About
Mauritius has established itself as a leading jurisdiction for setting up and administering funds. It is widely recognised by both fund managers and investors and is commonly used for structuring international investments, particularly into Africa and Asia.
Funds set up in Mauritius enjoy a low tax regime and have access to its extensive network of double tax treaties. The maximum income tax levied on a fund that is tax resident in Mauritius is 3% under the current Deemed Foreign Tax Credit regime. 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.
As from 1 January 2019, the deemed foreign tax credit regime will be replaced by a partial exemption regime, applicable to both domestic companies and global business companies (GBCs). 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%.
Mauritius has 44 tax treaties that are currently in force worldwide, while another seven – Gabon, Ghana, Jersey, Kenya, Morocco, Nigeria and Russia – have been signed and await ratification. A further four treaties have been negotiated and await signature, while 21 treaties are under currently under negotiation.
Other factors that have contributed to Mauritius’s success as a funds location include the quality and flexibility of its legislation, the strength of its legal system and regulatory framework, its political stability, its infrastructure, a beneficial time zone (GMT+4) that allows trading on all global markets in a single day, its wide range of international banks and professional firms and, most importantly, the availability of qualified and skilled staff. It is also a very cost effective jurisdiction.
Mauritius is also well positioned as a risk-mitigation platform for investments into Africa. To date it has signed 23 Investment Promotion and Protection Agreements (IPPAs) with African states and is also a member of the World Bank’s Multilateral Investment Guarantee Agency (MIGA). This provides security and peace of mind for investors in respect of non-commercial risks.
A Mauritius Investment Fund can be structured as a company, a protected cell company, a trust, a limited partnership, foundation or any other legal entity prescribed or approved by the Mauritius Financial Services Commission (FSC). Funds can either be open-ended – with a variable share capital – that fall under the CIS category, or CEFs with a fixed share capital, often commonly known as private equity funds.
