Mauritian regulator issues rules for family offices
The Financial Services Commission of Mauritius has issued its regulatory standards to govern Overseas Family Offices.
Namely, the Financial Services (Family Office) Rules 2020- here
The Government amended the Financial Services Act 2007 in 2016 to introduce (a) the Overseas Family Office (Single) Licence; and (b) the Overseas Family Office (Multiple) Licence.
Pursuant to the second schedule of the Income Tax Act, single and multiple family offices will be eligible for tax holidays if they meet the ‘substance’ requirements laid out in a circular letter named CL1-231216, issued by the FSC on 23 December 2016.
- ‘Economic substance’ is a label with no clearly defined meaning but it does, in the eyes of the Organisation for Economic Co-operation and development, rule out the use of companies in states with desirable tax treaties that are often qualified as ‘letterboxes,’ shell companies or conduits to gain benefits from tax treaties because these companies exist on paper but have hardly any substance in the relevant jurisdiction in reality.
- The more a company conducts actual economic activity in an offshore jurisdiction, the more legitimate it is in the OECD’s eyes for that company to be tax-resident there
A Single Family Office is a company licensed by the FSC under section 14 Financial Services Act, to manage the passive investments, assets and estate of a single family. It ought not to engage in any financial activity that requires a licence under the relevant Acts. The FSC may, on a case-by-case basis, grant it a relevant financial services licence.
A Multiple Family Office is a company also licensed under s14 to manage the investments, assets and estates of various families which are not necessarily connected with one another. The same terms apply as above.
A family is constituted as one individual or a group of individuals, all of whom are the bloodline descendants of a common ancestor or his/her spouses (including widows and widowers, whether or not remarried); subject to such other limitations or conditions otherwise agreed or determined by the FSC.
The asset/estate of each family to be managed by a family office should be at least US$5 million.
A single or multiple family office ought to be structured as a company under the Companies Act and ought, at all times, to have a licensed management company as agent, which is to be responsible for:
- applying to the FSC for a licence;
- sending the regulator any such document as may be required under the Act or the relevant Acts;
- sending the regulator any other document that may be required as part of its annual statement of compliance;
- receiving or forwarding any communication, notice or summons from, or to, the regulator;
- doing things to combat money laundering and the financing of terrorism and the like;
- keeping the records of the family office in question;
- acting as its company secretary; and
- such other services as the regulator might require.
Every family office, incidentally, is required to submit an annual statement of compliance on a pre-set form not later than six months after the financial year’s end.
Minimum capital requirement and PII cover
The minimum stated unimpaired capital should be at least US$50,000 for a single family office and US$100,000 for a multi family office or any higher amount that the FSC might like.
Every family office ought to satisfy the regulator that it has made the necessary arrangements for professional indemnity insurance cover in relation to the activities governed by its licence. If a family office hires an external service provider or professionals, they themselves ought to satisfy the regulator that they have done the same.
Sometimes a family office carries out some activities that are not covered by its licence, in which case it must comply with all relevant laws and regulatory rules.
The FSC intends to review the fees that these entities pay as follows:
- Single family office: processing fee US$2,500 and annual fee US$5,000.
- Multi-family office: processing fee US$5,000 and annual fee US$10,000
Meet the team of industry experts behind ComsureFind out more
Keep up to date with the very latest news from ComsureFind out more
View our latest imagery from our news and workFind out more
Think we can help you and your business? Chat to us todayGet In Touch
As well as owning and publishing Comsure's copyrighted works, Comsure wishes to use the copyright-protected works of others. To do so, Comsure is applying for exemptions in the UK copyright law. There are certain very specific situations where Comsure is permitted to do so without seeking permission from the owner. These exemptions are in the copyright sections of the Copyright, Designs and Patents Act 1988 (as amended)[www.gov.UK/government/publications/copyright-acts-and-related-laws]. Many situations allow for Comsure to apply for exemptions. These include 1] Non-commercial research and private study, 2] Criticism, review and reporting of current events, 3] the copying of works in any medium as long as the use is to illustrate a point. 4] no posting is for commercial purposes [payment]. (for a full list of exemptions, please read here www.gov.uk/guidance/exceptions-to-copyright]. Concerning the exceptions, Comsure will acknowledge the work of the source author by providing a link to the source material. Comsure claims no ownership of non-Comsure content. The non-Comsure articles posted on the Comsure website are deemed important, relevant, and newsworthy to a Comsure audience (e.g. regulated financial services and professional firms [DNFSBs]). Comsure does not wish to take any credit for the publication, and the publication can be read in full in its original form if you click the articles link that always accompanies the news item. Also, Comsure does not seek any payment for highlighting these important articles. If you want any article removed, Comsure will automatically do so on a reasonable request if you email email@example.com.