Alternative finance opportunities in Malta
Investors in Malta can take advantage of a number of the country’s alternative finance options, including its Prospects platform, investment-based crowdfunding, preference shares and a well-stocked securitisation rule book.
Listing on the Prospects platform
Malta’s Prospects platform gives SMEs access to its capital markets. Compliant with MiFID, Prospects allows SMEs to raise capital by issuing bonds/shares or by selling existing shares to investors beyond inner circles without the need for security or collateral.
International SMEs can apply for access to Prospects if they meet at least two of the following three criteria:
- Average of less than 250 employees during the financial year
- Total balance sheet not exceeding €43m
- Annual net turnover not exceeding €50m
An authorised corporate adviser must be appointed by the respective company.
Investment-based crowdfunding, where businesses raise finance by placing a project idea on an internet-based platform and inviting individuals to invest in that idea, can be an interesting alternative. In return, investors usually acquire equity in the business proportional to the amount initially invested and share in the profits if the business venture is successful.
The Malta Financial Services Authoriry (MFSA) regulates investment-based crowdfunding in Malta.
The M&A of a private company may cater for the possibility of the company issuing preference shares, which can be attractive for prospective investors. Holders of preference shares are generally granted extraordinary decision-making powers in specific matters, such as the right to appoint individuals on a board of directors and vetoing decisions made at a general meeting.
Securitisation vehicles in Malta may be set up in the form of a company, investment company, commercial partnership, trust or by any other legal structure which has the prior approval of the MFSA. Moreover, any asset, whether existing or future, movable or immovable, tangible or intangible, including risk, can qualify as a securitisation asset.
Uniquely regulated securitisation cell companies can be created to avail themselves of segregated cells (via a resolution) that cater for an array of securitisation transactions. No prior approval is needed unless securities are to be issued to the public. Such companies can be set up through public or private companies, with each company having to satisfy minimum statutory requirements. Each cell is composed of assets that are segregated and independent of assets and/or liabilities contained in other cells.