Since the Variable Capital Companies Act 2022 took effect in May 2022, Mauritius has offered fund managers a vehicle that combines the familiarity of a company with the flexibility of a segregated fund platform. The Variable Capital Company, or VCC, is a single legal entity that conducts its business through sub-funds and, where useful, special purpose vehicles, each constituted with the approval of the Financial Services Commission (FSC).
One Umbrella, Many Sub-Funds
A VCC is a single legal entity. Beneath it sit sub-funds and, where useful, special purpose vehicles. The umbrella entity holds the licence and the governance; the sub-funds hold the investments. The Commission may approve each sub-fund to operate as a collective investment scheme or a closed-end fund, and that sub-fund then becomes subject to the Securities Act, FSC Rules, and guidelines applicable to that fund type.
Ring-Fenced by Law
The Act provides that the assets of a sub-fund may not be used to discharge the liabilities of the VCC or of any other sub-fund, and creditors of a sub-fund may look only to the assets of that sub-fund. Segregation is therefore statutory rather than merely contractual: a loss in one strategy stays contained within that strategy.
Capital That Moves With Investors
A VCC's share capital is designed to be variable. Shares in an open-ended sub-fund are issued, redeemed, or repurchased at net asset value, and the VCC may repurchase or redeem its shares under its constitution.
One Licence, Tax Residence and Treaty Access
A VCC Fund meeting the Financial Services Act criteria holds a single Global Business Licence, regardless of whether its sub-funds have separate legal personality. That licence makes the VCC tax resident in Mauritius and eligible for the country's double taxation treaty network, currently forty-five treaties strong according to the Mauritius Revenue Authority.
What This Means for a Fund Manager
Consider a manager running three strategies: a private credit fund, a real estate fund, and a venture capital fund. Structured conventionally, that is three fund companies, three boards, three licences. As a VCC, it is a single umbrella entity with three sub-funds:
- One board and one governance framework across all three strategies, with each strategy's assets ring-fenced by law from the liabilities of the others.
- A new strategy is added as a sub-fund of the existing umbrella, subject to Commission approval, rather than as a new company with its own licence.
- Investors subscribe and redeem from the sub-fund holding their strategy at that sub-fund's net asset value, and financial statements can be consolidated across the VCC or presented separately per sub-fund.
How Aurevya Can Help
Aurevya Wealth structures and administers Variable Capital Companies from Mauritius. We support fund managers with licensing, fund accounting, and corporate secretarial services. To start a conversation, reach out to us at aurevya.com.
This article is general information and does not constitute legal, tax, or investment advice.