DAO Structures: The Caymans Foundation Company Option

There has been much discussion across the past few years about the legal status of a DAO.

 

For those new to the concept a DAO (a decentralized autonomous organization) is a Blockchain based “organization” encoded as a transparent computer program, controlled by the organization members rather than by any outside entity or authority.

 

As discussed in a previous article the primary aim behind the creation of a DAO is to create a virtual entity to replace the central management of previous forms of organization. A decentralized autonomous organization (DAO), is an organization, particularized by rules encoded as a computer program, that is transparent, and controlled by the organization members. In terms of decision making a DAO is, in effect, unable to be influenced by any outside party including any central government.

 

Legal challenges can come into play if a DAO wants to own Intellectual Property eg a Patent (Can a DAO in fact own a patent? It’s a moot point currently being debated by final year IP law students in high level law schools!). There’s also the inherent litigation risk associated with any unincorporated Association. If a DAO were to be sued – without the protection of having been incorporated as a Limited Liability body – the individual members of the DAO would be jointly and severally liable for any judgment debt that may be entered.

 

Enter the progressive Financial Centre that is the Caymans Islands which passed amendments to its Companies Law in 2017 to give birth to a product now at the forefont of DAO Industry developments ie the “Foundation Company”.

 

Over the course of the past few years we have seen numerous DAOs congregate as Private Foundations. The jury is still out however in terms of whether a Foundation can deliver the necessary commercial flexibility that a DAO may need to take a product (or service) to market. Typically a Foundation with commercial objectives would form a subsidiary Company -  which would enter into some form of Licensing or Royalty agreement with the parent Foundation – such as would enable the Company to commercialise any IP owned or developed by the Foundation.

 

A Foundation Company potentially can cover both objectives within one legal shell.

 

Cayman Islands Foundation Companies – Overview

 

The Caymans Islands Foundation Company is a remarkably flexible vehicle that operates like an incorporated trust, allowing it to function like a civil-law foundation or common-law trust while retaining the separate legal personality and limited liability of a company.

 

The passing of this new Law was timely as it coincided with the nascent emergence of the DAO in the Blockchain space. As DAOs are launched with the ultimate goal of becoming fully decentralised and governed by the DAO’s community, a Foundation Company vehicle can assist the Founders of DAOs to achieve a range of goals.

 

The Need for Legal Personality

 

DAO Founders are often reluctant to create a legal personality for the DAO. As the purpose of a DAO is to be a decentralised organisation that is governed by a community, the idea of centralising responsibilities or ownership rights into a legal person is often seen as anathema to the core values of the project.

 

Moreover, the legal structures available in many jurisdictions require some person or group to act as the owner of the DAO. However, DAOs without legal personality run into problems. These include the inability of the DAO to:

(a) interact with third parties outside the DAO

(b) enter into contracts (particularly with digital asset exchanges)

(c) hold assets

(d) protect valuable intellectual property that may be imitated by other projects or DAOs, and

(e) carry out the wishes of the DAO where the community has voted for the DAO to undertake an action vis a vis third parties.

 

As a result, DAO Founders can sometimes find themselves carrying out actions on behalf of the DAO and, consequently, be personally exposed to potential liability.

 

Foundation Company as a Solution

 

The solution to the problems above is for the DAO to establish a Foundation Company. Like a typical company, the Foundation Company has legal personality to enter into contracts and undertake actions with third parties. It is also managed by directors who carry on the business of the DAO. However, unlike a company, a Foundation Company can be structured without shareholders. In essence, it can be ownerless – just like the DAO it represents.

 

In place of shareholders, a Foundation Company can be supervised by a supervisor (or even multiple supervisors if desired). A supervisor has no ownership or economic entitlement in the Foundation Company but simply acts as a steward, ensuring that the directors of the Foundation Company observe their obligations to the DAO pursuant to the Foundation Company’s governing documents. Therefore, with no shareholders, all of the officers of a Foundation Company simply have the objectives of the DAO as their priority – similar to trustees and enforcers carrying out the objectives of a trust.

 

Flexibility

 

As a further benefit, the Caymans Law provides the utmost flexibility to a Foundation Company when drafting the governing documents of a DAO. These governing documents comprise of the memorandum and articles of association (the M&A). With some limitations and restrictions, the M&A of a Foundation Company could include almost any form of governance structure so long as the Foundation Company is managed by at least one director, is supervised by at least one supervisor and has a secretary.

 

The director(s) and the supervisor(s) need not be natural persons (e.g. they could be corporate vehicles) and could even be the same person. The M&A could even mirror the governance structure of the DAO itself, with each user or node of the DAO entitled to one vote on any number and type of matters included as such in the M&A.

 

At the very least, the M&A could include provisions that require the director(s) and the supervisor(s) of a DAO to carry out the decisions of the DAO or could provide that the director(s) and/or the supervisor(s) be nominated by majority resolution passed by the DAO. The possibilities are truly endless and the foundation company’s flexibility is a great advantage to any existing or future DAO.

 

Works like a Trust

 

DAOs often wish to hold assets for the benefit of the DAO community or issue tokens or distribute rewards to users. Once again, the Foundation Company is a great fit as it acts like a legal trust and has the power to designate beneficiaries. However, one particular benefit of the Law’s concept of a beneficiary is that it will not be treated as a beneficiary under a legal or common law trust arrangement.  This is because the starting position under the Law is that a designated beneficiary has no rights or powers as against the foundation company.

 

The Law therefore excludes the creation of any inadvertent common law trust rights and limits the beneficiary’s rights to those expressly stated by the Foundation Company. This is particularly useful for DAOs which are then free to designate the users or the nodes of a DAO as beneficiaries but with limited rights.

 

Another attractive feature is that a Caymans Foundation Company does not have to maintain a register of its beneficiaries. This means that a Caymans Foundation Company need not specify individuals as beneficiaries but can designate beneficiaries by class of persons (e.g. “tokenholders” or “node operators”) and also reward those beneficiaries according to that class.  Whilst anti-money laundering considerations are always a factor, this could be particularly useful for DAOs built on blockchain technology where the DAO intends to undertake distributions, airdrops of tokens or other rewards to the DAO community.

 

Tax and Economic Substance

 

As a DAO is decentralised and in theory has no fixed location, many DAO Founders are reluctant to incorporate their DAO in any particular jurisdiction as this may lead to unintended and unwanted tax consequences. However, as a tax neutral jurisdiction, a Caymans domiciled Foundation Company need not worry about taxes being levied against it in the Cayman Islands.

 

Interestingly, a Foundation Company limited by guarantee is specifically exempted from the economic substance regime of the Cayman Islands. Hence a DAO incorporated as a Caymans Foundation Company does not have to move staff, nodes or resources to the Cayman Islands to prove that it has substance here. This means that the DAO can be a truly internationally focused project. It also means that it can hold the intellectual property of the DAO and even make profit from the intellectual property (or any other relevant activity under the substance regime) without creating substance in any particular jurisdiction.

 

Would you like to know more? Then please Contact Us:

 

www.offshoreincorporate.com

 

info@offshorecompaniesinternational.com

 

ocil@protonmail.com

 

oci@tutanota.com

 

oci@safe-mail.net

 

ociceo@hushmail.com

 

DISCLAIMER: Information current at 31.10.22. OCI is a Company/Trust/LLC/LP/Foundation Formation Agency. We are not tax advisers or legal advisers. You are advised to seek local legal/tax/financial advice in regards to your local reporting/tax requirements before committing to set up or use an Offshore Company or other entity.

 

How to make an Investment in the name of your IBC

We are often asked by clients How do I buy or make or place an investment using my Offshore Company?

 

(This article assumes that you’ve already set up an Offshore Company and that you’ve deployed a Nominee Director as part of your Corporate/legal structure).

 

The starting point here is that you would or should have been appointed, via a consultancy agreement/contract, as an authorised representative/agent of the Company.

 

Such an appointment, in effect, gives you (or should give you) the authority and the power to go shopping for investments on behalf of your IBC/Offshore Company.

 

Typically you would also have the power to negotiate the price of the investment and the terms of the purchase.

 

Once (ie acting as Agent for the company) you’ve reached agreement with the seller/investment provider as regards the price and terms of the investment:

 

  • You would make certain recommendations in writing to the Company Director ie to place XYZ investment. In short you’d need to explain what the particular investment/opportunity is that you’ve found and why you think/believe the particular investment/opportunity you’ve found is or would be a good investment for the company. Ideally, at the same time you would email the documents that need to be signed by the Company in order to proceed with the investment to your International Corporate Services Provider/the Company Director; and
  • Your Company would then call a Board meeting authorizing the Company to proceed with the transaction
  • The Company director would then sign the board resolution and the purchase documents.

 

NOTE: If you need to close the sale quickly the Board could provide you or your local Lawyer with a Limited/Specific Power of Attorney enabling you/your Lawyer to sign the Purchase/Sale Contract

 

Would you like to know more? Then please Contact Us:

 

www.offshoreincorporate.com

 

info@offshorecompaniesinternational.com

 

ocil@protonmail.com

 

oci@tutanota.com

 

oci@safe-mail.net

 

ociceo@hushmail.com

 

DISCLAIMER: OCI is a Company/Trust/LLC/LP/Foundation Formation Agency. We are not tax advisers or legal advisers. You are advised to seek local legal/tax/financial advice in regards to your local reporting/tax requirements before committing to set up or use an Offshore Company or other entity.

 

 

 

Costa Rican EGaming Licenses

Are you looking to set up an Online Gaming Business or a Payment Processing Business? If so you might want to consider applying for a Data Processing License in Costa Rica (“CR”).

 

Costa Rica Background

 

Costa Rica is a small (population 5 million) Central American country (bordered by Panama, Nicaragua, the Pacific Ocean and the Caribbean Sea) and is arguably the most politically and economically stable country in the region.

Historically the Costa Rican economy centred around agriculture but, since the dawn of the new millennium, CR has diversified its economic focus, in the process creating a boom in tourism, finance, and corporate services. Costa Rican residents now enjoy a high standard of living, social stability and some of the foremost education in Central America. Spanish is the first language but English is commonly spoken particularly in business circles.

 

In summary what you/we will need to do here is incorporate a Costa Rican Company (ie an S.R.L.) AND then apply for a Data Processing License (“DPL”).

 

For many years Costa Rican Corporations have been known and used in the offshore world as vehicles for online gaming. Hence included in the Articles of Incorporation of such companies appears typically the activity of ”online gaming and entertainment”. Some clients can function just with the CR company, however most clients come to us and request the DPL as Banks, Merchant Account Providers and Ewallet providers require to sight such a licence before they will agree to provide accounts or payment processing or merchant account services for CR Companies.

 

Step 1 Company Formation

 

First step is you will need to Incorporate a Costa Rica (“CR”) Company for Gaming:

 

Type of entity: S.R.L. (Sociedad de Responsabilidad Limitada)

 

Main characteristics: authorized for gaming in its bylaws, limited liability, offshore tax exempt, low maintenance, operated by a single director

 

Includes:

 

ü  Articles of Incorporation

ü  Share Certificates

ü  Legal Books

ü  Corporate Certification

ü  Resident Agent*

ü  Registered Address*

ü  Official Translation to English

ü  Tax Registration

*Included in the first year*

 

Legal Fees: USD 2,300 (includes registry fees, VAT and Yearly Corporations Tax)

 

Estimated Duration: 2-4 days (we offer the fastest incorporation service available compared to the normal 2-4 weeks of other companies) 

 

After one year of operation, you will need to renew it by paying:

 

ü  Legal Fees, Renewal of Resident Agent, Registered Address, Legal Book Custody, Yearly Corporations Tax Payment Diligence and Final Beneficiary Declaration: USD 950.00

ü  Associated Expenses, Yearly Corporations Tax USD 150.00 paid with the incorporation and then every January.

 

Annual Renewal:

 

Re Gaming Businesses as advised there is no online gambling license in Costa Rica and that a company incorporated under the laws of Costa Rica can operate an online gaming business under a “data processing” license. The basic requirements to obtain such a license are:

  • Office Lease Contract
  • Health permit
  • Workers insurance policy

 

A specific gaming license was issued as a tax in 2012, such license starts at US$40K per year and increases to US$60K and US$80K depending on the number of employees, This particular license was created for gaming companies that actually have employees in Costa Rica; thus far nobody has paid for such a license as it doesn’t provide any real benefit. Hence startups keep operating with just the CR Corporations and with the Data Processing License (DPL – see details below) which is especially valuable if you wish to be accepted by ewallet providers such as Skrill etc.

 

The following is the description that we give to our clients on a daily basis:

 

Step 2: Apply for a Data Processing License

 

Type of license: CR Business License

 

Process Includes:

 

ü  Lease of Small Office Space at a selected local government

ü  Zoning Permit at local government

ü  Employer Registration at Social Security Agency

ü  Work Risk Insurance at Insurance Agency

ü  Health Permit at Ministry of Health

ü  Business License at local government

 

Legal Fees: USD 9,750 (50% to begin, 50% with approval)

Estimated Duration: 3 months

 

After one year of operation, you will need to renew it by paying:

 

ü  Yearly Renewal: USD 4,750 (after one year of operation includes one year lease and business license yearly taxes and processing fees)

 

Ancillary Services

 

We can also assist with drafting and/or reviewing the website and service terms and conditions. For these kind of jobs we charge an hourly rate ($US300 per hour). Average cost is usually between $1,500 and $US2,000. And we can advise on what countries residents it would be illegal to market such a business to (again on an hourly rate basis)

 

Would you like to know more? Then please Contact Us:

 

www.offshoreincorporate.com

 

info@offshorecompaniesinternational.com

 

ocil@protonmail.com

 

oci@tutanota.com

 

oci@safe-mail.net

 

ociceo@hushmail.com

 

DISCLAIMER: OCI is a Company/Trust/LLC/LP/Foundation Formation Agency. We are not tax advisers or legal advisers. You are advised to seek local legal/tax/financial advice in regards to your local reporting/tax requirements before committing to set up or use an Offshore Company or other entity.

 

 

 

 

Seychelles – Passive Foundations Account Keeping Requirements – Reviewed

Seychelles has recently introduced new Account keeping requirements as regards Seychelles IBCs and Seychelles Private Foundations.

 

There has been some consternation about how the rules work, particularly in respect of Foundations which are completely passive (the typical Seychelles Foundation is set up to own the shares of a Trading or Investment Company which generates all the revenue) or which own Companies that are yet to trade.

 

This article is designed to provide some clarity in regards to such issues.

 

FOUNDATIONS

 

Firstly, if a foundation was only formed in January 2022 and has not operated and does not yet have any assets or liabilities or income, then obviously no “accounting records” will exist. In such a case, the FSA’s Foundation Guide (which can be downloaded from here: https://fsaseychelles.sc/legal-framework/guidelines  – see paragraph 19.11 and Annexure 2) permits the Foundation to provide a declaration for accounting record purposes confirming that it has no activities/assets, etc. See below a sample of such a declaration.

 

Every foundation must provide an Annual Financial Summary (short-form accounts) – see Annexure 3 to the FSA’s Foundation Guide. However, the good news is that if a foundation was formed in January 2022, then it has until end June 2023 to provide its first Annual Financial Summary. This is clear from paragraph 19.14 of the Guide, which mirrors section 75(3)(a) of the Foundations Act: a foundation shall prepare an annual financial summary to be kept at its registered office in Seychelles within 6 months from the end of the foundation’s financial year. The default financial year is the calendar year, unless changed by resolution of councillors and notified to the RA (section 75(3C) of the Foundations Act).

 

The above relates to a foundation without assets/liabilities, which has not commenced operating or is dormant.

 

What about if you’re the typical case ie you’ve set up a foundation purely to hold shares in an active trading company? In this instance the corporate documents of the subsidiary company owned by the foundation would constitute accounting records and copies would need to be submitted to the Foundation’s Seychelles Registered Agent. Yes a “blank” Annual Financial Summary could be provided. However, the Annual Financial Summary should not be totally blank if the foundation owns shares, as these are an asset of the foundation, i.e. should appear on the balance sheet/Annual Financial Summary as an asset, at least at book value (the amount paid for the shares).

 

If the foundation has entered any financial-related agreements (such as a share subscription agreement or loan agreement, etc), these too will be “accounting records”.

 

Paragraph 19 of the FSA’s Foundation Guide provides comprehensive guidance regarding accounting record requirements for foundations.

 

IBCs

 

For an IBC, only a “large company” is required to prepare an Annual Financial Summary. “Large company” means a company which meets the annual turnover (income) threshold specified for a “large business” under the Revenue Administration Act, namely Seychelles Rupees 50,000,000 (approx. US$3.7 million as at today’s date ie 25.9.2022).

 

As with foundations, if an IBC has no assets/liabilities and has not yet traded or is dormant, for accounting record purposes it may provide a declaration: see paragraph 32.10 and Annexure 24 of the FSA IBC Guide (which can also be downloaded from/via this link: https://fsaseychelles.sc/legal-framework/guidelines ) .

 

Paragraph 32 of the FSA’s IBC Guide provides comprehensive guidance regarding account record requirements for IBCs.

ACCOUNTING RECORD DECLARATION

 

Section 75 of the Foundations Act 2009

 

TO: The Foundation’s Registered Agent in Seychelles

[ insert name & address of Registered Agent ]

 

[ insert date ]

 

 

Dear Sir

 

[ Insert Foundation name ]  Foundation No: [ xxxx ] (the “Foundation”)

 

We, the Councillor(s) of the Foundation, hereby declare and confirm that (tick as appropriate):

 

      Since its incorporation/registration in Seychelles, the Foundation has no activities and has no assets or liabilities. 


      For the relevant period the Foundation has not traded and has not carried out any transactions.

 

Therefore, the Foundation has no transaction for which it needs to lodge the relevant accounting records in Seychelles, for the period from [ insert relevant period, i.e. either from January to June or from July to December, as applicable ], [ insert year ].

 

Yours faithfully

 

 

Signature:   _______________________________

 

Name of Councillor / Authorised Signatory:   _______________________________

For and on behalf of the Foundation

 

 

Note:

 

The Act requires a Foundation to keep reliable accounting records:

 

(a)        that are sufficient to show and explain the Foundation’s transactions;

(b)        that enable the financial position of the Foundation to be determined with reasonable accuracy at any time; and

(c)        that allow for financial statements of the Foundation to be prepared.

 

The accounting records should be kept at the registered office in Seychelles on a bi-annual basis, as follows:

 

(a)        Accounting records relating to transactions or operations in the first half (January to June) of a calendar year must be kept in Seychelles by July of that year

 

(b)        Accounting records relating to transactions or operations in the second half (July to December) of a calendar year must be kept in Seychelles by January of the following year

 

Would you like to know more? Then please Contact Us:

 

www.offshoreincorporate.com

 

info@offshorecompaniesinternational.com

 

ocil@protonmail.com

 

oci@tutanota.com

 

oci@safe-mail.net

 

ociceo@hushmail.com

 

DISCLAIMER: OCI is a Company/Trust/LLC/LP/Foundation Formation Agency. We are not tax advisers or legal advisers. You are advised to seek local legal/tax/financial advice in regards to your local reporting/tax requirements before committing to set up or use an Offshore Company or other entity.

 

Mauritius Special Purpose Funds – Setup Costs

Depending on your requirements, setting up a Mauritius Special Purpose Fund can either be done through an open-ended fund (CIS) or a closed ended fund (CEF), the main difference being the frequency at which the fund plans to redeem the investments.

 

On an indicative basis, we have displayed below OCI’s fee schedule for the setting up of an SPF through a CIS and our fact sheet on CIS and CEF.

 

Services that OCI Can supply or arrange (and costs thereof) in relation to a Special Purpose Fund in Mauritius are detailed below.

 

Services to the Fund

Services to the CIS Manager

KYC Review and Set-up of a GBC structured as a Special Purpose Fund. Establishment of the CIS Manager
Registered Office Address Registered Office Address
Company Secretarial Services Company Secretarial Services
Directorship services Directorship services
Preparation of Annual Financial Statements Preparation of Annual Financial Statements
Monthly NAV calculation Provision of Money Laundering Reporting Officer
Provision of Money Laundering Reporting Officer Provision of Compliance Officer
Provision of Compliance Officer Tax and Statutory Filings
Tax and Statutory Filings FATCA/CRS
FATCA/CRS

 

 

Introduction

This letter specifies the services we are to deliver as your service provider for the subject of this engagement, the team we have assigned to the Engagement, how you will remunerate us and other terms of business governing our relationship.

 

We kindly request you to read this letter carefully and confirm your agreement with its terms by signing and returning to us the enclosed duplicate.

 

  1. 1.     Mauritius GBC structured as a Special Purpose Fund

 

  1. A.   Set-Up Fee:

Particulars

USD  
  1. Professional Fees (one-off fee)

Review of due diligence documents, preliminary review and application for name reservation; Preparation and submission of all necessary paperworks to register the Company and application of Licences, provision of Constitution & Legal Certificates, receipt of Certificate of Incorporation and Licences, first Board Minutes, issue of first Share Certificates, FATCA and CRS classification.

15,000

  1. Opening of first bank account in Mauritius

2,700

Government Fees:
  1. ROC Processing Fee

350

  1. Annual Fee payable to FSC- GBC Licence

1,950

  1. Annual Fee payable to FSC – Fund licence

3,000

  1. FSC Processing Fee – GBC Licence

500

 

  1. MRA fee for the First time application of Tax Residency Certificate (“TRC”)

500

Total :

20,300

Legal Fees
 The above excludes Legal Fees if required (in the range USD 10,000-15,000)

 

  1. B.    Annual Administration Fees

 

             Particulars

USD

Annual

  1. Provision for a Registered Office & Registered Agent

1,300

  1. Provision for Company Secretary

1,300

  1. Annual Responsibility fee for 2 Resident Directors

7,000

  1. Provision for Money Laundering Reporting officer (MLRO)

3,000

  1. Provision of a Compliance Officer

3,000

  1. Review and Compliance Fees

700

  1. Administrative Services (ensuring that the Fund complies with the licence conditions and Mauritius laws, Preparation of minutes of meetings, convening Board meetings, maintaining registers, etc)

4,000

Government Fees
  1. Preparation of Tax Return

1,350

  1. Tax Residence Certificate  payable to MRA

750

  1. Annual Fee payable to the FSC – GBC

1,950

  1. Annual Fee payable to the FSC – Fund Licence

3,000

  1. Annual Fee payable to ROC

275

Accounting and Other Fees

 

Retainer for preparation of annual accounts under IFRSMaintaining Accounting Records and Liaising with Auditors

Calculation and Sign-off of NAV

10,000

Professional fees for due diligence on investors USD 100 per investor

 

 

 

 

  1. 2.     Mauritius GBC – CIS Manager

 

 

  1. Incorporation Fee:

Particulars

USD  
  1. Professional Fees (one-off fee)

Review of due diligence documents, preliminary review and application for name reservation; Preparation and submission of all necessary paperworks to register the Company and application of Licences, provision of Constitution & Legal Certificates, receipt of Certificate of Incorporation and Licences, first Board Minutes, issue of first Share Certificates, FATCA and CRS classification.

4,000

  1. Opening of first bank account

1,350

Government Fees:
  1. ROC Processing Fee

350

  1. Annual Fee payable to FSC- GBC Licence

1,950

  1. Annual Fee payable to FSC – Fund licence

3,000

  1. FSC Processing Fee – GBC Licence

500

 

  1. MRA fee for the First time application of Tax Residency Certificate (“TRC”)

500

Total :

5,300

Optional
 The above excludes Legal Fees if required

 

  1. Annual Administration Fees

 

             Particulars USDAnnual
  1. Provision for a Registered Office & Registered Agent
1,300
  1. Provision for Company Secretary
1,300
  1. Annual Responsibility fee for 2 Resident Directors
7,000
  1. Provision for Money Laundering Reporting officer (MLRO)
3,000
  1. Provision of a Compliance Officer
3,000
  1. Review and Compliance Fees
750
  1. Administrative Services (ensuring that the Fund complies with the licence conditions and Mauritius laws, Preparation of minutes of meetings, convening Board meetings, maintaining registers, etc)
4,000
  1. Preparation of Tax Return
1,350
  1. Renewal of Tax Residence Certificate
750
  1. Annual Fee payable to the FSC – GBC
1,950
  1. Annual Fee payable to ROC
350
Accounting & Investor Due Diligence Services  
Retainer for preparation of annual accounts under IFRSMaintaining Accounting Records and Liaising with Auditors

 

USD 7,000

 

 

OTHER SERVICES  USD
Provision of Fully Serviced Office Space

1,200 monthly

Annual Fee : Provision of a nominee shareholder pp

2,000

Annual Fee : Provision of a nominee director pp

2,000

Notarization and Apostilation – Per set of document

330

Certificate of Good Standing

300

Certificate of Incumbency

200

Renewal of TRC

750

Bank Account opening outside of Mauritius

Price on Application

Power of Attorney

200/hr

Change of Director

200/hr

 

  1. 3.     Mauritius GBC structured as a Special Purpose Fund
  1. Set-Up Fee:

Particulars

USD

 

  1. Professional Fees (one-off fee)

Review of due diligence documents, preliminary review and application for name reservation; Preparation and submission of all necessary paperworks to register the Company and application of Licences, provision of Constitution & Legal Certificates, receipt of Certificate of Incorporation and Licences, first Board Minutes, issue of first Share Certificates, FATCA and CRS classification.

15,000

  1. Opening of first bank account in Mauritius

3,000

Government Fees:
  1. ROC Processing Fee

350

  1. Annual Fee payable to FSC- GBC Licence

1,950

  1. Annual Fee payable to FSC – Fund licence

3,000

  1. FSC Processing Fee – GBC Licence

500

 

  1. MRA fee for the First time application of Tax Residency Certificate (“TRC”)

500

Total :

20,300

Legal Fees
 The above excludes Legal Fees if required (in the range USD 10,000-15,000)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  1. Annual Administration Fees

 

             Particulars

USD

Annual

  1. Provision for a Registered Office & Registered Agent

1,300

  1. Provision for Company Secretary

1,300

  1. Annual Responsibility fee for 2 Resident Directors

7,000

  1. Provision for Money Laundering Reporting officer (MLRO)

3,000

  1. Provision of a Compliance Officer

3,000

  1. Review and Compliance Fees

750

  1. Administrative Services (ensuring that the Fund complies with the licence conditions and Mauritius laws, Preparation of minutes of meetings, convening Board meetings, maintaining registers, etc)

,000

Government Fees
  1. Preparation of Tax Return

1,000

  1. Tax Residence Certificate  payable to MRA

500

  1. Annual Fee payable to the FSC – GBC

1,950

  1. Annual Fee payable to the FSC – Fund Licence

3,000

  1. Annual Fee payable to ROC

275

Accounting and Other Fees

 

Retainer for preparation of annual accounts under IFRSMaintaining Accounting Records and Liaising with Auditors

Calculation and Sign-off of NAV

10,000

Professional fees for due diligence on investors USD 135 per investor

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  1. 4.     Mauritius GBC – CIS Manager

 

 

  1. G.   Incorporation Fee:

Particulars

USD  
  1. Professional Fees (one-off fee)

Review of due diligence documents, preliminary review and application for name reservation; Preparation and submission of all necessary paperworks to register the Company and application of Licences, provision of Constitution & Legal Certificates, receipt of Certificate of Incorporation and Licences, first Board Minutes, issue of first Share Certificates, FATCA and CRS classification.

4,000

  1. Opening of first bank account

1,350

Government Fees:
  1. ROC Processing Fee

350

  1. Annual Fee payable to FSC- GBC Licence

1,950

  1. Annual Fee payable to FSC – Fund licence

3,000

  1. FSC Processing Fee – GBC Licence

500

 

  1. MRA fee for the First time application of Tax Residency Certificate (“TRC”)

500

Total :

5,300

Optional
 The above excludes Legal Fees if required

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  1. H.   Annual Administration Fees

 

             Particulars USDAnnual
  1. Provision for a Registered Office & Registered Agent
1,300
  1. Provision for Company Secretary
1,300
  1. Annual Responsibility fee for 2 Resident Directors
7,000
  1. Provision for Money Laundering Reporting officer (MLRO)
3,000
  1. Provision of a Compliance Officer
3,000
  1. Review and Compliance Fees
750
  1. Administrative Services (ensuring that the Fund complies with the licence conditions and Mauritius laws, Preparation of minutes of meetings, convening Board meetings, maintaining registers, etc)
4,000
  1. Preparation of Tax Return
1,350
  1. Renewal of Tax Residence Certificate
750
  1. Annual Fee payable to the FSC – GBC
1,950
  1. Annual Fee payable to ROC
350
Accounting & Investor Due Diligence Services  
Retainer for preparation of annual accounts under IFRSMaintaining Accounting Records and Liaising with Auditors

 

USD 7,000

 

 

OTHER SERVICES  USD
Provision of Fully Serviced Office Space

1,200 monthly

Annual Fee : Provision of a nominee shareholder pp

2000

Annual Fee : Provision of a nominee director pp

2000

Notarization and Apostilation – Per set of document

330

Certificate of Good Standing

260

Certificate of Incumbency

200

Renewal of TRC

750

Bank Account opening outside of Mauritius

Price on Application

Power of Attorney

200/hr

Change of Director

200/hr

Share Transfer

200/hr

Increase of Share Capital

200/hr

Standard charge in respect of disbursements

130

Amendment of memorandum of association              200/hr
Change of Company Name

400

Miscellaneous non-standard work in relation to company management to be carried out by a qualified member of staff as and when specifically requested by client (perusal, preparation, modification and issue of legal and commercial documents, correspondence, responses to third-party inquiries, and similar)

200/hr

 

   

Notes on our fees:

 

  1. All fees will be subject annually to an indexation of 2%
  2. All fees and hourly rates are exclusive of VAT and disbursements
  3. FSC fee is payable in advance on incorporation on a pro-rata basis up to 30 June; For subsequent years, the annual licence fee is payable annually at latest by 30 June. In the event of late payment, a penalty will be chargeable by the FSC and thereafter the licence shall lapse and no other business can be transacted by the entity.
  4. The ROC annual fee is payable by 10 January of each year.
  5. The retainer covers the appointment of a Company Secretary; Any other administrative services will be charged on a time-spent basis.
  6. Wherever retainer is mentioned in this proposal, it covers the minimum charge for the applicable service. Depending on the complexity and volume of transactions, additional charges may be claimed on an agreed time-spent basis.
  7. Any other administrative work or professional services not specified above shall be charged on an agreed time-spent basis.
  8. Fee schedules do not include external Auditors fees which vary depending on choice of auditor.
  9. Fee schedules do not include legal costs (when required)
  10. Local Director Fees should be added to fees should Directors Services be retained.

Customer Due Diligence Checklist

List A – Documents required for an individual

 

  1. A certified true copy of the individual’s current valid passport, driving licence or national identity card. The document must be pre-signed and should bear a (clear) photograph of the person.
  2. A recent original or certified true copy of the individual’s utility bill (dated not less than three months), bank or credit card statement or an original bank reference confirming his/her current  residential address. Note that “P.O. Box” addresses are not accepted.
  3. An original bank reference from a recognised banking institution bank which has known the person for at least the last two years, confirming that the bank account of the individual is currently in good standing.
  4. Individual Questionnaire including declaration of source of funds (template to be provided by OCI upon signature of the fee proposal).
  5. FSC Personal Questionnaire
  6. Evidence of source of funds.
  7. Detailed CV.
  8. Signed FATCA/CRS Declaration form.

 

Enhanced Due Diligence measures

 

1. Signed declaration of source wealth.

2. Evidence of the source of wealth (i.e.; bank statements for the last 6 months).

 

List B- Documents required for a Company

 

  1. Certified true copy of the Certificate Incorporation or Registration and certified true copy of the Company’s licence (where the latter is a regulated entity).
  2. Original Certificate of Good Standing.
  3. Certified true copy of the constitution or Memorandum and Article of Association of the Company.
  4. Details of the registered office and place of business.
  5. Copy of latest audited accounts or original signed Corporate Profile (template to be provided by OCI upon signature of the fee proposal).
  6. Certified true copy of the register of directors
  7. A certified true copy of at least two directors’ current valid passport, driving licence or national identity card. The document must be pre-signed and should bear a (clear) photograph of the person.

A recent original or certified true copy of the two directors’ utility bill (dated not less than three months), bank or credit card statement or original bank reference confirming his/her current residential address. Note that “P.O. Box” addresses are not accepted.

  1. Certified true copy of the register of shareholders.
  2. Complete set of due diligence documents (as per List A/B/C/D/E/F) on controlling shareholders of the Company.
  3. Original or certified true copy of due diligence documents on the senior managing official of the Company.
  4. Certified board resolution confirming the person authorized to act on behalf of the Company as well as a certified true copy of the proof of identification and proof of address (as listed in section A (1) and A (2)) of the authorised person.
  5. Signed declaration source of funds (template to be provided by Redbird upon signature of the fee proposal) and evidence of source of funds.
  6. Signed FATCA/CRS Declaration form.

Enhanced Due Diligence measures

 

  1. Signed declaration of the source of fund and source of wealth of the Ultimate beneficial owner (“UBO”) together with the relevant evidences.
  2. Bank Reference Letter of the UBO.

 

* The senior managing official will need to be identified by OCI in the event that the natural person who ultimately has controlling ownership interest in the Company cannot be identified.

 

List C- Documents required for a Trust

 

  1. Certified true copy of the extract of the trust deed.
  2. Certificate of registration, where applicable.
  3. Details of registered office and place of business of the trustee.
  4. Complete set of due diligence documents (as per List A/B/C/D/E/F) on principals of the trust (Trustees, Beneficiaries, Settlors, Protectors, Enforcers).
  5. Original or certified true copy of due diligence documents on the senior managing official of the Trust.
  6. Signed declaration of source of funds for Settlors/Contributor (template to be provided by OCI upon signature of the fee proposal) and evidence of source of funds.
  7. Signed FATCA/CRS Declaration form.

 

List D- Documents required for a Partnership

 

  1. Certified true copy of the partnership deed and certificate of registration (if registered).
  2. Copy of the latest report and accounts.
  3. Complete set of due diligence documents (as per List A/B/C/D/E/F) on the General Partners and the Limited Partners.
  4. Original Certificate of Authority (signed by the General Partners) confirming the person authorized to act on behalf of the Partnership as well as a certified true copy of the proof of identification and proof of address (as listed in section A (1) and A (2)) of the authorised person.
  5. Signed declaration of source of funds (template to be provided by OCI upon signature of the fee proposal) and evidence of source of funds.
  6. Signed FATCA/CRS Declaration form.

 

 

List E- Documents required for a Société

 

  1. Certified true copy of acte de société including profile of the Société.
  2. Original Certificate of Good Standing.
  3. Complete set of due diligence documents (as per List A/B/C/D/E/F) on the Principals, Administrators Gérants f the Société.
  4. Original or certified true copy of due diligence documents on the senior managing official of the Société*
  5. Original Certificate of Authority (signed by the Administrators or Gérants) confirming the person authorized to act on behalf of the Société as well as a certified true copy of the proof of identification and proof of address (as listed in section A (1) and A (2)) of the authorised person.
  6. Signed declaration of source of funds (template to be provided by OCI upon signature of the fee proposal) and evidence of source of funds.
  7. Signed FATCA/CRS Declaration form.

 

Enhanced Due Diligence measures

 

  1. Signed declaration of the source of fund and source of wealth of the UBO together with the relevant evidences.
  2. Bank Reference Letter of the UBO.

 

List F- Documents required for a Foundation

 

  1. Certified true copy of the Foundation Charter and certified true copy of the Certificate of Registration (if registered).
  2. Copy of the latest report and accounts of the Foundation.
  3. Complete set of due diligence documents (as per List A/B/C/D/E/F) on the Founder, members of the Council and beneficiaries of the Foundation.
  4. Original or certified true copy of due diligence documents on the senior managing official of the Foundation
  5. Signed declaration of source of funds (template to be provided by OCI upon signature of the fee proposal) and evidence of source of funds.
  6. Signed FATCA/CRS Declaration form.

 

Enhanced Due Diligence measures

 

  1. Signed declaration of the source of fund and source of wealth of the UBO together with the relevant evidences.
  2. Bank Reference Letter of the UBO.

 

REDUCED OR SIMPLIFIED CDD

 

Regulated financial services business based in Mauritius or in an equivalent jurisdiction (i.e. subject to the supervision of a public authority)

 

1. Proof of existence.

2. Regulated status.

3. Signed FATCA/CRS Declaration form.

 

Public companies listed on Recognised Stock / Investment Exchanges.

 

1. Proof of existence.

2. Proof of listing status.

3. Copy of latest annual report and account.

4. Original Certificate of Authority (signed by the directors) confirming the person authorized to act on behalf of the Public Company as well as a certified true copy of the proof of identification and proof of address (as listed in section A (1) and A (2)) of the authorised person.

5. Signed FATCA/CRS Decdaration form.

 

Government administrations or enterprises and statutory body

 

  1. Certified copy of the Charter or Constitutive Document or Enactment which established the body.
  2. Original Certificate of Authority (signed by the directors) confirming the person authorized to act on behalf of the Public Company as well as a certified true copy of the proof of identification and proof of address (as listed in section A (1) and A (2)) of the authorised person.

 

Note: Enhanced due diligence measures may be carried out by OCI on politically exposed persons (PEPS), non-face-to face business relationships, NCCT and non-equivalent jurisdictions, where adverse information is obtained, etc. In these circumstances, OCI reserves the right to request further information and documents, irrespective of percentage shareholding.

Note: Certification can be done either by a lawyer, notary, banker, or an accountant holding a recognised professional qualification; a serving police or customs officer; a member of the judiciary; a senior civil servant; an employee of an embassy or consulate of the country of issue of identity documentation.

 

Would you like to know more? Then please Contact Us:

 

www.offshoreincorporate.com

 

info@offshorecompaniesinternational.com

 

ocil@protonmail.com

 

oci@tutanota.com

 

oci@safe-mail.net

 

ociceo@hushmail.com

 

DISCLAIMER: OCI is a Company/Trust/LLC/LP/Foundation Formation Agency. We are not tax advisers or legal advisers. You are advised to seek local legal/tax/financial advice in regards to your local reporting/tax requirements before committing to set up or use an Offshore Company or other entity.

 

 

 

 

 

Mauritius Special Purpose Funds Framework

Two weeks ago we looked at the various options for the set-up of Investment Funds in Mauritius. Today we drill down to take a close look at the SPF ie Mauritius’s version of an Incubator Fund (ie a Start Up Fund aimed primarily at first time Fund Promoters and or Successful Traders looking to spread their wings by taking on/trading investor funds for the first time)

 

1. What is a Special Purpose Fund (“SPF”)?

 

New measures announced in the 2019/2020 Mauritius National Budget included the modernising of the existing Special Purpose Fund regime to provide further flexibility and ease access to new markets.

 

In line with this measure and its object to study new avenues for the development of the Financial Services Sector, the Mauritius Financial Services Commission (“FSC”) issued the Financial Services (Special Purpose Fund) Rules 2021 to govern “Special Purpose Funds” (“SPFs”), effective as from 6 March 2021. These new rules have replaced the Financial Services (Special Purpose Fund) Rules 2013.

 

An SPF is a Collective Investment Scheme (“CIS”) or a Closed-End Fund (“CEF”) which is authorised by the FSC as a Special Purpose Fund.

 

 

2. What are the requirements for a CIS/CEF to be authorised as an SPF?

 

The FSC may authorise a CIS or a CEF as an SPF if the fund will:

a. offer its shares, solely by way of private placements, to investors having competency, significant experience and knowledge of fund investment;

 

b. have a maximum of 50 investors and a minimum subscription of USD 100,000 per investor;

 

c. at all times, firstly be managed by a CIS manager; and secondly be administered by a CIS administrator;

 

d. comply with any such other conditions as may be imposed by the Commission.

 

 

3. Can an SPF invest in Mauritius?

 

Yes, investments can be made within as well as outside of Mauritius while benefitting from tax exemption provided in the Income Tax Act.

 

 

4. Can a Global Business Company (“GBC”) be authorised as an SPF?

 

A CIS/CEF holding a Global Business Licence can seek authorisation as an SPF if the Fund/Company is meeting the relevant requirements.

 

 

5. What are the on-going obligations of an SPF?

 

An SPF must comply with the provisions of the Financial Services Act, the Securities Act 2005 and the Securities (Collective Investment Schemes and Closed-end Funds) Regulations 2008 in so far as the provisions relate to a CIS and CEF.

 

In addition, an SPF must ensure that it abides by all provisions of the Financial Services (Special Purpose Funds) Rules 2021.

 

Furthermore, the submission of the Audited Financial Statements of an SPF must be accompanied by certificates from the SPF’s directors and auditors to confirm that the SPF is in compliance with the abovementioned rules and substance requirements referred to in point 8 below.

 

 

6. Can an SPF present its financial statements in a currency other than the Mauritius currency?

 

Yes. This is permissible subject to approval being granted by the Registrar of Companies in accordance with the provisions of the Companies Act 2001.

 

 

7. What happens if the CIS/CEF no longer fulfils the requirements/conditions under which it was authorised as an SPF?

 

Without prejudice to its powers under the relevant Acts, where a CIS/CEF, which was authorised as an SPF no longer, fulfils the requirements/conditions under which it is authorised, the FSC may withdraw its authorisation as an SPF.

 

 

8. What are the substance requirements of an SPF?

 

An SPF, its CIS manager and its CIS administrator shall carry out their relevant core income generating activities in, or from Mauritius, and shall:

a. employ directly or indirectly an adequate number of suitably qualified persons to conduct such core income generating activities; and

 

b. incur a minimum expenditure proportionate to the level of such activities.

 

 

9. Is there any new/additional application form to be filled-in by an SPF?

 

There is no new/additional application form to be filled-in by an SPF. An SPF will have to fill-in only the current application form and pay the applicable processing fee so as to be authorised as a CIS/CEF. Once authorised, an SPF will have to pay the annual fee applicable to the CIS/CEF authorisation and an additional annual fee of MUR 200,000 (USD 5,000 for a holder of a Global Business Licence).

 

 

10. Does an SPF benefit from tax incentives?

 

An SPF, as well as a certain category of investors in the SPF, will benefit from tax exemptions as provided in the Income Tax Act.

 

Would you like to know more? Then please Contact Us:

 

www.offshoreincorporate.com

 

info@offshorecompaniesinternational.com

 

ocil@protonmail.com

 

oci@tutanota.com

 

oci@safe-mail.net

 

ociceo@hushmail.com

 

DISCLAIMER: OCI is a Company/Trust/LLC/LP/Foundation Formation Agency. We are not tax advisers or legal advisers. You are advised to seek local legal/tax/financial advice in regards to your local reporting/tax requirements before committing to set up or use an Offshore Company or other entity.

 

 

 

How To set up an Online or Telehealth Medical Practice Offshore

Are you a practising GP/Family Doctor?

 

Are you thinking post Covid of ways to move online and or to reduce your overall tax burden?

 

If so, once can easily understand where you are coming from/what you are thinking…. If I can deliver all or most of my services online why live/pay tax in a high tax jurisdiction?

 

There are 2 aspects to this. The first is the issue of physical residence. The second is the issue of tax residence.

 

First you need to identify places where you could reside in that are nil tax or tax friendly. Then you’d need to check out their residency programs and whether you’d qualify for residency rights.

 

There are a number of jurisdictions where one can live exotically and free from tax.  Many of the nil tax havens you’ve probably heard of or read about in novels… You may even have holidayed in some of them! They include:
• The Cayman Islands
• St Kitts and Nevis
• Dubai
• Monaco
• The Bahamas
• Bermuda
• Vanuatu
• The Turks & Caicos Islands
• Anguilla

 

Countries with no Income Tax

 

The below mentioned countries generally speaking do not levy a tax on income regardless of where the income is/was sourced:

  • UAE
  • Qatar
  • Oman
  • Kuwait
  • Cayman Islands
  • Bahrain
  • Bermuda
  • The Bahamas
  • Saudi Arabia
  • Brunei Darussalam

 

Countries That Don’t Tax Offshore Income

 

Another option is to live/base yourself in a country which has a territorial tax system (ia country which only taxes you on locally sourced income) and run your business income through a (tax free) Offshore company. Hong Kong is an example of such a place. Singapore is another. Panama would also be in the discussion as would the UAE be. Other examples include:

Costa Rica

Gibraltar

Hong Kong

Malaysia

Nicaragua

Panama

Paraguay

San Marino

Singapore

Seychelles

 

In such a scenario all your business sales in the first instance would run through a tax-free Offshore Company. Thereafter you should only (maybe) have to report/pay tax locally on any salary paid to you by the Offshore Company.

 

To be able to live in such a place you’d need to obtain a residency permit or citizenship. We can assist you to obtain residency rights in Panama and the UAE. We can also assist you to apply for citizenship in Nevis.

 

Second Issue

 

The next thing you need to would be to take steps to ensure that you effectively exit the local tax system. From a taxing rights perspective in terms of which country has the rough to tax you the question isn’t where I am residing (or where do I have a residency permit for) but where am I resident for tax purposes.

 

We are often asked by individuals where (ie in what country/s) am I liable to pay tax?

 

The starting point it this: If you are regarded at law to be tax resident (ie resident for tax purposes) in a particular country you are liable to pay tax there on your (usually, worldwide) income.

 

The concept of tax residency however (ie what it takes to be classified as non-tax resident) varies from country to country. Depending on where you originate from you may pass the non-tax resident test of one country but fail the same test had you originated from the country next door.

 

Let me explain….

 

The most well-known tax residency test is in fact the oldest ie the days spent at home test. Historically, in most countries (USA excepted – see below), you were considered non-tax resident if you spent less than half the year inside your “home” or mother country.

 

Over the years, and particularly with the proliferation of “fly in-fly out” jobs (seen most prevalently in the oil/mining industries) a number of countries (in particular the more developed countries) have brought into play a multifaceted tax residency test. In other words notwithstanding that you might spend less than half the year on the ground in your mother country if you have a “substantial connection” with your mother country you may still be classified as tax resident of/in that country.

 

So what constitutes “substantial connection”?

 

In considering whether you still have a “substantial connection” to your mother country a number of factors are looked at including:

 

  • Do you retain a residency/home in your mother country?
  • Do you own any personalty in your mother country (eg a car, furniture/home contents/boat/leisure toys etc etc)
  • Do you have a bank account in your mother country?
  • Do you have investments or business interests in your mother country?
  • Do you retain a professional or trade license (eg Lawyer/Plumber/Doctor/Teacher/Nurse/Engineer/Architect/Builder/Dentist etc) license in your mother country?
  • Do you keep current a golf/tennis/leisure club membership in your home country?
  • Do you regularly renew a driver’s license in your home country?
  • Do you have children at school in your home country?
  • Do you have a spouse/partner living full time in your home country?
  • Etc etc etc

 

Chances are, as a minimum, what you will need to do in order to become non-tax resident in your mother country is:

 

(a)   Sell your home/residence in your mother country (or cancel any lease you might have over residential premises there)

(b)   Sell any business you own on the ground in the mother country

(c)    Sell all personalty owned/held in your mother country

(d)   Hand in (and not renew) any professional/trade license you may have in your mother country

(e)   Close down any bank/investment accounts you might have in your mother country

(f)     Write to your local IRS/Tax Office and advise that you have departed the country permanently and filed your last tax return.

 

For USA citizens however a unique situation applies. Generally speaking, if you are a US citizen you are required to declare worldwide income in and pay tax in America regardless of (a) whether you spend less than half the year there and (b) whether you have no substantial connection with the USA. (For Americans the only way to be classified as “non tax-resident” of the US is to hand in your passport and denounce your citizenship).

 

All that said we are not tax advisers or financial advisers. Before committing to move abroad we’d advise you to seek advice from a local Tax Lawyer and a local tax Accountant (ie both in the country where you are departing from and the country where you are going to).

 

Would you like to know more? Then please Contact Us:

 

www.offshoreincorporate.com

 

info@offshorecompaniesinternational.com

 

ocil@protonmail.com

 

oci@tutanota.com

 

oci@safe-mail.net

 

ociceo@hushmail.com

 

DISCLAIMER: OCI is a Company/Trust/LLC/LP/Foundation Formation Agency. We are not tax advisers or legal advisers. You are advised to seek local legal/tax/financial advice in regards to your local reporting/tax requirements before committing to set up or use an Offshore Company or other entity.

 

 

 

Mauritius Investment Funds Setup Options

Over the course of the past 20 years+ the reputation of the central Indian Ocean Islands Financial Centre of Mauritius has indeed blossomed.

 

Led by an innovative Financial Services authority and boasting political stability and low taxes – alongside a powerhouse and stable economy – Mauritius has become a popular jurisdiction for fund managers, institutional investors, entrepreneurs and private investors looking to set up Private Funds, Blockchain enterprises or Fiduciary structures. In recent years – thanks to vibrant new laws, quality service providers, value for money pricing and solid banking infrastructure – Mauritius has increasingly become a/the jurisdiction of choice for Fund Managers and Traders looking to set up traditional funds, start-up funds and alternative investment collectives.

 

If you are a Fund Manager or successful Trader looking to kick off a Hedge Fund or Private Fund structure this article will provide you with an overview of the various Fund structures on offer in Mauritius.

 

Key advantages of Mauritius

  • Low tax – A Partial Exemption Regime is applicable to domestic and global business companies ie GBCs – 80% of foreign-source income from collective investment schemes (CIS), closed-end funds (CEFs), CIS manager or administrator will be exempted from income tax. And a tax rate of just 3%.
  • No capital gains tax and no withholding tax on dividends and interest
  • No exchange controls
  • Innovative well drafted legislation and a British Legal/Court system
  • Advantageous time zone for global markets (GMT +4)
  • Low-cost jurisdiction for services
  • Minimal red tape/Business friendly set up procedures
  • Wide Range of Fund structuring options (Global CIS, Professional CIS, Specialised CIS and Expert Fund)

 

How to set up a Collective Investment scheme in Mauritius

 

An Investment Fund if incorporated/established in Mauritius is regulated as a “Collective Investment Scheme” – CIS.

 

A Collective Investment Scheme’s aim is to pool capital from accredited investors or institutional investors and to infuse such funding in a variety of assets, often with complex portfolio-construction and risk management techniques thus diversifying its investment risk whilst at the same time ensuring an absolute return objective.

 

Essentially, such a CIS is structured with an elastic capital and provides its subscribers the freedom to exit at any time based on the NAV (Net Asset Value).

 

Sub-categories of CIS:

  • Professional CIS: A Professional CIS is a CIS which offers it shares solely to sophisticated investors or as private placements
  • Specialised CIS: A Specialised CIS is one that invests in real estate, derivatives, commodities or any other product authorized by the Mauritius Financial Services Commission (FSC)
  • Expert Fund: An Expert Fund is a Fund which is only available to expert investors. As per the Securities Act 2005 (‘SA 2005’), an expert investor means: a. an investor who makes an initial investment, for his own account, of no less than USD 100,000; or b. a sophisticated investor as defined in the SA 2005 or any similarly defined investor in any other securities legislation
  • Public CIS: A CIS other than sub-categories (1), (2), (3) above, and which is fully regulated and meant mainly to be offered to the public (Such a CIS may be referred to as a “Public CIS”).

 

Would you like to know more? Then please Contact Us:

 

www.offshoreincorporate.com

 

info@offshorecompaniesinternational.com

 

ocil@protonmail.com

 

oci@tutanota.com

 

oci@safe-mail.net

 

ociceo@hushmail.com

 

DISCLAIMER: OCI is a Company/Trust/LLC/LP/Foundation Formation Agency. We are not tax advisers or legal advisers. You are advised to seek local legal/tax/financial advice in regards to your local reporting/tax requirements before committing to set up or use an Offshore Company or other entity.

 

 

 

Where To set Up a Private Fund Offshore

Are you an Online Trader (eg Trading cryptocurrency or Trading forex or Trading shares or Trading commodities/futures/options or etc)?

 

Have you developed a successful Trading strategy?

 

(Having experienced some success) are you now being asked by family and friends to trade their funds?

 

If the answer to all these questions (in particular, the latter question) is yes then you’re probably considering (or thinking about the possibility of) setting up some kind of Private Investment Fund.

 

Most “Onshore” jurisdictions make it extremely difficult for a career Trader to set up a Hedge Fund. You may be interested to know there are several ways to cost effectively set up a Fund type Company “Offshore” (including options that do not require any form of special license).

 

Here’s how this might be achieved:

 

Popular Licensing Options here include:

-        A Seychelles Securities Dealers License – Check this file/link for an overview: https://www.dropbox.com/s/6pstxtedigpb0ep/Seychelles%20Securities%20Dealers%20License%20OVERVIEW.docx?dl=0

-        A Belize Broker’s License – Check this file/link for an overview: https://www.dropbox.com/s/vrofr9vhhgcwkd3/Belize%20Broker%27s%20License%20FACT%20SHEET.docx?dl=0

-        A BVI Brokers License – Check this file/link for an overview: https://www.dropbox.com/s/kkapiwyse8wyhwn/BVI%20Brokers%20License%20FACT%20SHEET.docx?dl=0

-        A Vanuatu Financial License – Check this file/link for an overview: https://www.dropbox.com/s/h15jmyga764vo7x/Vanuatu%20-%20Applications%20for%20Financial%20Licenses%20-%20Requirements.pdf?dl=0

 

 

 

 

  • Semi licensed/regulated options include the BVI Incubator Fund & Mauritius Special Purpose Fund; Check these files/links for details:

https://www.dropbox.com/s/quu1kjc7emnpbys/How%20To%20set%20up%20a%20BVI%20Incubator%20fund.docx?dl=0

 

https://www.dropbox.com/s/89cm6g0mkje1tyo/Mauritius%20Special%20Purpose%20Fund%20FAQ.pdf?dl=0

 

 

Cost to set up a Licensed Entity range from circa $US15,000 (eg a for a Broker’s License) up to north of $25,000 (eg to establish a Licensed Mutual Fund).

 

To set up a non-licensed Closed End Fund can be done for as little as $3-5,000 (+ Bank Account set up). A BVI Incubator fund to set up costs around 15-18k. The most cost-effective Open Ended Fund Option would be a Panama PF 20 Fund which can be set up for a little as $4,000 (+ nominee Directors if required).

 

Non License Jurisdiction Suggestions

 

Given they are low regulation, boast peerless privacy laws and are cost effective places to maintain/setup such a Company (ie assuming you’d prefer to go down the non licensing road) commonly we would suggest Seychelles, Belize or Nevis as potential jurisdictions in/at which to incorporate “Offshore” such an Enterprise.

 

See here for details:

 

 

Cost there to incorporate a Company would be:

 

  • For a Nevis Company, including incorporation, registered/agent office service and one year’s basic admin: $1,475 . 2nd and subsequent years $1,165
  • For a Belize Company, including incorporation, registered/agent office service and one year’s basic admin: $1,000. 2nd and subsequent years $690 (or $1,090 if nominees are required)
  • For a Seychelles Company, including incorporation, registered/agent office service and one year’s basic admin: $1,075  2nd and subsequent years $765

 

Another popular place to incorporate such a business is Hong Kong. Check this link which explains why it’s so popular:  https://www.dropbox.com/s/hfzo6gdlk5v0xci/Why%20Incorporate%20in%20Hong%20Kong.docx?dl=0

 

Would you like to know more? Then please Contact Us:

 

www.offshoreincorporate.com

 

info@offshorecompaniesinternational.com

 

ocil@protonmail.com

 

oci@tutanota.com

 

oci@safe-mail.net

 

ociceo@hushmail.com

 

DISCLAIMER: OCI is a Company/Trust/LLC/LP/Foundation Formation Agency. We are not tax advisers or legal advisers. You are advised to seek local legal/tax/financial advice in regards to your local reporting/tax requirements before committing to set up or use an Offshore Company or other entity.

 

 

 

 

 

 

How To Add a New Shareholder to your IBC or Offshore Company

If you want to or need to add a new shareholder to your Offshore Company the process is simple and streamlined.

 

To add an additional shareholder/s for/to an IBC/Offshore Company:

 

(a)   You will need to tell us the name and address of the new shareholder and how many shares, and of what value and what kind of shares are to be issued to that person/entity (eg please issue 1,000 ordinary shares of one USD each to Mr John Smith of 1 Jones Street Jonesville, NY, USA)

 

(b)   You will need to provide us with KYC (ie Certified Proof of ID and residential address) per the requirements for/as regards the proposed new shareholder

 

(c)   We would need the Director/Chairman of the Company to sign s a Change of Shareholder minute/resolution.

 

(d)   A new share certificate will need to be issued

 

(e)    The share register will need to be amended

 

(f)    A share subscription form will need to be drafted and signed by the new shareholder.

 

(g)   We will also need the requisite fee settled in advance. See details below.

 

Procedures Once Documents Have Been Received

 

Once OCI’s fees have been settled and we have received the original (or certified copy) of the signed resolution and the original share subscription form duly signed, within 72 hours we will:

(i) email you (and prepare for couriering to you) the new share certificate/s; and

(ii) upgrade the Company’s Share register to note the new shareholder’s name; and

(iii) email you a Lawyer certified true copy of the upgraded Share register plus a new Certificate of Incumbency (if required); &

(iv) (the same day) package and take the above docs to DHL (or to the post office for airmailing as you may prefer) for dispatch by courier to you with the next available flight to your region.

 

Cost of attending to Change of Shareholder inclusive of the above is from $375 per shareholder inclusive of provision of Certificate of Incumbency if required (cost of courier if required is extra).

 

NOTE: If the new shareholder is a Company we’ll also need proof of the Company’s Incorporation + confirmation that the Company is in Good standing (eg a Certificate of Good standing issued by the Company Registry in the country wherein the Company is incorporated) + KYC per the requirements for the shareholders & directors (& beneficial owners) of the new shareholder Company.

 

Would you like to know more? Then please Contact Us:

 

www.offshoreincorporate.com

 

info@offshorecompaniesinternational.com

 

ocil@protonmail.com

 

oci@tutanota.com

 

oci@safe-mail.net

 

ociceo@hushmail.com

 

DISCLAIMER: OCI is a Company/Trust/LLC/LP/Foundation Formation Agency. We are not tax advisers or legal advisers. You are advised to seek local legal/tax/financial advice in regards to your local reporting/tax requirements before committing to set up or use an Offshore Company or other entity.