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| Legal entities |
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| Investment funds - Under the Collective Investment Scheme (CIS) and Closed -end Funds (http://www.gov.mu/portal/sites/ncb/fsc/index.html)
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| The aim of such 'Investment Companies' comprises investing funds, mainly securities, to achieve portfolio diversification, hence risk-spreading, with the beneficiaries being the shareholders of these funds.
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| Governing Legislation
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The Companies Act 2001 |
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The Financial Services Act 2007 |
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The Securities Act 2005 |
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| Registration |
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| To qualify under the CIS, companies need to hold GBC1 License as directed by the Financial Services Act 2007. Registration approval is subjected to satisfaction of criteria set by the Financial Services Commission (see link above), prior to incorporation.
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| Legal forms |
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A quotable close ended company with fixed share capital. Shares in such a company are non-redeemable, but tradeable on the stock market. Such companies may be given limited life, with assets allocated to investors on winding up.
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An open ended company with variable and redeemable share capital. Redemption timing may be preset by the articles of association.
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| Umbrella funds are possible under each or the above categories to enhance diversification and portfolio risk reduction. Each sub-fund is a separate legal entity, but with inter-changeable investments. Sub funds may also be established abroad.
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| Audit and administration |
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| Investment funds must have a local auditor and a local administrator of funds, with requirements attached. However foreign assistance may be sought as far as asset management and decision-making is concerned.
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| Taxation |
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| Investment funds are taxable at 15%, subject to foreign tax credit, hence effectively 3%. DTAs are applicable with permission from the Commissioner of Income Tax.
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| Custodian |
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| GBC1 companies must entrust custody of their assets to an approved organisation, usually a banking institution.
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| Reporting |
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| Half-yearly unaudited reports and an audited annual report, drafted under IFRS and other international GAAP, relating to:
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assets and liabilities, with the net asset value
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Shares status, including outstanding
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Net asset value per share
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Movements and details of the portfolio
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| Fees payable to the FSC: |
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| GBC1 Licence |
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Processing Fee : US$ 500
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Annual Licence Fee : US$ 1500
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| CIS (Single fund) / Closed end (single fund)
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A Processing Fee : US$ 1000 |
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Annual Licence Fee : US$ 2500 |
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| All fees are payable in advance.
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