May 09, 2022

The Variable Capital Companies Act 2022

The crossing of the Variable Capital Companies Act 2022 (the "Act") in April 2022 is yet another major achievement for Mauritius, solidifying its position as the region's ideal international financial centre.

The VCC will actively sought to meet the growing demand for innovation in the fund market, and it will undoubtedly attract international investors looking for a cost-effective and flexible structure. The Act also ensures that the legal framework governing the VCC complies with the Anti-Money Laundering/Terrorism Financing Act.


The rationale for using a VCC

The VCC can operate as a standalone entity or as an umbrella structure comprising sub-funds.


Standalone Fund

  • A standalone fund compromises of a single investment portfolio.


Umbrella Fund

  • The VCC may be structured as an umbrella fund with multiple sub-funds with varied investment objectives, investors, and asset classes. The sub-funds can have the same board of directors, fund manager, custodian, auditor, and administrative agent.


Special Purpose Vehicles (SPVs) can also be set up under the VCC or its sub-funds.



Main features of the VCC


Setting up /registration

  • Incorporated under the Companies Act
  • An existing Mauritian company can apply to be converted to a VCC.
  • A foreign incorporated company can apply for registration by way of continuation as a VCC provided that the foreign jurisdiction allows for outward migration



  • Must have the words “Variable Capital Company” or “VCC” after its name



  • Its primary objective is to operate as a fund. It must carry out its business through sub-funds and special purpose vehicles


Constitutive document

  • A VCC is required to have a constitution that complies with the Companies Act


Requirement to be authorised by the Financial Services Commission (FSC)

  • It should apply to the Financial Services Commission (FSC) for authorization to operate as a VCC Fund.
  • The Financial Services Commission (FSC) may also approve the operation of a sub-fund(s) as a collective investment scheme (CIS) or a closed-end fund (CEF) all within one structure


Legal Proceedings

  • A VCC may sue or may be sued in respect of a sub-fund / SPV and this will only be ring-fenced to that specific sub-fund / SPV


Issue of shares and declaration of dividend

  • A VCC may issue shares of varying amounts in its sub-funds and SPVs and it can also declare and pay dividend in respect of shares of a sub-fund or SPV by reference only to the assets and liabilities attributable to that sub-fund or SPV


Power to redeem / buy back shares

  • A VCC may redeem or buy back its own shares, as well as those of its sub-funds and SPVs, in accordance with its constitution; shareholders will be entitled to a refund proportionate to the number of shares owned.


Reduction of share capital

  • A VCC may seek an authorisation from the Registrar to reduce its share capital or that of its sub-funds or SPVs.
  • Similarly, a shareholder may seek an authorisation from the Registrar to reduce the share capital of the sub-fund or SPV in which he/she holds shares.



Filing of accounts

  • The VCC may elect to present separate financial statements in respect of each of its sub-funds and SPVs in accordance with IFRS or any other internationally accepted accounting standards by providing an irrevocable notice to the Registrar and the Mauritius Revenue Authority.
  • If the sub-funds and SPVs have a separate legal personality from the VCC, they still must present separate financial statements.


For fund managers having several investment strategies and objectives, the VCC could prove to be the ideal vehicle since it can have different sub-funds operating as either closed-end funds or open-ended funds as well as SPVs. If it so wishes, the VCC, its sub-funds and SPVs can all share a board of directors, a fund manager, CIS administrator and other service providers which ultimately provides significant economies of scale. Furthermore, the sub-funds and SPVs in a VCC can opt to have a separate legal personality and be structured as companies.



For more information on the Variable Capital Companies (VCC), do not hesitate to contact us on: