Mauritius: FSC issues new rules for Special Purpose Funds
The Financial Services (Special Purpose Fund) Rules 2021 (referred hereinafter as the “Rules”) came into force on 6 March 2021. The Rules supersede the Financial Services (Special Purpose Fund) Rules 2013 and usher in a revamp of the existing framework for Special Purpose Funds (SPF), as it was announced in the 2019/2020 National Budget.
The new SPF regime is a welcome move as it broadens Mauritius’ offering to international investors looking for an investment hub that adheres to best international practices and the highest levels of transparency.
The general requirements for a SPF
According to the Rules, a collective investment scheme and closed-end fund licensed by the FSC after the commencement of the Rules, is eligible to apply for an authorisation to operate as a SPF provided that:
– It offers its shares, solely by way of private placements, to investors having competency, significant experience and knowledge of fund investment;
– It has a maximum of 50 investors and a minimum subscription of USD 100,000 per investor;
– It is managed by a CIS manager and administered by a CIS administrator at all times
If such an authorisation is granted, the SPF will be subject to any conditions as may be imposed by the FSC. No clarity has been provided on the said conditions so far.
The SPF, the CIS Manager and CIS administrator will have to carry out their Core Income Generating Activities in Mauritius by employing, directly or indirectly, an adequate number of suitably qualified persons and incurring a minimum expenditure proportionate to the level of such activities.
While the SPF is exempted from preparing and filing unaudited quarterly financial statements, it is required to file its audited financial statements with the FSC within 6 months of its financial year-end.
The taxation of a SPF
The SPF is exempt from income tax as provided under the Income Tax Act. All interest, rents, royalties, compensation, and other amounts paid by an SPF to a non-resident are considered as exempt income.
For more information on the SPF or on the establishment of a fund structure in Mauritius, please get in touch with your usual contact person at ITL or write to us on info@intercontinentaltrust.com
Established in 1999, Intercontinental Trust Limited (ITL) provides a plethora of financial and fiduciary services to a diversified client base including private equity firms, real estate multinationals, financial institutions, investment managers and high-net-worth individuals among others.
ITL is located in Ebene, the financial centre of Mauritius and has offices in Singapore, Seychelles and representative offices in South Africa and Kenya.