Mauritius has earned a reputation as one of the most attractive jurisdictions wherein to establish an offshore fund. The country ranks amongst the most flexible and advantageous regional fund domiciles due in no small part to the wide gamut of funds such as the Expert Fund that may be established under the legal and regulatory system of Mauritius.
The Expert Fund regime was introduced in Mauritius with the promulgation of the Securities (Collective Investment Schemes and Closed-end Funds) Regulations 2008. These Regulations, implemented a framework for the establishment and operation of collective investment schemes including Global Schemes and Expert Funds, built upon the regime put in place by the Securities Act 2005.
The Securities (Collective Investment Schemes and Closed-end Funds) Regulations 2008 define an “expert investor” as either an investor who makes an initial investment, for his own account, of no less than US$ 100 000; or a sophisticated investor as defined in the Securities Act 2005 or any similarly defined investor in any other securities legislation (e.g. an accredited investor under US federal securities laws)
The offering document or any other similar document of an expert fund shall:
(a) contain a statement to the effect that the expert fund shall be available only to expert investors,
(b) contain in a prominent position, the definition of an expert investor; and
(c) shall have the following statements in a prominent position -
"Investors in [name of the expert fund] are not protected by any statutory compensation arrangements in Mauritius in the event of the fund's failure."
"The Mauritius Financial Services Commission does not vouch for the financial soundness of the fund or for the correctness of any statements made or opinions expressed with regard to it."
High regulatory standards – combined with the flexibility of a small jurisdiction and the availability of highly-skilled professionals along with quality infrastructure at reasonable cost – have made Mauritius an increasingly attractive funds location in the region. Another attraction has been the fact that Mauritius has international accountancy firms such as Deloitte, Ernst & Young, KPMG and PwC to provide audit and other ancillary services; leading international banks such as Bayclays, HSBC and Standard Chartered to provide custody services; and multi-jurisdictional offshore law firms such as Appleby, Bedell Cristin and Conyers Dill & Pearman to provide legal services.
An Expert Fund must be administered by a Mauritius-based CIS Administrator, its directors are required to be pre-approved by the Financial Services Commission, and it must have a custodian. Expert funds must also prepare and file annual audited accounts.
An Expert Fund may also be structured as a Protected Cell Company under the Protected Cell Companies Act 1999 to segregate assets and liabilities in different cells in an umbrella structure with a number of sub-funds.
The Securities Act 2005, and the Securities (Collective Investment Schemes and Closed-end Funds) Regulations 2008 have provided continued impetus to the funds industry and positioned Mauritius as the regional domicile of choice for regulated funds.
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