Global Business
· Category 1 and 2 Global Business Companies.
· Collective Investment Schemes
· Management Companies and Other Service Providers
Category 1 and Category 2 Global Business Companies
Category 1 Global Business Licence
A Global Business corporation
(Category 1) is a corporation which undertakes any of the following activities listed in the
Second Schedule of the FSDA 2001 which is carried on from within
·
Aircraft financing and leasing
·
Assets management
·
Consultancy services
·
Employment services
·
Information and communication technologies
·
Insurance
·
Licensing and franchising
·
Logistics and or marketing
·
Operational headquarters
· Pension funds
· Shipping and Shipping Management
·
Trading
·
Any other activity as may be approved by the Commission
It is qualified to take
protection of the tax treaties to which
Category 2 Global Business Licence
A Global Businesswhich is carried on by private company –
(i)
incorporated or registered under the Companies Act 2001
(ii)
which does not conduct business with persons resident in
(iii)
which holds a Category 2 Global Business Licence.
It is exempt from the
provisions of the Income Tax Act and is declared as a non-resident for tax purposes.
GLOBAL BUSINESS VEHICLES
The
corporate vehicles available to carry global business activities from within
Company Holding a Category 1 Global Business Licence (GBC 1)
A GBC 1 is required to file with the Financial
Services Commission within six months after the close of its financial year
annual audited financial statements prepared in accordance with the
International Accounting Standards or internationally recognised
accounting standards.
The GBC 1 may be set up by direct incorporation, or
by registration of a branch of a foreign company, or by way of continuation
where this is allowed by the law in the country of origin. A branch of a
foreign company may have access to
A GBC 1 may be structured as a PCC. The PCC is a special legal structure made up of cellular and non-cellular assets. It provides legal segregation of assets attributable to each cell of the company whether owned by individuals or body corporate. The PCC offers a wide range of applications as set out under Protected Cell Companies (Amendment of Schedule) Regulations 2005.
Incorporation
& Registration
A PCC may be directly incorporated or may be
registered as a foreign company by way of continuation as a PCC, provided that
the incorporation, registration and conversion requirements prescribed in the
Companies Act 2001, the Protected Cell Companies Act 1999 (PCC Act) and the
Protected Cell Companies (Amendment of schedule) Regulation 2005 are satisfied.
The incorporation and licensing procedures for a PCC is similar to that of a GBC
1. In the case of a continuation, additional requirements as laid down in
section 5 of the PCC Act must be satisfied. Section 6 of the PCC Act stipulates
that the suffix "PCC" must be added after the name of the company. A
PCC may also be converted into a normal GBC 1.
Management of a PCC
A PCC is managed by its Directors. However, the management may be transferred or shared through a management contract with an Investment Manager in the case of investment funds.
Capital Requirement
No minimum capital requirement is imposed for the PCC and for each cell within the PCC. However, on a case to case basis and depending on the nature of the business, the Commission may prescribe certain capital requirements. In the case of insurance or re-insurance business, each cell must abide by the Financial Services Development (Amendment Of Schedules) Regulations 2001 regarding the requirement of minimum paid up capital.
Winding Up & Liquidation
Special winding up procedures are provided in the PCC Act which protect contagion of solvent cells by insolvent ones. Dissolution of the PCC is addressed by special provisions in the PCC Act which provide for receivership and administration orders and no recourse to the creditor of the insolvent cell to the assets of the other solvent cells.
Reporting & Filing of Audited Accounts
A PCC is required to submit annual audited accounts to the Commission. The accounts should contain a note explaining the status of the various cells. If it is deemed necessary the Commission may request each cell to report independently.
Taxation
As far as taxation is concerned, the PCC is liable to tax as a single legal entity.
Company Holding a Category 2 Global Business Licence (GBC 2):
The GBC 2 provides greater flexibility and is a suitable vehicle for holding and managing private assets. It is however not allowed to raise capital from the public or to conduct any financial services or to act as a fiduciary. The GBC 2 is not resident for tax purposes and therefore does not benefit from double taxation relief under tax treaties. The GBC 2 may either be limited by shares or by guarantee or limited by shares and guarantee or simply unlimited. A GBC 2 may also be structured as a Limited Life Company.
For further details refer to Setting Up A Company holding a Category 2 Global Business Licence and the Guide to Global Business.
Trusts set up under the Trusts Act 2001 provide an
effective and legitimate means of sheltering ones' assets. Various types of
Trusts may be set up by residents and non residents in
A
trust may carry on a Qualified Global Business after
obtaining a Category 1 Global Business Licence.
(A trust may not apply for a Category 2 Global Business Licence)
Société en Nom Collectif (partnerships) and "Société en Commandite Simple" set up under the Code de Commerce Amendment Act 1985 (limited partnerships) may be used to structure investments in the global business sector. A Société may conduct any qualified global business activities after it has received a Category 1 Global Business Licence from the Financial Services Commission. However, a Société does not qualify for a Category 2 Global Business Licence. To enhance the use of such vehicles the Finance Act 1996 has introduced favourable taxation provisions which enable Sociétés to benefit from reliefs available under double taxation treaties.
Collective Investment
Schemes
(Global funds)
The Commission has adopted "best industry" practices from long established jurisdictions for regulating investment business. A set of flexible regulatory practices have been developed for Collective Investment Schemes.
Corporate and Legal
Structure
Global funds registered with
the Financial Services Commission in
An Investment Company can take the form of :
§ A close-ended company which has a fixed share capital. Investors do not have the right to call for their shares to be redeemed at net asset value by the company. A close-ended company can be listed on the Stock Exchange enabling investors to buy and sell shares in the market thereby preventing any lock in. The company may be formed with a limited life after which the assets are distributed to investors on winding up.
§ An open-ended company which has a variable share capital. Investors are allowed to redeem their shares at net asset value at pre-determined times in accordance with the articles of association.
It is also possible
to constitute an umbrella fund under each of the foregoing structures. The
umbrella fund will comprise two or more subfunds and
investors subscribe for shares or units in specific subfunds.
Each subfund has its own investment policy with
segregated assets and accounting records. Investors can switch their investment
from one subfund to another without redeeming their
shares or units. A Mauritian
Investment Company can also be set up as one of the sub fund of
an umbrella fund not established in
Registration
Requirements
An Investment
Company needs to be approved by the Commission before it commences business. In
considering an application, the Commission needs to be satisfied about the
following:
§
the track record
and credentials of the promoters;
§
the fund
structure;
§
the objectives
of the fund;
§
the investors
and the market targeted;
§
types of
investment the fund will be dealing in;
§
the track record
of the investment manager, custodian, and administrator;
§
compliance with
regulations in third countries, as appropriate (e.g. SEBI's
approval if investment is to be made in
Once the Commission is satisfied with the above, it
may issue an approval in principle so as to enable all
constitutive documents to be prepared and the company to be incorporated.
The Commission generally wishes to satisfy itself
that, as far as possible, the administration of the fund is in
2
the accounts are
kept and the accounting documents are available in
3
the share
register is kept in
4
issues and
redemptions of shares are carried out in
5
the calculation of the Net Asset Value
(NAV) is carried out in
The above does not exclude the possibility of the Fund
obtaining assistance for the management of its assets from an investment
adviser established overseas, nor does it prevent management decisions in
relation to investment and disinvestment being executed overseas. Also the
requirement for the location of the issuance and redemption of shares in
In appropriate circumstances, it is also possible to
establish a management or advisory company in the sector to take advantage of the beneficial
tax regime.
Taxation
A company holding a Category 1 Global Business Licence
for fund business in
Custodian
All Funds registered with the Commission as GBC 1 must
entrust the custody of their assets to an approved custodian, generally a
banking institution. The custodian carries out operations concerning the
day-to-day administration of the assets of the Fund, and is responsible for
ensuring that the sale, issue, redemption, and cancellation of shares are done
in accordance with the investment management regulations of the Fund. The main
custodian can delegate certain of its activities to an approved third party,
but retains its responsibilities.
Prospectus
Investment Funds operating from
1.
the basis of the net asset value circulation;
2.
the borrowing policies;
3.
the type and the legal status of the fund;
4.
the investment policy (by class of fund if an umbrella
fund is opted for), including the use of financial instruments;
5.
the remuneration of investment advisors and directors,
investment managers, custodian and administrators;
6.
the conditions for the issuance and redemption of
shares, including their frequency, and the different rights attached to them;
7.
the tax status;
8.
the name and details of the custodian bank, the
independent auditor, the investment manager, the investment adviser (if any),
the directors and the registrar/administrator.
Reports
Funds are required to file with the Commission an
unaudited half-year report and an audited annual report. These reports must include,
at least, the following:
2
a statement of
assets and liabilities, including the net asset value;
3
the number of
shares outstanding;
4
the net asset
value per share;
5
details of the investment portfolio and the movements in the
period, disclosed by types of securities and types of market analysed as a percentage of the Fund's net assets.
The Annual Report must be audited in accordance with International Accounting Standards or with other internationally recognised accounting standards.
In addition to the above report, quarterly accounts have to be submitted to the
Commission, and these will include NAV at the end of each month, the change in
the NAV, the proceeds from issue of shares and payments for shares redeemed.
Supervision
The Commission may request other information in
addition to the published reports and reporting requirements. It also has the
right to inspect the books and records of the
Fund.
Listing
Global Business Funds can be listed on the Stock Exchange of Mauritius.
Incorporation Procedures
An application for registration must be made through a licensed
Management Company. The main documents that are required for
incorporating a company are:
·
Constitution (3
copies)
·
Notice of First
Directors, Secretary and location of registered office
· Consent forms of Directors and Secretary
·
Other
information that is necessary for the establishment of a Company:
·
Letters of
reference from banker, lawyer, accountant (Letters of reference may be
dispensed with if the promoter is itself a fund manager authorised in another
jurisdiction. In such cases, the letters of reference may be replaced by proof
of authorisation in the other territory and a copy of the promoter's latest
accounts. Short CVs are needed of the persons to be involved in key positions
in the Mauritian company).
·
Certificate from
local law practitioner
·
Name and address
of local representative
·
Set of
constitutive documents of the scheme (i.e,
Prospectus, Custodian Agreements, sub Custodian Agreement, Investment
Management Agreement, Administration Agreement, Investment Advisory Agreement,
Secretarial and Registrar Agreement, etc.)
·
Name and
particulars of expatriate staff if required
·
Brief track
record of applicant and detailed business plan
Fees
Fees payable to the Commission:
§
Processing Fee :
US$ 500
§
Annual Licence
Fee : US$ 1500
§
All fees are
payable in advance.
Management Companies and other Service Providers
</span>
Management Companies are specially licensed by the Financial Services Commission under section 24 of the Financial Services Development Act 2001 to set up, manage and provide nominee and other services to a corporation (which carries on or intends to carry on any qualified global business and such class of corporation as may be prescribed) or act as corporate trustee or qualified trustee under the Trusts Act 2001. As the Commission requires that all applications for a Global Business licence be channeled through a Management Company, the latter has the responsibility of initial vetting of the client and needs to exercise due diligence. Management Companies therefore act as intermediaries between clients and the Commission and they operate under the Guidance Notes for Management Companies issued by the Commission. While performing their Customer Due Diligence (CDD) duties, they are under the obligation of collecting and verifying all necessary information about their clients and keeping this information for any request by the Commission. Most of the Licensed Management Companies form part of reputable international consultancy firms network thereby providing high standard professional services to clients.
Services provided by Management Companies are inter alia:
<span class="subheadtext">Capitalisation</span>
The Company shall maintain a
paid up and unimpaired stated capital and shareholder’s funds of at least Rs 500,000 or its equivalent in any currency at such higher
amount as may be prescribed by the Commission from time to time.
<span class="subheadtext">Obligations</span>
<span class="bodytext">A Management
Company must:</span>
·
<span
class="bodytext">Report confidentially to the Commission any
suspicious dealings by any
of their clients.</span>
·
<span
class="bodytext">Ensure that their business is at all times in
conformity with the stipulated conditions, norms of honourable conduct and with the laws
of
·
<span
class="bodytext">Take all reasonable measures and exercise due
diligence to ensure that their clients are sound and reputable.</span>
· <span class="bodytext">Keep books and records in connection with their business of company management that reflect accurately their affairs and business.&l