The reputation of Mauritius as an International Financial Centre rests on the quality of its services and its pool of highly qualified professionals.
Its modern and flexible legislation, affordable cost and low tax rate has made Mauritius one of the most attractive jurisdictions in the world.
The quality of its services and availability of a pool of highly qualified professionals has also contributed to enhance its reputation
The Securities Act 2005 and rules & regulations made under it allow for Investment Dealer Companies to be set up and licensed in Mauritius. These are particularly beneficial for Brokerage Houses operating worldwide.
WEALTH MANAGEMENT
A Wealth Management Company is an entity licensed as an Investment Adviser in Mauritius.
A Global Business Licence (GBL) may apply for an Investment Adviser Licence to perform the following:
There are two categories of licences, Investment Adviser (Restricted) which allows the provision of investment advisory services only through printed matter or other means, or Investment Adviser (Unrestricted) which authorizes a company to manage, under a mandate, portfolios of securities and give advice on securities transactions through printed materials or any other means. A licensed Investment Adviser may solicit any person to enter into securities transactions.
Licencing Conditions
In order to obtain an unrestricted licence, an investment adviser shall provide sufficient justification to the Mauritius Financial Services Commission (FSC) as to the competence of the persons who will be responsible for investment advice and the management of portfolios. An investment adviser, as the case may be, shall at all times employ or be represented by at least one representative who is entitled to carry out the functions of the investment adviser. The representative should hold a Degree in a relevant field and at least 4 years of relevant experience in investment business.
An investment advisor who is dealing outside Mauritius is not forced to appoint a representative.
Capital Requirements
The applicant for a licence shall maintain a minimum stated unimpaired capital of MUR 600,000 (approx. USD 20,000) or equivalent for an Investment Adviser (unrestricted) and MUR 500,000 (approx. USD 16,700) or equivalent for an Investment Adviser (restricted) licence. The minimum stated unimpaired capital shall be fully paid and no amount shall be due or payable. The licensee shall inform the FSC immediately where its minimum stated unimpaired capital falls below the minimum required.
SECURITIES OR CAPITAL MARKET INTERMEDIARIES LICENSES
Mauritius offers the opportunity to trade in a variety of commodities through the appropriate platform
| LICENCE | DESCRIPTION/ACTIVITIES |
| Investment Dealer (Full service) Can be with or without underwriting |
|
| Investment Dealer (Broker) |
|
| Investment Dealer (Discount Broker) |
|
| Investment Dealer (Commodity Derivatives Segment) |
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| Investment Dealer (Currency Derivatives Segment) |
|
Investment Dealer
The Investment Dealer licenses as issued by the Financial Services Commission in Mauritius are getting increasing popularity among many of the Brokerage Houses worldwide.
Application for Investment Dealer license must be made under a Global Business Licence Company is granted subject to the approval of the Financial Services Commission.
The Securities Act 2005 coupled with the Securities (licensing) Rules 2007 remain the main legal framework governing the provisions and setting the parameters within which a GBC 1 with an Investment Dealer license can operate.
There are different categories of Investment Dealer license and Securities (licensing) Rules 2007 clearly set out the activities authorized to be carried out under each category.
Categories of Investment Dealer:
Any person who, by way of business, intends to carry out any of the activities of investment dealer under section 29 of the Securities Act 2005 shall apply for a license as an investment dealer in one of the following categories:
a) Full Service Dealer authorized to:
- Act as intermediary in the execution of securities transactions for clients;
- Trade in securities as principal with the intention of reselling these securities to the public;
- Underwrite or distribute securities on behalf of an issuer or a holder of securities;
- Manage portfolios of clients.
b) Broker authorized to: execute orders for clients, to manage portfolios of clients and to give advice on securities transactions to clients;
c) Discount broker authorized to: execute orders for clients without giving advice;
An investor may apply for the following licences:
- Investment Dealer (Commodity Segment) Licence which allows trading in Commodity Futures and Options. Products that can be traded with this licence are Gold, Silver and WTI (Crude Oil).
- Investment Dealer (Currency Segment) Licence allows trading in a variety of Currency Derivatives. The following currency futures may be traded with this licence; EUR/USD, GBP/USD, JPY/USD, MUR/USD, ZAR/USD. Currency Futures for USD/MUR weekly delivery based contract which offers a convenient trading size of USD 1,000.
- Investment Dealer (Equity Segment) Licence. The license allows trading in Contract for Difference (“CFDs”) CFDs enables retail participants to trade on Gold, Silver, WTI (Crude Oil), Pound and Euro with a smaller capital requirement compared to Futures Contract.
Capital Requirements for Investment Dealer
The applicant for an Investment Dealer licence shall maintain a minimum stated unimpaired capital as per Fourth Schedule of the Securities Licensing Rules 2007.
| CATEGORY | MUR (approx. USD) | ||
| Investment Dealer (Full Service Dealer – including underwriting) | 10,000,000 (335,000) | ||
| Investment Dealer (Full Service Dealer – excluding underwriting) | 1,000,000 (33,500) | ||
| Investment Dealer (Broker) | 700,000 (23,400) | ||
| Investment Dealer (Discount Broker) | 600,000 (20,000) | ||
| Investment Dealer (Currency Derivatives Segment) | 1,000,000 (33,500) | ||
| Investment Dealer (Government of Mauritius Securities and Bank of Mauritius Securities Segment) | 200,000,000 (6,670,000) | ||
The minimum stated unimpaired capital shall be fully paid and no amount shall be due or payable. The licensee shall inform the FSC immediately where its minimum stated unimpaired capital falls below the minimum required.
Licensing Conditions for investment dealer
The Commission shall not grant a full service investment dealer licence, unless it is satisfied that the applicant has established procedures designed to prevent conflicts of interest and the use of inside information by an effective segregation of its different activities.
The procedures shall ensure that the investment decisions concerning the portfolio of clients shall not be communicated or be available to any unauthorized third party.
Notes:
Difference between the full service (incl. underwriting) and full service (excl. underwriting) dealer
Full Service Dealer – Including Underwriting
This type of company is licensed by the FSC and is engaged in the business of trading in securities. It is authorised to:
- Act as an intermediary in the execution of securities transactions for clients;
- Trade in securities as principal with the intention of reselling these securities to the public;
- Underwrite or distribute securities on behalf of an issuer or a holder of securities[This is the difference between licence excluding underwriting];
- Give investment advice which is ancillary to the normal course of its business activities; and
- Manage portfolios of clients.
- Capital requirement: The minimum stated fully paid capital of a company holding a Full Service Dealer (Including Underwriting) licence is MUR 10,000,000 (approx.USD 335,000).
Full Service Dealer – Excluding Underwriting
This type of company is licensed by the FSC and is engaged in the business of trading in securities. It is authorised to:
- Act as an intermediary in the execution of securities transactions for clients;
- Distribute securities on behalf of an issuer or a holder of securities;
- Give investment advice which is ancillary to the normal course of its business activities; and
- Manage portfolios of clients.
- Capital requirement: The minimum stated fully paid capital of a company holding a Full Service Dealer (Excluding Underwriting) licence is MUR 1,000,000 (approx. USD 33,500).
Investment Dealer Broker License under the Security Act
Financial services and securities included:
(a) Keeping, investing and managing money, securities and investment portfolios on behalf of third parties;
(b) shares or stocks in the share capital of a company, whether incorporated in Mauritius or elsewhere, other than a collective investment scheme;
(c) debentures, debenture stock, loan stock, bonds, convertible bonds or other similar instruments;
(d) rights warrants, options or interests in respect of securities mentioned in paragraphs (a) and (b);
(e) treasury bills, loan stock, bonds and other instruments creating or acknowledging indebtedness and issued by or on behalf of or guaranteed by the Government of the Republic of Mauritius or the government of another country, a local authority or public authority, as may be prescribed;
(f) shares in, securities of, or rights to participate in, a collective investment scheme;
(g) depository receipts or similar instruments;
(h) options, futures, forwards and other derivatives whether on securities or commodities;
(i) any other transferable securities, interests or assets as may be approved by the Commission; or
(j) any such other instruments as may be prescribed.
Remark: The Investment Dealer is allowed to take money from the client by asking him to open an account with the Dealer. However, this money should be exclusively used for securities transactions.
Benefits of A GBL Company :
- A GBL benefits from a deemed tax credit so that it will end up paying a maximum effective tax rate of 3% on its tradable profits;
- There is no capital gains tax and no withholding tax on dividends, interest and royalties paid by a GBL company;
- Access to the tax treaty network signed by Mauritius;
- There is no minimum capital requirement for a GBL and the stated capital can be denominated in any currency except Mauritian Rupee;
- A GBL is allowed to have either par value (which may be stated in more than one currency) or no par value shares. The shares can be in the form of registered shares, preference shares, redeemable shares and shares with or without voting rights. Bearer shares are not permissible;
- Both individual and corporate bodies are allowed to be shareholders of a GBL;
- There is no statutory requirement for a GBL to have a constitution. In the absence of the latter, the company will be governed by the provisions under the Companies Act 2001. The shareholders of the GBL may adopt a constitution at any time through a special resolution; and
- It is to be noted that it is possible to apply for occupational permit for expatriates who are employees of the GBL Company.
Main Characteristics of a GBL:
- A GBL must have a minimum of two (2) Resident Directors in order to avail of treaty benefits, with board meetings held in Mauritius. It is to be noted that the concept of Corporate Director is not applicable in case of a GBL ;
- A GBL must at all times have a Resident Secretary and a Registered Office in Mauritius
- A GBL must have a local auditor and a local bank account;
- A GBL must file an annual tax return with the Mauritius Revenue Authority (MRA);
- It must also file its audited financials prepared in accordance with internationally acceptable accounting standards, not later than 6 months after its financial year end;
- The shareholders of a GBL must hold an Annual Meeting in every calendar year and within 6 months of the company’s balance sheet date;
- the names of shareholders and beneficial owners coupled with their corresponding due diligence documents must be disclosed to the FS (such information, in addition to any filing and return of the GBL with the Registrar of Companies, are not available for public inspection)
- Accounting records and statutory records such as register of members, register of directors, minutes of all directors’ and shareholders’ meetings and resolutions, amongst others, must be kept at all times at the registered office of the GBL.
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