Introduction
The Mastercard Foundation study on Africa as a jurisdiction for
domiciling investment vehicles, analysed 13 African countries and
found that 60% of Africa-focused investment vehicles are domiciled
mainly in Luxembourg, Dublin, and Delaware. This limits capital for
African businesses, particularly micro, small, and medium
enterprises, which face a USD940 billion funding gap despite
generating 80% of formal jobs on the continent. The study also
highlighted the need for more African-domiciled investment
vehicles, urging stakeholders to increase efforts to diversify and
encourage local investment vehicles. This would attract
international capital, catalyse local capital mobilisation, and
drive growth in Africa’s investment ecosystem, promoting
economic growth and dignified work for the continent’s youth,
who make up 70% of the population.
The report also outlines a path to increase the domiciliation of
investment funds in Africa. By examining insights gathered from the
drivers and participants of domiciliation decisions –
including fund managers, regulators and other ecosystem enablers,
key areas were identified on how to enhance Africa’s readiness.
These areas include emerging trends, growth drivers, key sectors
and the size of funds in Africa’s investment landscape.
According to the report, Africa’s potential as a
domiciliation hub depends on improvements in regulatory frameworks,
operational efficiency and domestic capital mobilisation.
Furthermore, there is an urgent need for African jurisdictions to
enhance their regulatory environments, oversight and enforcement to
attract more investment. Of the 13 African countries studied,
Mauritius stands out as a leader in the drive for increased
domiciliation. The research below delves deeper into the investment
landscape of Mauritius.
Strategically located in the Indian Ocean, Mauritius has
established itself as a leading jurisdiction for investment fund
structuring, leveraging its position as a gateway to Africa. Its
robust legal and regulatory framework, business-friendly
environment, and commitment to international best practices have
solidified its reputation as a trusted and competitive financial
centre.
Recent developments continue to shape Mauritius’ investment
fund landscape. With a well-established legal and tax framework, it
stands as one of Africa’s top-regulated financial centres,
making it an attractive hub for fund domiciliation. By refining its
regulatory environment and aligning with global best practices,
Mauritius aims to strengthen its position as a preferred domicile
for Africa-focused investment vehicles, reinforcing its role as a
gateway to Africa.
Mauritius has also advanced in the Global Financial Centers
Index (GFCI 37), rising to 58th globally from 60th and securing 4th
place in the Middle East and Africa. The country has made
significant strides in fintech, climbing over 20 spots to 53rd
worldwide and 1st in Africa, highlighting its growing status in
digital finance. Furthermore, it is recognised as one of the 15
financial centres poised to gain importance in the next few years,
reinforcing its trajectory as a financial powerhouse.
As Mauritius continues to refine its value proposition, fund
managers and investors alike are closely monitoring the evolving
legal and regulatory trends. Against this backdrop, this article
explores the latest trends and regulatory developments shaping the
investment funds ecosystem in Mauritius. From licensing efficiency
reforms to the strengthening of environmental, social, and
governance (ESG) fund regulations, these initiatives highlight the
jurisdiction’s ongoing commitment to maintaining its leadership
as a sophisticated and resilient financial centre.
Mauritius Strengthens Its Financial Services Sector
Through Regulatory Reforms and Market Enhancements
Mauritius has implemented significant reforms to enhance the
efficiency and appeal of its financial services sector,
particularly regarding the licensing processes and the
modernisation of its funds regime.
Policy and governance continuity to ensure market
stability
While Mauritius has maintained consistent financial regulation,
adjustments to enhance competitiveness, streamline fund
structuring, and reinforce compliance may be expected. As of
February 2025, after the change of administration following the
November 2024 general elections, the country is ranked as having a
stable political environment, due to its multi-party democracy,
strong policy continuity, and peaceful international relations.
Stakeholders are closely monitoring the new administration’s
approach to key areas like financial services modernisation and tax
policies.
Streamlining licensing processes for investment
funds
To expedite the licensing process for financial activities, the
Financial Services Commission (FSC) introduced a fast-track
mechanism through the Financial Services (Consolidated Licensing
and Fees) (Amendment) Rules 2024, which came into force on 1 July
2024. These amendments aim to reduce bureaucratic delays and,
consequently, turnaround times for investor queries and licence
applications by implementing new processes and establishing fixed
timeframes for processing different types of licences. Furthermore,
applications nearing the end of their designated timeframe are now
escalated to a special fast-track sub-committee for expedited
processing.
Modernisation of the funds regime and
fintech
One key reform in the funds regime, was the revision of the
regulatory framework for special purpose funds (SPFs). The 2024
reforms expanded the eligibility criteria for collective investment
schemes (CISs) and closed-end funds (CEFs) seeking SPF status,
offering more flexibility for fund promoters.
In addition to its status as an International Finance Centre
(IFC), Mauritius has made significant progress in fintech, ranking
53rd in the GFCI 37 with a fintech score of 668 – a jump of
21 places and 34 points from the previous ranking. This progress is
attributed to factors such as access to finance, an
innovation-friendly ecosystem, ICT infrastructure, demand, and
skilled talent. Mauritius’ commitment to fintech is evident in
its strengthened regulatory framework, business facilitation, and
investment in financial and technological infrastructure. The
country has also diversified its IFC offerings, introducing
innovative products like the variable capital company (VCC) and
virtual asset and initial token offerings (VAITOS) licences to
attract fintech investors.
Introduction of post-licensing
fees
The Finance (Miscellaneous Provisions) Bill 2024, the object of
which aims to implement measures announced in the Budget Speech
2024-2025, introduces provisions for post-licensing fees applicable
to regulatory processes that occur after obtaining an FSC licence.
These fees are now required for applications to appoint new
management companies or registered agents. Additionally,
post-licensing processes such as the appointment of officers,
directors, auditors, actuaries, new controllers, and beneficial
owners are also subject to these fees.
IFRS 17: exceptional extension of filing
deadlines
In response to the challenges arising from the implementation of
International Financial Reporting Standards (IFRS 17) (which
replaces IFRS 4 and sets out principles for the recognition,
measurement, presentation, and disclosure of insurance contracts
within the scope of IFRS 17), the FSC has granted an exceptional
extension of filing deadlines for regulated entities. This
regulatory relief measure acknowledges the significant impact of
IFRS 17 on financial reporting obligations, providing insurers and
other affected entities with additional time to comply with the new
accounting framework.
The extension applies to financial years starting between 1
January 2023 and 31 December 2023 and covers various reporting
requirements. The revised deadlines are as follows:
- audited financial statements and annual reports –
extended from three to six months; - actuarial investigation reports – extended from three to
six months; - auditor’s certificate and statutory returns –
extended from three to nine months; - risk management framework documents, auditor’s report and
actuary’s report – extended from six to 11 months;
and - quarterly/interim financial statements – specific
deadlines now apply.
Failure to meet the extended deadlines will result in
administrative penalties under the Financial Services
(Administrative Penalties) Rules 2013. However, the FSC encourages
entities to adhere to the standard statutory deadlines whenever
possible, to maintain transparency and meet stakeholders’
expectations.
Enhanced regulatory oversight
The FSC continues to strengthen its regulatory framework to
bolster the integrity of the Mauritius financial centre. This
includes the publication of updated FSC Rules and Guidelines,
ensuring a fair, efficient, and transparent financial market.
Additionally, the regulator introduced new enforcement mechanisms,
enabling past cases of non-compliance to be referred to an
enforcement committee for further scrutiny.
Tax exemption on virtual assets and virtual
tokens
The Finance (Miscellaneous Provisions) Act 2024 has amended the
definition of “securities” to include virtual assets and
virtual tokens. As a result, any trading profits or gains on
virtual assets and virtual tokens are exempt from income tax
starting 1 July 2024.
Mauritius Strengthens ESG Fund Framework and Corporate
Climate Initiatives
As global interest in ESG investing surges, Mauritius is
positioning itself as a forward-thinking financial hub with the
recent issuance of the Disclosure and Reporting Guidelines for ESG
Funds by the FSC. Effective from March 2025, these guidelines aim
to enhance transparency, combat greenwashing, and align local
standards with international best practices – a timely move
as Africa’s ESG landscape gains momentum.
The African and Mauritian ESG
context
Africa’s ESG market is growing rapidly, driven by demand for
sustainable infrastructure, climate resilience, and social impact
investments. Mauritius, with its strong financial services sector
and commitment to the United Nations Sustainable Development Goals
(UNSDGs), is well-positioned to connect global capital with African
ESG opportunities. The country has seen a rise in ESG-labelled
funds, especially those focused on renewable energy, gender equity,
and sustainable agriculture.
However, the lack of standardised disclosure frameworks raises
concerns about “greenwashing”, where funds overstate
their ESG credentials. The FSC’s guidelines address this by
introducing strict reporting requirements and third-party
certifications, in line with recommendations from the International
Organization of Securities Commissions (IOSCO).
Key highlights of the FSC
guidelines
The newly established FSC guidelines introduce a multi-layered
regulatory framework designed to reinforce investor confidence and
ensure that funds marketed as ESG-compliant meet rigorous
standards.
A key pillar of these guidelines is the introduction of a strict
eligibility criteria for ESG funds. Only investment schemes that
allocate at least two-thirds of their net asset value to assets
genuinely aligned with ESG principles can claim ESG status. This
threshold ensures that ESG considerations are central to investment
decision-making, rather than merely an ancillary feature. The
guidelines also explicitly exclude funds that rely solely on
negative screening or those that integrate ESG factors merely as a
secondary consideration without a concrete and measurable
commitment to ESG principles.
To enhance transparency and accountability, the guidelines
establish robust disclosure requirements. ESG funds must provide
comprehensive details in their offering documents, clearly defining
their ESG objectives, the methodologies used to assess and achieve
these objectives, and the key performance metrics they employ
– such as carbon footprint, gender diversity indicators, or
governance structures. Funds are also required to specify the
benchmarks they use, whether tracking an ESG-focused index or
measuring their ESG impact against a designated sustainability
reference point.
Annual sustainability reporting is another cornerstone of the
framework. ESG funds must disclose the extent to which their
investment objectives have been met, providing investors with a
comparative analysis of performance across previous periods. This
report must include the actual proportion of the fund’s
investments that align with its stated ESG goals, an evaluation of
any deviations from these goals, and an explanation of corrective
measures taken to ensure compliance. Moreover, funds must outline
their engagement with stakeholders, detailing initiatives such as
proxy voting policies, corporate engagement strategies, and
measures undertaken to drive sustainable impact.
The FSC requires ESG funds to undergo third-party certification
from qualified entities, such as registered auditors, credit rating
agencies, or recognised sustainability certifiers. This applies to
both new ESG fund applications and existing funds transitioning to
ESG, which must obtain certification by August 2025.
Additionally, the FSC will maintain a public register of all ESG
funds, promoting transparency and allowing investors to verify ESG
claims and monitor compliance. Funds that fail to meet ESG criteria
may be removed from the register, with the FSC taking regulatory
action to uphold the credibility of Mauritius’ ESG fund
ecosystem.
Implications for investors and fund
managers
For fund managers, the guidelines require robust internal ESG
due diligence processes and may necessitate the restructuring of
portfolios. Investors, meanwhile, gain clearer insights into a
fund’s alignment with sustainability goals – a critical
factor as institutional allocators increasingly prioritise ESG
compliance.
The FSC’s proactive stance mirrors global trends but is
particularly significant for Africa, where ESG frameworks remain
fragmented. By adopting IOSCO-aligned standards, Mauritius not only
enhances its reputation as a transparent jurisdiction but also sets
a benchmark for other African financial centres.
Corporate climate responsibility levy and
sustainability initiatives
Mauritius has introduced a Corporate Climate Responsibility Levy
in the 2024/2025 National Budget. Corporations, including
partnerships, with an annual turnover exceeding MUR50 million must
contribute 2% of their taxable profits to the Climate and
Sustainability Fund, starting from the financial year ending on or
after 1 January 2024. The levy will finance national projects
focused on environmental protection, ecosystem restoration, and
climate change mitigation.
The government has also allocated approximately MUR300 billion
towards climate change adaptation and mitigation projects,
highlighting the need for proactive ESG engagement across
industries.
Mauritius is also promoting cross-sector collaboration in
sustainability efforts. In partnership with the University of
Mauritius and various non-governmental organisations, the country
is working to enhance public health, protect natural ecosystems,
and optimising resource usage. Key initiatives include:
- Decarbonisation Strategy: The Central Electricity Board is
introducing prepaid charging stations for electric vehicles,
supporting the transition to clean energy. - Water Quality Monitoring: The National Environmental Laboratory
is launching a programme to detect pesticides in aquifers and
groundwater, using 26 IoT sensors to provide real-time monitoring
of surface and groundwater quality. - Coral Farming Projects: The Economic Development Board (EDB) is
inviting private sector participation in coral farming to
strengthen Mauritius’ position as a green destination and
support sustainable tourism.
Looking ahead
As ESG investing evolves, Mauritius’ regulatory clarity and
strategic initiatives have the potential to attract more
impact-driven capital to Africa. However, challenges remain,
including data availability and the need for local ESG expertise.
For fund managers and corporations alike, these measures should be
viewed not as hurdles but as opportunities to differentiate
themselves in a competitive market and unlock certain types of
financing.
One thing is clear: Mauritius is committed to sustainable
finance. The FSC’s regulatory framework, coupled with
nationwide climate initiatives, represents a decisive step toward
ensuring that ESG funds and corporate responsibility efforts fulfil
their promises – both for investors and the planet.
Mauritius Strengthens its AML/CFT Framework for
Investment Funds
Mauritius, as a prominent international financial centre, has
been strengthening its AML/CFT framework to align with global best
practices. With a robust regulatory environment, the country aims
to uphold financial integrity and maintain investor confidence,
particularly in the investment funds sector, which faces increased
risks due to complex financial transactions.
Regulatory and legislative
framework
Mauritius has strengthened its AML/CFT framework with the
adoption of the Anti-Money Laundering and Combating the Financing
of Terrorism and Proliferation (Miscellaneous Provisions) Act 2024,
enacted on 18 July 2024 and effective from 25 July 2024. This
legislation amends 16 existing laws to align with international
best practices, particularly those of the Financial Action Task
Force (FATF) and the Eastern and Southern Africa Anti-Money
Laundering Group (ESAAMLG). A key reform is the extension of
electronic know your customer (e-KYC) processes to the global
business sector, streamlining identity verification and enhancing
regulatory compliance.
Additionally, amendments to the Financial Crimes Commission Act
2023 bolster international co-operation in asset recovery,
responding to FATF’s revised Recommendation 38. These changes
enhance Mauritius’ asset recovery framework, positioning the
country as a strong jurisdiction in the fight against financial
crime and promoting global financial security.
Key AML/CFT measures for investment
funds
Given their exposure to large capital flows and complex
financial structures, collective investment schemes (CIS) and
closed-end funds (CEF) remain at the forefront of AML/CFT
compliance. Regulatory authorities have strengthened their
expectations regarding customer due diligence, transaction
monitoring, and compliance oversight to mitigate the risks
associated with money laundering and terrorist financing.
The FSC has placed particular emphasis on beneficial ownership
transparency, requiring investment funds to identify and verify the
ultimate beneficial owners behind investments. Heightened due
diligence obligations also apply to politically exposed persons
(PEPs) and investors from high-risk jurisdictions, ensuring a
robust, risk-based approach to financial crime prevention.
Mauritius has also strengthened transaction monitoring and
reporting obligations, requiring investment funds to maintain
comprehensive records of financial activities and promptly report
suspicious transactions to the Financial Intelligence Unit (FIU).
The FSC continues to enforce stringent compliance requirements,
including the appointment of a Money Laundering Reporting Officer
(MLRO) for each fund and the implementation of independent audit
mechanisms to assess and enhance AML/CFT controls.
Strengthening AML/CFT enforcement and international
co-operation
In response to international concerns regarding the
effectiveness of asset recovery measures, Mauritius has expanded
its legal framework to ensure seamless co-operation with foreign
jurisdictions in identifying and confiscating proceeds of crime.
The country remains committed to maintaining compliance with FATF
recommendations and avoiding blacklists, further reinforcing its
reputation as a transparent and co-operative financial hub.
To further bolster its AML/CFT regime, Mauritius has enhanced
its information-sharing mechanisms with global financial crime
enforcement agencies. The FSC and the FIU have strengthened their
cross-border collaboration frameworks, ensuring that Mauritian
entities can swiftly respond to international requests for
assistance in financial crime investigations.
Sanctions and penalties for
non-compliance
The FSC has reinforced strict sanctions and penalties for
non-compliance, underscoring Mauritius’ zero-tolerance approach
to financial misconduct. It has the authority to impose
administrative sanctions, including fines, licence revocations, and
operational restrictions on non-compliant entities. More severe
breaches may lead to criminal liability, with individuals and
institutions facing substantial fines and imprisonment for AML/CFT
violations.
Conclusion
Mauritius’ unwavering commitment to refining its financial
infrastructure ensures that it remains at the forefront of global
investment fund domiciliation, particularly in the African context.
By modernising its financial services sector, enhancing ESG
standards, and reinforcing its AML/CFT framework, the island has
not only solidified its position as a leading financial hub but
also demonstrated a forward-thinking approach to evolving global
trends.
As the region embraces new economic and sustainability
paradigms, Mauritius is uniquely positioned to act as a bridge,
channelling capital into Africa’s burgeoning markets while
adhering to global best practices. Looking ahead, the strategic
regulatory advancements and deepening international co-operation
suggest that Mauritius is primed to play a pivotal role in shaping
the future of investment funds in the region and beyond.
In an era where financial innovation and regulatory integrity
are paramount, Mauritius’ agility in adapting to global trends
positions it not only as a regional powerhouse but also as a beacon
of stability and opportunity for investment flows, particularly in
the African context. The journey ahead will undoubtedly reveal even
greater potential as the island refines its offerings and
strengthens its role as a gateway to the future of sustainable
investment.
Originally published by Chambers and Partners
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