Fund Domicile - Mauritius - VC Lab 2.0 (2024)

Mauritius Summary

Fund Structure	Limited Partnership (most common)
Cost	Payable to FSC: USD$1,000 registration fee USD$3,000 annual fee Payable to Registrar of Companies: USD$107 incorporation feeUSD$64 annual fee Additional costs may be incurred depending on the service providers engaged
Timing	~60 business days
Fund Marketing	Fund managers may not solicit investments from persons in Mauritius, unless the fund manager is licensed in Mauritius. Fund managers may be required to register the offering with the FSC before marketing the fund to investors.
Tax Treatment	Companies are tax opaque, LPs are tax transparent An investor who is not tax resident in Mauritius and who does not otherwise derive any income from Mauritius is not required to pay any tax in Mauritius There is no withholding tax on the following payments by a fund established as a company or a limited partnership: distribution by the fund to its resident and non-resident investors;in respect of a fund holding a GBL, interest paid to non-residents out of the foreign source income of the fund; or interest paid to a company resident in Mauritius.
African Private Equity and Venture Capital Association	https://www.avca-africa.org/

Mauritius Overview

Mauritius is a leading jurisdiction for forming funds given its investor-friendly tax regime, the flexibility of its legislation, political stability, and the strength of its legal system. There is no capital gains tax in Mauritius. Many fund managers looking to invest in Africa, Asia, and India choose to organize their funds in Mauritius. Funds in Mauritius can be structured as a company, protected cell company, trust, or limited partnership, though typically funds are structured as limited partnerships. A limited partnership can be set up with or without legal personality. The liability of an investor is limited to their capital contribution to the fund, provided the investor is not involved in the management of the fund.

Mauritius is a common choice of domicile to access the Indian market given its tax and regulatory framework and historical ties with India. Key sectors include tech, eCommerce, healthcare, financial services, and hospitality. The India-Mauritius tax treaty is what makes Mauritius such an attractive domicile for accessing the Indian market, as there is no capital gains tax in either India or Mauritius on the sale of the shares of the Indian company by a Mauritius entity.

More Domicile Analysis

For more information on fund domiciles, including details and analysis below:

About The Author

Adeo Ressi

Adeo Ressi is CEO of Decile Group, powering the next generation of venture capital firms worldwide with an integrated offering of training, tools, support, and funding. Decile Group is the parent of the VC Lab venture capital accelerator, which helped to launch nearly 50% of all new manager firms in 2022. Adeo is also Executive Chairman at the Founder Institute, a pre-seed accelerator with chapters in over 250 cities worldwide and over 5,000 portfolio companies.

Adeo has launched 14 venture capital funds and founded 11 startups, having nearly $2 billion in exits before 30. Adeo previously served on the Board of the X Prize foundation to pursue his interests in space exploration. He studied architecture and spent time living on a commune to explore his interests in designing better ways to live. Adeo is passionate about inspiring people to achieve their potential.

Mauritius as a Fund Domicile:

Mauritius stands out as a prominent fund domicile for Africa, known for its investor-friendly tax regime, legislative flexibility, political stability, and robust legal system. Key points include:

Fund Structures:
- Limited Partnership (most common): Offers flexibility, and investor liability is limited to their capital contribution.
- Other structures: Funds can also be organized as a company, protected cell company, trust, or limited partnership (LP).
Costs:
- Registration Fees: USD$1,000 (payable to FSC), USD$107 incorporation fee, and USD$64 annual fee (payable to Registrar of Companies).
- Additional costs may apply based on service providers engaged.
Timing:
- Approximately 60 business days required for the fund setup process.
Fund Marketing:
- Fund managers must be licensed in Mauritius to solicit investments from individuals within the country.
- Registration with the Financial Services Commission (FSC) may be necessary before marketing to investors.
Tax Treatment:
- Companies are tax opaque, while LPs are tax transparent.
- No tax obligations for non-resident investors without income from Mauritius.
- No withholding tax on certain payments, including distributions and interest on foreign source income.
Mauritius Overview:
- No capital gains tax in Mauritius.
- Attractive for accessing the Indian market due to the India-Mauritius tax treaty.
- Key sectors include tech, eCommerce, healthcare, financial services, and hospitality.
Regulation:
- Funds are regulated by the Financial Services Commission (FSC).
- Authorization process involves submission of various documents, including fund prospectus, governance documents, and KYC documents.
EU Listing (May 2020):
- Mauritius was listed as a high-risk country by the EU in terms of anti-money laundering and counter-terrorist financing frameworks.

In conclusion, Mauritius serves as a compelling jurisdiction for fund formation, particularly for those targeting investments in Africa, Asia, and India. The strategic advantages, coupled with the tax-friendly environment, make it a preferred choice for venture capital and private equity activities.

For more detailed analysis on fund domiciles, the provided article suggests exploring additional reports on various jurisdictions, including Luxembourg, Singapore, Delaware (United States), Ontario (Canada), Hong Kong, Caymans, the Netherlands, Estonia, and the United Kingdom.

As an enthusiast in this field, I encourage readers to stay informed about evolving regulatory landscapes and strategic considerations when selecting fund domiciles for their ventures.