Variable Capital Company

The Mauritius Variable Capital Companies Act 2022 (“VCC Act”), passed on 12 April 2022 and gazetted on 15 April 2022, allows the setting up of a Variable Capital Company (VCC). It is a new type of investment fund entity which complements the other fund entities in Mauritius. The primary objective of setting a VCC is to operate as a fund. It can either operate as a standalone entity or as an umbrella structure comprising sub-funds. Special Purpose Vehicles (SPVs) can also be set up under the VCC or its sub-funds.

A VCC Fund must comply with all the requirements of the VCC Act 2022, Financial Services Act 2007 (FSA),The Financial Intelligence And Anti-Money Laundering Act 2002 (FIAMLA) as well as any other relevant laws. In addition, a sub-fund of a VCC Fund shall comply with all applicable provisions of the Securities Act, the Securities (Collective Investment Schemes and Closed-end Funds) Regulations 2008, FSC Rules and Guidelines.

Important Factors regarding VCC:

  • An existing Mauritian company can apply for conversion to a VCC
  • A foreign incorporated company can apply for registration by way of continuation as a VCC provided that the foreign jurisdiction allows for outward migration
  • Must have “Variable Capital Company’’ or ‘’VCC” after its name
  • Is required to have to have a constitution that complies with the Companies Act
  • No limit to the number of sub-entities that can be created by a VCC under the VCC Act – subject to approval from the Financial Services Commission
  • Operates either through sub-funds or special purpose vehicles which are licenced by the Financial Services Commission – the VCC fund, its sub-funds and special purpose vehicles shall have the same promoter.
  • Sub-fund/SPV can be ring-fence their assets and liabilities to prevent financial contagion- A VCC may sue or may be sued in respect of a sub-fund/SPV and this will be ring-fenced to only that specific sub-fund/SPV
  • The solvency test requirements that have to be satisfied under the Companies Act 2001 do not apply to a VCC – may pay dividends out of capital
  • Cross-investment is allowed among sub-funds/SPVs
  • The sub-fund/SPV may elect to have separate legal personality from the VCC – if the sub-fund elects to have a separate legal personality, it must be incorporated as a company under the Companies Act and must include “incorporated VCC sub-fund” and for the SPV it will be “incorporated VCC special purpose vehicle”.
  • A VCC Fund can appoint a single CIS Manager, CIS Administrator, Custodian or other service provider for all its sub-funds. However, nothing prevents a subfund from appointing a separate CIS Manager, CIS Administrator, Custodian or other service provider from the VCC Fund or other sub-funds.
Type of Licence/authorisation
VCC Fund
A sub-fund of a VCC Fund, subject to the approval of the Commission, will operate as a Collective Investment Scheme (“CIS”) or a Closed-End Fund (“CEF”) of any category and may elect to have a separate legal personality from that of the VCC Fund.

The licence fees applicable for a VCC Fund are:

Processing fees
Fixed Annual Fees
VCC Fund & 1st SubFund
MUR 45,000(USD 1000)
MUR 135,000 (USD 3000)
2nd sub-fund/SPV
MUR 22,500 (USD 500)
MUR 45,000 (USD 1,000)
3rd sub-fund/SPV
MUR 22,500 (USD 500)
MUR 45,000 (USD 1,000)
5th sub-fund/SPV
MUR 22,500 (USD 500)
MUR 45,000 (USD 1,000)
For each additional sub-fund/SPV
MUR 22,500 (USD 500)
MUR 87,750 (USD 1,950)

LMS can assist in the establishment of a new VCC structure or the re-domiciliation to Mauritius of an existing fund.

Accounting and taxation

1. VCC are required to file non-audited quarterly management accounts and yearly audited financial statements with the FSC. The reports must include:

  • A statement of assets and liabilities, including the NAV
  • The number of shares outstanding
  • The NAV per share
  • Details of the investment portfolio and the movements in the period, disclosed by types of securities and type of market

2. Where a VCC elects to present separate financial statements for each of its sub-funds or SPVs under the VCC Act, each sub-fund or SPV shall be deemed to be an entity separate from the VCC and shall be liable for income tax in respect of its own income

3. Where the VCC opts to present consolidated financial statements, the VCC fund will be required to file a single tax return to the MRA and will be liable for income tax on the aggregated income of its sub-funds and SPVs

LMS can assist with the preparation of the management accounts (yearly and quarterly) for each sub-funds, financial statements and/or consolidated financial statements and preparation of tax returns to meet the statutory deadline.

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