Setting Up A Mauritius Variable Capital Company (VCC)

Setting up a VCC in Mauritius involves meeting some essential requirements as outlined in the Variable Capital Companies Act 2022 (VCC Act):

• A minimum of two directors is required, who can either be individuals or corporate bodies.
• At least one director should reside in Mauritius.
• Every VCC shall have a company secretary appointed within six months of incorporation.
• No minimum share capital requirement: the flexible share capital structure allows the VCC shares to be created upon investments and implies that the capital of the VCC shall be equal to its net assets.

Regulatory framework for VCC in Mauritius

The establishment of a Mauritius VCC is governed by the VCC Act, which serves as the legal framework for incorporating, converting, or re-domiciling funds as VCCs. This serves as a supplement to the current structures employed by asset and wealth managers, such as trusts structures, partnerships, and corporations.

Tax considerations for this corporate structure in Mauritius

Being a legal corporate structure, a VCC has to comply with the same statutory requirements as a company. It is therefore important to understand the tax implications associated with this type of entity under the Income Tax Act:

• VCCs enjoy favourable tax treatment on their income derived from foreign sources.
• Dividends paid by a VCC to non-resident shareholders are exempt from withholding tax.
• Capital gains realised by a VCC on the sale of its shares or securities are not subject to any taxation

Variable Capital Companies in Mauritius are exempt from taxes on dividends, withholding tax and capital gains tax earned through their investments. They are also eligible to claim the partial exemption of 80% on certain specific incomes and avail the benefits of the country’s network of Double Taxation Avoidance Agreements (DTAA).

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