A PCC is similar to a multi-class company/fund, where there are various classes of shares, which may either invest collectively in one portfolio or separately in distinct portfolios.Protected Cell Companies (“PCCs”) were introduced in Mauritius by the Protected Cell Companies Act No. 137 of 1999. Initially thought to be a suitable structure for the business of insurance, it was also worked out to become a versatile vehicle for collective investment funds and for asset holding in Mauritius.
This structure allows for the segregation of risks, assets/liabilities of different individuals and/or corporate entities under a shared structure. This legal segregation is often described as ‘ring fencing’ and is the main attraction of PCCs, thus making a PCC a very useful vehicle for any investment entity with various investment portfolios, where each has its own investment strategy and risk profile. This overcomes the problem encountered with an umbrella fund company whereby the excess liabilities of a sub-fund can be set-off against the assets of the entire company. The ring-fencing of claims is possible for offshore funds, captive insurance companies and investment holding companies. The PCC also simplifies administration and reduces costs of operation. A PCC is also attractive when investors are not common in each portfolio.
PCCs in Mauritius can take the form of Category 1 Global Business Licence companies and thus obtain favourable tax treatment by being granted access to the 33 double taxation agreements currently in force.