Transforming the Mauritius IFC: Cross-border investments
Transforming the Mauritius IFC: Cross-border investments
A case for Reform in the Global Business Sector
Category 2 Global Business Licence
GBL2 issued by the FSC after 16 October 2017 are deemed to lapse on 31 December 2018. Grandfathering provisions will apply for GBL2 issued prior to 16 October 2017, which may continue to operate under the ‘former regime’ up to 30 June 2021. In line with this development, holders of GBL2s licensed after 16 October 2017, have three options:
- to either wind up; or
- to apply for a change in regime by opting to continue as a Global Business Corporation or an Authorisation Company before 31 December 2018; or
- to redomicile in another jurisdiction and to inform the FSC of same before 31 December 2018.
The FSC has issued application forms for Authorised Companies as per a Communiqué dated 01 October 2018.
Authorised Company
The eligibility criteria to operate as an Authorised Company is provided in Section 71A of the Financial Services Act (FSA) as amended by the Finance Act 2018. The fee structure for Authorised Companies, applying after 31 December 2018 shall be as follows: Processing fee of USD 150 and Annual Fee of USD 350. In this respect, the Financial Services (Licensing and Fees) Rules was amended. The Rules provide for the licensing criteria to be considered by the FSC.
As a general rule, Authorised Companies will not be allowed to:
- conduct financial services;
- to carry out other activities that the FSC may deem detrimental to Mauritius.
Global Business Corporations
The Finance Act 2018 further amended the FSA to review the current Category 1 Global Business Licence (GBL1), now deemed to be Global Business Corporations (GBC). The GBCs will be required to fulfil additional substance requirements embedded in the FSA. Substance will be assessed based on the nature and level of activities, whether the employment is reasonable and the expenditure is adequate.
The FSC has started communicating with its licensees and will continue through Rules, Circular Letter, and Explanatory Notes - to facilitate the transitional period and to mitigate disruptions in the business process. The reform in the Global Business marks a new era of development for the Mauritius IFC.