THE OVERSEAS FAMILY OFFICE SCHEME
The Financial Services (Family Office) Rules 2020
The Overseas Family Office Scheme (the “Scheme”) caters for the domiciliation of high net worth single-family and multi-family offices, characterised by two licences under the Scheme respectively. The Scheme is regulated by the Mauritius Financial Services Commission (“FSC”) and the licences are governed by the Financial Services Act and the new Financial Services (Family Office) Rules 2020.
In 2016, the Financial Services Act 2007 was amended to introduce the:
- the Overseas Family Office (Single) Licence (“SFO”); and
- the Overseas Family Office (Multiple) Licence (“MFO”).
The FSC has issued the Financial Services (Family Office) Rules 2020 (the “Rules”) on 7 April 2020, bringing clarity on the obligations and requirements of the Overseas Family Office Scheme with the aim of attractive high net worth families to hold and manage their international assets and funds from Mauritius. The Rules are effective since 7 March 2020.
The family office must have no clients other than “family clients” as defined under Schedule 1 of the Rules. The family office, whether it is an MFO or SFO should be wholly owned by family clients; and exclusively controlled by family members/family entities.
Overview of the Overseas Family Office Scheme
- Allowable activities under the SFO or MFO licences
- Benefits of the Overseas Family Office Scheme
- Minimum Value of Asset/Investment
- Minimum Capital Requirement
- Professional Indemnity Cover
- Officers of the Family Office
A. Allowable activities under the SFO or MFO licences:
Allowable activities under the SFO or MFO licences as listed under the Rules include but are not limited to the following:
- Administration and management of investments, assets and/or estate(s);
- administration and management of concierge services;
- management of accounting and reporting;
- administration and management of philanthropic services;
- providing training and development to the incoming generations;
- administration and management of disaster recovery planning;
- administration of risk management;
- provision of administrative support;
- ensuring compliance with domestic and international legislations;
- establishing family governance, wealth strategies, family board(s) including family charter(s);
- providing tax advisory and compliance services;
- advising on wealth planning and protection; and
- any other activities as may be approved by the Commission.
B. Benefits of the Overseas Family Office Scheme:
Pursuant to the Income Tax Act, SFOs and MFOs will be eligible for tax holidays provided they meet the ‘substance’ requirement.
- Work and Residence permits for immediate family members in Mauritius.
- Eligibility to acquire immovable properties in Mauritius.
- Corporate Tax Residency in Mauritius.
C. Minimum Value of Asset/Investment:
The value of the assets and/or investments of each family under the SFO or MFO management should be more than USD 5 million.
D. Minimum capital requirement:
An SFO should at all times maintain a fully paid minimum stated unimpaired capital of at least USD 35,000 whereas an MFO should at all times maintain a fully paid minimum stated unimpaired capital of at least USD 70,000.
E. Professional Indemnity Cover:
The holder of an SFO or a MFO should subscribe to such insurance policies as are necessary to cover:
- fraudulent activities of employees;
- fraudulent instructions;
- losses arising from the malicious or fraudulent corruption of electronic data or electronic transactions;
- liabilities arising from breaches of professional duties; and
- any other activities as the SFO or MFO deems appropriate.
F. Officers of the Family Office:
Each Family Office should at all times have (i) a designated officer, (ii) a designated Money Laundering Reporting Officer and (iii) a Deputy Money Laundering Reporting Officer approved by the FSC, who shall comply with its duties under the Rules and any relevant Acts.
The designated officer shall:
- be the point of contact between the FSC and the Family Office (Single or Multiple);
- be a member of the senior management of the SFO or MFO;
- have unrestricted access to information about the members of the SFO or MFO; and
- have access to sufficient resources to fulfil his responsibility.