Investment Licence in Mauritius
1. Types of Licences
The proposed Company will hold two types of licences, namely an Investment Dealer Licence under the Securities Act 2005, Securities (Licensing Rules 2007 & the Financial Services (Consolidated Licensing and Fees) Rules 2008 and a Category 1 Global Business Licence (GBL 1) under the Financial Services Act.
2. Sharing resources with other entities
It should be noted that despite the requirement to have an appointed local/authorised management company/administrator (who acts as an intermediary between the Company and the FSC in relation to any requests from the FSC while it is responsible for record keeping), it is possible for the Company to share resources with other companies of a group i.e. in Cyprus for accounting, client account opening and support. This can keep costs lower as far as the management company is concerned.
3. Services included in the Investment Dealer licence
A full service dealer (excluding underwriting) is authorised to:
- act as an intermediary in the execution of securities transactions for clients;
- trade in securities as principal with the intention of reselling these securities to the public;
- give investment advice which is ancillary to the normal course of his business activities; and
- manage portfolios of clients.
- The Company will be taxed on its chargeable income (including dividends, interests and other income but not capital gains less expenses) at a corporate rate of 15% which is reduced to a net effective tax rate of 3% or even less;
- No tax on dividends and income;
- No capital gains or inheritance tax;
- No exchange control restrictions;
- 100% foreign ownership;
- Free repatriation of profits, dividends and capital; and
- No stamp duty and no capital duty levied on the issue of share capital.
5. Minimum stated capital requirements
The requirement for the licence Investment Dealer (Full Service Dealer excluding underwriting) is US$33,333.
The funds used to capitalize the Company can be used to cater for its expenses but the capital should at all times be unimpaired.
6. Investor Compensation Fund
The Company would be required to keep an amount in a fixed deposit which will be used to compensate investors in case the Company goes bankrupt. The amount of USD 100.000 should be kept in a bank account of the Company. This account can be with a bank outside Mauritius.
7. Board of Directors
It is mandatory for the Board to have two resident directors.
8. Estimated Time Frame
Minimum of two months will be required from the date when the application is lodged with the Financial Services Commission of Mauritius.
9. Disclosure requirements
The proposed Company will be required to file its audited financial statements and tax return within 6 months from its balance sheet date.
Also, through the appointed management company, copies of all agreements with third parties will be provided to the regulator.
Finally, authorization is obtained from the regulator for any new products which will be offered during the operation of the Company.
10. Local presence
In determining whether a GBL1 is managed and controlled from Mauritius, as from 1st January 2015, the FSC will be considering whether the GBL1 implements one of the following additional measures:
- having office premises in Mauritius, or
- employing full time local staff, or
- the constitution providing for all disputes arising out of the constitution to be resolved by way of arbitration in Mauritius, or
- holding within the next 12 months, assets (excluding cash held in bank account or shares/interests in another corporation holding a Global Business Licence) which are worth at least USD 100,000 in Mauritius, or
- the shares are listed on a securities exchange licensed by the FSC, or
- having a yearly expenditure in Mauritius which can be reasonably expected from any similar corporation which is controlled and managed from Mauritius.
11. Other features
- It is mandatory to segregate clients’ funds from company funds;
- In case the Company is willing to do any activity in Mauritius, a separate authorisation will need to be sought;
- Marketing the services of the Company outside Mauritius will depend on local legislations existing in targeted countries;
- Clients of the Company should not be from black-listed countries;
- The authorities may do half-yearly audit of the Company;
- The audit of the Company should be done from Mauritius;
- Accounting records should be kept at the offices of the administrator while this activity could be carried out e.g. from Cyprus.