Malta Introduces Special Limited Partnership Funds: A Game-Changer for Private Equity and Venture Capital

Malta has taken a significant step forward in its ambition to become a leading jurisdiction for alternative investment funds with the introduction of Special Limited Partnership Funds (SLPFs). This new framework, introduced by the Malta Financial Services Authority (MFSA), allows for Collective Investment Schemes (CISs) structured as Limited Partnerships without separate legal personality. The move aligns Malta’s regulatory environment with top-tier fund jurisdictions such as Luxembourg, making it a more attractive destination for private equity, venture capital, and alternative investment funds.

A New Alternative for Fund Structuring

Traditionally, Malta’s fund industry has been dominated by corporate structures, such as SICAVs. While effective, these structures do not always align with the global preference for limited partnerships in the private equity and venture capital sectors. The introduction of SLPFs provides fund managers with a flexible, tax-efficient, and investor-friendly alternative.

Under the new framework, SLPFs can be structured under the following regulatory models:

• Professional Investor Funds (PIFs)
• Notified Professional Investor Funds (NPIFs)
• Alternative Investment Funds (AIFs)
• Notified Alternative Investment Funds (NAIFs)

This flexibility allows fund promoters to tailor structures to their investment strategies while benefiting from Malta’s well-regulated and cost-effective environment.

Key Advantages of the SLPF Structure

1. Tax Transparency: SLPFs operate as tax-transparent vehicles, ensuring that income is not taxed at the fund level but is instead passed through to investors, who are taxed according to their jurisdictions. This eliminates the risk of double taxation, a key advantage for international investors.
2. Greater Structural Flexibility: Unlike corporate structures, SLPFs do not have a separate legal personality, making them simpler to administer and more attractive to international investors familiar with Limited Partnership (LP) models.
3. Limited Liability Protection: Investors participating as limited partners enjoy limited liability, meaning their financial exposure is capped at their investment commitment. Meanwhile, the General Partner (GP) retains control over fund management and operations.
4. Investor-Focused Governance: SLPFs are governed by a Limited Partnership Agreement (LPA), which provides customizable governance arrangements rather than rigid corporate formalities. This makes it an attractive option for fund managers who require more flexibility in structuring capital commitments and profit-sharing.
5. Alignment with International Best Practices: Malta’s SLPF framework mirrors successful LP structures in major fund jurisdictions, making it easier for fund managers and investors to transition to a Malta-based structure without significant regulatory or operational hurdles.

Enhancing Malta’s Competitiveness in the Private Funds Space

Malta has long been recognized as a strategic European hub for financial services, but the launch of SLPFs significantly strengthens its position in private equity and venture capital markets. Key reasons why fund promoters may now consider Malta over other jurisdictions include:

• Cost Efficiency: Setting up and maintaining a fund in Malta remains more cost-effective compared to Luxembourg or Ireland, while still adhering to EU regulatory standards.
• Regulatory Clarity: The MFSA provides a clear, robust, and business-friendly regulatory framework, reducing administrative burdens.
• Fast-Track Approval for Notified Funds: The NAIF regime allows for rapid fund launches, an attractive feature for investment managers looking to move quickly.
• EU Passporting Benefits: As an EU member state, funds domiciled in Malta can benefit from passporting rights across the European market.

Who Should Consider an SLPF?

SLPFs are particularly suitable for:

Private equity funds looking for a flexible, tax-efficient structure.
Venture capital funds seeking a simplified governance model for early-stage investments.
Real estate investment funds that require capital commitment structures aligned with investor expectations.
Hedge funds and alternative investment managers targeting professional investors who are familiar with limited partnership models.

Zampa Partners provides corporate services through ZD Corporate Services Limited which is authorised to act as a Company Service Provider by the Malta Financial Services Authority

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