Unlock the Benefits of Mauritius’ Double Tax Avoidance Agreements (DTAAs)

The Financial Services (Special Purpose Fund) Rules 2021 (the “Rules”) was issued by the Financial Services Commission to govern Special Purpose Funds (“SPF”).

The Rules sets out the criteria for a CIS or a CEF to qualify as an SPF and are more attractive for promoters, who are targeting professional investors by way of private placement. The SPF benefits from an advantageous tax regime subject to compliance with substance requirements.

The FSC may authorise a CIS or a CEF as a SPF if a fund:

1. offers its shares, solely by way of private placements, to investors having competency, significant experience and knowledge of fund investment;
2. has a maximum of 50 investors and a minimum subscription of USD 100,000 per investor;
3. at all times, is managed by a CIS manager; and administered by a CIS administrator;
4. complies with any such other conditions as may be imposed by the FSC.

Mauritius offers various Occupation and Residential Permits tailored to investors, professionals, retirees, and their families. Navigating the options can be complex, and misinformation from so-called experts may lead to costly mistakes.

At GWMS Ltd, our seasoned team provides accurate guidance to help you select the most suitable permit based on your unique circumstances and objectives. With our expertise, you can ensure compliance and enjoy a seamless relocation experience.

Talk to us today for reliable, professional advice and make the right choice for your future in Mauritius.

The Foundation is another tax efficient product, in addition to the existing limited partnership, private and public company, limited life company, variable capital company and trust which the Mauritius International Financial Centre offers.

The Foundation is a hybrid vehicle which combines the benefits of a company with those of a trust. The Foundations Act 2012 is a modern and efficient legislation which is effective since 1 July 2012.

It is mostly used in wealth management, estate planning and asset holding but is equally ideal as a special purpose vehicle to legally protect one’s assets against personal liability, high taxes or forced heirship rules.

A non-resident foundation is exempt from Mauritius tax on any income derived from outside Mauritius. It is, however, liable to tax on its chargeable income attributable to its Mauritian source income. The applicable tax rate applicable to any Mauritius source income is 15%.

A foundation whose exclusive purpose or object is of a charitable nature is exempt from tax in Mauritius.

The Trust Act 2001 provides, inter alia, for the settlement of several types of trusts including fixed, discretionary, protective or spendthrift trust, charitable purpose, non-charitable purpose, commercial purpose and sharia compliant trusts amongst others. A charitable trust may be settled for several reasons including, for example, to cater for the education of a client’s children which are not resident in Mauritius.

The Trust Act provides for the protection of the assets of a trust against attacks on the basis of succession rights (i.e. guards against forced heirship rules) marriage or divorce and insolvency of a settlor or beneficiary. The trust can avail of the legitimate confidentiality provisions enshrined in the legislation itself.

Discretionary trusts afford the most opportunities for tax planning.
A non-resident trust is exempt from Mauritius tax on any income derived from outside Mauritius. It is, however, liable to tax on its chargeable income attributable to its Mauritian source income. The applicable tax rate applicable to any Mauritius source income is 15%.

A trust whose exclusive purpose or object is of a charitable nature is exempt from tax in Mauritius.

Mauritius offers attractive taxation benefits on specified investment income such as management fees, performance bonus, dividends, interest, and foreign-source income, through a partial exemption regime. Eligible income can benefit from an 80% exemption, resulting in an effective tax rate of only 3%, provided that substance requirements and Core Income Generating Activities (CIGA) are met.

These requirements ensure that the company demonstrates real economic activity in Mauritius, including maintaining adequate office premises, employing qualified staff, and performing strategic decision-making locally.

GWMS Ltd provides expert guidance to ensure your business meets these conditions while maximizing the available tax benefits. Contact us to learn more about structuring your investments in Mauritius efficiently.

The Asset Management Company Licence permits asset managers to oversee both securities and non-securities investments, except high-risk assets, allowing for a broad investment activity. The licence is complemented by a Global Business Company (GBC) licence, which opens access to Mauritius’ tax and treaty benefits.

Mauritius defines securities comprehensively to include shares, bonds, derivatives, and other financial instruments, ensuring clarity and flexibility in asset management activities.

A Variable Capital Company (VCC) is a company incorporated under the Companies Act which carries its activities through its sub-funds and Special Purpose Vehicles (SPVs). A VCC needs to be authorised by the Financial Services Commission (FSC).

A sub-fund of a VCC Fund, subject to the approval of the FSC, operates as a Collective Investment Scheme (CIS) or a Closed-End Fund (CEF) of any category, and may elect to have a separate legal personality from that of the VCC Fund. For example, a sub-fund can be approved to operate as a CIS and an Expert Fund. The sub-fund shall comply with all requirements under the applicable legal framework.

Collective Investment Schemes (CIS) and Closed-End Funds (CEF) are regulated by the Financial Services Commission (FSC) under the Securities Act 2005. All CIS and CEF authorised by the FSC must entrust custody of their assets to an approved custodian.

An Expert Fund is a sub category of a CIS and it is targeted to Expert Investors who can make an initial investment for his own account of not less then USD 100,000 or a sophisticated investor (including governmental bodies and banks, amongst others).

Most of the obligations and restrictions governing other types of CIS do not apply to Expert Fund which is most suited to private placements and benefits from significant exemptions of the provisions of the Securities Act and its related regulations.

An AC must have its Central Management and Control (CMC) outside of Mauritius making it non-resident in Mauritius for tax purposes and hence not subject to tax in Mauritius on its income.

CMC is considered to be outside of Mauritius where the strategic decisions of the company in respect of its business are taken by the board of the AC outside of Mauritius AND either the majority of the company’s board meetings are held outside of Mauritius or the executive management of the company is exercised outside of Mauritius.

GWMS is able to provide the services of its corporate director to assist its clients to comply with the CMC requirement.
CAUTION – Several countries have a corporate tax residence test which provides that a company which is centrally managed and controlled in that country is taxed in that country. This test may render the AC taxable in your country if you act as a director of the AC and you manage and control the AC from your country. GWMS may provide a solution to clients who do not have their own arrangement to ensure that management and control is not in their country of residence.

An AC cannot access Mauritius’ network of double taxation avoidance treaties.