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4. Offshore Fund Company

4.1 Corporate & legal structure

A GBC1 may be registered with the FSC as a fund. Such a structure, referred to as an Investment Company is defined as one where the Company’s business consists of investing its funds mainly in securities with the aim of spreading investment risk and giving members of the Company the benefit of the results of the management of its funds.

4.2 Registration requirements

An Investment Company needs to be approved by the FSC before it commences business. Once the Commission is satisfied with the above, it may give an approval in principle so as to enable all constitutive documents to be prepared and the Company to be incorporated.

The Commission generally wishes to satisfy itself that, as far as possible, substance and central administration is in Mauritius. To this end, the Fund must have a local administrator, a local custodian, and a local auditor.

The above does not exclude the possibility of the Fund obtaining assistance for the management of its assets from an investment adviser established overseas, nor does it prevent management decisions in relation to investment and disinvestment being executed overseas. Also the requirement for the location of the issuance and redemption of Shares in Mauritius does not preclude foreign intermediaries from participating in the placing and redemption operations as distributors or nominees. The Commission insists on the independence of the manager, the trustee and the custodian.

In appropriate circumstances, it is also possible to establish a management or advisory Company in the sector to take advantage of the beneficial tax regime.

4.3 Taxation

A Company holding a GBC1 License for fund business in Mauritius is liable to Mauritian taxation at a rate of 15% with the option of reducing to 3% through an 80% credit for foreign tax paid. Funds which are centrally controlled and managed in Mauritius can, with the approval of Mauritian Revenue Authority accede to the benefits of Double Taxation Agreements. Furthermore it should be noted that there is no withholding tax on dividends, Capital gains and interests.

4.4 Custodian

All Funds registered with the Commission as a GBC1 must entrust the custody of their assets to an approved custodian, generally a banking institution. The custodian carries out operations concerning the day-to-day administration of the assets of the fund, and is responsible for ensuring that the sale, issue, redemption, and cancellation of Shares are done in accordance with the investment management regulations of the fund. The main custodian can delegate certain of its activities to an approved third party, but retains its responsibilities.

4.5 Prospectus

Investment Funds operating from Mauritius must lodge a prospectus (or a placement memorandum) with the FSC.

4.6 Reports

Funds are required to file with the Commission an unaudited half-year report and an audited annual report. The Annual Report must be audited in accordance with international accounting standards or. In addition to the above reports, quarterly accounts have to be submitted to the Commission, 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.

4.7 Incorporation procedures

An application for a certificate must be made through a licensed OMC, such as Inter-Ocean Management Limited.

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