MAURITIUS Law and Practice Contributed by: Gilles Athaw, Jason Barbe, Deeviya Rughooputh and Sushika Ramlugun, Bowmans
vides, advertises or holds themselves out in any way as providing that business, whether or not they pos- sess or own property or money derived from sourc- es other than the lending of money, and whether or not they carry on the business as a principal or as an agent, is required to apply for a licence with the Financial Services Commission. Procedures An applicant wishing to be authorised to operate as a non-banking financial institution conducting mon- eylending activities must be a company and must apply to the Financial Services Commission using the prescribed form, accompanied by a non-refund- able processing fee, which varies depending on the type of licence being applied for. Among other AML, cybersecurity and related prescribed procedures and requirements, including the minimum paid-up and unimpaired capital (normally around MUR30 million or an equivalent amount (approximately USD661,172) that the applicant needs to adhere to, the applicant must show adequate substance in Mauritius by having a principal place of business in Mauritius and comply- ing with other prescribed requirements. 3. Structuring and Documentation 3.1 Restrictions on Foreign Lenders Providing Loans There is currently no restriction on foreign lenders to grant loans from their foreign jurisdiction. However, if those foreign lenders intend to carry on the business of moneylending in Mauritius, they should first obtain the appropriate licence from the Financial Services Commission or the Bank of Mauritius, depending on
Under the Mauritian Civil Code, a fixed and/or floating charge can only be granted in favour of an Institution Agréée (the Civil Code Restriction). An Institution Agréée is, effectively, an approved insti- tution, as listed in the Institution Agréées Regulations 1988, which lists those entities or category of entities approved to hold a fixed and/or floating charge, and include “any body corporate not registered in Mau- ritius and having no place of business in Mauritius”. Although the description of that approved body may appear broad, the Civil Code Restriction has been interpreted narrowly by the Supreme Court (vide Atel- ier Etude Limousin & others v BPCE International et Outremer & another 2014 SCJ 166). Given this ruling, the prevailing market perspective has been that a foreign entity can reap the advantages of a fixed and/or floating charge only if it qualifies as a “financing institution”. This stands in contrast to a scenario where the foreign entity might not be directly engaged in financing activities. 3.3 Restrictions and Controls on Foreign Currency Exchange The Foreign Exchange Control Act was suspended in 1994. As a result, there is currently no exchange con- trol requiring approval for payments outside Mauritius or repatriation of profits, dividends or capital gains earned in Mauritius. 3.4 Restrictions on the Borrower’s Use of Proceeds While Mauritian laws do not impose any legal con- straints on how borrowers can utilise funds from loans or debt securities, it is common to observe contractual limitations on such usage. These limitations are typi- cally established through mutual agreement between the lender and the borrower. 3.5 Agent and Trust Concepts Mauritian laws acknowledge the notion of a trust. Additionally, the Civil Code offers broader concepts that can serve as substitutes for the trust including the mandat (which corresponds to agency) and the tiers convenu (where a third party is jointly appointed by the involved parties to hold the security).
the activities that they wish to conduct. 3.2 Restrictions on Foreign Lenders Receiving Security
There are generally no rules restricting the granting of security or guarantees to foreign lenders in Mauritius. However, when a security involves the taking of a fixed and/or floating charge, certain elements of the activi- ties of the charge-holder will need to be considered.
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