A PCC may issue cell shares in respect of different cells for the purpose of segregating protecting different assets, referred to as cellular assets. The cellular assets attributed to a cell will only be affected by the liability of the company arising from transaction attributable to that cell. Further, a PCC may pay dividend, cellular dividend, in respect of which the cell shares by reference only to the cellular assets and liabilities attributable to the cell in respect of which the cell shares were issued.
As provided under the PCC Act, a PCC can be used to carry out two types of global business namely global insurance business and investment funds (i.e. Collective Investment Schemes).
A PCC may be directly incorporated or may be registered by way of continuation provided that the incorporation and registration requirements prescribed in the Companies Act 2001 and the PCC Act are satisfied. The incorporation procedure of a PCC is similar to that of a Global Business Company. In the case of a continuation, additional requirements as laid down in section 5 of the PCC Act 1999 must be satisfied.
All applications should be submitted to the Financial Services Commission (FSC) on a prescribed form through a management company. Applications should be accompanied by a detailed business plan and policyholders profile for each cell along with corporate statutory documents. Subsequent cells created at a later stage should be disclosed to the FSC with details of its business plans and policyholders.
Similarly for investment funds, promoters need to submit to the FSC, through a management company, an outline memorandum containing the identity, track record and credentials of the promoter, general information regarding the fund, its objectives and proposed investment, its structure, the size of the fund and the minimum subscription, track record of the functionaries of the fund and compliance with requirements of other regulatory bodies.
A PCC is liable to Mauritius income tax at the rate of 15% which may be reduced to 3% after application of the provisions on foreign tax credit.
Alternatively, the PCC can claim, against the nominal tax payable, credits for actual taxes suffered. These are generally of three types, namely:
Residual tax is often nil since corporate tax rates in most countries are above 15%.
In such a situation, the PCC may even have surplus tax credits which can go to waste. However, the entity is allowed to claim the credits against any nominal taxes payable on any type of income (interest, royalties, business profits, etc), from any source country. This makes full use of all available credits. This can be particularly attractive for holding entities which derive income from many source countries, and of different nature.
The claim for underlying tax credits is available provided the PCC holds at least 5% in the foreign company paying the dividends. However, it is also available if the dividends come through a chain of intermediate holding companies before reaching the PCC, provided the shareholding at each stage is at least 5%.
A PCC that is centrally controlled and managed in Mauritius can accede to the benefits of Double Taxation Agreements. There is no withholding tax on dividends, capital gains and interests.