The Investment Services Act (Special Limited Partnership Funds) Regulations (“LN 30 (2025)” or “the Regulations”) introduced a new type of structure for investment funds in Malta which will be useful for those who are interested in setting up a vehicle without a separate legal personality.
The Regulations provide the framework for the Special Limited Partnership Fund (“SLPF”), a limited partnership without juridical personality, a structure that aligns Malta with several other leading asset-management jurisdictions.
The SLPF can only be set-up as an investment vehicle which is notified or licensed by the Malta Financial Service Authority (“MFSA”) as a collective investment scheme (“CIS”). The amendments do not alter Malta’s company laws.
Limited Partnerships without separate juridical personality
Recognising the evolving needs of the investment management market, LN 30 (2025) allows CIS structures to include limited partnerships without a separate legal personality. Unlike the traditional structures, SLPFs are specifically designed without separate legal personality to offer enhanced operational flexibility, streamlined administrative processes, and improved tax transparency.
Limited partnerships without separate juridical personality are a distinct legal structure in which the partnership itself is not recognised as an independent entity separate from its partners.
Unlike incorporated entities such as limited liability companies, these partnerships do not have the capacity to own assets, enter into contracts, or sue or be sued in their own name. Instead, all legal relationships, rights, and obligations are directly attributed to the partners, typically with a general partner assuming full management control and bearing unlimited liability, while limited partners contribute capital and share in profits without engaging in management, thereby limiting their liability to their investment.
By not conferring separate juridical personality, these types of partnerships allow investors to benefit from a structure that avoids double taxation at the entity level while maintaining the ability to structure investment arrangements with clear risk allocation between general and limited partners.
Structure of Malta’s Special Limited Partnership Funds
LN 30 (2025) provides that the SLPF is to be constituted as a limited partnership governed by a partnership agreement between one or more general partners and one or more limited partners. Unlike traditional corporate forms, the SLPF does not enjoy separate legal personality; instead, its existence is linked to its partners.
The Regulations make it clear that the SLPF may only be established if it is duly licensed, recognised by, or notified to the MFSA, thereby ensuring that only entities that meet the MFSA’s regulatory standards can benefit from this framework.
The partnership agreement, which is central to the establishment of the SLPF, must clearly set out essential details including the fund’s name, the identities and addresses of the general and limited partners, the partnership’s object, and its intended duration. Notably, Regulation 4(2)(d) mandates that the object of the SLPF be confined to the collective investment of funds, ensuring that the structure is used solely for investment purposes and not for conducting commercial business operations outside the designated scope. This emphasises that the amendment is solely in relation to investment structures and does not amend Malta’s established corporate law.
Liability is a core aspect of any partnership regime with Regulation 5 providing a balanced delineation of responsibilities between the general and limited partners. The general partner, by virtue of its role in managing the partnership’s affairs, bears full liability for the debts and obligations incurred by the SLPF. In contrast, limited partners are only liable up to the amount of their capital contributions, provided they do not engage in the day-to-day management of the fund to protect passive investors from unforeseen liabilities.
Advantages of choosing Malta to set up a limited partnership without a separate legal personality for investment purposes
The legal framework introduced by the LN 30 (2025) offers a number of tangible benefits that serve to continue positioning Malta as an attractive jurisdiction for setting up investment funds in the European Union.
One of the foremost advantages is the tax transparency afforded by the SLPF structure. By operating as a tax-transparent entity, the SLPF ensures that income and losses are allocated directly to the partners, who are then taxed according to their individual circumstances. This mechanism avoids the double taxation that may otherwise occur if the partnership were taxed at the entity level. The MFSA’s own documentation on the framework highlights this benefit as a key advantage for investors seeking efficient tax planning.
Administrative simplicity is another significant advantage associated with the absence of legal personality. The Regulations have been designed with a view to minimising administrative burdens. In traditional corporate structures, entities must comply with numerous statutory reporting and regulatory requirements that can be both time-consuming and costly. In contrast, the SLPF framework, by virtue of its streamlined structure, reduces some of these compliance obligations.
In addition to tax transparency and administrative ease, the SLPF structure offers considerable flexibility in the way partnership agreements are drafted and implemented. The Regulations permit tailored agreements that can be adjusted to meet the specific investment objectives and risk profiles of the participating partners. This bespoke approach is particularly beneficial for fund managers who wish to create innovative investment strategies that may not be accommodated by more rigid legal structures. The flexibility inherent in the SLPF model allows for the efficient allocation of risk and rewards among partners, thereby fostering an environment conducive to innovation and customised investment solutions.
Furthermore, the introduction of SLPFs without legal personality brings Malta into closer alignment with international investment structures which already provide for limited partnerships without a legal personality.
By introducing a structure that is tax-transparent, administratively efficient, and internationally aligned, Legal Notice 30 of 2025 (under the Investment Services Act, Chapter 370 of the Laws of Malta) offers significant benefits for fund managers and investors. The ‘Special Limited Partnership Fund’ can only be set-up under the purview of an MFSA investment services licence and does not alter Maltese company laws.
Overview of each regulation in Legal Notice 30 (2025)
The citation and scope (Regulation 1) establishes that these funds must be expressly constituted for the purpose of collective investment, separate from standard limited partnerships under the Companies Act (Chapter 386).
The interpretation section (Regulation 2) defines key terms, including “general partner,” who bears unlimited liability for the SLPF’s obligations, and “limited partner,” whose liability is capped at their contributed capital. It also clarifies that the competent authority regulating SLPFs is the MFSA as per Regulation 3
The section on formation of the SLPF (Regulation 4) outlines the key structural requirements: the SLPF must be established through a partnership agreement, consist of at least one general and one limited partner, and must be duly registered by the MFSA before coming into existence. It explicitly states that the SLPF lacks separate legal personality and cannot own property, enter contracts, or sue or be sued in its own name.
Regulation 5 on the constitution of the SLPF specifies that general partners bear full liability for the fund’s obligations, while limited partners’ liability is restricted to their contributions. Furthermore, each SLPF is treated as having a separate patrimony distinct from the assets of its partners.
The rule on the name of the SLPF (Regulation 6) requires that these funds use “Special Limited Partnership Fund” or its abbreviation, namely “SLPF” or “S.L.P.F.” in their official name. Notably, Regulation 6(4) prohibits the use of limited partners’ names in the fund’s title to prevent confusion, making such partners liable as general partners if they allow their names to be used.
The register of SLPFs (Regulation 7) mandates the MFSA to maintain a public register listing all SLPFs, their principal office, and the identity of their general partners.
The partnership agreement (Regulation 8) must be in writing and include specific details such as the fund’s objectives, investment policy, governance structure, accounting principles, and provisions on dissolution. A copy of the agreement must be submitted to the MFSA. Any amendments to the partnership agreement (Regulation 9) requires that any modifications be made in writing, generally requiring unanimous partner consent, and must be notified to the MFSA.
The section on administration and representation (Regulation 10) states that only general partners can represent and manage the fund, and legal proceedings may only be brought by or against them. Limited partners generally cannot participate in administration. The regulation on Binding Acts of the Fund (Regulation 11) establishes that SLPFs can only be bound by their general partners, and third parties dealing with the fund must rely on their actions. The obligation for filing of returns and notices (Regulation 12) makes general partners responsible for submitting required filings to the MFSA. If there is no general partner, a limited partner may step in to fulfil these obligations
Regulation 13 outlines the general partners’ restrictions on general partners, including prohibitions against competing with the fund and obligations to prioritise the fund’s interests. Regulation 14 restricts limited partners’ ability to engage in management. If they act beyond their defined role, they risk losing limited liability protection and being treated as general partners. The section on holding out as a general partner (Regulation 15) imposes liability on any person who falsely represents themselves as a general partner.
The sections on cessation of limited partners (Regulation 16) and cessation of general partners (Regulation 17) establish rules governing the departure of partners, including succession rights and notification requirements. The option of admitting new limited partners (Regulation 18) requires compliance with the partnership agreement and registration of new partners with the MFSA.
The possibility of assignment of limited partners’ interests (Regulation 19) allows limited partners to transfer their interests, subject to approval and formal registration.
Indemnification of partners (Regulation 20) permits general partners to indemnify partners against liabilities, except in cases of negligence or misconduct.
Return of contributions (Regulation 21) regulates the repayment of capital to limited partners, ensuring the fund remains solvent before any distributions. The section on distributions of profits (Regulation 22) prevents payments to partners that would render the fund insolvent. The section on fraudulent transactions (Regulation 23) prohibits transactions intended to defraud creditors, making them voidable.
Use of Special Purpose Vehicles (“SPVs”) in Regulation 24 allows general partners to establish SPVs for asset-holding purposes in line with the partnership agreement.
Record-keeping requirements in Regulation 25 mandate that SLPFs maintain records, including partnership agreements, financial accounts, and partner registers, at their principal office. Accounting requirements (Regulation 26) require adherence to generally accepted accounting principles (GAAP) and mandates submission of annual accounts to the MFSA. The Auditor’s role (Regulation 27) makes it obligatory for SLPFs to appoint an auditor, outlines their rights and duties, and sets rules for dismissal or resignation.
The dissolution of the SLPF (Regulation 28) specifies the circumstances under which a SLPF is dissolved, including expiration of its term, partner agreement, or prolonged absence of a general partner. A court-ordered dissolution (Regulation 29) provides for dissolution by the court if the fund is insolvent, acts fraudulently, or fails to comply with regulatory obligations. The possibility of asset distribution upon dissolution (Regulation 30) prioritises creditor claims, followed by the return of capital and distribution of remaining profits to partners.
The application of investment services rules (Regulation 31) extends existing MFSA investment fund regulations to SLPFs and grants the MFSA authority to issue additional rules.
Under the administrative penalties section (Regulation 32) the MFSA is empowered to impose penalties for regulatory breaches, with a right of appeal to the Financial Services Tribunal.
The section on non-applicability of other laws (Regulation 33) excludes certain provisions of the Civil Code and other legislative instruments from applying to SLPFs.
Ancillary legislative amendments
The introduction of SLPFs through Legal Notice 30 of 2025 necessitated corresponding amendments to existing subsidiary legislation governing collective investment schemes. Legal Notice 31 of 2025, which amends the Investment Services Act (Prospectus of Collective Investment Schemes) Regulations, was issued to ensure that the provisions governing the preparation and disclosure of prospectuses now explicitly apply to SLPFs, thereby integrating them into Malta’s regulatory framework for investment funds.
Similarly, Legal Notice 32 of 2025, amending the Investment Services Act (Notified CISs) Regulations, extends the scope of Notified Collective Investment Schemes (Notified CISs) to encompass SLPFs, allowing these new structures to be established under the Notified CIS regime.
Moreover, the MFSA issued two circulars on the 12th of February 2025 to reflect these legal amendments, one is titled ‘MFSA Launches Framework for Collective Investment Schemes Structured as Limited Partnerships without Separate Legal Personality’ and the other is titled ‘MFSA Extends the Notified PIF Framework to Cater for Self-Managed Structures’.
No amendments to the Companies Act, Chapter 386 of the Laws of Malta were carried out because SLPFs can only be set up with an investment services licence/notification. Maltese corporate law remains the same.
These amendments reflect Malta’s intent to harmonise the new regulatory framework with existing investment fund regimes, ensuring that SLPFs benefit from the same regulatory efficiencies and investor protections applicable to other collective investment schemes in Malta through the MFSA’s investment services supervision function.
This document does not purport to give legal, financial or tax advice. Should you require further information or legal assistance, please do not hesitate to contact Dr. Mario Mizzi.