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Global Funds

A Global Fund is a business structure whose activities consist of the investment of funds in a portfolio of securities, or other financial assets, real property or non-financial assets, and whose operation is based on the principle of diversification of risk; thus giving members of the company the benefit of the results of the management of its funds.

The law in Mauritius provides for two main categories of Global Funds:

  • Open-ended Fund, also known as a Collective Investment Scheme (‘CIS’); and
  • Close-ended Fund, commonly known as the Private Equity Fund.

Collective Investment Schemes ('CIS')

  • A CIS has a variable share capital;
  • Investors are allowed to redeem their shares at net asset value at pre-determined times in accordance with the Private Placement Memorandum;
  • It is also possible to constitute an umbrella fund under each of the foregoing structures. The umbrella fund will comprise two or more sub-funds and investors subscribe for shares or units in specific sub-funds. Each sub-fund has its own investment policy with segregated assets and accounting records;
  • Investors can switch their investment from one sub-fund to another without redeeming their shares or units;
  • A CIS can also be set up as one of the sub-funds of an umbrella fund not established in Mauritius;
  • Categories of CIS:
    1. Fully regulated CIS – meant for Public Funds;
    2. Professional CIS – offers its shares solely to sophisticated investors or as private placements. The Professional CIS is exempt from most on-going obligations/regulations generally imposed on a Public CIS;
    3. Specialised CIS – invests in real estate, derivatives, commodities or any other products authorised by the FSC;
    4. Expert Fund – only available to expert investors.

Close-ended Funds

  • A close-ended company has a fixed share capital;
  • Investors do not have the right to call for their shares to be redeemed at net asset value by the company;
  • A close-ended company can be listed on the Stock Exchange enabling investors to buy and sell shares in the market thereby preventing any lock in;
  • The company may be formed with a limited life after which the assets are distributed to investors on winding up.

Key Features:

Capital and shares

  • Issues and redemptions of shares are carried out in Mauritius;
  • Location does not preclude foreign intermediaries from participating in the placing and redemption operations as distributors or nominees.

Administration

  • Two resident directors are required;
  • A qualified secretary resident in Mauritius is required;
  • May obtain assistance for the management of its assets from an investment adviser established overseas;
  • Management decisions in relation to investment and disinvestment may be executed overseas.

Bank account

  • Investments to be made via bank account must be maintained in Mauritius with an offshore bank;
  • The custody of assets must be entrusted to an approved custodian that carries out operations concerning the day-to-day administration of the assets.

Meetings

  • Board meetings must be held in Mauritius.

Accounts

  • Required to maintain accounts and the accounting documents must be available in Mauritius;
  • Calculation of the Net Asset Value (‘NAV’) is carried out in Mauritius;
  • Required to file with the FSC an unaudited half-year report and an audited annual report;
  • Quarterly accounts have to be submitted to the FSC, and these will include NAV at the end of each month, the change in the NAV, the proceeds from issue of shares and payments for shares redeemed.

Taxation

  • Liable to tax at the rate of 15% but this can be reduced to 3% upon application of the foreign tax credit of 80%;
  • If centrally managed in Mauritius, the Global Fund can benefit from the DTA.