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New FSC regulations reinforces the position of Mauritius as a jurisdiction of substance

December 2013 - Finance. Legal Developments by BLC Robert & Associates.

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The introduction of new substance requirements for Global Business Companies operating from Mauritius which will become effective on 1st January 2015 are part and parcel of a strategy to further boost financial services and increase its input to the country's GDP.

In determining whether a company should be granted with a GBC 1 license, the Financial Services Commission (FSC) would consider whether the company will be managed and controlled in Mauritius. In doing so, the FSC will consider whether the GBC1 Company will have at least 2 directors, resident in Mauritius, of sufficient caliber to exercise independence of mind and judgment; will maintain at all times its principal bank account in Mauritius; will keep and maintain, at all times, its accounting records at its registered office in Mauritius; will prepare or proposes to prepare its statutory financial statements and causes or proposes to have such financial statements to be audited in Mauritius and will provide for meetings of directors to include at least 2 directors from Mauritius.  

Conscious that the global regulatory environment is changing quickly, the Mauritian regulator has been pretty quick to review its approach to regulation.  In addition to existing requirements for management and control, the regulator wants to see additional substance by way of one of the following requirements, namely, having office premises in Mauritius; or employment of staff; or choosing Mauritius as the seat for arbitration of disputes; or holding assets which is at least worth USD 100000 in Mauritius; or listing on a Mauritius Stock Exchange; or incurring reasonable expenditures in Mauritius.

In addition to the substance requirements mentioned above, the FSC has also issued special guidelines for professional directors, especially those sitting on multiple boards in the global business sphere.