Insight 4 June 2020

The rise of Mauritius as a family office destination

The Mauritius International Financial Centre (“MIFC”) remains focused in continuously upgrading its regulatory infrastructure to provide a safe, efficient and world-class experience to the global users of the MIFC.

Ever since the enactment of the Trust Legislation nearly two decades ago and the Foundation Act in 2012, the MIFC has been ceaselessly enhancing its offerings to the global High Net Worth/ Ultra High Net Worth (HNW / UHNW) community.

The innovative private wealth offerings of the MIFC through a combination of legislative flexibility and fiscal incentives have allowed a successful integration of the HNW / UHNW community into the economy through real estate schemes, work/ retire and live schemes, investment schemes as well as business facilitation incentives.

The MIFC has continued its innovation streak in this niche by launching in 2016 the family office licence through the Overseas Family Office (Single) (“SFO”) Licence and the Overseas Family Office (Multiple) (“MFO”) Licence. The Financial Services Commission (“FSC”), in line with its objective to enhance the reputation of Mauritius as an International Financial Centre and ensure sound conduct of business in the financial service sector, has published the Financial Services (Family Office) Rules 2020 (effective as from 7 of March 2020) to regulate the activity of family offices in the MIFC.

We are pleased to set out the salient features of the family office legislations and incentives in Mauritius:
  • Licenced by the FSC, an SFO can manage the investment, assets and estate of a single family and an MFO that of multiple families not necessarily connected to one another.
  • The group family members (or connected family members) of an individual allowed to be serviced by the SFO and MFO has been widely defined and can be suitable for extended families/ extended family businesses very common in certain parts of the world.
  • The family office, whether it is an MFO or SFO, may be wholly owned by the family and exclusively controlled by family members/ entities.
  • The category of family office services, which a holder of a SFO or MFO may provide, is wide ranging and include advising on wealth planning and protection; administration and management of investments, assets and/ or estate(s); accounting, philanthropic, reporting and concierge services, providing training and development as well as taxation, governance, compliance and risk services.
  • The value of the assets and/ or investments of each family under SFO or MFO management must be more than USD 5 million. The threshold proposed under the MIFC’s regulations remains low compared to global standards. This opens the possibility to emerging markets’ HNW/ UHNW to have a safe and regulated family office in a recognised international financial centre.
  • The family office licence is entitled to a five-year tax holidays based on minimal employment and expenditure requirements as follows:
    • In the case of an SFO, the family must employ at least one professional and have assets under management of at least USD5 million.
    • In the case of MFO, the family must employ at least one professional and have assets under management of at least USD5 million per family.
  • The low threshold and tax holiday as well as the competitiveness of doing business in Mauritius enlarges the accessibility of the family office licence to any professional/ family wishing to set up a family office.
  • The licence fees payable to the FSC are as follows:

Processing fee (USD)

Fixed Annual fee (USD)

Single family office

2,500

5,000

Multiple family office

5,000

10,000

  • The SFO and MFO should appoint a senior management officer and a Money Laundering Reporting Officer along with an alternate.
  • The SFO and MFO shall always maintain a fully paid minimum stated unimpaired capital of at least USD35,000 and USD70,000 respectively.
  • The SFO and MFO are required to adopt integrated risk management approach as well procure a Professional Indemnity Cover for the purpose of covering frauds and breaches.

Let’s talk...

How can Sanne help?

Sanne can assist in the structuring and operations of your SFO and MFO by offering you:

  • Support in setting up and licencing
  • Support in drafting the constitutive documents, risk management procedures, disaster recovery plans and the AML-CFT framework and subsequent monitoring thereof
  • Bookkeeping, preparation of financial statements as well as bespoke financial reporting
  • Full administration and support services
  • Monitoring compliance with domestic legislations
  • Providing tax compliance services
  • Setting up of wealth protection vehicles such as Trust and Foundations

We would be delighted to speak with you to discuss how Sanne can assist.

Other insights from Peter Nagle

Insight 4 February 2020
Mauritius Regulatory Update - AML/CFT Handbook issued by the Financial Services Commission
Insight 15 April 2020
Mauritius funds eligible for Category-I status
Insight 13 July 2020
FinTech in Mauritius