The Mutual Fund and Hedge Fund Act, 2008 sets out the guidelines pertaining to the application and licensing of mutual funds and other collective investment entities.

Key Features

A Private Fund licence may be issued to a mutual fund which meets the following criteria:

  • Its constitutional documents specify that it will not have more than 50 investors;
  • Its constitutional documents specify that the making of any invitations to the public to subscribe for or purchase shares in the fund is prohibited; or
  • Invitation is to be made on a private basis.

In accordance with the Act, an invitation is made on a private basis when it is made:

  • To specified persons or specified ascertainable class of persons and is not calculated to result in shares becoming available to other persons;
  • By reason of a private client or business relationship between the person making the invitation and the investor; or
  • It is designated as a private fund by Regulations.

Legal Requirements

Requirements

Description

General

  • Corporate  vehicle permitted

IBC (International Business Company), CSL (Special License Company), Trust and PCC (Protected Cell Company)

  • License application fee
  • Annual license fee
  • Local physical office required

No

Share capital or equivalent

  • Minimum subscription

None

  • Minimum investors

None

Directors

  • Minimum number

2

  • Corporate directorship allowed

Yes

  • Local director required

No

Service Providers Required

  • Custodian

Yes

  • Fund manager/Investment manager

Yes

  • Fund administrator

Yes (from Seychelles)

  • Auditors

Yes

 Tax Treatment

  • The Business Tax Act does not apply to licensed and exempt funds unless the licensed fund is a company under the Companies (Special Licence) Act, 2003, in which case a tax rate of 1.5% will be applicable on the income of the fund.
  • No withholding tax is payable on dividends and/or interest payable.

Duration to Set Up

Around 3 months

Distinctive Benefits of Licence

  • Ease and speed of establishment
  • Flexible structuring of the entity
  • Favourable compliance restrictions
  • Friendly regulatory environment
  • A mutual fund in Seychelles can be administered by a Seychelles Licensed fund administrator or an approved foreign administrator domiciled outside Seychelles.

The Valsen Advantage

  • End to end comprehensive service
  • Speedy and efficient service
  • Expert advice on structuring options
  • Dedicated ongoing compliance support
  • Extensive network pool of service providers