MFSA issues guide to formation of Limited Partnerships


The Malta Financial Services Authority has issued a ‘Guide on the Formation of Limited Partnerships’. The publication deals with the prominent traits of domestic law regarding the formation of Limited Partnerships (‘LP’) whilst addressing the latest legislative amendments on the use of Limited Partnerships in a funds context.

Notwithstanding leading aspects of LP legislation having remained intact over the passage of time, several additions have been introduced over recent years. The developments include the addition of a set of laws to the Companies Act in 2003, which regulate the setting up of Collective Investment Schemes (CIS). Moreover, in 2013, further amendments were endorsed in the bid to enhance the use of Limited partnerships as a fund vehicle. This is mainly due to the fact a key element of LP is that they may boost the transparency of the fund structure through their dominant characteristic of allowing for the possibility of having the investment scheme’s capital divided into shares or otherwise.

Further modifications include simplifying the registration process of a LP, which can be carried out by the submission of a registration form, as well as elucidating the occurrences when the Limited Partnerships would be obliged to submit accounts, therefore simplifying the Limited Partnerships’ compliance framework.

Nonetheless, such characteristics do not modify the nature of the LP, such as the ability to contract in its own right with limited liability, where limited partners are concerned, or that collective investment schemes best fit in the LP structure, since the responsible person for the management of the partnership is the general partner.

From a Maltese tax law point of view, a CIS established in the form of a LP with capital not divided into shares is deemed to be a transparent vehicle, so that income and capital gains arising from the fund are taxed directly in the hands of investors according to their tax status and retain their character (as income or gains).


For further information or for assistance on the formation of limited partnerships, please contact:

Karl Cini

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