Mauritius moves to offer regulation for ‘Global Shared Services’


Picture this. You are the managing director of a firm that operates in the financial services industry. The business is transactionally heavy and administratively intense, and your offices are located in a global financial centre like London, New York, Paris, Singapore or Hong Kong. Business is good and you are looking to expand to increase your market share.

Office space in big cities is expensive, but you can take the hit to because you have to spend money to make money. When it comes to recruiting new employees to fill this shiny new office, however, you quickly realise that the cost of living in big cities has driven staff costs up significantly. You may be able to pass this cost onto your customers, but competition is fierce, and your margins are being squeezed. Although your revenues have increased, your profits are falling, and shareholders are voicing their concerns.

Fortunately, there is a way to maintain the increased volume and market share that will also enable you to bring your costs back under control and avoid having to raise prices to your customers. Office space in Mauritius is significantly cheaper than in the major financial centres, while staffing costs are substantially lower. And this is not a “you get what you pay for” situation. The Mauritian workforce is highly educated, bilingual and contains a very high proportion of qualified accountants and administrators. The presentation to your shareholders writes itself.

It is not surprising then that an increasing number of financial services firms have been shifting their back-office operations to subsidiary companies set up in Mauritius. So many in fact that the government of Mauritius is now seeking to supervise this activity, which previously fell into a regulatory grey area. Businesses performing financial services in Mauritius are required to be licenced and regulated by the Financial Services Commission (FSC), but subsidiaries providing back-office operations in respect of what would be licensable activities in Mauritius were unregulated.

The Financial Services (Global Shared Services) Rules 2022 were issued on 3 January 2023 to rectify this anomaly. They are designed to ensure that any company in Mauritius providing ‘global shared services’ to a related entity that is providing financial services outside Mauritius is effectively licensed and regulated in Mauritius. The Rules will give overseas regulators comfort that those services being performed in Mauritius for entities under their supervision are being formally monitored and controlled.

Under the Global Shared Services Licence, ‘financial services’ are defined as: “any financial services or financial business activities governed by relevant Acts in Mauritius, or similar services or business activities which are regulated outside of Mauritius”.

Broadly, this will include any business that is engaged in insurance, investment, funds or financing activities, so the Rules are relatively narrow in their application and will only affect those in already regulated industries.

‘Global Shared Services’ are further defined as any three of the following activities:

  1. Records keeping
  2. Financial Statements preparation
  3. Invoicing and Payment of Bills
  4. Periodic regulatory filings
  5. Administration of Board proceedings
  6. Tax support services
  7. Debt collection
  8. Data capture and reporting
  9. Other services as may be approved by the Commission

The conditions for the Global Shared Services Licence are relatively stringent when compared to other special licences provided by the FSC. While other licences focus on the regulatory and compliance aspects, the Global Shared Services Licence requires that a licence holder must:

  • Appoint at least two Mauritian resident directors, one executive and one non-executive.
  • Directly employ staff proportionate to the size, nature and complexity of the services being provided.
  • Establish an office in Mauritius.

These requirements are in addition to the more general licensing conditions such as demonstrating documented internal controls, risk management and governance policies, adequate insurance etc. The FSC is yet to publish the full licensing criteria but considering the nature of the services being performed under the licence it seems unlikely that there will be a minimum capital requirement or need for a large compliance function.

Companies performing Global Shared Services have six months from the issue of the Rules on 3 January to obtain the licence. Special licence applications to the FSC typically take between three and six months to process, so if you believe that your company will require a Global Shared Services Licence in Mauritius, we recommend making an application as soon as possible.

Sovereign Mauritius is ready to assist with all special licence applications. As a licensed Management Company (MC) in Mauritius, Sovereign serves as an intermediary between its clients and the FSC and will provide full support during the application process to get your company properly set up and licenced in Mauritius.

Beyond the application phase we also offer a full suite of services to provide ongoing support to your business, from assisting with corporate bank account opening, accounting and payroll services to specialist insurance services. We also perform the administration and management required for licence holders to maintain full compliance with all their corporate and licensing requirements and to ensure that their affairs are properly managed and controlled from their place of incorporation.

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