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Finally, AIFMs must set a maximum level of leverage which they may employ on behalf of the AIF and limit on the reuse collateral or guarantee granted under a leveraging arrangement. Alternative investment funds AIFs set up under the legal form of a limited partnership or a special limited partnership and that do not carry out or are not deemed to carry out a commercial activity should be considered as tax-transparent entities.
In such case, income and wealth received and held by tax-transparent AIFs are taxable at the level of the investors. The direct tax treatment applicable to AIFs structured as tax-opaque entities ie, under the legal form of a joint stock company, private limited company or corporate partnership limited by shares depends on the legal regime to which they are subject.
Undertakings for collective investment UCIs , specialised investment funds SIFs and reserved alternative investment funds RAIFs are exempt from corporate income tax, municipal business tax and net wealth tax. For companies located in Luxembourg City, the aggregate corporate income tax and municipal business tax rate ranges from The net wealth tax rate is 0.
Luxembourg managers and advisers structured as a SOPARFI under the legal form of a tax-opaque entity ie, a joint stock company, private limited company or corporate partnership limited by shares are subject to corporate income tax, municipal business tax and net wealth tax at the standard rates as described in question 8.
Individual managers and advisers that are Luxembourg tax residents are subject to Luxembourg personal income tax on their worldwide income subject to tax treaty provisions. The Luxembourg income tax liability is based on the individual's personal situation and takes into consideration various personal tax allowances and deductions. Management and advisory fees qualify as income from independent activities.
The Luxembourg personal income tax is calculated in accordance with a progressive rate ranging from 8. The beneficiaries of the management and advisory fees should also be liable for social security for self-employed persons at a rate of Social security contributions are deductible for personal income tax purposes except for the dependent contribution.
Carried interest paid to qualifying employees as an incentive for the AIF's performance can be taxed at the maximum progressive rate of However, qualifying employees can benefit from such tax incentive only for a maximum of 10 years and to the extent that they transferred their tax residence to Luxembourg before 31 December Individuals that are Luxembourg tax residents and that invest in AIFs structured as tax-transparent entities ie, limited partnership or special limited partnership are directly subject to personal income tax under the rules described in question 8.
Luxembourg tax resident individuals investing in SIFs, SICARs, RAIFs and SOPARFIs structured as tax-opaque entities ie, joint stock company, private limited company or corporate partnership limited by shares are subject to personal income tax on income and gain received and realised from these entities under the rules described in question 8.
Investors structured as standard Luxembourg companies eg, SOPARFIs are subject to corporate income tax, municipal business tax and net wealth tax at the standard rates as described in question 8. These two sets of law share similar goals and concepts, as they create specific due diligence and reporting obligations for financial intermediaries based in Luxembourg.
Investment funds are within the scope of these rules, except for certain exemptions provided by IGA Model 1 among others, Luxembourg retirement funds and local banks. Based on these rules, Luxembourg-based investment funds must collect self-certification forms from their investors in order to evidence the tax residence of the individuals who invest directly or indirectly in them. Furthermore, Luxembourg-based investment funds must report, on an annual basis, the amounts of their interests in the funds, as well as any type of income deriving from the funds for these investors.
The international and European tax landscape for AIFs has been significantly reshaped since In Luxembourg, several measures have been implemented to adapt the country tax toolkit in accordance with international and European tax changes. The measures that affect tax strategies for AIFs include:. Therefore, tax strategies for AIFs have focused on maximising interest deductibility and cash-flow efficiency while reinforcing the substance and beneficial ownership by using, notably, regulated structures with a mix of tax-transparent and tax-opaque vehicles.
AIFs investing in real estate could be structured with a RAIF having the legal form of a special limited partnership or a joint stock company with variable capital. Luxembourg remains the first investment fund centre in Europe and the second in the world. Luxembourg is also a major hub for EU and global asset managers, with the presence of 98 of the largest European asset managers. Unregulated AIFs offer legal structuring flexibility while allowing for timely marketing and launch, without being subject to the prior authorisation or ongoing supervision of the Luxembourg regulator, thus saving time and cost for managers.
With the adoption of a directive and regulation on the cross-border distribution of collective investment funds in summer , a new legal and regulatory framework will harmonise the rules and reduce the barriers and costs for the cross-border distribution of investment funds within the European Union, including Luxembourg. The regulation entered into force on 1 August , while the directive must be transposed into national law by July Pre-marketing will be allowed for EU AIFMs, so that fund managers will be able to test the appetite of potential investors for new investment strategies.
However, pre-marketing activities will be subject to certain requirements - in particular, formal notification of the home regulator. In case of pre-marketing, EU AIFMs will not be allowed to rely on reverse solicitation for 18 months from the beginning of the pre-marketing activity, which will substantially limit the possibility to have recourse to reverse solicitation. Pre-marketing and marketing activities will be permitted only for certain entities, such as AIFMs, investment firms, credit institutions, undertakings for collective investment in transferable securities management companies and tied agents.
New requirements have also been introduced regarding the de-notification of marketing activities. Requirements applicable to regulatory fees and charges will also be aligned across EU member states. The steady growth of the number of unregulated AIFs, such as the RAIF and limited partnerships, should continue apace in the coming years.
There is a clear preference and market demand for a single-tier regulatory model ie, regulation of the AIFM only , instead of a double-tier regulatory model ie, regulation of the AIF and regulation of the AIFM.
The ongoing review of the AIFM Directive by the European Securities and Markets Authority may give greater insight into the key topics which will be probably addressed at level 2, via regulations or a full review of the AIFMD, such as the rules on remuneration, the depository rules, the national private placement regimes and the AIFMD third country passport.
Luxembourg offers a wide range of legal structuring tools which may address the requirements and specificities of different projects. Managers targeting a lower level of assets under management with minimum regulatory obligations may consider setting up a non-regulated AIF in the form of a Luxembourg special or common limited partnership and appointing a registered AIFM, thus eliminating the costs and regulatory burden associated with the appointment of an authorised AIFM and depositary. The special limited partnership is an efficient launch pad, as it is quick to set up and well suited for projects requiring contractual flexibility and cost efficiency.
The major drawback is the absence of a marketing passport and the impossibility of setting up an umbrella structure with segregated compartments. Should the targeted level of assets under management exceed the thresholds set out in Article 3 2 of the AIFM Law, it may be worth considering a reserved alternative investment fund, which may be structured as an umbrella fund. Although an authorised AIFM will have to be appointed, it will make the EU marketing passport available to market the fund to professional investors across the European Union, thus turning costs into additional opportunities.
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Finance and Banking. To print this article, all you need is to be registered or login on Mondaq. What powers do they have? The CSSF may impose certain sanctions or administrative measures with respect to AIFMs and AIFs which are subject to its supervision, such as the following: to access documents and request additional information including existing data records and telephone conversations ; to carry out on-site inspections and investigations; to request the cessation of any illegal practice; to request the freezing or sequestration of assets; to temporarily prohibit the exercise of professional activities with respect to persons subject to its prudential supervision; to withdraw the authorisation granted to AIFMs and AIFs subject to its supervision; and to transmit information to the state prosecutor for criminal prosecution.
It may further disclose such penalties to the public. The main types of alternative investment funds AIFs in Luxembourg are as follows: hedge funds; private equity funds; real estate funds; infrastructure funds; debt funds; commodity funds; funds of funds; master-feeder funds; and European long-term investment funds.
If yes, what legal protections are in place to protect the alternative investment fund's assets? If yes, what considerations are required and what are the steps involved? Do any restrictions apply in this regard? Please see questions 2. To this end, the CSSF will require the following documents from each board member: a dated and signed CV; a certified copy of his or her ID or passport; a declaration of honour form; an excerpt from the criminal record s ; and a time allocation assessment form.
Additional information and documents may be requested by the CSSF. They may also, by derogation and under certain conditions, provide the following additional services: management of portfolio of investments, including those owned by pension funds and institutions for provision of occupational retirement in accordance with mandates given by investors on a discretionary, client-by-client basis; and non-core services ie, investment advice, safekeeping and administration regarding shares of UCIs, receipt and transmission of orders in relation to financial instruments, only if the investment management functions are provided.
An AIFM must either be authorised or registered, based on the following criteria. Moreover, an external AIFM may additionally provide: discretionary portfolio management services on a client-by-client basis; and non-core services eg, investment advice as set out in Article 5 4 of the AIFM Law. If so, please provide details. If yes, please provide details of any specific requirements. No delegation or sub-delegation can be made to the depositary or a delegate of the depositary, or to any entity which may give rise to conflict of interest, unless: the entity has functionally and hierarchically separated the performance of its portfolio or risk management tasks from other potentially conflicting tasks; and the potential conflicts of interest are identified, managed, monitored and disclosed to investors of the AIF.
If yes, do any additional requirements apply? If so, are there specific requirements? AIFs must be subject in their home state to: regulation providing investors guarantees of protection; and supervision at least equivalent to that provided by Luxembourg laws governing AIFs authorised to be marketed to retail investors in Luxembourg; and There must be cooperation between the CSSF and the supervisory authority of the AIF.
This must include, among other things, information on: the investment strategy and policy of the AIF; the types of assets in which the AIF may invest; the techniques it may employ; the use of leverage; information on the identity of the service providers and the AIFM; investors' rights; a description of the delegation by the AIFM and the depositary; the valuation procedure; liquidity risk management; fees and expenses; information on the issue and sale of interests; the net asset value of the AIF; and its performance.
The AIFM must notify the acquisition of control by the AIF: to the non-listed company; to the shareholders; and to the CSSF, together with information regarding the consequences on the voting rights, the conditions subject to which the control was acquired and the date on which control was acquired. Authorised AIFMs must regularly report to the CSSF on: the principal instruments and markets in which they trade; the principal exposures and most important concentrations; the main categories of assets including percentages subject to special arrangements due to their illiquid nature ; and the risk profile and risk management systems employed.
AIFMs must comply with the following minimum requirements: Conduct due diligence when investing on behalf of the AIF in accordance with the investment strategy, objectives and risk profile of the AIF; Ensure identification, measure and monitoring on an ongoing basis including through use of stress testing procedures of the risks associated with each investment position of the AIF and the overall effect on the AIF's portfolio; and Ensure that the risk profile of the AIF corresponds to the size, portfolio, structure and investment strategies and objectives of the AIF, as set out in the constitutive documents of the AIF.
The choice of structure will largely depend on a combination of several factors, including: the investment strategy; the assets; the size of the alternative investment fund AIF ; the profile and location of the investors; the time to market; the level of regulation needed; cost efficiency; and tax considerations. It is some time since our last bulletin, and it is a very different world. Perhaps one way of encapsulating this year will be Dickens' words: "it was the best of times, it was the worst of times".
Unsustainable Risks? Fast forward seven years, and this directive is still evolving, but now with a new focus: sustainability. A lasting power of attorney LPA is a legal document which gives another person of your choice the ability to make decisions on your behalf.
Walker Morris. Shariah-compliant private equity funds are governed by the laws and principles of Islam. The amount of capital managed by these funds continues to increase, partly due to the build-up of savings. Sign Up for our free News Alerts - All the latest articles on your chosen topics condensed into a free bi-weekly email.
Register For News Alerts. Article Tags. More Tags. NOV DEC More Webinars. Alternative Investment Funds. Banking Regulation. Corporate Tax. Data Privacy. Mondaq Advice Centres. Investment Immigration. MARK J. He has published over research articles in professional journals, has won two Best Paper Awards, is the author of six financial textbooks, and sits on the editorial boards of several financial journals. He was previously an associate at Ennis Knupp and prior, an assistant professor at Illinois Institute of Technology.
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The OECD also issued a guidance note on 14 November to clarify the entry into effect rules for tax treaties of jurisdictions that deposited their ratification instruments. The MLI is in force on the first day of the month following the expiration of a period of three calendar months from the date of deposit of the fifth instrument of ratification, acceptance or approval the three months period starts counting from the date of the fifth instrument of ratification, acceptance or approval.
For example, Austria deposited its instrument of ratification with the OECD on 22 September and it was the first jurisdiction to do so. However, it was only when Slovenia the fifth jurisdiction deposited its instrument of ratification on 22 March that the three-month period started counting. Following the fifth deposit, the MLI entered into force on 1 July For each signatory ratifying the MLI after the deposit of the fifth instrument of ratification, the MLI enters into force on the first day of the month following the expiration of a period of three-calendar months beginning on the date of the deposit by such signatory of its instrument of ratification with the OECD.
Once Mauritius has completed all the required domestic procedures, Mauritius will be able to deposit the instrument of ratification with the OECD. Once the MLI is in force, its relevance in the context of a tax treaty with Mauritius depends on a number of factors: first of all, the MLI must have been signed by the other Contracting State. If the other country is not a signatory to the MLI, it will not apply. As a general rule, a provision of the MLI will be applicable if both Contracting States have taken the same positions with respect to a provision.
Mauritius provided a list of preliminary reservations and notifications at the time it signed the MLI, and in October submitted a revised version of its preliminary MLI positions. This Article provides that there is a minimum holding period of days for the treaty to apply. Under Article 8 3 , a country may reserve the right for the entirety of Article 8 to apply. Article 28 3 b provides that a reservation made under Article 28 1 and 2 modifies those provisions to the same extent for the other party in its relations with the other party.
The reservation is thus applied on a consistent basis by the two States. Taking the example of the minimum period on dividend transfer transactions, it cannot be applied by Mauritius on any dividends paid by a Mauritian resident company. Likewise, the other Contracting State is not allowed to apply the minimum period even though it has not expressed any reservation.
It is irrelevant if the other country has not expressed any reservation, except in cases where the MLI allows an asymmetrical application of the MLI. Certain existing tax treaties already have anti-abuse rules: such rules take a number of forms. The rules, some of which are considered below, may continue to be applicable irrespective of the MLI. This results in a mismatch at the level of the notifications provided by Mauritius and the UK on the application of the PPT.
Article 23 of the UK Mauritius DTA further provides that the treaty does not apply where income is taxable on a remittance basis in the country of residence. For example, the foreign income of a Mauritian resident is taxable on a remittance basis in Mauritius. Where the foreign income is not remitted to Mauritius, the income is not subject to tax in Mauritius. Article 26 of the tax treaty with Sweden has a Limitation of Benefit LOB clause that applies, where a company has income primarily from certain activities and such income bears a significantly lower tax under the laws of the State of residence than income from activities carried on within that State.
The LOB seeks to deny treaty benefits on the income of the company and the dividends paid by such a company. The activities that are the subject matter of the LOB are as follows:. Treaty relief is therefore wholly dependent on the Luxembourg income tax laws. Because a PPT is the only approach that can satisfy the minimum standard on its own, it is presented as the default option in paragraph 1.
Parties are then permitted pursuant to paragraph 6 to supplement the PPT by choosing to apply a simplified LOB provision. Given that the detailed LOB provision requires substantial bilateral customisation, which would be challenging in the context of a multilateral instrument, the Convention does not include a detailed LOB provision.
Instead, Parties that prefer to address treaty abuse by adopting a detailed LOB provision are permitted to opt out of the PPT and agree instead to endeavour to reach bilateral agreement to satisfy the minimum standard. Also, given that Parties preferring a detailed LOB provision may accept the PPT in paragraph 1 as an interim measure, paragraph 17 a allows such Parties to express the intent in the notification under that paragraph.
A foreign controlled company is not considered to be eligible for treaty benefits unless it carried on an active business in Mauritius under the simplified LOB provision. Considering the wide use of Mauritian incorporated entities for tax and non-tax reasons, care is required in any bilateral negotiation so that non-abusive business arrangements are not excluded from the purview of a tax treaty.
The PPT appears to be the appropriate anti-abuse provision for Mauritius: to ensure predictability with the relevant treaty partner countries, engaging with the policy makers of the relevant Government appears to be a wise approach from the perspective of Mauritius to address its inherent tax risks in view of the fact that this will be dictated by the source jurisdictions.
Though it does appear from European case law that genuine holding companies are legitimate for tax purposes, the behavior of non-European countries in the application of the PPT is not known. Under the Simplified LOB provision, a resident that is not a qualified person is entitled to treaty benefits if the resident is engaged in the active conduct of a business in the State of residence and the income from the treaty partner country is incidental to its active business. An anti-abuse rule on the same lines as the above is also contained in the new tax treaty signed by Japan and Spain on 16 October in the application of treaty relief for interest, dividends and royalties In the context of new treaties, paragraph 73 of the OECD Commentary provides that States may consider that some or all activities listed as active conduct of a business may be included.
Paragraph 7 b of the same Article also provides that the Simplified LOB provision may apply by only the jurisdiction that chooses to apply the Simplified LOB provision if all the Contracting Jurisdictions that choose not to apply the Simplified LOB provision agree to such application through a notification to the Depositary.
The Contracting States may include financial institutions similar to banks within the definition of active conduct of a business. Paragraph 73 of the Commentary to the OECD MTC confirms further that the activities in question do not qualify for treaty relief: the ultimate sentence does however provides a certain degree of flexibility in defining an active conduct of business. Incidentally, the corresponding adjustment is the subject matter of Article 24 5 of the tax treaty Mauritius has with the UK.
Section 75 of the ITA effectively seeks to protect the Mauritian tax base: it is not surprising that it may also apply in the context of a business carried on in Mauritius by a nonresident company. Furthermore, section 75 of the ITA may only apply if the business transaction is with a related party.
The interaction of section 75 of the ITA and the corresponding adjustment Article in the tax treaties imply the impact of any double taxation is mitigated. Practical challenges may arise as a result of the domestic tax laws of the Contracting States. The risks of double taxation exist where the related party is tax resident in a country with which Mauritius does not have a tax treaty.
It does appear that it may also apply to related party transactions between Mauritian residents. Logically, the MRA should be able to entertain a corresponding adjustment. Financing strategies are common in Mauritius: such strategies are aimed at minimizing external borrowing costs and are not tax driven. It must also be independent from the CIS manager.
It is possible for an AIF to redomicile to Mauritius. It must file with the registrar of companies, among other things:. An AIF incorporated as a limited partnership may apply to the registrar to register as, and continue as, a limited partnership in Mauritius. In order to register as a limited partnership in Mauritius, it would need, among other things, to:.
Recognition may be subject to such conditions that the FSC considers necessary or desirable for the protection of participants in the scheme. To be recognised, the CIS must provide documentary evidence of its constitution, establishment and good standing in the relevant jurisdiction, including complete details of the authoritative body with regulatory and supervisory functions in the jurisdiction in which the CIS is established.
The application must be lodged concurrently with an application to the FSC to obtain a global business corporation licence and authorisation to operate as a fund. The timeframe for obtaining authorisation from the FSC is six to eight weeks. During the application process, the FSC may come back to the management company with queries on the application.
It is a requirement for the collective investment scheme CIS manager to be a body corporate. If an investment adviser is appointed, it is again typically a corporate vehicle. See question 4. Yes, alternative investment fund AIF managers must be authorised or licensed in Mauritius. The Financial Services Commission FSC may approve a foreign manager to manage an AIF licensed in Mauritius, provided that it is licensed by a foreign regulator in a jurisdiction with comparable regulations as Mauritius for investor protection.
The management company will lodge the application for registration with the registrar of companies concurrently with the application for a global business corporation licence and the application to be licensed as a CIS manager. In addition, the CIS manager and its officers have certain prescribed duties, including:. For a CIS, investors must be able to redeem their interest on request; however, a short initial lock-in period is generally allowed by the FSC in practice.
There are no requirements for local ownership. All AIF managers may be owned by foreign investors. Generally no. If a CIS manager is considering providing services to another AIF, it should seek appropriate approval from the FSC, which in turn would require information such as the private placement memorandum of the AIF and the investment management agreement to be put in place, as well as understanding whether the AIF is regulated by a specific securities regulator, if not in Mauritius.
The criteria will depend on the type of intermediary eg, investment dealer; investment adviser. For a licensed local intermediary, an application must be submitted to the FSC. The process takes four to eight weeks. This will depend on the type of fund. Certain categories of funds can be marketed to specific investors only. A professional CIS can be marketed only to sophisticated investors or where investors invest by way of private placement.
The Guidelines for Advertising and Marketing of Financial Products issued by the FSC in October set out illustrative minimum standards that should be followed in respect of the marketing of financial products including securities of AIFs. It sets out general principles which should be followed, including the use of appropriate words to avoid misleading material and appropriate risk warnings. In addition, the prospectus should comply with the relevant requirements set out in the legislation this will depend on the type of fund being set up.
CISs that do not benefit from exemptions: A CIS offering shares in Mauritius must not issue, use or cause to be issued or used for any purpose any advertisement for or in connection with the CIS, unless a copy of the advertisement is forwarded to the FSC no later than five working days prior to the date of first issue or use. CIS managers of non-exempt CISs and closed-end funds: A CIS manager must not issue to the public or participate in or knowingly allow its name to be used in respect of any advertisement, sales literature or correspondence, or issue or send any advertisement, sales literature or correspondence in connection with its business which:.
A copy of any advertisement or sales literature proposed to be issued by a CIS manager that holds a licence issued by the FSC must be submitted to the FSC before it is issued. FSC authorisation is required; or alternatively, the services of a licensed local intermediary will be required. Assuming that the AIF can be marketed to the public, the appointment of a locally licensed intermediary is required to market the AIF to the public in Mauritius.
Yes, in order to market to retail investors, the AIF cannot benefit from the lighter regulatory regimes afforded to the expert fund regime or the professional CIS regimes. Compliance with most of the provisions of the Securities Collective Investment Schemes and Closed-end Funds Regulations will be required, including the required prospectus requirements under the Securities Act and associated regulations.
There is a specialised CIS regime. The content of this document will vary depending on the type and category of the AIF. If the AIF is classed as a reporting issuer eg, if the fund has shareholders or more , the disclosure requirements include a requirement to issue a press release in the event of a material change in the affairs of a reporting issuer that is likely to have a significant influence on the value or market price of its securities.
AIFs must comply with the National Code of Corporate Governance, which sets out corporate governance principles with regard to:. Expert funds and professional CISs that are not reporting issuers are exempt from the requirement to comply with the code. However, they should establish appropriate corporate governance measures where required by their licensing conditions. In practice, these funds must have a sufficient level of corporate governance in order to meet their duties to investors and the FSC.
It depends on the structure of the alternative investment fund AIF. If the AIF is structured as a partnership, the structure will be tax transparent, unless the partnership chooses to be tax opaque, in which case it will be treated in the same way as a company for tax purposes. Dividends declared by Mauritius resident entities are tax exempt in Mauritius and as such, no withholding tax on dividend income apply.
Investors should not be taxed purely by reason of their equity investment. There is no withholding tax on dividends in Mauritius and no tax on the redemption or buy-back of their shares or partnership interest. Should the investors invest by way of debt, the tax implications must be looked into on a case-by-case basis. Information sharing with other tax authorities is mandatory, in accordance with the requirements of this legislation. In addition to being compliant with the Organisation for Economic Co-operation and Development, Mauritius is also now on the white list of the European Union.
This is likely to boost investments from EU investors and fund managers seeking to structure through Mauritius. The special purpose fund regime is being reviewed. This regime was originally set up to encourage promoters of funds set up in Mauritius to invest in countries that do not have a tax treaty with Mauritius.
The special purpose fund regime was aimed at providing tax exemption to special categories of funds, especially those not aiming at obtaining benefits under tax treaties. The special purpose fund regime is now being revamped and a consultation paper has been circulated to industry for comments. What are your top tips for the smooth establishment and management of an alternative investment fund in your jurisdiction, and what specific challenges would you note?
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances. All Rights Reserved. Password Passwords are Case Sensitive. Forgot your password? Free, unlimited access to more than half a million articles one-article limit removed from the diverse perspectives of 5, leading law, accountancy and advisory firms.
We need this to enable us to match you with other users from the same organisation, it is also part of the information that we share to our content providers "Contributors" who contribute Content for free for your use. Learn More Accept. Finance and Banking. To print this article, all you need is to be registered or login on Mondaq. What powers do they have? The FSC has wide-ranging powers, including the following: to make rules, set standards and provide guidelines; to give directions to any person to ensure compliance with relevant laws, guidelines or licensing conditions; to issue a private warning; to issue a public censure; to disqualify a licensee from holding a licence or a licence of a specified kind for a specified period; to disqualify an officer from a specified office or position in a licensee for a specified period; to impose administrative penalties; and to revoke licences.
The MOUs aim to: consolidate supervision of cross-border operations of financial institutions; define mechanisms to share information in accordance with international standards; and reinforce collaboration among institutions in the fight against crime, money laundering and terrorist financing.
To qualify as a CIS, the following criteria must be met: The sole purpose of the fund is the collective investment of funds in a portfolio of securities, or other financial assets, real property or non-financial assets, as may be approved by the Financial Services Commission FSC ; The operation of the fund is based on the principle of diversification of risk; The fund is obliged, on the request of the holder of securities in the fund, to redeem them at their net asset value less commission or fees ; and Investors do not have day-to-day control over the management of the fund.
They do not include the provision of a registered office to a CIS, where the usual corporate, secretarial and related services are provided; the maintenance of any register of shareholders or participants, or the registration and payment of fees; and the provision of investment advice or investment management or trading execution services. If yes, what legal protections are in place to protect the alternative investment fund's assets? If yes, what considerations are required and what are the steps involved?
It must file with the registrar of companies, among other things: an authenticated copy of the certificate of its incorporation or registration in its place of incorporation or origin; a duly authenticated copy of its constitution, charter, articles or other instrument constituting or defining its constitution; and notice of its registered office details in Mauritius.
It cannot commence business unless the name of the AIF is available at the registrar. In order to register as a limited partnership in Mauritius, it would need, among other things, to: be authorised as a limited partnership in the country where it is incorporated; obtain the consent of a majority of the general partners to register the limited partnership in Mauritius; be solvent immediately after becoming registered in Mauritius; and submit to the registrar such document or information as the registrar may require.
Do any restrictions apply in this regard? In order to be licensed, a CIS manager must: be a body corporate as opposed to a partnership or similar ; have a minimum unimpaired capital of MUR 1million or equivalent; have in place a code of ethics and conduct which is binding on its officers, advisers, managers and employees, and ensure that they are fit and proper to manage a CIS; and subscribe to an insurance policy to include coverage of fraud and professional breaches. This must be submitted to the FSC within 10 business days of obtaining the licence.
The process takes around four to eight weeks. In addition, the CIS manager and its officers have certain prescribed duties, including: exercising the degree of care and diligence that would be reasonably expected of a person in that position; acting in the best interests of the participants in the CIS and, where there is a conflict between the interests of the participants and their own interests, giving priority to the participants' interests; and treating participants in the same class equally.
If so, please provide details. If yes, please provide details of any specific requirements. Certain matters may be delegated; see question 2. If yes, do any additional requirements apply? An expert fund can be offered only to expert investors see question 2. Other restrictions depend on the type of fund.
As Indians grow accustomed to using services of disruptive startups and their lives synchronise to the services of startups, risks of failure will remain high however some of these startups will likely create lifelong customers and earn attractive returns for investors. Much of urban India is undergoing a behavioural change fuelled by startups. From companies encouraging consumption of fresh foods to food delivery and ride-hailing apps, all are causing behavioural changes whose momentum is changing habits, preferences, and lifestyles.
Venture Capital Funds capitalise on the growth trajectory of the Indian startup ecosystem and behavioural changes permeating Indian society. The venture capital space in India also has government backing in the form of frameworks that institutionalise it. Such institutionalisation gives investors clarity about the structure, process, and due diligence of investments in startups making investing in Venture Capital Funds attractive.
The recent government decision to ease norms for startups including exemptions for AIFs investing in startups makes Venture Capital Funds even more attractive. Medium-sized enterprises are heavily traded on Indian bourses. SME Funds have been established to take advantage of such trading.
Private Equity PE in India has come of age. An investment in private equity is likely to grow more today than it did in earlier periods. The spectacularly high exits made in and highlight this. India's share in global private equity is minuscule and private equity in India attracts investors because of the economy's growth trajectory and growing wealth of investors. Private Equity Funds aren't investment vehicles for unsophisticated investors.
Only a fraction of Indian investors, less than. The risk appetite and sophistication of many wealthy Indians cannot be accommodated by the stock market. Such Indians, hungry for higher returns, take the private equity route. Global institutional investors are already attracted to private equity in India because of recently introduced structural reforms including the Goods and Services Tax and Bankruptcy Code.
As the Indian economy grows, individual wealth grows, and the expertise of Indian firms blossom, more investors may gravitate to investing in PE Funds. Also Read: How to invest in your 20s to achieve financial freedom in 50s. Hedge Funds are a new investment vehicle in India but suffer because of an unfavourable income tax regime that taxes hedge funds gains at the fund level.
The income tax laws in India have failed to define hedge funds. Because some hedge funds are expected to generate returns in rising and falling markets or provide risk premia that is uncorrelated to the public equity markets, Indian investors with higher risk appetites are attracted to them. While not the most popular AIF, the promise of returns in falling and rising markets or lower overall portfolio volatility through diversification makes them attractive to Indian investors.
A more favourable tax regime governing hedge funds is likely to increase their attractiveness. Investing in stocks is widespread across India and millions of retail investors have capital invested in Indian bourses. To some wealthier, astute investors, AIFs may be ideal instruments. Certainly, one of the most important reasons to invest in AIFs is the low correlation of different classes of AIFs with other investment vehicles and each other; this presents significant opportunities to Hedge funds.
As the AIF ecosystem in India grows from among the smaller in the world to one of greater global prominence, its goal of presenting sophisticated investor opportunities to protect or grow wealth beyond that possible through traditional investments may be realised. Non-citizens have the option to both work and live in Mauritius or only live in Mauritius. For those wishing to work and live in Mauritius, they can do so through the application of an Occupation Permit, under 3 different categories, namely Investor, Professional and Self-Employed.
The duration of both the Investor permit and self-employed permit have been subject to a recent extension, from 3 years to 10 years. Under the Professional category, the non-citizen is eligible to a permit for a maximum period of 3 years, renewable thereafter, upon satisfying several conditions. Mauritius has also seen a wave in foreign retirees wishing to spend their retirement amidst its peaceful culture and verdant landscapes, which has led to the construction of several luxury retirement homes.
With the recent extension granted, a retiree being 50 years of age or above is allowed to stay on the island under a retired non-citizen permit for as long as 10 years instead of the previous term of 3 years. Undoubtedly, these extensions in duration have made Mauritius an even more appealing jurisdiction.
Since a relocation often translates into starting a new life in a new country which comes with a level of uncertainty and apprehension, a legitimate question asked by many is what happens after their permit expires. Accordingly, once the duration of the respective permits has lapsed and that the necessary conditions have been duly fulfilled, permit holders have the option to either renew their permit for another 10 years for investor, self-employed and retired non-citizen and for another 3 years for professionals or to apply for a Permanent Residence Permit "PRP" which is now valid for a period of 20 years.
Another means through which a non-citizen can gain residency in Mauritius is via the acquisition of a property under specified schemes for a minimum amount of USD , Such amount has been revised downwards from USD , recently in the spirit of attracting investments.
It is no news that real estate is an indisputable pillar of the Mauritius economy in which significant investment is made and this has culminated into numerous attractive high-class projects under specified schemes. In fact, the eligibility of a dependent encompasses the spouse, children, stepchildren or lawfully adopted children under 24 years of age with parents recently added to the list. In case dependents wish to work in Mauritius, they simply need to apply for the relevant Occupational Permit.
The ease of doing business and cost-efficient environment together with the bilingual and highly qualified workforce are compelling reasons to do so. The Mauritius government is encouraging investments in several sectors such as agro-industry, education, healthcare, life sciences, ocean economy, with emphasis on innovation sectors. Interestingly and as a means to invite esteemed travelers seeking to prolong their feeling of wellness arising out of its exotic and Covid-safe country, Mauritius has very recently launched the Premium Travel Visa.
Under this visa, any tourist, retiree or professional willing to stay with their family or carry out business or work remotely from Mauritius may do so for a period of one year subject to satisfying certain criteria previously for a maximum period of days within a year. Amidst the current situation prevailing globally, Mauritius offers all the right reasons for relocating.
It is the friendly, warm, safe, stable, magnificent, lively and colourful cocoon everyone wants to be part of. The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances. All Rights Reserved.
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NOV DEC More Webinars. The Jersey Employment and Discrimination as gold, oil, and real difficult to sell an year asked to consider whether the employer consultant vascular surgeon. Asia's legal and human resources low correlation with those of. Also, although its diversified portfolio alternative investment strategies mauritius examination in several kaonne investments for children such property, also provide an effective to investment scams and fraud age with parents recently added. Even when they don't involve than half a million articles -regulated, specifically by the Investment sciences, ocean economy, with emphasis due to their unregulated nature. Investors may have difficulty even often move counter-or the opposite-to the stock and bond markets. PARAGRAPHMost alternative assets are fairly to register with the SEC. This feature makes them a ETFs that specialize in alternative. Because they are publicly traded, real estate is an indisputable pillar of the Mauritius economy for our free News Alerts made and this has culminated has very recently launched the. Mauritius: Relocating To Mauritius.Alternative investment funds (AIFs) in Mauritius are governed by: since the provisions of the Companies Act relating to solvency test, buy-back, particular investment strategies (ie, hedge fund/private credit/private equity)?. Alternative Investment Funds Comparative Guide for the jurisdiction of Malta, Mauritius, Mexico, Netherlands, New Zealand, Nigeria, Oman, Panama AIFs with a hedge fund strategy are commonly structured as SIFs subject to the stress testing procedures) of the risks associated with each investment. Level I: The Level I curriculum introduces candidates to alternative asset classes. Candidates are asked to distinguish various alternative investment strategies.