Obtaining a license to manage third party funds in Mauritius

To obtain a license to manage third party funds, you must select a jurisdiction and Mauritius is one option. With a good reputation for its high level of regulation, Mauritius offers different types of licenses depending on the specific activity. Nevertheless, it is necessary to understand these types, choose the appropriate license and submit a large package of documents to the local licensing authority. You can read about how to obtain a license to manage third-party funds in Mauritius in this article.

Contents:

• Benefits of Mauritius for obtaining a license to manage third-party funds
• Why do I need a license to manage third party funds in Mauritius?
  • Types of licenses for managing third party funds in Mauritius
• The Process for Obtaining a License to Manage Third Party Funds in Mauritius

Benefits of Mauritius for obtaining a license to manage third-party funds

Although Mauritius is offshore, it has implemented international banking standards. Also, in Mauritius there is high level of AML regulation, which is not typical for some other offshore companies such as Belize, Panama, Seychelles, etc.

The time zone of Mauritius differs only by two hours from the European and Asian, and on the island itself, English language is spoken. It also creates favorable conditions for obtaining a license.

The third advantage is low taxation. Some organizational forms, notably GBC 1, are required to pay only 3% of the profits traded. The same organization does not have to pay capital gains tax and income tax.

Why do I need a license to manage third party funds in Mauritius?

The regulator clarifies that the license is suitable for managing both securities and other property. At the same time, in accordance with the law of Mauritius, securities include:

• Shares of companies, regardless of where they are registered;
• Debt obligations, bonds, convertible shares, and other similar instruments;
• Warrants, options;
• Treasury bonds, government bonds and other securities issued by public authorities;
• Depositary receipts;
• Options, futures, forwards and other derivatives.

The list is not closed. A cryptocurrency fund license can also be obtained in Mauritius. The regulator may recognize the need to obtain a license for the management of other property. In this case, the regulator considers the application taking into account the specific circumstances. 

Types of licenses for managing third party funds in Mauritius

There are three types of asset manager licenses:

• With such a license, the company can manage the portfolio, as well as advise and recommend the client to carry out specific operations;
• The company can only advise operations with securities;
• Corporate financial advisor. The company is entitled to provide corporate financial advisory services.

The Process for Obtaining a License to Manage Third Party Funds in Mauritius

The regulator is the Mauritius Financial Services Commission (FSC). Therefore, documents must be submitted to FSC. The regulator usually reviews the application in about 8-12 weeks. It is worth remembering, however, that if there is no response within 15 days to an FSC request, the body will stop considering your application.

When applying for a license, you must submit the following package of documents:

• Document confirming the registration of a legal entity
• A document confirming the presence of the authorized capital, the amount of which varies depending on the type of license, but in any case does not exceed $ 30 thousand;
• Business plan that includes
  • Financial plan for three years
  • Sources of financing
  • Company goals and strategy
  • Corporate structure
  • Target market;
• CVs of persons holding executive bodies of at least two directors;
• Latest annual reports;
• A document confirming professional liability insurance;
• Audit report;
• Information directly related to the activity:
  • About securities and instruments managed by the company
  • The manager's advice is mandatory or optional.
  • The means by which advice on asset management will be communicated
  • Details of how the portfolio will be managed.

As with licenses in other jurisdictions, directors are required to pass a fir and proper test, which confirms competence and good standing.

The implementation of such activities is impossible without the team itself, which will manage the assets. It must consist of at least 2 persons who already have management experience. They should also indicate whether they have their own licenses.

The license fee is $ 500 and the annual fee is $ 1900.

Thus, the licensing process comes down to two stages: choosing the right license for you and submitting documents to FSC. Special attention should be paid to the development of documents, as well as to ensure that there are two qualified directors, an experienced and professional team. Given the strict AML policy of Mauritius, which creates a reputation and a business environment, a company must meet this level. If you have any questions or need help obtaining a fund management license, please contact A4 Law Firm lawyers.