MAURITIUS Law and Practice Contributed by: Fazil Hossenkhan, Nafiisah Jeehoo, Kelly Li and Alicia Kwan Pang, Bowmans
A fund may be self-managed or may appoint a foreign manager with the prior authorisation of the FSC. Where a fund is self-managed, this implies that its board of directors is responsible for the day-to-day operations of the fund’s investment activities. As such, all the duties and functions assigned to a fund man - ager by the securities regulations are to be performed by the board of directors. See also 3.5 Rules Concerning Permanent Estab- lishments for when funds appoint a foreign manager. The fund manager and its officers have prescribed duties which include the duty to act honestly, to exer - cise the degree of care and diligence that would rea - sonably be expected of a person in that position, to act in the best interests of the investors of the fund and, where there is a conflict between the interests of the investors and their own interests, to give priority to the investors’ interests and not misuse information acquired through being the fund manager or an officer of the fund manager. 3.4 Tax Regime for Managers Where a fund manager is structured as a company, it is liable to pay tax on its chargeable income at the rate of 15% and will be subject to a CCR levy of 2% (if its turnover exceeds MUR50 million). However, a licensed fund manager may be entitled to benefit from a partial exemption of 80% on all its income if it satis - fies the following conditions relating to the substance of its activities: • it carries out its core income-generating activi - ties in Mauritius, which include management of a collective investment scheme, taking decisions on the holding and selling of investments, calculating risks and reserves, taking decisions on currency or interest fluctuations and hedging positions, and preparing relevant regulatory or other reports for government authorities and investors; • it employs, directly or indirectly, an adequate num - ber of suitably qualified individuals to conduct its core income-generating activities; and • it incurs a minimum expenditure proportionate to its level of activities.
Since 1 July 2025, a new 5% Fair Share Contribution has applied to fund managers with supplies exceed - ing MUR24 million and chargeable income exceed - ing MUR24 million (unless the fund manager holds a global business licence). Mauritius also implemented the Qualified Domestic Minimum Top-up Tax (QDMTT) from 1 July 2025, in alignment with the OECD/G20 Pillar Two framework. The measure applies to multi - national enterprise groups with consolidated revenues of at least EUR750 million (unless an entity is exclud - ed by the Income Tax Act 1995), ensuring they pay a minimum 15% effective tax rate on profits earned in Mauritius. If the local effective tax rate falls below 15%, a top-up tax will apply to covered persons. 3.5 Rules Concerning Permanent Establishments Although no express rule exists on this, as per estab - lished tax practice, the mere fact that a foreign man - ager has managed a Mauritius-based fund does not in itself create a permanent establishment for the fund manager in Mauritius if the FSC has approved the appointment of a fund manager in another jurisdiction. 3.6 Taxation of Carried Interest Carried interest is deemed to be the income of the beneficiary of that interest and is taxed as follows: • if the beneficiary is not tax-resident in Mauritius (as understood under the Income Tax Act 1995), the carried interest is not subject to tax in Mauritius; • if the beneficiary is not tax-resident in Mauritius, but derives the carried interest from any service performed in Mauritius, the carried interest is sub - ject to income tax at the rate of 15%; and • if the beneficiary is tax-resident in Mauritius, the carried interest is subject to income tax at the rate of 15%. As previously explained, if carried interest is paid to a licensed manager, the 15% headline rate is liable to be reduced through partial exemptions, provided substance conditions are met. In addition, the CCR Levy, Fair Share Contribution and QDMTT may also apply to a Mauritius tax-resident beneficiary, where the relevant thresholds and prescribed conditions are satisfied (see 2.4 Tax Regime for Funds and 3.4 Tax Regime for Managers ).
207 CHAMBERS.COM
Powered by FlippingBook