Malta - Comparison of Investment |Hedge | Mutual |UCITS |Funds

Type of PIF Experienced Investor Fund Qualifying Investor Fund Extraordinary Investor

Minimum Investment €10,000 / $10,000 €75,000 / $75,000 €750,000 / $750,000

Investment Limits Yes No No

Eligibility for Investors Satisfy definition of

experienced investor Satisfy definition of qualifying investor

Satisfy definition of extraordinary investor

Investment Restrictions Certain rules apply to property funds None

- except as specified in offering documentation

None - except as specified in

offering documentation

Borrowing Limits

100% NAV for borrowings used for in-vestment purposes & leverage via de-

rivatives. Assessed on VaR (value at risk) or Commitment Approach.

Unrestricted borrowing on temporary basis for liquidity purposes.

None - except as specified in

offering documentation

None - except as specified in

offering documentation

Time for MFSA Response 7 business days 7 business days 7 business days

Offering Memorandum Minimum Requirements Minimum Requirements Optional

Financial Statements / Reporting

Annual To be submitted with

Custodian’s report

Annual No Custodian’s report

required

Annual No Custodian’s report

required

Compliance Report Semi—Annual Semi—Annual Semi—Annual

Statistical Returns Quarterly Quarterly Quarterly

Investment Manager

Optional - depend on competence

- self managed PIFs allowed - can act as administrator

Optional - depend on competence

- self managed PIFs allowed - can act as administrator

Optional - depend on competence

- self managed PIFs allowed - can act as administrator

Investment Advisor Optional Optional Optional

Administrator Optional Optional Optional

Compliance Officer Required

Can also act as MLRO Required

Can also act as MLRO Required

Can also act as MLRO

MLRO (Money Laundering Officer)

Required if PIF marketing own units Required if PIF marketing own units Required if PIF marketing own units

Custodian / Depository

Required - assumes monitoring role

- need not be in Malta - must be independent from fund

manager

Optional - to implement safe custody

arrangements - must be independent from fund

manager

Optional - to implement safe custody

arrangements - must be independent from fund

manager

Local Representative Yes if all officials & service providers

outside of Malta Yes if all officials & service providers

outside of Malta Yes if all officials & service providers

outside of Malta

Independent Director from Manager /Custodian

Required Required Required

Self Managed Funds Allowed Allowed Allowed

Auditor Required Required Required

Listing Optional Optional Optional

Declaration Investor to declare qualifies as

Experienced Investor Investor to declare qualifies as

Qualifying Investor Investor to declare qualifies as

Extraordinary Investor

Taxation - Fund No Malta Tax No Malta Tax No Malta Tax

Taxation - Investors

No Capital Gains for Non Residents

No Withholding Tax on Distributions

No Capital Gains for Non Residents

No Withholding Tax on Distributions

No Capital Gains for Non Residents

No Withholding Tax on Distributions

Promoter Requirement Not Required Not Required Not Required

Pledge of Units Allowed Allowed Allowed

Side Pockets Allowed Allowed Allowed

Available Legal Structures

Legal Form UCITS Retail Non –UCITS PIFs

Open - ended Investment Companies (SICAV) (Most Popular)

Y Y Y

Close-ended Investment Companies (INVCO)

N Y Y

Unit Trusts Y Y Y

Limited Partnerships Y Y Y

Contractual Funds Y Y Y

Eligibility of Investors

Experienced Investor Qualifying Investors Extraordinary Investors

Person having at least 1 year of relevant work experience in financial sector, or person active in such types of investments.

Person or entity has net assets in excess of Euro / Dollar 750,000. If PIF is structured as trust, amount applied to net value of trust’s assets. Condition met alone or jointly with spouse.

Person or entity has net assets in excess of Euro / Dollar 750,000. If PIF is structured as trust, amount applied to net value of trust’s assets. Condition met alone or jointly with spouse.

Reasonable experience in acquisition or disposal of funds / instruments with similar risk profiles as proposed PIF

Reasonable experience in investment decisions on funds with similar risk profile / instruments of proposed PIF

Senior employee or director to service providers of PIF

Has frequently carried out investment transactions of significant size

Senior employee or director to service providers of PIF

Investor is PIF promoted to extraordinary investors

Any other appropriate justification Relation or close friend of promoters limited to 10 persons per PIF

Body corporate or partnership wholly owned by persons or entities meeting these criteria, where used as investment vehicle by the corporate or partnership

Entity with minimum of Euro 3.75 million under discretionary management investing on its own account

Investor is PIF promoted to qualifying or extraordinary investors

Body corporate or partnership wholly owned by persons or entities meeting these criteria, where used as investment vehicle by the corporate or partnership

Collective Investment Schemes

Hedge Funds - Professional Investor Funds—UCITS Maltese law uses the term ‘Collective Investment Schemes’ for all forms of investment funds - including hedge funds, retail or non-retail, as well as UCITS and non-UCITS funds. Multi Fund & Multi Class CISs A CIS may be established as a Multi-Fund CIS, meaning that it is capable of being divided into different classes of shares and a class or group of classes of shares constitute a distinct Sub-Fund of the CIS. A Sub-Fund may be allocated with assets and liabili-ties distinct from other assets and liabilities of the other Sub-Funds in the CIS. A Multi-fund CIS may create or issue new classes of shares constituting a new Sub-Fund—each Sub-Fund (class of shares) may be denominated in a different currency. A CIS can be a Multi-Class CIS if its share capital can be divided into different classes of shares, whilst not constituting in and of itself a Sub-Fund. Each class of shares may be denominated in a different currency. Multi-Class CIS’s cannot elect to segregate any of its assets or liabilities.

Malta - A Legitimate Low Tax EU Jurisdiction 100% EU & OECD Compliant

Scheme Sub-Fund

Application for Preliminary Indication

of acceptability of PIF

€600

(irrespective of number of Sub-funds)

Application for PIF Licence €1,500 €1,000 per Sub-fund

Annual Supervisory Fee €1,500 €500 per Sub-fund

Fees Malta has one of the lowest levied fees in comparison to other states in the European Union and the traditional offshore jurisdictions such as the Cayman Islands.

Malta Taxation of Funds

Prescribed - 85% of assets located in Malta Non - Prescribed - 15% of assets outside of Malta & Overseas UCITS

Fund 15% - Bank Interest 10% - certain investment income 35% - Malta real estate income 0% - all other income

0% tax on income or gains

(Malta real estate income taxed)

Non-Resident Investors No tax if withheld at source. Can opt not to have any source deductions.

0% on distribution

Resident Investors No tax if withheld at source or deducted in line with personal circumstances.

15% on distribution

Licensable Activities Investment funds must have a license from the Malta Financial Standards Authority (MFSA), before (i) units can be issued or created, or (ii) activities can be carried out in or from within Malta.

Exempt Activities The following activities do not require licenses: Funds involving participants carrying on a business that does not constitute an investment serve and enters into the

arrangement for commercial purposes related to that business. Funds which operate under the principle of risk spreading, where the contributions of the participants, profits or income

from payments are to be made are pooled, provided the general purpose of the scheme is commercial and not for in-vestment purposes

Schemes operated by a company or its group of companies for its employees (past and present, as well as dependents),

in instruments issued by the company/group and any other instruments as approved by the MFSA.

Private Funds A separate licensing regime applies to private funds where they are subject to a ‘recognition’ as opposed to the full licensing regime. A private fund must have the following features: Total number of participants are limited to 15 Fund does not qualify as a professional investor fund (meaning a non-retail fund) Fund is private in nature.

European Union Passporting

UCITS fund units can be freely marketed or promoted within the EU by virtue of the Passporting arrangements under UCITIS IV Directive.

Acumum - Legal & Advisory

‘Uniquely local - Uniquely International’ Located in the EU tax efficient jurisdiction of Malta, Acumum Legal & Advisory employs Maltese, UK, & international lawyers &

tax accountants - with extensive on-location & off-shore international experience - providing appropriate, bespoke solutions.

Excellence| Superb Client Service | Cost Efficient Dubai, Luxembourg & Portugal Representative Offices

info@acumum.com | www.acumum.com | Skype ID: acumum

Malta Office: +356 2778 1700

260 Triq San Albert, Gzira, GZR 1150, Malta (EU) Information for guidance purposes only © Acumum 2014 All Rights Reserved

Malta’s International Legal & Advisory Firm

Malta’s International Legal & Advisory Firm

Acumum - Legal & Advisory

‘Uniquely local - Uniquely International’

Located in the EU tax efficient jurisdiction of Malta, Acumum Legal & Advisory employs Maltese, UK, & international lawyers &

tax accountants - with extensive on-location & off-shore international experience - providing appropriate, bespoke solutions.

Excellence| Superb Client Service| Cost Efficient Dubai, Luxembourg & Portugal Representative Offices

info@acumum.com | www.acumum.com | Skype ID: acumum

Malta Office: +356 2778 1700

260 Triq San Albert, Gzira, GZR 1150, Malta (EU)

Information for guidance purposes only © Acumum 2014 All Rights Reserved

For individuals working in the financial

services industry, in addition to the

‘one stop shop’ approach of the Malta

Financial Services Authority (MFSA) and

the flexible regulations detailed above,

Malta has enacted a low, flat rate of

15%.

Malta wants to attract high income individuals and why not?

Positioning itself as a premier financial

and commercial district, Malta employs

an attractive low tax regime for busi-

nesses. On a personal front, with its

Mediterranean climate and lifestyle,

there are numerous options and levels

in Malta for accommodation, entertain-

ment and schools.

Individual income from a qualifying contract of employment in an “eligible office” with a company licensed and/or recognised by the Competent Authority is subject to tax at a flat rate of 15% on an income of at least €76,136 adjusted annually in line with the Retail Price

Index. €78,207 for basis year 2012 and €80,100 for 2013 As such, Malta authorities have created a scheme to attract highly qualified persons who occupy as “eligible office” with companies licensed and/or recog-nized by either the Malta Financial Ser-vices Authority (MFSA).

The 15% flat rate is imposed up to a

maximum income of €5 million - any

excess is exempt from tax. The 15% tax

rate applies for a consecutive period of

five years for EU, EEA and Swiss nation-

als and for a consecutive period of four

years for third country nationals.

EU. EEA and Swiss individuals who al-

ready have a qualifying contract of em-

ployment in an “eligible office” for two

years (or one year for 3rd party nation-

als) before 2008 may still benefit from

the 15% tax rate for the remaining

years of the statutory period.

“Eligible office” is employment in one of the following positions:

Actuarial Professional

Chief Executive Officer

Chief Financial Officer

Chief Commercial Officer

Chief Insurance Technical Officer

Chief Investment Officer

Chief Operations Officer

Chief Risk Officer (including Fraud

and Investigations Officer)

Chief Technology Officer

Chief Underwriting Officer

Head of Investor Relations

Head of Marketing (including Head

of Distribution Channels)

Head of Research and Develop-

ment; (including Search Engine

Optimisation and Systems Architec-

ture)

Portfolio Manager

Senior Analyst (including Structur-

ing Professional)

Senior Trader/Trader

Odds Compiler Specialist

Taxation Corporate & Company Formation Financial Services Licenses

Gaming Aviation Insurance Licenses

Intellectual Property Trusts & Foundations Maritime & Yachts

Telco, Tech, Media Estate & Wealth Management Arbitration & Litigation

Immigration & Residency

Divisions

Compliance Accounting, Tax & Back Office Outsourcing

Malta’s Highly Qualified Earners Scheme 15% flat rate income tax rate for senior employees within the

financial services sector