The New Generation fund administration platform – this is perhaps how we should now refer to Mauritius. As at February 28, 2007 more than US$36 billion were invested by Mauritius domiciled investment funds, into global equities.

While the Cayman Islands has been the instinctive choice for domiciling offshore funds, major US institutional investors and leading fund managers have realized that international pooling of funds for cross border investments can also be structured in Mauritius. Indeed numerous regional funds investing into various parts of Asia, Africa and South America are located here.

Funds established in Mauritius are commonly structured in various ways, including:

  1. One tiered structure;
  2. Master feeder structure;
  3. Side by Side feeders with Master Fund in Mauritius;
  4. Main fund and parallel funds with underlying special purpose vehicles; and
  5. Three tiered structure where a domestic pass-through VCF is set up in India.

Most Mauritius funds are centrally controlled and managed and effectively administered in Mauritius.

Mauritius has all the benefits that are offered by traditional and comparable jurisdictions.

These include (a) flexible and appropriate legislation, (b) exchange liberalization, (c) free repatriation of profits and capital, (d) no withholding taxes, (e) no capital gains and inheritance taxes, (f) no capital duty on issued capital, (g) confidentiality and banking secrecy, and (h) well regulated businesses.

Mauritius has additional comparative advantages that traditional jurisdictions generally do not have. These include

1. Cost of professional services
Mauritius is a relatively new international financial services center, but traditionally has a high literacy rate, of nearly 90 %. The quality of local skills is comparable to the best competing jurisdictions like Guernsey, Jersey, Cayman Islands, etc… which depend heavily on expatriates. The country having been a British colony in the past, the local professional labor force has been mainly comprised of UK qualified chartered accountants, chartered secretaries, and lawyers. Most barristers have been called to the bar both in the U.K. and in Mauritius. In addition, the University of Mauritius, which has been in existence for some forty years, produces about 1,500 graduates of a high quality every year.

2. A center of substance
Mauritius is an outward-looking economy geared towards the world environment. It is well known as an up market tourist destination, and a producer of quality textile products exported to Europe and the United States. There is a long tradition in banking (first bank established in 1838) and stock exchange transactions (the Chambre des Courtiers dating back to the 1850’s). The economy opened to foreign investment over a hundred years ago when multinationals first started operations on the island. The Mauritius Chamber of Commerce & Industry was set up in the 1850’s and the first Companies Act dates back to 1913. The financial services sector now accounts for 11% of the country’s GDP. Mauritius is thus a jurisdiction of substance.

3. Tax efficiency
Mauritius has in place a network of 32 treaties. This strongly distinguishes Mauritius from the traditional offshore jurisdictions that cannot mitigate any tax implications in the ultimate country of investment.

A list of countries with which Mauritius has a treaty can be downloaded from

Whilst investment funds would generally aim to achieve capital gains, they often earn significant amount of ordinary income in the form of dividend and interest. Such income earned by a Mauritius tax resident Global investment entity, net of all operating expenses of the entity, is taxed in Mauritius at an effective rate between Nil and 3% depending on the availability of foreign tax credits on such income.

4. Quality of service and response time
Most investors and professionals in the US who have worked with Mauritius service providers have been pleased with the quality and convenience of this jurisdiction.

Fund administrators and trust companies in Mauritius typically employ a multi-disciplinary team of professionals. It is usual for the top service providers to have in house accountants, chartered secretaries and administrators as well as lawyers, and the level of competence is no less than what would be available in other comparable financial centers of the world.

5. Time Zone
The island is 8 to 9 hours ahead of New York and 11 to 12 hours ahead of San Francisco. It is normal for Mauritius service providers to participate in teleconferences early in the morning with the Far East, handle work flow from Europe late morning, and interact with the United States in the evening, or early next morning Mauritius time.

6. Another approach to regulation
It is common belief that offshore jurisdictions are lightly regulated. Most offshore entities are not licensed but simply registered. Even multi-billion dollar funds are often not licensed in the main traditional jurisdictions. The Mauritius Financial Services Commission ("FSC") has taken a different approach. Every Global investment vehicle, be it a special purpose vehicle or an investment fund, is properly licensed and hence has to abide by a set of licensing conditions. The FSC vets the promoter of every single investment fund before licensing it. Mauritius also applies Customer Due Diligence procedures in line with FATF recommendations.


It is fair to say that Mauritius is not a tax haven in the accepted (and sometimes pejorative) sense of the word. Rather it is a tax-efficient jurisdiction, with a wide range of high value services provided locally.

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.