Mauritius: Best of Breed Fund Jurisdiction
The primary focus of fund managers is to efficiently deploy investment monies. It is thus crucial that a fund vehicle is domiciled in a jurisdiction that allows pooling of capital effectively and safely and the timely distribution to investors. Choosing the right financial center to domicile for your fund is always important but sometimes tricky. Given a choice, fund managers will generally seek out the most efficient, secure and reputable financial jurisdictions. Only the most efficient financial centers with a proper legal and fiscal framework are going to be selected and are able to meet the requirement of fund managers and their international investment strategies.
Mauritius satisfies the criteria for an efficient and secure financial center. Capitalising on its strategic location, it has forged itself as the fund jurisdiction of choice for India and more recently for Africa. Mauritius is a tax neutral jurisdiction, stable, secure and has good ties with all neighboring emerging jurisdictions as well investor jurisdictions. It boasts a large infrastructure of professional legal, accounting, audit, administration and fiduciary expertise, an independent legal and judicial system, with a right of final appeal to the Privy Council of the House of Lords in England, a wide network of Double Taxation treaties,high-tech ICT connections – high communication speed and capacity, high bandwidth connectivity with Europe, Southeast Asia and Africa and strategic time zone (GMT +4). It is has been voted first in Africa according to the World Bank “Ease of doing business” report for several consecutive years. Further, Mauritius’s investment fund fee structure is competitive which ultimately benefits both the manager and the investor in regards to launch and ongoing expenses of the fund.
Being a genuine and sound jurisdiction, it enjoys a good relationship with international regulators and the FSC, the regulator is a member of IOSCO. It is currently on the OECD list of compliant jurisdictions and is vigorously pursuing expansion of its network of information exchange agreements with other countries. Mauritius has a trusted legal and regulatory framework that it constantly being updated and innovated to ensure equivalence with international best practices and standards. Mauritius has been fine tuning its alternative dispute resolution regimes of law, namely in the field of arbitration with the set-up of Mauritius International Arbitration Centre. This provides much required comfort to fund managers and investors towards protection of their rights and that the financial center is a true financial hub.
Much of Mauritius’s success in attracting funds is also the fact that Mauritius Securities Law while being in line with international norms and best standards does not impose onerous restrictions on a fund’s investment strategy. Establishing a fund and related functionary entities is simple. This allows fund managers a discretion and flexibility in the operation and structure of a fund.
A Mauritius licenced fund can be structured as corporate entity, a trust, a limited partnership or as segregated portfolio in the form of a protected cell company. A Mauritius fund as well as its functionaries as the investment manager or adviser can be set up as domestic or global business entities. Different categories of fund can be set up which may invest directly in securities or make use of SPVs for particular types of investments. In recent years there has been much more traction with our African counterparts with a surge in private equity and venture capital funds. Mauritius funds have attracted considerable capital from developed financial institutions, institutional investors and HNWIs targeting impact investments or conventional private investments. It has been become the premier choice for these types of fund.
It is useful to highlight that when launching a fund, it is important to think of the end at the beginning. Ensuring an effective exit is crucial especially for private equity funds. Be it through a share sale, an IPO or merger and acquisitions, Mauritius affords the fund and its manager the flexibility to choose its exit strategy within the framework of a flexible and modern legislation. Mauritius allows a licenced fund to list on the Mauritius Stock Exchange as well as have a dual listing.
The attractive fiscal regime in Mauritius is certainly an important factor in attracting investment managers and funds. Mauritius has a wide network of double taxation treaties that offer investors the opportunity to effective tax planning and structuring of investments. There is no capital gains tax or withholding tax on dividends and capital distributions. Mauritius also has a wide network of IPPAs which provides added protection to the funds with respect to their investments.
As a dynamic and fluid financial jurisdiction, Mauritius has a robust banking system with 21 banks made up of international and local banks. There are currently no exchange controls allowing the remittance of funds easily subject to applicable regulatory requirements.
Mauritius continues to be a jurisdiction of choice for investors who place increased emphasis on greater levels of transparency, third party service providers and rigorous due diligence on fund documents and custody and administration arrangements. The fund model is a tried and tested one especially for those targeting India and/or Africa.
Today, fund managers wish to domicile their funds in a legal and regulatory environment that supports diverse investment strategies as well as a quick and non‐bureaucratic formation process. Mauritius remains committed to attracting quality funds by offering political and economic stability, a sound legal system, a pool of professional service providers and an efficient regulatory framework of the investment industry that provides transparency and disclosure.
Rizwana Ameer Meea is the Chief Executive Officer of Sphere Management (Mauritius) Limited. She is a qualified barrister. She was called to the bar of England and Wales In 2002 at the Middle Temple and called to the bar in Mauritius in 2003.
She counts several years’ experience in offshore structuring and administration, She currently leads a team of professionals involved in the administration various global funds, companies and trusts. The combination of her experience in professional practice and in general management provides her with the requisite experience for advising international businesses in tax-efficient corporate structuring and administration. She serves as director on the board of several companies and funds.Rizwana is also member of the Mauritius branch of The Society of Trust and Estate Practitioners.
Rizwana can be contacted on +230 211 6726 or by email at email@example.com