MAURITIUS Law and Practice Contributed by: Fazil Hossenkhan, Nafiisah Jeehoo, Kelly Li and Alicia Kwan Pang, Bowmans
Companies have the following features: • legal personality; • investors are liable only up to the extent of their investment; • a board of directors is responsible to investors for its actions under the doctrine of fiduciary respon - sibility; • statutory rules of filing and reporting ensure trans - parency and accountability; and • income is distributed as long as the company remains solvent. Protected cell companies (PCCs) A PCC is a single legal entity consisting of segregated cells that have separate assets and liabilities. A PCC is governed by the Protected Cell Companies Act 1999 and the Companies Act 2001. For compliance pur - poses, each cell will usually require the approval of the FSC in order to be created. PCCs have the same Limited partnerships are governed by the Limited Partnership Act 2011. Participants are issued with “partnership interests”. A partnership must have at least one general partner, who is responsible for the management of the limited partnership, and one or more limited partners. Limited partnerships have the following features: • they can elect to have legal personality; • the general partner has unlimited liability for the debts and obligations of the partnership; • a limited partner has limited liability, provided that the limited partner does not take part in the man - agement of the partnership (where a limited partner does participate in the management of the partner - ship, they will be treated as a general partner and will be liable for the debts of the partnership to the extent of their involvement in the management); and • limited partnerships are tax transparent. A limited partnership is commonly the preferred struc - ture for private equity funds, given the relative flexibil - ity of the vehicle, its tax transparency, lack of fiduci - features as companies. Limited partnerships
ary risk, and the fact that it is possible to account for profits and losses at limited partner level. Trusts Trusts are set up in Mauritius under the Trusts Act 2001 and participants are issued with units in the trust. A trust can have up to four trustees, of which at least one should be a qualified trustee, that is, a person who is authorised by the FSC to provide trusteeship services. Trusts have the following features: • no legal personality; • they are not required to be incorporated or regis - tered; • they may be structured as a non-resident trust resulting in no tax liability in Mauritius; • the trustees are subject to fiduciary duties; and • no corporate filings are required. Variable capital companies (VCCs) VCCs were introduced by the Variable Capital Com - panies Act 2022. They permit the setting up of sub-funds and special purpose vehicles (SPVs) – together, the “sub-entities” – within the same entity, facilitating the segregation and ring-fencing of the assets and liabilities of each of the sub-entities. Furthermore, a sub-fund may be set up as a CIS or CEF. As such, under one single entity, that of the VCC, fund managers are able to manage a CIS sub-fund and a closed-end sub-fund. The VCC structure may be used for all types of investment funds, including mutual funds, hedge funds, private funds, private equity and real estate funds. VCCs have the following features: • A VCC carries out its business through its sub- entities. • Each sub-entity may elect to have a legal personal - ity, which will be distinct from that of the VCC. The sub-entity is not a subsidiary of the VCC merely by reason of being part of the VCC structure. Howev - er, each sub-fund is entitled to have an investment that is distinct from the VCC.
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