Malta's growing family office sector is poised for an additional boost: key amendments to the Malta Financial Services Authority regulatory framework.
March 20, 2025
A Single Family Office (‘SFO’) is a specialized entity dedicated to overseeing and managing the wealth and affairs of a single high-net-worth family. It provides a holistic suite of services, including investment management, estate planning, philanthropy, and lifestyle coordination, ensuring seamless financial and personal wealth administration. The core purpose is to protect, increase, and transfer family wealth efficiently through multiple generations.
The Malta Financial Services Authority (‘MFSA’) has acknowledged SFOs as a significant growth opportunity within Malta’s financial services sector and has accordingly refined its regulatory framework with a focus on mitigating money laundering and terrorism financing risks. The revised legislation reinforces that all entities operating within the family office framework must adhere to AML obligations. Notified Professional Investor Funds ('NPIFs') are still required to appoint a Money Laundering Reporting Officer ('MLRO'), and this obligation remains unchanged under the new exemption for family offices. The rules explicitly state that the MFSA’s framework “ensure[s] that a subject person in terms of the Prevention of Money Laundering and Funding of Terrorism Regulations forms part of the structure at all times.” This requirement underscores the MFSA’s commitment to preserving the integrity of Malta’s financial sector while ensuring a balance between operational flexibility and regulatory oversight, in line with the EU’s principle of proportionality.
These updated regulations strengthen Malta’s appeal as a hub for SFOs by providing high-net-worth families with a well-defined framework to establish wealth management entities with investment functions, all while maintaining minimal reporting obligations. Let’s delve into this in more detail.
Key amendments introduced on 27 November 2024:
The Investment Services Rules for NPIF and Related Due Diligence Service Providers
Section 6, part A has been amended to allow a NPIF 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. By streamlining regulatory obligations, this amendment reduces costs and administrative burdens while preserving the benefits of a collective investment scheme registered with the MFSA. In a such way, for fund promoters, a NPIF, compared to fully licensed funds, is a more efficient and affordable solution enabling quicker market entry with minimal regulatory hurdles. Unlike traditional investment funds that necessitate full regulatory approval, a NPIF undergoes a notification process instead of an authorization process. This allows it to be listed by the MFSA within ten working days of submitting a complete notification request.
The amendments also clarify the definition of a "family office vehicle" and specify the types of investors eligible to participate:
In order to act as managers for an NPIF without requiring an investment services license, the NPIF must be designated as a family office vehicle.
Family office vehicles are prohibited from soliciting investments from third parties as a "family office vehicle" is defined as an investment entity that is exclusively available to a group of family members, regardless of the legal structure they use to make investments. The sole beneficiaries of these structures must be family members, and the family group must exist prior to the creation of the investment entity.
Rule 3.03, part B has been amended to incorporate certain reporting requirements for the aforementioned fund managers; accordingly, New Supplementary Rules have been introduced which provide thresholds for fund manager exemptions and verification responsibilities for due diligence service providers and governing bodies.
Family Trusts Rulebook:
The amendments primarily focus on refining the definition of ‘family member/family dependent’ to align with more modern and inclusive circumstances. In certain cases - such as when a family trust, managed by a registered trustee, is established to invest in a NPIF overseen by an exempt manager - the definition may be expanded further to encompass additional individuals classified as "family clients." To support these changes, new definitions have been introduced specifically for these parties. Additionally, registration requirements have been revised to accommodate trusts that include ‘family clients.’
Thus, given the above, in the case if an EU/non-EU family office would like to create an investment structure in Malta to manage its wealth, a setting up procedure would appear as follows:
First, a legal assessment confirming that the activity qualifies for exemption under Regulation 3(1)(f) or Regulation 3(1)(t) of SL370.02. should be obtained.
Next, a structure must be established in Malta - typically a company, partnership, or trust - though other structures outlined in Rule 2.05 of Part A of the NPIF Rules may also be considered. The structure must include a Maltese resident on the governing body (typically, though not exclusively, a non-executive director) and an appointed MLRO.
And the final step is to submit the structure to the MFSA for registration as an NPIF. Once notified, the MFSA will complete the registration of the NPIF within 10 working days of receiving the full application. After registration, the investment activities can begin without delay.
In conclusion, Malta's recent regulatory updates, along with its attractive tax regime for financial vehicles and the benefits of double tax treaties, highlight the country’s commitment to becoming an even more appealing destination for high-net-worth families seeking to preserve and grow their wealth efficiently. The island offers a streamlined, cost-effective setup for SFOs, together with legal, accounting, and compliance services at competitive price - ensuring premium service without unnecessary expenses.
Griffiths + Associates has been delivering professional expertise to individuals and their families for over 20 years. Our experienced team will help plan a tax-efficient family office in Malta to consolidate investments into a structure that aligns with your family's specific goals. For further information on SFOs in Malta and legal assistance, please do not hesitate to contact us directly at info@griffithsassoc.com.
The Malta Financial Services Authority (‘MFSA’) has acknowledged SFOs as a significant growth opportunity within Malta’s financial services sector and has accordingly refined its regulatory framework with a focus on mitigating money laundering and terrorism financing risks. The revised legislation reinforces that all entities operating within the family office framework must adhere to AML obligations. Notified Professional Investor Funds ('NPIFs') are still required to appoint a Money Laundering Reporting Officer ('MLRO'), and this obligation remains unchanged under the new exemption for family offices. The rules explicitly state that the MFSA’s framework “ensure[s] that a subject person in terms of the Prevention of Money Laundering and Funding of Terrorism Regulations forms part of the structure at all times.” This requirement underscores the MFSA’s commitment to preserving the integrity of Malta’s financial sector while ensuring a balance between operational flexibility and regulatory oversight, in line with the EU’s principle of proportionality.
These updated regulations strengthen Malta’s appeal as a hub for SFOs by providing high-net-worth families with a well-defined framework to establish wealth management entities with investment functions, all while maintaining minimal reporting obligations. Let’s delve into this in more detail.
Key amendments introduced on 27 November 2024:
The Investment Services Rules for NPIF and Related Due Diligence Service Providers
Section 6, part A has been amended to allow a NPIF 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. By streamlining regulatory obligations, this amendment reduces costs and administrative burdens while preserving the benefits of a collective investment scheme registered with the MFSA. In a such way, for fund promoters, a NPIF, compared to fully licensed funds, is a more efficient and affordable solution enabling quicker market entry with minimal regulatory hurdles. Unlike traditional investment funds that necessitate full regulatory approval, a NPIF undergoes a notification process instead of an authorization process. This allows it to be listed by the MFSA within ten working days of submitting a complete notification request.
The amendments also clarify the definition of a "family office vehicle" and specify the types of investors eligible to participate:
In order to act as managers for an NPIF without requiring an investment services license, the NPIF must be designated as a family office vehicle.
Family office vehicles are prohibited from soliciting investments from third parties as a "family office vehicle" is defined as an investment entity that is exclusively available to a group of family members, regardless of the legal structure they use to make investments. The sole beneficiaries of these structures must be family members, and the family group must exist prior to the creation of the investment entity.
Rule 3.03, part B has been amended to incorporate certain reporting requirements for the aforementioned fund managers; accordingly, New Supplementary Rules have been introduced which provide thresholds for fund manager exemptions and verification responsibilities for due diligence service providers and governing bodies.
Family Trusts Rulebook:
The amendments primarily focus on refining the definition of ‘family member/family dependent’ to align with more modern and inclusive circumstances. In certain cases - such as when a family trust, managed by a registered trustee, is established to invest in a NPIF overseen by an exempt manager - the definition may be expanded further to encompass additional individuals classified as "family clients." To support these changes, new definitions have been introduced specifically for these parties. Additionally, registration requirements have been revised to accommodate trusts that include ‘family clients.’
Thus, given the above, in the case if an EU/non-EU family office would like to create an investment structure in Malta to manage its wealth, a setting up procedure would appear as follows:
First, a legal assessment confirming that the activity qualifies for exemption under Regulation 3(1)(f) or Regulation 3(1)(t) of SL370.02. should be obtained.
Next, a structure must be established in Malta - typically a company, partnership, or trust - though other structures outlined in Rule 2.05 of Part A of the NPIF Rules may also be considered. The structure must include a Maltese resident on the governing body (typically, though not exclusively, a non-executive director) and an appointed MLRO.
And the final step is to submit the structure to the MFSA for registration as an NPIF. Once notified, the MFSA will complete the registration of the NPIF within 10 working days of receiving the full application. After registration, the investment activities can begin without delay.
In conclusion, Malta's recent regulatory updates, along with its attractive tax regime for financial vehicles and the benefits of double tax treaties, highlight the country’s commitment to becoming an even more appealing destination for high-net-worth families seeking to preserve and grow their wealth efficiently. The island offers a streamlined, cost-effective setup for SFOs, together with legal, accounting, and compliance services at competitive price - ensuring premium service without unnecessary expenses.
Griffiths + Associates has been delivering professional expertise to individuals and their families for over 20 years. Our experienced team will help plan a tax-efficient family office in Malta to consolidate investments into a structure that aligns with your family's specific goals. For further information on SFOs in Malta and legal assistance, please do not hesitate to contact us directly at info@griffithsassoc.com.