The Special Purpose Fund (SPF) rules in Mauritius
The Mauritius Financial Services Commission (FSC) recently released a set of rules under the Special Purpose Fund (SPF) regime to provide further flexibility and ease access to new markets.
The 2019/2020 Mauritius National Budget included the modernising of the existing Special Purpose Fund (SPF) regime to provide further flexibility and ease access to new markets. The objective of the upgraded SPF rules is to offer a tax-exempt entity having economic substance in Mauritius to further attract international fund promoters and managers wishing to avail of modern securities laws and overall fund logistics with globally competitive cost structures. This benefits both manager and the investor with respect to the set-up and ongoing operations and maintenance of fund structures.
Updates on the Financial Services Commission rules (the Rules) in relation to SPFs:
- A collective investment vehicle (open-ended fund) or a close-ended fund can apply for recognition as an SPF.
- The SPF is a tax-exempt vehicle as provided under the Income Tax Act with economic substance in Mauritius.
- The SPF can have a maximum of 50 investors.
- The minimum subscription per investor in the SPF shall be US$100, 000.
- The SPF shall at all times be managed by a CIS Manager (a locally licensed investment manager) and administered by a CIS administrator (a locally licensed fund administrator).
- The SPF, the CIS Manager and the CIS Administrator shall carry out their relevant core income-generating activities in, or from, Mauritius, and shall employ, directly or indirectly, an adequate number of suitably qualified persons to conduct such core income-generating activities and incur minimum expenditure proportionate to the level of such activities.
- Offer for shares shall only be by way of private placement to investors having competency, significant experience and knowledge of fund investments.
- Audited Financial Statements of the SPF is required to be submitted to the FSC.
- All ongoing obligations such as AML/CFT, corporate governance and other usual obligations applicable to investment funds shall be applicable to SPFs.
The upgrading of the SPF regime is a welcome initiative for the investment funds industry with the Mauritius IFC expanding the range of competitive financial products and services, making it a destination of choice for cross-border investments.
Mauritius as an IFC of choice
Over the past two decades, Mauritius has established itself as an International Financial Centre (IFC) of high repute, a jurisdiction of substance with a sound platform for investment funds. Mauritius is known for its state-of-the-art infrastructure, modern and innovative legal framework and ease of doing business regime. With its knowledge and proximity to the Indian market, in addition to being a natural hinterland for Africa, Mauritius has seen sizable inward and outward investments from Asia into Africa.
The regulatory and legislative framework has constantly evolved in line with global requirements and continues to offer a safe, secure and world-class platform for LP’s and GP’s looking to set up operations in the jurisdiction.
Listen to the podcast episode explaining the new SPF regime
Sanne Group is an AVCA Member. Find out more at avca-africa.org.
