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[ESTABLISHING A BUSINESS ENTITY IN MALTA]
companies that are not other INVCOs; Distribution of an INVCO’s capital profits is prohibited by its M&A, and it cannot retain more than 15% of income derived from securities. • Form of company with a variable share capital equal to the net asset value of the company, and no nominal value assigned to the shares; • For collective investment or retirement scheme use; • May be registered as a private (SICAV Ltd.) or a public (SICAV p.l.c.) company; • Several different structuring options: - Multi- fund/ ‘umbrella’ company where different classes or groups of shares comprise sub-funds with distinct investment objectives and policies; - Possibility for each sub-fund to have a separate patrimony, thus allowing for the ring-fencing of assets & liabilities of each sub-fund; - Recognised Incorporated Cell Companies (RICC), where each Incorporated Cell (IC) is established as a separate collective investment scheme, with its own licence and separate legal & juridical personality. The RICC would provide standardised administrative services to its ICs in a ‘platform’ setup. • A trust creates a fiduciary relationship between the trustee and the beneficiaries; • Property is transferred to trustee who has all the rights of a person having absolute title to property; • However, the rights of ownership of the trustee are limited by the duties they owe to the beneficiaries; • Malta is a signatory to the Hague Convention on the law applicable to trusts and therefore
SICAV
• Internal management carried out similarly to public or private companies, depending on whether the entity is a private investment company (SICAV Ltd) or a public investment company (SICAV p.l.c.); • Number of Directors and the criteria which they must fulfil varies, depending on the purpose for which the SICAV is being set up (e.g., an Alternative Investment Fund, a Professional Investor Fund, or an Undertaking for the Collective Investment in Transferable Securities (UCITS), and the category of investment licence which the SICAV obtains under the Investment Services Act; • Directors must pass a ‘fit and proper’ test and be approved by the MFSA. The Registry of Companies must be notified of changes in relation to the officers of the company; • Annual reports must be filed, and accounts and directors' report must comply with both the Companies Act and the Investment Services Act.
Trust
• Trustee must act with prudence, diligence and utmost good faith and to administer the property as if it were his own; • Delegation of tasks by trustee is not allowed except in certain instances e.g., role of investment manager; • Other powers may also be allowed to trustee e.g., power to vary terms of the trust deed;
ILN Corporate Group – Establishing a Business Entity Series
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