Key amendments brought by the finance (miscellaneous provisions) act 2020
Post the presentation of the National Budget 2020/2021 on 04 June 2020, entitled ‘Our New Normal: The Economy of Life’, The Finance (Miscellaneous Provisions) Act 2020 (the Act) was promulgated on 07 August 2020. The Hon. Minister of Finance of the Republic of Mauritius has announced a number of measures to ensure economic resilience and sustainable development subsequent to the economic situation brought by Covid-19. This article highlights the key regulatory and fiscal amendments brought in the Act together with the date of effectiveness. Financial Services Act The functions of Financial Services Commission Mauritius (‘FSC’ or ‘the Commission’) has been extended to include the following: The Commission may request competent authorities or any other entity (which includes Ultimate and intermediate financial holding Mauritian companies which have, within the group, at least one subsidiary or joint venture or such ownership structure which holds a licence by the Commission) to furnish to the Commission with the necessary statistical information within such time frame as may be prescribed by the Commission; and The Commission shall consult and with the approval of the competent authorities, collect the required information from the relevant entities, where the information requested under the above is not furnished within the time frame determined by the Commission. The following new business activities have been introduced under the Financial Services Act: 1. Moneylender A ‘moneylender’ is a person, other than a bank or a non-bank deposit taking institution, whose business is that of moneylending or who provides, advertises or holds himself out in any way as providing that business, whether or not he possesses or owns property or money derived from sources other than the lending of money, and whether or not he carries on the business as a principal or as an agent. This licence shall be provided by the Commission only to a corporate entity engaged in such business activities in Mauritius. Each moneylender shall comply with the prudential requirements, guidelines, instructions or directives as specified by the Commission. As part of its regulatory duties, FSC Mauritius may appoint a duly qualified person or an officer to carry out inspections on the operations and affairs of the moneylender to ensure that the moneylender is complying with the financial services laws and guidelines. Any person who contravenes the laws pertaining to moneylenders under the Financial Services Act shall commit an offence and shall be liable to a fine not exceeding one million rupees and to imprisonment for a term not exceeding 5 years. 2. Peer-to-Peer Lending “Peer-to-Peer Lending” is defined as a financial business activity which enables a person to lend funds through an online portal or electronic platform which matches lenders and borrowers. Henceforth, a licensee who intends to surrender his license to the Commission, he must abide by the following: Give notice to the Commission of the proposed surrender date on not less than 30 days before the date of the proposed surrender; Make arrangements for the transfer of its business to another licensee prior to giving notice; After the date of surrender, the licensee must certify to the Commission that all his client accounts have been transferred; Provide the Commission with a written undertaking by the transferee that the business has been transferred to it; With respect to the discharge of his liabilities, the licensee must specify the measures taken by him; The effective date of termination must be specified; and The licensee must comply with other matters as required by the guidelines. With respect to the reporting obligations of FSC’s licensees, the Commission may extend the period of filing the licensee’s Annual Financial Statements (AFS) during an emergency period. ‘Emergency period’ is defined as: A period of public emergency (as referred in Chapter II of the Constitution); A period during which a curfew order is placed or similar restriction on the movement of persons; or A period where Mauritius has been affected by a natural disaster. A person or any class of persons required to file it’s AFS, may be exempted if the Commission is of the opinion that it would not be practicable for that person or class of persons to comply with this obligation. Companies Act An independent director is defined as an executive director with the following characteristics: He must not be an employee of the company; He must not have material business relationship with the company either directly or as a partner, shareholder, director or senior employee of an organisation that has such relationship with the company; He must not receive remuneration from the company except remuneration or any other benefit given to him as a director in accordance with the Companies Act; He must not be a nominated director representing a substantial shareholder; He must not have close family ties with any of the advisers, directors or senior employees of the company; He must not have cross directorships or significant link with other directors through involvement in other companies or other organisations; or He must not have been on the Board for more than 9 continuous years from the date of his first election. As from 01 January 2021, the Board of directors of a public company shall include at least 2 independent directors. With respect to the duties of directors to act in good faith and in best interests of the company, the director must act in a manner which is not, oppressive, unfairly discriminatory, or unfairly prejudicial to shareholders. Any director who fails to act in good faith under the Companies Act, he shall commit an offence and shall, on conviction, be liable to a fine not exceeding 100,000 rupees and to imprisonment for a term not exceeding 12 months. Henceforth, Registrar shall give notice in the Gazette and by any electronic means prior to restoring any company in their register instead of giving public notice in 2 daily newspapers. (Effective date: 07 August 2020) Immigration Act In order to obtain a Resident Permit in Mauritius, the minimum investment has been reduced from USD 500,000 to USD 375,000.
