Malta Notified AIFs (NAIF)

Malta Notified AIFs (NAIF)

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Following the draft framework for Notified AIFs as issued back in early 2016 by the Malta Financial Services Authority (“MFSA”), the legislation governing the new fund regime is live and governed by LN 219 of 2016 as part of the Investment Services Act (Cap. 370 of the Laws of Malta).

Months after the launch of the QIAIF as governed by the Irish Investment Services Rule Books, Malta has now introduced the NAIF structure.  Such structure will make it easier for fund promoters to launch their investment vehicle as the timing to market is only 10 working days, i.e. the period required by the competent authority to include the AIF in the List of Notified AIFs.  Needless to say, such period is subject to the complete documentation required by the MFSA. 

Structures of the Notified Alternative Investment Fund (NAIF)

An AIF, in relation to which a notification may be submitted, may be in the form of one of the below structures:

  1. An Investment Company with Variable Share Capital (SICAV),
  2. An Investment Company with Fixed Share Capital (INVCO),
  3. An Incorporated Cell Company of a SICAV ICC,
  4. An Incorporated Cell of a Recognised Incorporated Cell Company (RICC),
  5. A Contractual Fund.

Main Features of the Notified Alternative Investment Fund (NAIF)

The process of notification should apply to AIFs which are promoted to Qualifying or Professional Investors.  Funds falling within the scope of the notification process shall be managed by a Full-Scope AIFM which is authorised and regulated under Directive 2011/61/EU of the EU Parliament and of the Council of 8th June 2011 on Alternative Investment Fund Managers.  The below list lays down the main features of such regime:

  • The Investment Fund is not subject to the licensing process by the MFSA;
  • The NAIF is subject to a Notification Process;
  • Onus of Due-Diligence & Ongoing supervision lie within the AIFM;
  • The NAIF can be both open & closed ended;
  • The NAIF cannot be self-managed;
  • The NAIF cannot be in the form of a Loan Fund;
  • The NAIF cannot invest in non-financial assets, including real-estate;
  • The AIFM is to appoint and MLRO as an oversight over the NAIF.

The Notification Process

Although the NAIF is not subject to the 3-phased licensing procedure, it is still subject to a Notification process.  Such process is structured as follows:

  1. A written request by the AIFM in respect of an AIF – and its sub-funds, if any – to be included in the list of Notified AIFs in the form and manner as required by the MFSA;
  2. Prior submission of (1) above, the governing body of the AIF shall approve a resolution certifying that the Prospectus of the AIF satisfies the minimum criteria as prescribed by the MFSA;
  3. The AIFM shall submit the duly completed written notification together with the accompanying documents within thirty (30) calendar days from the date of the resolution of the governing body of the AIF whereby approving the AIFs prospectus and prior to the effective date of the prospectus;
  4. The competent authority should include the AIF in the List of Notified AIFs within ten (10) working days from the date of filing of the notification request together with the completed required documentation

Onus on the AIFM

One of the key features of the regime is that the due diligence requirements and ongoing supervision are the AIFM’s responsibility.  Thus, prior to submitting a request for notification, the AIFM shall carry out the necessary due diligence process to ensure that the service providers and governing body of the AIF are “fit and proper” as specified by the competent authority.  Moreover:

  • The AIFM shall undertake and ensure that each service provider and governing body of the AIF maintain the “fit and proper” standard on an ongoing basis;
  • The AIFM should notify the MFSA in the case of any changes in service providers and/or members of the governing body of the AIF;
  • The AIFM shall keep records of all evidence of, and correspondence regarding, the due diligence process carried out;

The inclusion of an AIF in the list of Notified AIFs is a concession and a privilege revocable by the competent authority at any time at its sole discretion on notice to the AIFM.  The burden of providing that the AIF should be retained on the List of Notified AIFs shall rest at all times on the AIFM.

Investor Base

Applicable investors within the Notified AIFs follow the same path as for a fully licensed AIF and thus the target investor base can be in the following forms:

  1. Professional Investors as described by Annex II of Directive 2004/39/EC; and/or
  2. Qualifying Investors which:
    • Invest a minimum of €100,000 (or equivalent) in the AIF
    • Declare in writing to the AIFM and the AIF that they are aware and accept the risks associated with the proposed investment

Where the AIFM intends to market the NAIF on a cross-border basis as governed by the Investment Services Act (Marketing of Alternative Investment Funds) regulations, the NAIF shall be marketed to professional investors as defined above or as otherwise permitted in the applicable jurisdiction that the NAIF is being marketed.

Key Contacts

Franklin Cachia

Director - Tax & Regulated Industries

Kyle Scerri

Manager - Gaming & Fintech



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