Global Funds in Mauritius

Global Funds registered with the Financial Services Commission of Mauritius are commonly incorporated as private or public limited companies under the Companies Act 2001 and licensed as a company holding a Category 1 Global Business Licence under the Financial Services Act 2007.

The Mauritius Securities Act 2005 classified funds into two broad categories namely collective investment schemes (CIS) and close end funds with further sub categories allowed. The local laws are flexible and allow various structures like master-feeder, sub funds, fund of funds, umbrella funds, protected cell companies (PCC), private equity funds/venture capital funds, trusts organized as funds etc. The basis characteristics of a CIS and a PEF under Mauritian laws follow:

GENERAL

Definition

Collective Investment Schemes
A scheme constituted as a company, a trust, or any other legal entity prescribed or approved by the FSC having the following characteristics:
    

  1. Pooling of funds from investors for collective investment of funds in a portfolio of securities, or other financial assets, real property or non-financial assets as may be approved by the FSC;
  2. diversification/spreading of risks;
  3. obligation, on request of the holder of the securities, to redeem them at their net assets value, less commission or fees; and
  4. day to day control over the management of the CIS does not rest with the investors.


A CIS includes closed end funds whose shares are listed on a securities exchange but excludes all such schemes as specified in Part II of the Schedule of the Act.
   
Note: CIS are usually identified as open ended funds
   

Closed end Funds

An arrangement or a scheme constituted in such legal form as may be approved by the Commission and whose object is to invest funds, collected from subscribers during an offering made through a prospectus or from sophisticated investors, in a portfolio of securities, or in other financial or non-financial assets, or real property, as may be approved by the FSC.
   
Note: Closed end funds are usually identified as private equity funds



Legal structure

Category 1 Global Business Company*
Private or Public (if 25 or more shareholders)
Limited liability
Multi class or Umbrella fund or PCC* or any other permissible structure (e.g Master-Feeder, Fund of Funds, multi-funds structures)
Can be incorporated as a Limited Life Company
Can be incorporated with minimum 1 share
No restriction on Fund's size
Can be listed on the local or any foreign stock exchange

* Please refer to website for more details on such type of companies



Sub Categories of CIS

  1. Expert Fund (investment of minimum USD100,000 per investor)
  2. Professional CIS (open to only sophisticated investors or as private placements)
  3. Specialised CIS (investing in real estate, commodities and derivatives and other structured products)
  4. Retail/Public CIS (any CIS other than the above)


Note1 : Closed end funds may apply for Professional CIS and Specialised CIS status

Note 2: Investors may be residents and/or non-residents of Mauritius



Taxation/Fiscal incentives

Tax Resident in Mauritius*
No Capital Gains Tax
No withholding tax on dividends
Maximum effective income tax rate -3%
Avail from benefits under Double Taxation Avoidance Agreements (DTAs)
No Thin Capitalisation Rule
No Exchange Control

 

Capital structure

Redeemable Participating shares (usually for investors but at times also subscribed by the Fund Manager)
Management/Common/Ordinary/Core Shares (usually for Fund Manager but may also be issued to core/seed investors)
Carry Shares/Performance Shares (usually issued to Fund Manager)

Note 1: Investors in closed end funds may also participate through capital contributions


Note 2:CIS have a variable share capital structure whilst closed end funds have a fixed share capital structure

 

Exit

Collective Investment Scheme- At option of shareholder/investor but may be subject to an initial lock in period
Closed end Fund- At option of the Fund or at winding up

 

Investment/Fund Manager

The Investment/ Fund Manager can be resident or foreign

Collective Investment Scheme- Resident Investment / Fund Manager should hold a CIS Manager licence from the FSC

Closed end fund- Investment / Fund Manager should hold an investment advisor (unrestricted) licence from the FSC

Note: Funds in Mauritius may be self managed- in such instance, all the functions that are legally required from a CIS Manage/Investment Manager are expected from the Board of Directors

 

Other usual functionaries

Investment Advisor (Resident* or foreign)
Administrator and Registrar (Resident)
Secretary (Resident)
Custodian ( Resident - if foreign then Resident sub-custodian to be appointed)
Banker (Resident- Main bank account should be in Mauritius)
Broker (Resident and/or foreign)
Legal Counsel ( Resident and/or foreign)
Tax Advisor ( Resident and/or foreign)
Auditor ( Resident)

* Resident Investment Advisor should hold an investment advisor (restricted) licence from the FSC

 

SET UP

Time frame for set up

Normally within three weeks from lodging of application

Documents required

Due diligence documents on (i) Promoter; and (ii) core/seed investors and other significant investors (i.e holding more than 20% economic rights); and (iii) Fund Manager; and (iv) proposed directors and (v) Investment Advisor (if any)
Constitutive documents (in near final form) usually to include (i) Offering Memorandum (M); and (ii) Constitution(or M&A/bye-laws); and (iii) Investment Management Agreement; and (iv) Administration Agreement; and (vi) Custodian Agreements; and (vii) Investment Advisory Agreement (if any); and (viii) Subscription Agreement and (ix) such other material agreement to which the Fund would be a party.

Note1: All constitutive documents in its final form should normally be filed with the FSC within one month from date of set up

Note 2: Post set up, the FSC would expect the Fund to put in place (i) a Framework for Combating Money Laundering and for Prevention of Terrorist Financing and (ii) Good Corporate Governance measures for the sustainability of the Fund.

Government Fees for Set up and first year

USD 6,000

FINANCIAL STATEMENTS

Statutory filings of annual financial statements

Collective Investment Scheme - audited financial statements to be filed within 3 months from balance sheet date with FSC

Closed end fund - audited financial statements to be filed within 6 months from balance sheet date with FSC

Statutory filings of quarterly financial statements

Public/ Retail Collective Investment Scheme - Required

Expert Fund/ Professional CIS - Not required unless having 100 shareholders or more

Specialised CIS - Depends on licencing condition set by the FSC or if having 100 shareholders or more

Closed end fund - Not required unless having 100 shareholders or more

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