Funds in Mauritius are incorporated under the Companies Act 2001 and are licensed by the Financial Services Commission (FSC) under the Financial Services Act 2007 (FSA 2007), Securities Act 2005 as amended (SA 2005) and the Securities (Collective Investment Schemes & Closed-End Funds) Regulations 2008 (CIS Regulations). Such Funds are required to hold a Global Business Corporation (GBC) License under the FSA 2007 and an activity license under the CIS Regulations.
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The legal framework provides the possibility to investors to select the type of investment funds that best suit their profile, risk tolerance and return objective.
 

WHY MAURITIUS FUNDS?

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The use of Mauritius as a fund domicile has taken a new turn with the coming of the funds and securities regulations which have made Mauritius a favoured jurisdiction. The combination of relatively low rate of taxation together with the access to the vast network of double taxation avoidance treaties and an array of non-tax benefits make Mauritius one of the preferred routes for foreign investment to emerging economics such as India and China as well as counties on the African continent.

Tax Benefits
 

A substantial network treaties & double taxation avoi­dance agreements in place

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• Foreign source income derived by a Collective Investment Scheme (CIS) & Closed End Funds benefit from 80% tax exemption, subject to meeting the substance requirements

• Low tax rates

• No withholding tax on remittance of branch profits

• No withholding tax on payments of interest and royalties

• No withholding tax on distribution to shareholders/investors

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• No capital gains tax, estate duty, inheritance taxes

• No transfer pricing rules but has the concept of 'arm length' for transactions between related parties

• No thin capitalization rule

• No controlled foreign corporation (CFC) rules

• Royalties, interest and service fees payable to foreign reasonable & correspond to actual expenses incurred

• No stamp duties, registration duties and levy

• Zero rated VAT for global business transactions

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International Financial Centre of Repute​

 

Mauritius is ranked top in Africa for ease of doing business.

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• ​No exchange control and free movement of capital.

• Growing number of Investment Promotion and Protection Agreements (IPPA) with several countries.

• Mauritius is part of and a leading member of many regional organisations such as African Union, COMESA, SADC, Indian Ocean Rim Association for Regional co- Operation and Multilateral Investment Guarantee Agency.

• Political stability, business friendly and modern legislative framework.

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• Pool of skilled professionals such as lawyers and accountants who speak at least English and French.

• Favourable Time Zone - Mauritius is GMT +4.

• Low cost in Fund set up and administration.

• Advantage of being a licensed Fund in a well-known white listed OECD jurisdiction.

• Easy listing on Mauritian Stock Exchange which is a Member of World Federation of Exchanges and a recognised stock exchange by UK.

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• Modern Securities Law.

• Highest Court of Appeal is UK Privy Council

• Acceptable arbitration for the region with the presence of international law firms

• Presence of major international banks offering a diversified range of financial products

• Well-developed communication infrastructure

• Accessibility with more direct flights.

 
TYPES OF FUNDS
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1. Collective Investment Scheme

2. Closed-End Fund

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(1) Collective Investment Scheme
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• A collective Investment Scheme (CIS) is a scheme with the following features:

• Whose sole purpose is the 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.

• Whose operation is based on diversification of risks.

• That has the obligation, on request of the holder of securities, to redeem them at their net asset value less commission of fees.

• Where the participants do not have day to day control over the management of the assets. 

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4 Types of CIS:
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a) Professional CIS
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• Exempted from most ongoing obligations provided that the shares acquired are not resold to the public and is not listed

• for trading on a securities exchange.

• Must notify FSC of its offering a minimum of 15 days before the offering is made and must file a copy of the prospectus at the same time.

• At conclusion of the offering, it must advise FSC of the total amount and value of shares sold.

• Must give notice to the FSC of any bankruptcy or winding up petitions served on the CIS Manager/custodian and steps to protect interest of participants.

• Shares acquired by participants are not to be resold to the public and participants are to be apprised of this restriction

• at the time of subscription.

• Cannot be listed for trading on a securities exchange

• Minimum subscription amount shall be at least USO 200,000.

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b) Expert Fund
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• A Fund which is only available to expert investors. An expert investor is an investor who makes an initial investment, from their own account, of not less than USO 100,000 or a sophisticated investor.

• May appoint a licensed CIS in Mauritius or a manager with license granted in a jurisdiction having comparable regula­tion for investor protection.

• Exempted from certain obligations under the CIS Regulations subject to authorisation from the FSC

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​c) Domestic Retail Fund
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• Target retail investors.

• It is subject to Investment Restrictions and Practices under CIS Regulations

• Minimum amount of subscriptions of at least 5 per cent of the total amount to be raised from investors.

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d) Global Schemes
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• Authorised to carry out the activities of a CIS but does not fall into specific categories of a Professional CIS or Expert Fund.

• Can appoint and retain a CIS Manager established in a foreign jurisdiction subject to the approval of the FSC.

• Most of the CIS Regulations apply to Global Schemes.

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(2) Closed-End Funds (CEF)

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A CEF is one whose object is to invest in funds in which the subscriber is asked:
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• to purchase or subscribe to securities that have never been issued;

• to enter into an agreement for the underwriting of securities;

• to purchase securities underwritten;

• to distribute securities previously offered without a prospec­tus; or

• to purchase securities, other than securities acquired on a securities exchange in normal market operations, previously issued and held by a person, including an issuer, and where the offer or distribution is made from Mauritius, or received in Mauritius.

 

2 Types of CEF:
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(a) Professional CIS
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• cannot be a Reporting Issuer.

• shares acquired by participants are not to be resold to the public and participants are to be apprised of this restriction at the time of subscription.

• cannot be listed on a trading securities exchange.

• exempted from certain obligations under the CIS Regula­tions subject to authorisation from the FSC.

• No minimum subscription amount.

 
(b) Reporting Issuer
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A Reporting Issuer is an issuer:
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• who by way of a prospectus, has made an offer of securities either before or after the commencement of the SA 2005;

• who has made a takeover offer by way of an exchange of securities or similar procedure;

• whose securities are listed on a securities exchange in Mauritius;

• exempted from some of the obligations under the CIS Regulations subject to authorisation from the FSC;

• subject to disclosure requirements as per the SA 2005, CIS Regulations, Securities (Disclosure Obligations of Reporting Issuers) Rules 2007;

• No minimum subscription amount.

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