The Protected Cell Companies Act 1999 of Mauritius introduced a new structure – The Protected Cell Company. A Protected Cell Company (PCC) is a special corporate structure that authorises the lawful segregation of assets owned by each cell of the company. The PCC allows for more security and flexibility for international investment structuring.
A PCC may be incorporated in Mauritius as a Global business corporation ("GBC"). As stated above, foreign companies and existing Mauritian companies may also apply to be registered as a PCC. Further an existing company may be converted into a PCC.
The main characteristics of a PCC are as follows:
Segregation of cellular assets and liabilities
Access to Double Taxation Avoidance Agreements
No withholding taxes on dividends, interest, and royalty payments from Mauritius
No foreign exchange controls
KEY FEATURES OF AN AUTHORISED COMPANY
GENERAL
LOCAL REQUIREMENTS
ANNUAL REQUIREMENTS
(a) Issue of shares
(b) Minimum capital requirement
(c) Business Activity
(d) Segregation of cellular assets
(e) Foreign Exchange Controls
(f) Liabilities
(g) Voting rights
(h) Cell creation
(i) Taxation
(j) Confidentiality
(k) Duty to disclose PCC status in dealings
(a) A PCC may create and issue shares in the capital of its cells (“cell shares”) and the proceeds of the issue shall form part of the cellular assets of that cell. The proceeds of the issue of shares other than cell shares shall form part of the non-cellular assets (also referred to as core cell) of the PCC.
(b) No minimum capital requirement imposed for the PCC or the cell(s) except in the case of certain specific financial business activities
(c) PCCs are suitable vehicle for investment funds, insurance business and asset holding. A PCC can engage in the following activities:
Asset holding and managing of assets (or portfolios of assets);
Structured finance businesses;
Collective Investment Schemes (CIS) and Close-ended Funds;
Specialised CIS and Close-ended Funds; and
Insurance business
The business activity of each cell must not be different from the overall business activity of the PCC.
(d) The Board is responsible to ensure that cellular assets are held independently and distinctly and easily identifiable from cellular and non-cellular assets
(e) No foreign exchange controls
(f) The liabilities of one cell are confined to the assets of that particular cell. In the case where the assets of that cell are not sufficient to meet its liabilities, then the non-cellular assets of the PCC will be liable.
The assets of one cell are not available for set off against the liabilities of another cell.
In the case of liabilities of the PCC which bear no relation to any transaction linked to a particular cell, the PCC’s non-cellular (core) assets will bear all liability.
(g) Core shares will carry voting rights of the PCC. Cellular shares, on the other hand, have all voting rights pertaining to a specific cell. This gives maximum protection to the investors of each cell with regard to its corporate governance issues.
(h) A PCC can create an unlimited number of cells with each one having its own name and designation. Although each cell is legally independent from the other cells, the creation of a cell does not create in respect of that cell, a legal entity separate from the PCC.
(i) PCCs are considered as a single legal entity for taxation purposes. Being the holder of a Global Business Licence, the PCC is subject to the flat tax rate of 15%. A partial exemption regime is available for certain income streams which brings the effective tax rate to a maximum of 3%.PCCs may also claim credits for actual taxes suffered against the nominal tax payable, such as for withholding taxes applicable in the source countries.
(j) Documents are kept at the registered office. Information is not publicly available.
(k) A PCC is under an obligation to inform any person with whom it deals or transacts that it is a PCC. Further the PCC is under an obligation to identify or specify the cell in respect of which that person is transacting, unless that transaction is not a transaction in respect of a particular cell.
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