Mauritius has firmly established itself as a preferred jurisdiction for structuring investments into Africa, and offers a robust regulatory environment, tax-efficient structures, and strategic geographic positioning. The jurisdiction offers investors a mature legal environment and an array of corporate vehicles suited to diverse investment strategies and investor profiles. This article gives an overview of the investment funds ecosystem in Mauritius, with a particular focus on the licensing regime that underpins its attractiveness.
Legal and Regulatory Framework
Investment funds in Mauritius are primarily governed by:
- Financial Services Act 2007;
- Securities Act 2005 (SA 2005);
- Securities (Collective Investment Schemes and Closed-End Funds) Regulations 2008;
- Companies Act 2001;
- Protected Cell Companies Act 1999;
- Variable Capital Companies Act 2022; and
- Limited Partnerships Act 2011.
The Financial Services Commission (‘FSC’) is the key regulatory authority responsible for licensing, regulating, and supervising investment funds and related functionaries.
Mauritius has concluded 46 tax treaties to date, with an additional 20 under negotiation[1]. In addition, 29 investment promotion and protection agreements (‘IPPAs’) are in force, with 16 being negotiated[2], providing enhanced protection and legal certainty for foreign investors.
Investor Classifications
Understanding investor categories is essential in determining the appropriate fund licence:
- Retail Investor: General public with no specific financial expertise or wealth thresholds.
- Expert Investor: Meets criteria such as investing a minimum of USD 100,000 or qualifying as a sophisticated investor.
- Sophisticated Investor: Includes banks, insurance companies, pension funds, investment firms, or individuals with high net worth (over USD 1 million in personal assets).
Fund structures
Open-ended funds, called collective investment schemes (‘CIS’) in Mauritius, are defined in the Securities Act 2005 as being schemes whose sole purpose is the collective investment of funds in a portfolio of securities or other approved assets, based on the principle of risk diversification. Investors in a CIS have no day-to-day control over management and are entitled to redeem their units at net asset value at any point in time they wish.
Closed-end funds (‘CEF’), in contrast, are defined as schemes other than a CIS whose object is to invest funds collected from subscribers during a public offering or from sophisticated investors in portfolios of approved assets. As the name suggests, a CEF does not allow redemption at NAV but instead return investors’ capital upon the expiry of the CEF’s life through distributions.
CISs and CEFs in Mauritius are more commonly set up as companies but can also be structured as limited partnerships, protected cell companies, or trusts. The introduction of the variable capital company (‘VCC’) regime in 2022 was a game changer by offering a more flexible and cost-effective option, enabling fund managers to establish umbrella funds encompassing multiple sub-funds and special purpose vehicles.
Under those two broad categories, the FSC offers several fund licences based on factors such as investor categorisation, asset type, and minimum investment:
1. Fully regulated retail funds
Fully regulated retail funds can be structured as a CIS or a CEF, targeting the general public in Mauritius. The prospectus must contain extensive disclosures to protect investors and there are stringent requirements concerning operational matters (including but not limited to the appointment of functionaries, valuation methods, permitted asset classes and ratios, minimum funding, transactions with related parties etc).
2. Fully regulated global schemes
Fully regulated global schemes operate in a similar manner as fully regulated retails funds, except that these funds are marketed to non-Mauritian investors.
3. Professional CIS
Open to sophisticated investors by way of private placements and with a minimum subscription of USD 200,000 per investor, a professional CIS can be structured as a CIS or a CEF. There are no statutory requirements concerning permitted asset classes. These funds benefit, in comparison to a fully regulated fund, from a more relaxed regulatory framework due to the sophisticated nature of investors.
4. Expert fund
Similarly, the regulatory obligations of an expert fund are significantly reduced due to the presumed financial literacy and risk tolerance of the target investor base. An expert fund can be structured as a CIS or a CEF, and is available to expert investors making an initial investment of at least USD 100,000 or sophisticated investors.
5. Specialised CIS
A specialised CIS can be structured as a CIS or CEF but is limited to specific asset classes. A specialised CIS can only invest in real estate, derivatives, commodities, or other products authorised by the FSC. Unlike professional and expert funds, there is no statutory requirement concerning targeted investors.
Mauritius has positioned itself as a credible and innovative fund jurisdiction offering both structural flexibility and regulatory integrity. Its diverse licensing regime caters to a broad range of investor profiles and investment strategies, from retail funds to alternative investment structures, making the jurisdiction a compelling choice for fund promoters targeting African and global markets
[1] https://www.mra.mu/taxes-duties/international-taxation/double-taxation-agreements
[2] https://edbmauritius.org/bilateral-agreements
