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On 6 March 2021, the Mauritius Financial Services Commission (FSC) released the Financial Services (Special Purpose Fund) Rules 2021. The Financial Services (Special Purpose Fund) Rules 2021 revokes the Financial Services (Special Purpose Fund) Rules 2013 and sets out new criteria for Mauritius’s Special Purpose Fund regime.

The SPF Rules 2013

By the time of the introduction of the Financial Services (Special Purpose Fund) Rules 2013, Mauritius had already attracted many treaty-based funds. However, there were a number of countries that did not have double taxation avoidance agreements with Mauritius. Therefore, in the absence of an appropriate framework, certain promoters had been using other jurisdictions as a platform for investment funds. The introduction of the Special Purpose Fund (SPF) regime aimed at attracting those promoters.

Under the 2013 rules, the FSC may only approve a Collective Investment Scheme (CIS) or a Closed-end Fund (CEF) as a SPF if the CIS/CEF would:

  • conduct investment solely in countries that do not have a tax arrangement with Mauritius;
  • invest mainly in securities whose returns will be exempted from taxation; or
  • have all its investors as pension schemes or other persons entitled to tax exemption.

As per Rule 3(2) of the SPF Rules 2013, a CIS/CEF holding a Global Business Licence was not entitled to be approved as a SPF.

Under the new SPF Rules 2021, the above criteria have been removed and any CIS/CEF may apply for an authorisation as a SPF, subject to any conditions as may be imposed by the FSC and the FSC Rules.

Obligations of SPFs

The Financial Services (Special Purpose Fund) Rules 2021 detail several obligations on the part of SPFs:

  • Offer of shares: The SPF is required to offer its shares solely by way of private placements and to investors having competency, significant experience and knowledge of fund investment. Furthermore, the maximum number of investors allowed is 50, with the minimum subscription per investor being USD 100,000.
  • Management and administration: The SPF shall at all times be managed by a Collective Investment Scheme (CIS) manager and administered by a CIS administrator. Under the Securities Act 2005, no person is allowed to act as CIS manager for a CIS unless that person holds a CIS manager licence. And no person may provide administration services to a CIS unless the CIS manager or the CIS seeks the prior approval of the FSC.
  • Core income generating activities in Mauritius: The special purpose fund, the CIS manager and the CIS administrator are required to carry out their relevant core income generating activities in, or from, Mauritius. An adequate number of suitably qualified persons would need to be employed, directly or indirectly, to conduct such core income generating activities. Furthermore, the SPF would need to incur a minimum expenditure proportionate to the level of such activities.
  • Filing of financial statements: The SPF is required to file with the FSC every year audited financial statements prepared in accordance with International Financial Reporting Standards.

Tax exempt entity

Under the Mauritius Income Tax Act 1995, a Special Purpose Fund established under the Financial Services Act is a tax-exempt entity. Furthermore, all interest, rents, royalties, compensations, and other amounts paid by the SPF to non-residents are exempt from Mauritius income tax. There is no capital gains tax in Mauritius.


The Financial Services (Special Purpose Fund) Rules 2021 provides more flexibility for Special Purpose Funds to be structured in Mauritius under such terms and conditions as may be approved by the Mauritius Financial Services Commission.

Special Purpose Funds remain tax-exempt vehicles under Mauritius income tax law, and any income or capital gain from the fund are distributable free of Mauritian tax to non-residents.

The Special Purpose Fund would have economic substance in Mauritius and would be managed and administered by persons duly approved by the Financial Services Commission.

The improvements made to Mauritius’s SPF regime are a welcome initiative. By enabling the Mauritius investment fund industry to closely meet the needs of international fund promoters, the new SPF regime enhances the positioning of Mauritius as an innovative and competitive jurisdiction for cross-border investments.

Fred Yeung Sik Yuen
11 May 2021

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