Macau Investment Funds Law
The Legislative Assembly has enacted the Investment Funds Law (“IFL”), repealing the Decree-Law No. 83/99/M of 22 November 1999. Entering into force on 1 January 2026. It introduces a modern regime for both Public and Private Funds, expands structuring options, and strengthens investor protection. These changes bring Macau closer to international standards.
Chapter I – General Provisions
- I. Capital Raising: Public Vs Private Funds
One of the matters that is comprised in the IFL is capital raising through public or private placement funds. The distinction is based on the method of fundraising:
- Public Funds raise capital through mass communication channels and require prior authorisation from the Monetary Authority of Macau (“AMCM”) before launch. Authorisation covers the approval of core fund documents (i.e. prospectus, key fact statements, accounting reports and other essential information in respect to the fund, manager and custodian or trustee).
- Private Funds, raise capital only on a non-public basis from professional investors through private placement. The marketing and selling of private funds in the Macau SAR is subject to reporting regime with the AMCM. Such capital raise from professional investors should still be carried out through Macau distributors.
- II. Forms of Incorporation
The new IFL significantly expands the structuring options available for investment vehicles. Funds may now be established as contractual funds, colective investment companies (“SICs”), or limited partnership funds (“FPLs”):
- Contractual funds are autonomous pools of assets without legal personality;
- SICs are entities with legal personality, set up as public limited companies, where the assets belong to the company itself;
- FPLs are partnerships without legal personality, composed of at least one general partner and one or more limited partners. In this structure, the general partner bears unlimited joint liability for the fund’s debts, while limited partners’ liability is capped at their subscribed capital.
Public Funds may only adopt the contractual fund or SIC form.
Private Funds, however, may use any of the three, giving them greater flexibility. This makes them particularly attractive for private equity, venture capital and other alternative investment strategies that require bespoke structuring.
- III. Flexible Structures and Operating Models
Flexible structures such as umbrella funds with subfunds, master–feeder arrangements and funds of funds are contemplated in the IFL. An umbrella fund may contain multiple subfunds under a single constitutive document, each with distinct unit categories and investment policies. Master–feeder structures allow several feeder funds to pool capital into a single master fund, which then manages investments on a consolidated basis.
A fund of funds is a single investment vehicle that applies most or all of the capital it raises in other funds in order to achieve a specific investment policy.Operating models are also broadened. Funds may now operate as open-ended, closed-ended, hybrid, or other forms authorised by the AMCM.
The hybrid model, combining features of both open and closed-ended structures, is a new option not foreseen under the 1999 law. While open-ended funds allow continuous subscriptions and redemptions, and closed-ended funds restrict redemptions until maturity, the hybrid model blends the two by permitting limited liquidity within a longer-term structure.
- IV. Classification by Investment Objective
Funds are now categorised by investment objective into securities investment funds (“SIFs”), real estate investment funds (“FIIs”) and alternative investment funds (“AIFs”):
- SIFs are primarily composed of securities and liquid financial instruments. Their portfolios typically include shares, bonds, money market instruments, and other transferable securities. Within this category, there are equity funds, bond funds, and mixed-asset funds;
- FIIs are funds whose portfolios mainly consist of immovable property. This category explicitly covers real estate investment trusts (“REITS”) and infrastructure funds;
- AIFs are funds that primarily invest in non-traditional assets. They include, in particular, private equity funds, venture capital funds, commodity funds, and other non-traditional asset funds.
- V. Cross-Border Activity Rules
The IFL governs the cross-border promotion of Macau SAR-domiciled funds, the marketing of foreign funds in Macau, and the related supervisory framework. The promotion of Macau SAR-domiciled funds abroad must be notified to the AMCM, indicating, for example, the country or market targeted, the entities involved, the applicable supervisory mechanisms and legal requirements, with management entities also subject to periodic reporting.
The marketing of foreign funds in Macau requires AMCM prior authorization, a Macau licensed distributor, and the disclosure of key information, while private fundraising is permitted with adequate risk disclosure and must clarify that such funds are not constituted in Macau. The AMCM retains supervisory powers to request information, suspend or revoke authorizations, and adopt other necessary legal measures.
- VI. Redomiciliation of Foreign Funds
Another important innovation is the ability for foreign funds to re-domicile to Macau while maintaining legal personality and all its rights and obligations that arose before the re-domiciliation.
The process requires prior authorisation from the AMCM, supported, amongst other information that AMCM may require, by a legal opinion from a qualified lawyer in the fund’s home jurisdiction confirming compliance with local law and the continuity of the fund’s legal status. After re-domiciliation, the fund’s internal governance and day-to-day operations are governed by Macau law.
Chapter II – Fund Units
- I. Definition, Nature and Rules of Fund Units
The new law modernises the regime applicable to fund units. Units are now defined as nominative, book-entry securities without nominal value, which must be recorded in account systems in order to confer rights and legitimacy on their holders.
Registration creates a presumption of ownership. Where the registered holder is not the ultimate beneficial owner, the holder must maintain the ultimate benefit owner identification records and provide them to the AMCM upon request. Additionally, the law introduces detailed rules on acquisition, transfer, blocking, registration priority and enforcement.
Chapter III – Fund Participants and Key Actors
- I. Fund Managers
The law introduces enhanced governance requirements for fund managers (SGFs, credit institutions or finance companies). To obtain a licence, managers must demonstrate sufficient financial capacity, robust governance structures, effective internal controls, sound risk management and professional competence. These standards reflect a significant strengthening of regulatory expectations compared to the previous regime. In addition, Private Fund managers must follow the detailed operational and supervisory rules set out in AMCM’s Guideline on Management and Operation of Private Investment Funds (Circular 007/B/2023-DSB/AMCM), effective since 21 August 2023.
The law imposes obligations on fund managers to maintain and continuously update comprehensive records of all fund-related operations, ensuring the integrity, accuracy and security of data. At a minimum, these records must include unique identifiers, certified timestamps, the quantity of units and the value of each transaction.
- II. Custodians
Only authorised credit institutions and financial institutions may act as custodians. They must maintain proper administrative, accounting, compliance and information systems, keep complete records, and ensure that senior managers act with integrity.
The custodians must ensure that the assets that compose the funds are autonomous from its own assets and from the assets of the investors and from the assets of any other third-party.
Chapter IV – Close-out Netting
One of the most significative changes introduced by the IFL are set of rules that prevent that bankruptcy or insolvency proceedings affect, in certain conditions, transfer orders, clearing and settlement of securities and derivative products.
The transfer orders, clearing and settlement of securities and derivative products should not be considered revoked or null due to bankruptcy or insolvency proceedings if they are introduced and accepted into an accredited settlement system. These systems will be defined by AMCM.
Moreover, the IFL set out as well that the encumbrances, pledges or other guarantees previously created over securities will not be affected by the commencement of any bankruptcy or insolvency proceedings.
Chapter V – Transitional and Final Provisions
To ensure a smooth implementation, existing funds and managers are granted a one-year transitional period to adjust structures, documentation and operations to the new framework.