Mauritius – FSC

Investment Dealer – Broker

The reputation of Mauritius as an International Financial Centre rests on the quality of its services and its pool of highly qualified professionals. The Financial Services Act (FSA) adopted in 2007, simplifies the regulatory regime and consolidates the legislative framework of the global business sector. The Investment Dealer licenses as issued by the Financial Services Commission in Mauritius are getting increasing popularity among many of the Brokerage Houses worldwide.Application for Investment Dealer license must be made under a Category 1 Global Business Company and license is granted subject to the approval of the Financial Services Commission.
The Securities Act 2005 coupled with the Securities (licensing) Rules 2007 remain the main legal framework governing the provisions and setting the parameters within which a GBC 1 with an Investment Dealer license can operate.There are different categories of Investment Dealer license and Securities (licensing) Rules 2007 clearly set out the activities authorized to be carried out under each category.

Being Licensed – Licensed Activities The Financial Services Rules 2008

The Financial Services Rules 2008 (the Rules) set out the licensing framework that provides for a comprehensive codified list of financial services and financial business activities licensable by the FSC. The licensing framework provides clear sets of licensing criteria and requirements within a well-defined and consolidated framework. Prospective applicants, including service providers, may consult legal provisions, licensing requirements and fees applicable to the particular business they intend to conduct. The FSC considered the level of development of the different sectors under its purview as well as the need to sustain the overall competitiveness of Mauritius as an International Financial Centre, in determining the fee structure. The Rules also provide for a specific code for each of the licensable financial services and financial business activities.

Legal Changes from January 2015

In addition to the existing requirements, the GBC 1 must also meet any one of the following additional requirements before 1 January 2015 for it to be deemed to be managed and controlled in Mauritius. The GBC 1: Must have office premises in Mauritius; Must employ at least one full-time employee (who is tax resident in Mauritius) at an administrative or technical level; Constitution must provide for disputes arising out of the constitution to be resolved by arbitration in Mauritius;
Must hold assets of at least USD100 000 within a year, excluding cash or shares in another GBC 1; Shares must be listed on the Mauritius stock exchange; or
Must have annual expenditure in Mauritius, reasonably expected from any similar corporation managed and controlled from Mauritius.

Applying for a License

In order to carry out global business and other financial services in Mauritius, individuals or entities must apply for a licence from the FSC. Licenses available for application in Mauritius are: Global Business Insurance & Pension Capital Markets Other NBFIs

Applying for a License Capital Markets

Entities operating in the Capital Markets sector are licensed under the Securities Act (SA). The SA provides a comprehensive framework enabling entities to operate in full transparency and lists all the requirements/criteria and the prudential norms which need to be followed and the relevant disclosures. The FSC licences securities exchanges, clearing and settlement facilities, securities trading systems, market intermediaries, Collective Investment Schemes (CIS) and Closed-end fund (CEF), CIS Functionaries and also registers Reporting Issuers and Investment Clubs.

Registration and Licensing in Mauritius Investment Dealer – Broker Definition as in Securities Act 2005

Authorised to execute orders for clients, to manage portfolios of clients and to give advice on securities transactions to clients. Type of entity required to be eligible – GBC1; DTA – Double Taxation Agreements benefits – Yes; Taxation – Maximum 3% on profits; Time to incorporate – Approximately 3 to 4 weeks’ time if ll documents provided and FSC satisfied with same; Financial Statements Disclosure to FSC – File audited financial statements within 90 days of financial year end; Staff Qualification – At least two officers/representatives/board members having at least 4 years of relevant experience/skills in this field.

introduction

Benefits of a GBC1 Company

  • A GBC 1 benefits from a deemed tax credit so that it will end up paying a maximum effective tax rate of 3% on its tradable profits;
  • There is no capital gains tax and no withholding tax on dividends, interest and royalties paid by a GBC 1 company;
  • As soon as a GBC 1 is qualified as tax resident in Mauritius, it will benefit from the tax treaty network;
  • There is no minimum capital requirement for a GBC 1 and the stated capital can be denominated in any currency except Mauritian Rupee;
  • A GBC 1 is allowed to have either par value (which may be stated in more than one currency) or no par value shares. The shares can be in the form of registered shares, preference shares, redeemable shares and shares with or without voting rights. Bearer shares are not permissible in the case of a GBC 1;
  • Both individual and corporate bodies are allowed to be shareholders of a GBC 1;
  • There is no statutory requirement for a GBC1 to have a constitution. In the absence of the latter, the company will be governed by the provisions under the Companies Act 2001. The shareholders of the GBC 1 may adopt a constitution at any time through a special resolution;
  • It is to be noted that it is possible to apply for occupational permit for expatriates who are employees of the GBC 1 company;

Main characteristics of a GBC 1

A GBC 1 must have a minimum of two (2) Resident Directors in order to avail of treaty benefits, with board meetings held in Mauritius. It is to be noted that the concept of Corporate Director is not applicable in case of a GBC 1;

  • A GBC 1 must at all times have a Resident Secretary and a Registered Office in Mauritius;
  • In addition, a GBC 1 must have a local auditor and a local bank account;
  • A GBC 1 must file an annual tax return with the Mauritius Revenue Authority (MRA);
  • A GBC 1 must also file its audited financials prepared in accordance with internationally acceptable accounting standards, not later than 6 months after its financial year end;
  • The shareholders of a GBC 1 must hold an Annual Meeting in every calendar year and within 6 months of the company’s balance sheet date;
  • It is to be noted that the names of shareholders and beneficial owners coupled with their corresponding due diligence documents must be disclosed to the FSC. However, such information, in addition to any filing and return of the GBC 1 with the Registrar of Companies, are not available for public inspection;
  • Accounting records and statutory records such as register of members, register of directors, minutes of all directors’ and shareholders’ meetings and resolutions, amongst others, must be kept at all times at the registered office of the GBC 1.
  • Conversion of a GBC 1 into a GBC 2 is permissible

A company having a GBC 1 status is given the highest degree of confidentiality under Mauritius law and no information regarding its shareholding, accounts or activities are publicly accessible.The timeline for incorporating a GBC 1 company varies from 5 to 10 days.

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COI´s services are subject to its Terms and Conditions.The information provided by coi is intended as informative material and should not be relied solely upon in decision-making, especially if it concerns international tax planning and financial structuring as these areas are subject to frequent changes, although its efforts to keep all information on its website regularly updated. COI strongly recommends that each potential user of its services seek tax and legal advice before deciding on implementing a solution employing international financial structures. COI will not be liable for any damages, costs and expenses resulting from or incurred as a result of any action taken or omitted based upon any such information provided by COI.