The variable capital companies act 2022: a game-changer for Mauritius in the fund ecosystem

The Variable Capital Companies Act 2022

The VCC Act passed on 12 April 2022 provides a comprehensive legislative structure for those who wish to set up different types of funds within one legal entity.

A variable capital company (“VCC”) is incorporated under the Companies Act and may carry out its business through sub-funds and special purpose vehicles (“SPV)

Key feature and Avantages

The VCC has the added advantage (that a protected cell company does not have) that each sub-fund or special purpose vehicle may elect to have a legal personality that is distinct from the VCC.

This is in fact the key feature of the VCC which has

• the potential of attracting investors to Mauritius
• The closest structure to our VCC is that available in Singapore

Pimary Object

The primary object of the VCC is to operate as a fund and the SPV shall operate as vehicle ancillary to the VCC or to a sub-fund of the VCC. 

The VCC Act provides for the segregation of assets and liabilities of the sub-funds and SPVs.

A VCC must have a constitution, unlike another company which may choose to be governed by the Companies Act.

Protection Feature

Another investor protection feature is that no sub-fund or SPV shall be wound up voluntarily,except in accordance with a plan approved by the Financial Services Commission and the FSC shall not approve such plan unless it is satisfied that the interests of the participants in that subfund or SPV are properly protected.

For tax purposes, the VCC and each sub-fund or SPV may elect to file separate financial statements and pay tax in respect of each sub-fund or SPV.

All types of funds, whether closed-end funds, retail funds, real estate funds, or collective investment schemes, will now be able to cohabit within one VCC.