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”).
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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.