MAURITIUS Law and Practice Contributed by: Fazil Hossenkhan, Nafiisah Jeehoo, Kelly Li and Alicia Kwan Pang, Bowmans
authorised to do so under the Mauritius Dangerous Drugs Act 2000. 2.7 Use of Subsidiaries for Investment Purposes It is common for funds structured as partnerships to use holding companies for investment purposes. Given that partnerships are tax-transparent, they are not eligible to take advantage of preferential tax rates available under tax treaties. As such, the partner - ship may establish one or more underlying SPVs in the form of tax-resident companies that hold a global business licence, which will act as holding companies for investments. The added advantage of using such a holding company is the possibility of an exit at the holding company level, which can be both expedient and tax efficient. 2.8 Local/Presence Requirements for Funds Typically, a fund is required to be managed by an investment manager licensed as a CIS manager by the FSC, or a fund that is constituted as a company may be self-managed, that is, it can be managed by its board of directors, with the approval of the FSC. Nevertheless, a fund may also be managed by a foreign investment manager, provided that it holds a global business licence and has received prior approval from the FSC to appoint that foreign manager. There are no local substance requirements applica - ble for setting up a fund in Mauritius. Funds licensed by the FSC, which are tax-resident in Mauritius, may benefit from an exemption of 80% on the applicable tax rate of 15% and the CCR levy of 2% (if its turnover exceeds MUR50 million). To qualify for this exemp - tion, they must meet certain substance requirements, which can be found in 2.4 Tax Regime for Funds . Funds are required to appoint a money-laundering reporting officer, a deputy money-laundering reporting officer and a compliance officer, who are conversant with the anti-money laundering laws of Mauritius. 2.9 Rules Concerning Service Providers Administrator There is no requirement under Mauritius law to have a local administrator, and a CIS manager is generally
able to perform the necessary administrative servic - es. These services include accounting, valuation and reporting, as well as provision of a registered office, all of which are related to the fund’s operations and administration. However, where the fund or the CIS manager wish - es to appoint a third party to provide administrative services, that third party must be licensed as a CIS administrator by the FSC. Typically, given that all entities holding a global busi - ness licence are required under Mauritius law to appoint a “management company” in Mauritius, administrative services are then usually provided by that management company. Custodian Except in respect of a global scheme, where a foreign custodian may be appointed with the approval of the FSC, CISs are required to appoint a local custodian, which must be a bank or a trust company that is a subsidiary of a bank, and independent from the CIS manager. 2.10 Anticipated Changes for Funds There are no anticipated changes in relation to the regulation of funds in Mauritius. Mauritius has a global approach and welcomes spon - sors and promoters globally. However, the country attracts mainly African and European fund sponsors. 3.2 Legal Structures Used by Managers Under the laws of Mauritius, any body corporate may apply for a CIS manager’s licence from the FSC, pro - vided that they comply with the requirements set out in 3.8 Local Substance Requirements . However, fund managers are typically structured as private compa - nies in Mauritius under the Companies Act 2001. 3.3 Regulatory Regime for Managers A fund manager is required to be licensed by the FSC. 3. Fund Managers 3.1 Origin of Promoters/Sponsors of Alternative Funds
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