The Financial Services Act 2007 (the FSA) introduces two distinct legal, regulatory and fiscal regimes for the Mauritian companies conduction business in Mauritius and those conducting business outside Mauritius.

 

            What is a ‘’resident corporation’’?

 

Ø      A body corporate formed or registered under the Company Act 2001

Ø      A trust, société , or partnership or any body of persons governed by the laws of  Mauritius.

However, a ‘’ resident corporation ‘’ applying for GBC 2 IS under section 71 (3) of the FSA a ‘’ private company ‘’ and must pursuant to the definition of ‘’ resident corporation ‘’ be formed or registered under the Companies Act 2001. Furthermore, the FSC proposes to continue the present practice of not issuing a Category 2 GBC of which the shareholders or beneficial owner is a person resident in Mauritius.

 

A GBCI may under the FSA conduct any business activity but the FSC may ,in accordance with section 72 ( 4) of FSA, decline to consider an application for a GBL where in its opinion , the activity.

(a)is unlawful or contrary to public interest or

(b) may cause serious prejudice to the good reputed of Mauritius as a centre for financial services.

Where a GBC1 proposes to conduct any business for which a license authorized, approval, registration or other formality is required under any law, section 71(2) of the FSA provides that it should also comply with the relevant

a)     Submission of audited financial statements is mandatory for all GBC1s irrespective of whether they are active or inactive;

b)     In case where a GBC2 has been converted to a GBC1, the latter will be required to submit its audited financial statements for the period starting from date of issue of the GBL1 up to the date of its financial year end;

c)     In case where a company is incorporated in Mauritius as aGBC1 by way of continuation, it will be required to submit its audited financial statements for the period starting from the date incorporation of the GBC1 up to the date of its financial year end;

d)     In cases where a foreign company is licensed as a GBC1, the foreign company holding a GBL1 shall submit to the FSC financial statements which shall comply with IFRS, fairly showing the assets employed in, and liabilities arising out of and its profit and loss arising out of, its operations conducted in or from Mauritius. Please note that FSC may also request the submission audited financial statements of the head office;

e)     Secretary’s Certificate should be attached to the audited financial statements and should be dated for the sake of certification of matters contained therein;

f)       Whenever an amended cop[y of audited financial statements is filed, it should be certified by the auditor.

 

Further, the FSC expects the financial statements filed with the Commission to be accompanied by the GBC1’s corporate date – for completeness of our records. The corporate date would include – but not limited to – details of the GBC1’s directors, registered office/business address and banker.

 Activities that may be conducted by a GBC2

 The FSA provides certain restrictions on the business activities that may be conducted by a Category 2 Global Business Company (‘GBC2’). Section 71(3) of the FSA provides that the following activities will not be approved for a GBL2:-

 

 The FSA requires a GBC I  to be administered at all times by a Management Company licensed by the FSC and in determining whether a GBL1 should be granted, the Commission takes into account whether the company will be managed and controlled in Mauritius, in doing so, the FSC may consider, inter-alia, whether the GBC1:

  Will have or has at least 2 directors of sufficient caliber to exercise independence of mind and judgment, resident in Mauritius;

 A resident corporation will satisfy the ultimate purpose test where it:

  Opens and maintains with a bank an account in Mauritius currency for the purpose of its day to day transactions arising from its ordinary operations in Mauritius;

 

 
A company holding a GBL2 will be considered to be conducting business outside Mauritius notwithstanding the fact that it:-

  Opens and maintains with a bank an account in foreign currency;

 

NB: A company holding Category 2 Global Business License may not hold immovable property in Mauritius.


PROTECTED CELL COMPANY (PCC)

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 namely insurance (general, long term, reinsurance, captive) and collective investment schemes.


INCORPORATION & REGISTRATION

A PCC may be directly incorporated or may be registered as foreign company by way of continuation as PCC, provided the t 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 (Conversion) Regulations 2000 are satisfied.  The incorporation and licensiing 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 to 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 FSDA Regulations 2001 regardsing 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 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.

TRUST
Trusts set up under the Trusts Act 2001 provide an effective and legitimate means of sheltering one''''s assets.  Various types of Trusts may be set up by residents and non residents in Mauritius such as charitable, discretionary, purpose and trading trusts. Registration of the trust is optional.  Flexibility is provided under the Trusts Act in terms  of determining the governing law applicable to a trust.  There also exists the possibility to accumulate income for any period within duration of the trust.  With regards to trusts set up by non-citizens, the forced heirship rule does not apply. The Trusts Act 2001 further allows the enforceability of a foreign trust provided that it does not purport to do any thing which amounts to an offence under the law of Mauritius  or is immoral or contrary to public policy.

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)

Societe
Societe en Nom Collectif (partnerships) and "Societe 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 Societe may conduct any qualified global business activities after it has received a Category 1 Global Business Licence from the Financial Services Commission.  However, a Societe 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 enables Societes to benefit from reliefs available under double taxation treaties.