Sovereign Mauritius - Protected Cell Companies

Sovereign Mauritius assists with setting up and managing Protected Cell Companies (PCCs), designed for asset protection and investment structuring. A single legal entity with segregated cells, a PCC offers flexible, efficient liability-segregated investment vehicles. We guide you through incorporation, governance and compliant support.

About Protected Cell Companies (PCCs)

A Protected Cell Company is a company that is divided into cells, such that the assets and liabilities of each cell are legally separate from the assets and liabilities of any other cell. As a single legal entity with a single board of directors, single memorandum and articles of incorporation, single company secretary and single company registration number, a PCC is less expensive to administer than a company with multiple subsidiaries.

A Protected Cell Company in the Mauritius International Financial Centre (IFC) is made up of a core and any number of cells. The assets and liabilities of individual cells are segregated and protected from those of the other cells. Similarly, the assets and liabilities of the core are segregated and protected from those of the different cells. Assets that are not comprised in a cell are deemed to be comprised in the core.

This legal segregation of assets is the key issue that differentiates a Protected Cell Company from a traditional (non-cellular) company. In some other jurisdictions a Protected Cell Company is known as a Segregated Portfolio Company (SPC).

A Protected Cell Company is able to limit its liability in respect of a particular contract to a specified pool of assets that are attributable to a particular cell or the core, rather than exposing all of the assets of the PCC to liability in respect of every contract, as would be the case with a non-cellular company.

A Protected Cell Company therefore protects one cell from contagion from others, which provides for increased opportunities, flexibility and security for international investment structuring. New cells can be added or retired as needed, providing a flexible and efficient way to manage multiple investment strategies, assets, or risks while protecting each cell’s assets from the others.

When a PCC contracts, the directors of the PCC must inform the counterparty that it is a PCC and identify or specify the cell (or the core) in respect of which the PCC is acting.

Typically, the share capital of a Protected Cell Company is divided into ordinary voting (or management) shares in respect of the core, and non-voting redeemable shares in respect of each cell. The cellular shares issued in respect of a particular cell constitute a separate class of shares. The cell shares do not carry voting rights at general meetings of the company but they do have class rights that must be observed and can only be varied with the consent of the holders of that class of shares.

Protected Cell Companies can also offer significant benefits in terms of certain capital requirements. The minimum capital requirement of a PCC is held by the core and the individual cells are only responsible for holding their own solvency capital requirement, which could be lower than the minimum capital requirement.

Strong Regulatory Framework

Mauritius PCCs are governed by the Protected Cell Companies Act 1999. Due to its flexibility and efficiency, the Protected Cell Company model is widely used for asset holding, structured finance business, collective investment schemes and closed-end funds, insurance business and external pension schemes.

All Protected Cell Company applications must be submitted to the Financial Services Commission (FSC) Mauritius through a licensed Management Company in Mauritius. A Protected Cell Company may be directly incorporated or may be registered by way of continuation, provided that the incorporation and registration requirements prescribed in the Companies Act 2001 and the PCC Act are satisfied.

Applications for insurance-related PCCs should be accompanied by a detailed business plan and policyholders’ profile for each cell along with corporate statutory documents. Any cells created at a later stage should also be disclosed to the FSC with details of their business plans and policyholders.

PCCs are commonly used as umbrella investment funds with each cell being used as an investment vehicle for different asset classes. Promoters must submit an outline memorandum containing their identity, track record and credentials, together with general information about the fund, its objectives and proposed investments, its structure, the size of the fund and the minimum subscription.

The application should also provide information in respect of the track record of functionaries of the fund – investment manager, administrator, investment advisor, custodian or prime broker – and in respect of compliance with requirements of other regulatory bodies.

Mauritius tax regime

Mauritius’s beneficial tax regime is another key advantage. Companies structured as Global Business Licence (GBL) entities within a PCC framework enjoy a corporate tax rate of only 3% on foreign-sourced income, making it a highly tax-efficient option.

Mauritius’ extensive network of Double Taxation Agreements (DTAs) and Investment Promotion and Protection Agreements (IPPAs) provide additional security, allowing businesses to minimise tax liabilities and protect investments across multiple jurisdictions.