With the bringing into effect of legislation to regulate and licence Incorporated Cell Companies (ICCs), with the SICAV ICC Regulations of 2011 and the RICC Regulations of 2012, Malta has generated lot of interest across the fund sector and has helped cement its reputation as a flexible and innovative jurisdiction. There are various types of ICC structures in Malta purposing as investment vehicles.


Investment companies with variable share capital (SICAV) are Collective Investment Schemes (CIS), duly licensed in terms of the Investment Services Act and regulated by the Companies Act (SICAV Incorporated Cell Companies) Regulations: An ICC is defined as a SICAV formed and registered as, continued as, transformed or divided into, an incorporated cell company – which carries out the activity of a CIS referred to in the Investment Services Act of 1994.

Recognised Incorporated Cell Companies (RICC)

RICCs are companies which provide standardised administrative services to incorporated cells within a platform type of model. RICCs are recognised in terms of the Companies Act (Recognised Incorporated Cell Companies) Regulations, as follows: a limited liability company formed, continued as, transformed or divided into an incorporated cell company in accordance with the provisions of the (aforementioned) Regulations and recognised by the competent authority in terms of Article 9A of the Investment Services Act. Hence, for a RICC to be operable, the competent authority must first and foremost issue this Recognition Certificate to make sure that it is not carrying out any licensable activity – but only undertakes those administrative activities delineated in the Schedule to the RICC Regulations. Further to this, a RICC never qualifies as a Recognised Fund Administrator. The activities of the latter differ from the former.   Albeit, these categories of ICCs share the following common features:


A segregated multi-fund company is a multi-fund SICAV ICC with several segregated sub-funds, the patrimony of which is treated in isolation from one another – in accordance with the provisions of regulation 9 of the SICAV Regulations.   Likewise, according to Article 12 of Subsidiary Legislation 386.15 Companies Act (Recognised Incorporated Cell Companies) Regulations, it shall be the duty of the directors of a RICC and of the directors of each incorporated cell to keep the assets and liabilities of the RICC separate and separately identifiable from the assets and liabilities of its incorporated cells; as well as the assets and liabilities of each ICC separate and separately identifiable from those of the other incorporated cells of the RICC. Even if the incorporated cells are collectively managed by an investment manager, it is crucial to keep the relevant assets managed separately.   One must keep in mind that limited liability in an ICC is triggered by the separate legal identity of each individual cell. Adversely, limited liability in a segregated multi-fund company is attainable through the insertion of stipulated clauses in the company’s Memorandum of Association, outlining the segregation of assets and liabilities per sub-fund.


The legal status of the ICC and the segregated multi-fund company structure differs from one another – in the sense that there is a separate legal personality in the incorporated cells, as well as in their ICC; whilst in a segregated multi-fund company structure – the SICAV and its sub-funds are considered as one legal entity. To this end, a sub-fund in a segregated multi-fund company structure is unqualified to transact in its own name.     In addition to these two salient features, we find several other ways in which both categories of ICCs are comparable. The following similarities relate to the ICCs’ framework and procedure:


To establish an incorporated cell, the Board of Directors must pass a resolution stating the following:

  1. the agreed name of the incorporated cell;
  2. their approval of the memorandum and articles of association of said incorporated cell, which ought to be entered into by the ICC; and
  3. whether or not it is agreed to authorise the subscription by the ICC of a share or shared in the incorporated cell.

The Companies Act (Continuation of Companies) Regulations of 2002 makes reference to that both the SICAV ICC and the RICC, as ICCs (or any similar structures) which are domiciled outside Malta, shall be granted the option to seamlessly operate as a SICAV ICC or RICC in Malta.


The memorandum and articles of association of a limited liability company may provide for said company to undergo a transformation via the passing of an extraordinary resolution. The board of directors must approve this transformation; and the competent authority must always provide a written consent of this transformation. There are two ways in which a limited liability company may be transformed, namely:   from a non-cellular company into an ICC, or into an incorporated cell; and from an ICC having no incorporated cells, or from an incorporated cell into a non-cellular company.


This is done through an incorporation agreement between the non-cellular company, wishing to be transformed into an incorporated cell, and the ICC.   These agreements must always be approved by the board of directors, accompanied by an extraordinary resolution of all the companies involved, as well as the approval of the competent authority.


The division of a segregated multi-fund company into an ICC and incorporated cell/s, can be attained by having the director/s sign a declaration stating that a full enquiry into the affairs of the company and its segregated sub-funds has been carried out. The directors must also affirm that the company and its segregated sub-funds are able to discharge their liabilities as they fall due and that there are no creditors of the company or of the segregated sub-funds whose interests will be unfairly prejudiced by this division.   The approval of the competent authority is crucial for the division to succeed.


By having an incorporated cell pass an extraordinary resolution to relocate and carry out changes to the memorandum and articles of association, an incorporated cell of an ICC may move from one ICC structure to another.   In order for this to be effective, a relocation agreement entered into by the incorporated cell and the receiving ICC structure must be approved by the competent authority as well as the board of directors of the incorporated cell, the receiving ICC Structure and the exiting ICC. An extraordinary resolution of the incorporated cell and the receiving ICC structure, shall also be required.


As aforementioned, the assets and liabilities of the ICC are to be kept separate and identifiable from those of its incorporated cells. This is one of the main duties of the directors of an ICC, as well as directors of incorporated cells – as assets and liabilities of one incorporated cell and another are also kept separate.   Furthermore, directors of an ICC must draft a report to outline the names and registration numbers of all its incorporated cells.


Due to the concept of separate legal personality, the ICC and its incorporated cells cannot transact on behalf of one another – therefore, the directors of an ICC or an incorporated cell are duty bound to make sure that transactions are kept separately identifiable


The ICC and its pertinent cells must all submit an annual return containing the requirements prescribed in the Seventh Schedule to the Companies Act.   The accounts and financial statements of incorporated cells should never be consolidated with those of the ICC or other incorporated cells. This is partially allowed when the incorporated cell is a subsidiary of the ICC.


This can only be legally effective if an extraordinary resolution of the incorporated cell and a written approval of its ICC is given.


An ICC may only expel an incorporated cell through the approval of the Competent Authority; after referring to the specific grounds listed in the Regulations.


The Competent Authority’s consent must be given in order to have an ICC fully struck off. Also, its incorporated cells must either be:

  1. transformed into non-cellular companies;
  2. relocated to another ICC;
  3. expelled;
  4. continued as a body corporate under the law of another jurisdiction; or
  5. struck off completely.

The appointment of a liquidator of an ICC does not affect its incorporated cells – unless otherwise instructed by the Competent Authority or decided during the course of a winding up by the Court.


Although the ICC and its incorporated cells are separate legal persons, there is still a nexus with one another – this is evidenced in the registered office they share, and the requirement of at least one common director.