Mauritius Fund Manager License: Types of licenses available

Mauritius Fund Manager License

Tetra Consultants assists our international clients to secure Mauritius Fund Manager license or Investment Advisor license. There are three categories of Mauritius Fund Manager licenses. Under the Mauritius Securities Act 2005 and the Securities Regulations of 2008 on (Collective Investment Schemes and Closed end Funds), it allows for a Fund Manager or Collective Investment Scheme (CIS) Manager Company to be set up and licensed in Mauritius. In order to secure fund manager licenses, you are first required to secure Global Business Corporation (GBC) licenses. It is essential for our international clients to understand the different categories of fund manager license and proceed with the most suitable option. Contact us now for a free consultation. Our team of experts will revert within the next 24 hours.

Categories of CIS

CIS can be divided into the following categories: Global CIS, Professional CIS, Specialised CIS and Expert Fund.

• Global CIS – A fully regulated CIS that is mainly offered to the public. A Global CIS does not generally hold a GBC licence and is not entitled to any of the exemptions generally provided to funds;

• Professional CIS – A CIS that offers its shares solely to sophisticated investors or as private placements. Sophisticated investors include governments or public bodies, and banks, amongst others. A Professional CIS is exempted from most obligations and regulations provided that its interests are not resold to the public and are not listed on a securities exchange, whether in Mauritius or elsewhere;

• Specialised CIS – A CIS that is invested in real estate activities or in derivatives or commodities, as well as other FSC-approved products;

• Expert Fund – A CIS that is only available to Expert Investors. An Expert Investor is an investor who makes an initial investment of no less then US$ 100,000. Most of the obligations and restrictions governing Global Funds do not apply to Expert Funds.

CIS Manager

CIS Manager is the most comprehensive fund manager license in Mauritius. The CIS Manager Licence specifies that the fund manager shall be engaged solely in the business of management of collective investment schemes, unless otherwise authorised. It must demonstrate that it has suitably qualified staff with the appropriate expertise and experience to carry out the functions of a CIS manager.

The Financial Services Commission (FSC) shall not grant a CIS manager licence to an applicant unless

• the applicant is a body corporate;

• the Commission is satisfied that the applicant will be able, if licensed, to comply with the requirements of the FSC Rules as to the financial and other resources requirements needed by the investment manager for the collective investment scheme; and

• the applicant and each of its officers meet the requirements relating to eligibility, fit and proper, duties and obligations, rules of ethics and other such conditions as may be specified in FSC Rules.

After becoming a CIS Manager, you are allowed to carry out the following activities for the management of a Collective Investment Scheme (CIS):

• All administrative services required by the scheme;

• Provision of registrar and transfer facilities;

• Distribution of the securities of the scheme;

• Maintaining accounting records of the scheme;

• Giving investment advice in relation to the scheme;

• Managing the portfolio.

According to FSC, the minimum stated capital is US$ 30,000 and you are required to record an annual minimum expenditure of US$ 30,000 in Mauritius. Depending on your AUM, you are required to hire a minimum number of qualified employees with appropriate expertise. A CIS Manager is required to subscribe to an insurance policy to cover risks such as:

• Fraudulent activities of employees;

• Fraudulent instructions;

• Losses arising from the malicious or fraudulent corruption of electronic data or electronic transactions;

• Legal liability to third parties arising from breaches of professional duty.

A CIS Manager must file with the Commission interim financial statements within 45 days after the closing date of each quarter. In addition, a CIS Manager is required to file audited financial statements within 90 days of its balance sheet date.

Investment Advisor Unrestricted

• Investment Advisor Unrestricted license allows you to manage a portfolio of securities and advise on securities transactions through printed materials or any other means. The minimum stated capital is US$ 18,000 and you are required to record an annual minimum expenditure of US$ 25,000. In addition, your company is required to hire at least one employee who has at least 4 years of relevant experience in investment business. Although insurance cover is not mandatory, Tetra Consultants highly recommends our international clients to purchase the same. An Investment Advisor Unrestricted License also requires you to file audited financial statements within 6 months before the end of the financial year.

• For the Investment Advisor Unrestricted license, the application processing fee to FSC is US$ 500 and the annual fees to FSC is US$ 1,900.

Investment Advisor Restricted

• Investment Advisor Restricted license allows you to advise on securities transactions through printed materials or any other means. Unlike the above-mentioned license, you are not authorized to manage any portfolios. The minimum stated capital is US$15,000 and you are required to record an annual minimum expenditure of US$ 25,000 in Mauritius. Your business must hire at least one employee who has at least 3 years of experience in investment business. Although insurance cover is not mandatory, Tetra Consultants highly recommends our international clients to purchase the same. An Investment Advisor Unrestricted License also requires you to file audited financial statements within 6 months before the end of the financial year.

• For the Investment Advisor Restricted license, the application processing fee to FSC is US$ 500 and the annual fees to FSC is US$ 1,200.

How to secure Mauritius fund manager license?

• Tetra Consultants has more than a decade of experience in advising our global clients on securing Mauritius Fund Manager license. Our team of experts will manage your fund manager license application from the start to the end, including incorporation of a new Mauritius company, opening of corporate bank account, drafting the legal documents required and securing the fund manager licenses.

Taxation of funds and Tax Treaties in Mauritius

• Mauritius has established itself as a leading jurisdiction for setting up a Mauritius fund management company. This can be attributed to the fact that funds in Mauritius enjoy a low tax regime and have access to an extensive network of double tax treaties.

• As of 1 January 2019, the previous Deemed Foreign Tax Credit regime has been abolished. Previously, Category 1 Global Business Companies (GBC1) were eligible for a unilateral foreign 80% tax credit on all types of income, reducing the effective income tax rate to 3%. Now, Global License License (GBL) companies are subject to local taxes at a rate of 15%.

• As a result, 80% of the foreign-source income derived by a collective investment scheme (CIS), closed-end fund (CEF), CIS manager or CIS administrator will be exempted from income tax. This will maintain an effective tax rate of 3%.

• There is no capital gains tax in Mauritius and no withholding tax on dividends and interest in Mauritius. There are also no exchange controls in force and funds can be repatriated freely

• Currently, Mauritius has concluded 44 tax treaties (DTA), of which 16 are African countries namely Botswana, Lesotho, Madagascar, Mozambique, Namibia, Rwanda, Senegal, Seychelles, South Africa, Swaziland, Tunisia, Congo, Egypt, Uganda, Zimbabwe and Zambia. To reap the benefits of the Mauritius tax treaty network, the CIS and Fund Management Company will have to apply for a Tax Residence Certificate (TRC). Listed are the conditions the CIS and Fund Management Company have to fufill:

• • At least 2 resident directors, resident in Mauritius

• • Maintain its principal bank account in Mauritius at all times

• • Keep and maintain its accounting records at its registered office in Mauritius

• • Have its statutory financial statements audited in Mauritius

• • Have its Net Asset Value to be calculated in Mauritius

Financial reports requirements

Investment funds are required to file with Financial Services Commission (FSC) an audited annual report in accordance with the International Financial Reporting Standards (or other applicable standards). These reports must include, at least, the following:

• a statement of assets and liabilities, including the net asset value (NAV);

• the number of shares outstanding;

• the NAV per share; and

• details of the investment portfolio and the movements in the period, disclosed by types of securities and type of market analyzed as a percentage of the investment fund’s net assets.

Advantages of Mauritius’ Fund/CIS Manager Companies

Mauritius is deemed to be one of the most ideal places to save on costs for Investment Houses and Fund sponsors. Additionally, fund management companies in Mauritius are also able to enjoy the array of fund administrators, service providers and fund lawyers in the country. Some of the advantages of Mauritius include:

• Modern and flexible laws

• Minimum Capital requirement of MUR 1 Million (approx US$ 30,000)

• Low Tax rate – Maximum of 3% on net profits

• Low Fund Management License fee & Operational costs

• Availability of professional fund administrators and fund lawyers

• Extensive network of double tax treaties and favourable tax incentives

• Sound regulatory and legal framework

• Strategic location makes it a well-placed international financial centre to access African markets

Contact us now for a free consultation. Our team of experts will revert within the next 24 hours.

FAQ:

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