be noted, that initially, the offers may be up to 25 bp for smaller funds.

Overall, setup budget of € 20 000 and annual budget of €50 000 should be be sufficient for  most fund structures. Our budget is closer to €15 000 for setup and €40 000 in running costs. However, for fund structuring purposes we choosed to use Bermuda registered investment advisor and it will add about €4000 to setup costs and €5000 to running costs.



Written by A.S.

September 30, 2011 at 10:25 am

Posted in investment

Tagged with , , ,

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