MFSA Publishes Circular on the Establishment of Single Family Offices in Malta
MFSA Publishes Circular on the Establishment of Single Family Offices in Malta
On the 27th of November 2024, the Malta Financial Services Authority (‘MFSA’) issued a circular announcing key amendments to its regulatory framework to streamline the establishment and operation of Single Family Offices in Malta.
A Single Family Office is a dedicated structure designed to manage the wealth of a single high-net-worth family. It offers a comprehensive range of services including investment management, estate planning, philanthropic activities, as well as lifestyle management.
The MFSA has identified Single Family Office as a growth opportunity for Malta’s financial services sector and has in this respect updated two core regulatory frameworks:
- The Investment Services Rules for Notified Professional Investor Fund and
- Related Due Diligence Service Providers; and The Trustees of Family Trusts Rulebook.
In updating these regulatory frameworks, the MFSA took into consideration money-laundering and terrorism financing risks and sought to ensure that subject persons form part of the Single Family Offices Structures as well.
Amendments to the Investment Services Rules for Notified Professional Investor Funds and Related Due Diligence Service Providers
- Part A has been amended to allow a Notified Professional Investor Fund (‘Notified PIF’) to be managed by a fund manager, established in Malta, which is exempt from the requirements for an investment license, provided that it manages a family office vehicle which invests the private wealth of investors without raising external capital;
- Part B has been amended to incorporate certain reporting requirements for the aforementioned fund managers; and
- New Supplementary Rules have been introduced which provide thresholds for fund manager exemptions and verification responsibilities for due diligence service providers and governing bodies.
Amendments to the Trustees of Family Trusts Rulebook
- Amendments to the definitions mostly revolving around the definition ‘family member/family dependent’ which has been redefined to reflect more modern and broadened circumstances. In certain cases, particularly when a family trust managed by a registered trustee is established to invest in a Notified PIF overseen by an exempt manager, the definition may be broadened further to include additional individuals classified as "family clients." To accommodate these changes, new definitions have been introduced specifically for these parties.
- Registration Considerations have been adjusted to accommodate trusts involving ‘family clients’, including the provision of documentary evidence to the MFSA.
How can BDO Malta help?
To conclude, the recent regulatory updates in Malta reflect the country’s focus on balancing opportunity with robust compliance measures. At BDO Malta, our Legal Advisory services are designed to support high-net-worth families and their businesses by offering practical and tailored solutions. From structuring and regulatory compliance to operational setup, our experienced team provides services that align with Malta’s legal framework and your specific goals. BDO Malta is dedicated to helping you establish a solid, compliant foundation for sustainable success.