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:
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 |
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 |
