Mauritius financial services
Amongst Mauritius offshore entities, only GBC1 companies are legally allowed to offer financial services. Such activities usually require securing a financial service license with the relevant Mauritius administration, most often the Financial Services Commission. Please find below more information on business setup and licensing requirements for the most popular financial services entities:
The Mauritius forex brokerage company (currency derivatives licensed investment dealer)
- Foreigners willing to run a forex business in Mauritius can do so by i) registering a GBC1 company; then ii) securing an investment dealer license with the financial services commission. The process requires the appointment of a minimum of two directors including i) two Mauritius residents and ii) two directors with at least four years of experience in the forex brokerage industry;
- Licensing requirements also include: i) a minimum capital requirement of US$21,000 (MUR700,000); and ii) cash and cash equivalent assets corresponding to 10% of all outstanding liabilities; and iii) submission of 3 years financial projections, business plan and a quality AML/CFT program;
- While Mauritius used to be amongst the prime jurisdictions forex businesses, the Mauritius Financial Services Commission is reluctant to grant new licenses and has recently deregistered multiple offshore forex businesses for non-compliance with AML/CFT obligations;
- Best uses for a Mauritius forex company: Mauritius is an attractive jurisdiction for forex businesses which have already have several years in the industry and now want to serve their customers with a low cost / low tax licensed entity.
The Mauritius collective investment scheme fund (CIS licensed fund)
- There are four broad categories of open-ended funds in Mauritius:
- Fully regulated collective investment schemes, which offer their products to retail customers. These funds are subject to strict regulations in Mauritius and usually are onshore businesses with significant functions performed directly in the country;
- Professional funds, which only offer investment opportunities to “sophisticated” investors that is to say i) Governments and Government bodies; ii) other licensed funds; iii) banks; iv) insurers; and v) licensed investment dealers;
- Expert funds, which only offer their products to i) sophisticated investors; and ii) investors making a minimum investment contribution of US$100,000;
- Specialized Funds, which only deal in a subcategory of financial products (equity, bonds, derivatives, commodity) and for which the regulations applied by the Financial Services Commission are set on a case by case basis.
- All of the above funds are i) usually registered a GBC1 companies or partnerships; and ii) required to secure a global funds license with the Mauritius Financial Services Commission. Such license requires i) all funds to have a capital equivalent to 5% of the amount expected to be raised from investors; and ii) the appointment of a CIS manager who must be a licensed entity, preferably in Mauritius although the FSC can approve overseas licensed CIS managers for professional, expert and specialized funds;
- Additionally, fully regulated CIS are required to appoint a licensed custodian in Mauritius to hold the assets locally (when possible). This custodian must have a minimum capital of at least US$300,000 (MUR10 million);
- Best uses for a Mauritius collective investment scheme fund: such funds are attractive corporate structure to offer investment management services to an international wholesale clientele.
- There are four broad categories of open-ended funds in Mauritius:
The Mauritius captive re-insurance company
- Mauritius GBC1 entities can be used for captive re-insurance purposes, that is to offer insurance products within the same group of businesses. As long as such products are not offered to third parties, such businesses benefit from lower licensing requirements, as they are only required to secure an external insurance business license with the Financial Services Commission;
- To secure the above license, it is necessary for the business to i) have a minimum capitalization of US$750,000 (MUR25 million), to be maintained at all times; ii) appoint at least 7 directors, amongst whom 2 must be resident in Mauritius and 30% independent directors and iii) submit draft compliance manuals, proposed re-insurance arrangements and detailed program in place to ensure the safety of all assets of the business;
- After its registration, the business is required to submit annual actuarial reports, in addition to its annual financial statements;
- Best uses for a Mauritius captive re-insurance company: Mauritius captive re-insurance companies are attractive vehicles for larger MNCs to save costs on insurance products issued by third party insurers. Operating such type of business however requires a deep knowledge and know how in the financial and insurance industries and is expensive to maintain.
Table of comparison between Mauritius financial entities
Entity type Retail Fund Investment Fund Investment Fund Forex company Re-insurance company Also know as? Fully regulated CIS Professional Fund Expert Fund FX brokerage Firm Captive re-insurance Type of Mauritius entity usually used? Local LLC GBC1 GBC1 GBC1 GBC1 Doing business in Mauritius permitted? Yes Yes Yes Yes Yes Can only offer services within the same Group? No No No No Yes Allowed to sign contracts with retails Clients? Yes No No Yes No Allowed to sign contract with wholesale Clients? Yes Yes Yes Yes No Local office premises required before registration? Yes Yes Yes Yes Yes Allowed to hire staff in Mauritius? Yes Yes Yes Yes Yes Accounting and tax Corporate tax rate? 15% 3% 3% 3% 3% Statutory audit required? Yes Yes Yes Yes Yes Annual tax return to be submitted? Yes Yes Yes Yes Yes Access to DTAAs? Yes Yes Yes Yes Yes Company and licensing laws Must appoint a qualified fund manager? Yes Yes Yes No No Must appoint a resident custodian? Yes No No No No Probability the FSC approves a non resident fund manager? 0% 50% 50% N/A N/A Issued share capital required? 5% of total funds raised from investors 5% of total funds raised from investors 5% of total funds raised from investors US$21,000 US$750,000 Minimum number of directors required? 2 2 2 2 7 Resident director required? Yes, 2 Yes, 2 Yes, 2 Yes, 2 Yes, 2 Must the directors be qualified to run the business? Yes Yes Yes Yes Yes Independent directors required? Yes No No No Yes, 30% of the Board Business plan and financial projections required before registration? Yes Yes Yes Yes Yes Minimum number of shareholders? 1 1 1 1 1 Public register of licensed entities? Yes Yes Yes Yes Yes Immigration Can the entity hire expatriate staff? Yes Yes Yes Yes Yes How long to get work permit approved? 3 months 3 months 3 months 3 months 3 months Fees and timelines Estimate of engagement costs US$39,340 US$39,340 US$39,340 US$36,525 US$56,970 Draft invoice View invoice PDF View invoice PDF View invoice PDF View invoice PDF View invoice PDF