On February 12, 2025, the Malta Financial Services Authority (MFSA) launched the Special Limited Partnership Funds (SLPFs) framework, which is part of a series of strategic policy initiatives aimed at enhancing asset management in Malta. This initiative marks a significant step towards positioning Malta as a leading jurisdiction for alternative investment funds, enabling Collective Investment Schemes (CISs) to be structured as Limited Partnerships without needing a separate legal personality.
Who Can Benefit from Special Limited Partnership Funds (SLPFs)?
- Venture Capital Funds: These funds seek a simplified governance model for early-stage investments.
- Hedge Funds and Alternative Investment Managers: These target professional investors familiar with limited partnership models.
- Private Equity Funds: They require a flexible, tax-efficient structure.
- Real Estate Investment Funds: They need capital commitment structures that align with investor expectations.
- Infrastructure Funds: Provided they are aimed at qualifying or professional investors, they may fit within the SLPF structure.
The introduction of Special Limited Partnership Funds (SLPFs) provides fund managers with a more flexible, tax-efficient, and investor-friendly alternative. Traditionally, Malta’s fund industry has relied on 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.
Under the new framework, Special Limited Partnership Funds (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.
Key Advantages of the Special Limited Partnership Funds (SLPFs) Structure
Tax Transparency
Special Limited Partnership Funds (SLPFs) operate as tax-transparent vehicles. Income is not taxed at the fund level but is instead passed on to investors, who are taxed according to their respective jurisdictions. This feature eliminates double taxation, a significant advantage for international investors.
Greater Structural Flexibility
Unlike corporate structures, Special Limited Partnership Funds (SLPFs) do not have a separate legal personality, making them simpler to administer and more appealing to international investors familiar with Limited Partnership (LP) models.
Limited Liability Protection
Investors acting as limited partners enjoy limited liability, meaning their financial risk is confined to their investment commitment. Meanwhile, the General Partner (GP) retains control over fund management and operations.
Special Limited Partnership Funds (SLPFs) Governance
SLPFs are governed by a Limited Partnership Agreement (LPA), which allows for customizable governance arrangements instead of rigid corporate formalities. This flexibility is attractive for fund managers who need to structure capital commitments and profit-sharing
Malta’s SLPF framework models successful LP structures found in major fund jurisdictions, making it easier for fund managers and investors to transition to a Maltese structure without facing significant regulatory or operational hurdles.
In Summary
Malta has long been recognised as a strategic European hub for financial services, and the launch of Special Limited Partnership Funds (SLPFs) significantly enhances its position within the private equity and venture capital markets. Establishing a fund in Malta is straightforward, especially with the Fast-Track Approval for Notified Funds, which allows for rapid fund launches. This feature is especially appealing to investment managers who want to set up a fund promptly. Additionally, Malta-domiciled funds are eligible to make use of passporting privileges across the European market.
For more information, please access the circular published by the MFSA.
How Can We Assist?
For further clarification, investors are encouraged to review the framework or seek professional guidance tailored to their individual circumstances. Please contact us to arrange a consultation that will help us better understand your situation and provide effective advice on the Special Limited Partnership Funds (SLPFs).
