A GBC1 can be structured as a Fund for investment in equities or fixed income securities. The Fund could be a portfolio Fund or a Venture Capital Fund. The Investment Manager or in some cases the Investment Advisor may also be incorporated in Mauritius.
Steps involved in the set up of a Fund:
1. An outline memorandum is drafted which should contain information on the promoters including detailed CV, fund structure, type of share to be issued, size of fund, objectives, management team with their track record, target market, target investors, investment policies, and list of the various service providers with indication of the probable fees;
2. An application for in-principle agreement is made to the FSC (expect reply from FSC within 2 weeks);
3. A draft constitution to be submitted with incorporation request;
4. In the meantime the following documents need to be drafted and reviewed by various parties – lawyers, management team, and administrator:
• Prospectus or private placement memorandum;
• Investment management;
• Investment advisory;
• Global custody;
• Cash custody;
• Administration agreement;
• Operating procedure manual;
• Subscription or application form.
5. Seek legal opinion from all lawyers involved in drafting the documentation;
6. Submit final or near final documents/agreements to the FSC along with application for Global Business licence;
7. Upon receipt of FSC’s approval, hold launch board meeting in Mauritius with all or almost all the board members present in Mauritius; The fund then becomes operational and can invite subscription from investors;
8. Apply for tax residence certificate.
Taxation
A fund shall be taxable similarly as a GBC1 i.e at the rate of 15%. However, the fund will be entitled to a tax credit of the actual foreign tax suffered or to a deemed tax credit of 80 per cent of the Mauritian tax on their foreign source income, whichever is higher. There is no capital gain tax in Mauritius. Redemption proceeds paid by the fund to an investor will be exempt from Mauritian withholding tax.
Services provided by Halifax Management Limited
• Drafting the outline memorandum;
• Liaising with FSC for the in-principle approval;
• Liaising with lawyers who will be drafting the prospectus, subscription agreement, investment management and investment advisory agreements;
• Review the documents/agreements prepared by the lawyers from the Mauritian perspective;
• Review cash custody agreement and global custody agreement provided by the custodians;
• Draft administration agreement whereby Halifax will act as Registrar, Secretary and Administrator including responsibilities to perform NAV calculations, prepare quarterly, semi annual and annual accounts, draft operating procedure manual;
• Submit application forms for incorporation and for global business licence;
• Arrange to hold the launch Board meeting;
• Apply for Tax Residence certificate;
• Arrange for opening of bank accounts in Mauritius and abroad, providing local signatories effecting payment of expenses and following up on transfers;
• Liaising with brokers;
• Liaising with custodian for settlement of trades;
• Keeping investment activity records;
• Providing resident directors;
• Submitting the annual tax returns to the commissioner of Income tax;
• Keep the Board informed of all the Mauritian regulatory requirements and updates;
• Liaising with the Investment Manager for all the due diligence documents required under the law;
• Attend to any other queries that may arise in the day to day administration of the fund.
