The Mauritius Variable Capital Companies Act 2022 (“VCC Act”), passed on 12 April 2022 and gazetted on 15 April 2022, allows the setting up of a Variable Capital Company (VCC). It is a new type of investment fund entity which complements the other fund entities in Mauritius. The primary objective of setting a VCC is to operate as a fund. It can either operate as a standalone entity or as an umbrella structure comprising sub-funds. Special Purpose Vehicles (SPVs) can also be set up under the VCC or its sub-funds.
A VCC Fund must comply with all the requirements of the VCC Act 2022, Financial Services Act 2007 (FSA),The Financial Intelligence And Anti-Money Laundering Act 2002 (FIAMLA) as well as any other relevant laws. In addition, a sub-fund of a VCC Fund shall comply with all applicable provisions of the Securities Act, the Securities (Collective Investment Schemes and Closed-end Funds) Regulations 2008, FSC Rules and Guidelines.
Important Factors regarding VCC:
• An existing Mauritian company can apply for conversion to a VCC
• A foreign incorporated company can apply for registration by way of continuation as a VCC provided that the foreign jurisdiction allows for outward migration
• Must have “Variable Capital Company’’ or ‘’VCC” after its name
• Is required to have to have a constitution that complies with the Companies Act
• No limit to the number of sub-entities that can be created by a VCC under the VCC Act – subject to approval from the Financial Services Commission
• Operates either through sub-funds or special purpose vehicles which are licenced by the Financial Services Commission – the VCC fund, its sub-funds and special purpose vehicles shall have the same promoter.
• Sub-fund/SPV can be ring-fence their assets and liabilities to prevent financial contagion- A VCC may sue or may be sued in respect of a sub-fund/SPV and this will be ring-fenced to only that specific sub-fund/SPV
• The solvency test requirements that have to be satisfied under the Companies Act 2001 do not apply to a VCC – may pay dividends out of capital
• Cross-investment is allowed among sub-funds/SPVs
• The sub-fund/SPV may elect to have separate legal personality from the VCC – if the sub-fund elects to have a separate legal personality, it must be incorporated as a company under the Companies Act and must include “incorporated VCC sub-fund” and for the SPV it will be “incorporated VCC special purpose vehicle”.
• A VCC Fund can appoint a single CIS Manager, CIS Administrator, Custodian or other service provider for all its sub-funds. However, nothing prevents a sub fund from appointing a separate CIS Manager, CIS Administrator, Custodian or other service provider from the VCC Fund or other sub-funds.
| Code | Type of Licence/authorisation | Activities |
|---|---|---|
| VCC-1.1 | VCC Fund | A sub-fund of a VCC Fund, subject to the approval of the Commission, will operate as a Collective Investment Scheme (“CIS”) or a Closed-End Fund (“CEF”) of any category and may elect to have a separate legal personality from that of the VCC Fund. |
| Processing fees | Fixed Annual Fees | |
|---|---|---|
| VCC Fund & 1st SubFund | MUR 45,000(USD 1000) | MUR 135,000 (USD 3000) |
| 2nd sub-fund/SPV | MUR 22,500 (USD 500) | MUR 45,000 (USD 1,000) |
| 3rd sub-fund/SPV | MUR 22,500 (USD 500) | MUR 45,000 (USD 1,000) |
| 5th sub-fund/SPV | MUR 22,500 (USD 500) | MUR 45,000 (USD 1,000) |
| For each additional sub-fund/SPV | MUR 22,500 (USD 500) | MUR 87,750 (USD 1,950) |
We can assist in the establishment of a new VCC structure or the re-domiciliation to Mauritius of an existing fund.
Accounting and taxation
- VCC are required to file non-audited quarterly management accounts and yearly audited financial statements with the FSC. The reports must include:
- A statement of assets and liabilities, including the NAV
- The number of shares outstanding
- The NAV per share
- Details of the investment portfolio and the movements in the period, disclosed by types of securities and type of market
- Where a VCC elects to present separate financial statements for each of its sub-funds or SPVs under the VCC Act, each sub-fund or SPV shall be deemed to be an entity separate from the VCC and shall be liable for income tax in respect of its own income
- Where the VCC opts to present consolidated financial statements, the VCC fund will be required to file a single tax return to the MRA and will be liable for income tax on the aggregated income of its sub-funds and SPVs
We can assist with the preparation of the management accounts (yearly and quarterly) for each sub-funds, financial statements and/or consolidated financial statements and preparation of tax returns to meet the statutory deadline.