Funds are incorporated under the Companies Act 2001 of Mauritius and are licensed and regulated by the Financial Services Commission under the provisions of the Financial Services Act 2007 and Securities Act 2005.
 

Mauritius has a modern regime for establishing funds that is recognised by both fund managers and investors and is commonly used for investment structuring into Asia and Africa. Funds set up in Mauritius enjoy a low tax regime and have access to its network of double tax treaties.
 

Global Funds are licensed as GBC1s and deal in the pooling of public funds to be invested collectively by fund and investment managers. Structured as a company, a trust, a protected cell company or in any other legal form as approved by the FSC, Global Funds can take the form of either a Collective Investment Scheme (CIS) which has a variable share capital, or a Closed-end Fund (CEF) with a fixed share capital.

 

There are five types of CIS:

1. Fully Regulated CIS – these are mainly offered to the public and generally do not hold a GBC licence;
2. Regulated Global Scheme – authorised by the Financial Services Commission (FSC), holds a GBC1 licence and may be regulated in another jurisdiction;
3. Professional CIS – offer shares either to sophisticated investors or by way of a private placement;
4. Specialised CIS – invest in real estate, derivatives, commodities or other products authorised by the FSC;
5. Expert Fund – a CIS can apply to be authorised by the FSC if the scheme is only available to expert investors, who must make a minimum initial investment of not less than USD100,000 or qualify as sophisticated investors.

Fully Regulated CIS and Regulated Global Schemes are required to have a prospectus in the prescribed format that must set out details with regard to a minimum amount of subscription and at least 5% of the total amount must be raised within 6 months or risk being returned to the investors. Professional CIS, Specialised CIS and Expert Funds only need an offering document in order to be licensed by the FSC.
 

A Protected Cell Company (PCC) enables a GBC 1 to have one or more cells. It permits the flexibility to divide the assets into various cells with the objective of protecting the assets of one cell against the failure of another cell.
 

The option of limited partnerships is significant to the funds industry in Mauritius because they are the vehicle of choice for fund structures in many foreign jurisdictions. Limited partnerships are more flexible than companies, and may therefore be more attractive to investment vehicles such as hedge funds, private equity funds and joint ventures.
 

The Stock Exchange of Mauritius (SEM) previously catered only for investment companies, unit trusts and open-ended funds. In 2010 the listing regulations were amended to include regulated global schemes, professional CIS, specialised CIS, expert funds and CEFs.

 

 

Registration Requirements

 

A Fund, Collective Investment Fund or Closed Ended Fund, needs to be approved by the Financial Services Commission before it commences business. In considering an application, the Commission needs to be satisfied about the following:

• the track record and credentials of the promoters;
• the fund structure;
• the objectives of the fund;
• the investors and the market targeted;
• types of investment the fund will be dealing in;
• the track record of the investment manager, custodian, and administrator;
• compliance with regulations in third countries, as appropriate.

Once the Commission is satisfied with the above, it may give an approval in principle so as to enable all constitutive documents to be prepared and the company to be incorporated.
 

 

Administration & Control

 

The Commission generally wishes to satisfy itself that, as far as possible, substance and central administration is in Mauritius. To this end, the Fund must have a local administrator, a local custodian, and a local auditor. The requirement that central administration is situated in Mauritius implies that:

• the accounts are kept and the accounting documents are available in Mauritius;
• the share register is kept in Mauritius;
• issues and redemptions of shares are carried out in Mauritius;
• calculation of the Net Asset Value (NAV).
• two directors who are resident in Mauritius
• qualified secretary resident in Mauritius
• bank account is maintained in Mauritius with an offshore bank and investments are made via that bank account
• board meetings are initiated and chaired in Mauritius.

The above does not exclude the possibility of the Fund obtaining assistance for the management of its assets from an investment adviser established overseas, nor does it prevent management decisions in relation to investment and disinvestment being executed overseas. Also the requirement for the location of the issuance and redemption of shares in Mauritius does not preclude foreign intermediaries from participating in the placing and redemption operations as distributors or nominees. The Commission insists on the independence of the manager, the trustee and the custodian.
 

In appropriate circumstances, it is also possible to establish a management or advisory company in the sector to take advantage of the beneficial tax regime.
 

London Global Business Solutions Ltd provides the following services with respect to the set up and ongoing activities of the fund:

• Establishment of open-ended (unit trusts, open ended companies or mutual funds) and close-ended funds (investment trusts), more commonly Collective Investment Schemes.
• Establishment of Funds as Protected Cell Companies (“PCC”)
• Provide registered office address.
• Provide two directors and qualified secretary resident in Mauritius.
• Opening/Maintenance of bank accounts and providing resident signatories
• Provide administrator and registrar, and carry out NAV calculations.
• Preparation of financial statements in accordance with International Financial Reporting Standards
• Prepare and file tax returns with local authorities
• Provision of Money Laundering Reporting Officer and Deputy Money Laundering Officer
• Assisting in the preparation of Private Placement Memorandums and other constitutive documents
• Management of Investors’ information
• Point of contact for all service providers/connected parties/regulators
• Keeping all statutory and accounting records of the company
• Due-diligence checks on investors
• Ensuring compliance with laws and regulations
• Any other service that may be mutually agreed with the client.