Legal Personality
A limited partnership may elect to have a legal personality or not (and if it has not done so, the limited partnership may so elect at a later stage with the consent of the Registrar of Limited Partnerships (the “Registrar”).
Limited Partnerships set up in Mauritius for the purpose of doing business primarily outside of Mauritius may apply to the Mauritius Financial Services Commission (the “FSC”) for to be licensed as a Global Business Corporation (“GBC”) under the Financial Services Act 2007 (the “Financial Services Act”).
A limited partnership with a GBC Licence has access to Mauritius’ network of double taxation avoidance treaties.
Limited partnerships proposing to carry on certain types of business, such as funds or insurance (i.e. financial services as defined by the Financial Services Act) must apply for a GBC Licence and are regulated by additional statutes.
Key characteristics of Limited Partnerships
Limited partnerships must have one or more general partners and one or more limited partners;
General partners are jointly and severally liable for the limited partnership’s debts and obligations, but limited partners are only liable to the extent of their agreed contributions, unless amongst other things they participate in the management of the limited partnership;
A limited partnership may indemnify any partner or other person from and against all or any claims, demands and debt unless otherwise provided in the limited partnership agreement;
- Every general partner shall be an agent of the limited partnership and of the other partners and have general authority to conduct and manage the business and affairs of the limited partnership;
- A general partner shall, in relation to any matter affecting the limited partnership, act in good faith towards: (a) partnership, and (b) each of the partners;
- Limited partnerships must have a limited partnership agreement and maintain:
- a register of partners;
- an account of capital contributions and returns;
- accounting records;
- minutes of meetings of the general partners; and
- copies of all documents filed with the Registrar;
Limited partnerships must prepare financial statements within six months of their annual balance sheet date, but these only need to be audited where stipulated by the limited partnership agreement, or required by some other enactment;
- Unless otherwise provided in the Limited Partnerships Act or in the limited partnerships agreement, each partner shall be entitled to share any profit of the limited partnership which accrues while it is a partner, and shall be liable to bear any loss of the limited partnership incurred which it is a partner, in equal contribution;
A limited partner may demand the return of its contribution: (a) on the dissolution of the limited partnership; or (b) at such time or upon the occurrence of such event as may be specified in the limited partnerships agreement; and
There are “claw back” provisions for cases where limited partnerships are insolvent at the time or immediately after the payment of returns to limited partners, or if the limited partnership becomes insolvent within six months of making such a payment.
Taxation of Limited Partnerships
The default tax position of limited partnership is that of tax transparency. Accordingly, the profit and losses of a limited partnership are to be attributed to its partners and not the limited partnership.
A limited partnership may however elect to be taxed as a corporation, it will then be liable to tax at 15%, however they have the option of either claiming foreign tax suffered as a tax credit against their Mauritius tax liability or a partial exemption of 80% on certain income subject to meeting pre-defined substance requirements in Mauritius.
The criteria for meeting the substance conditions depend on the nature of the income and licensed activity. The income specified below shall be able to benefit from 80% partial exemption.
- foreign source dividends
- profits attributable to a foreign permanent establishment.
- interest and royalties; and
- income from provision of specified financial services amongst others
- Income derived by a Collective Investment Scheme (CIS), Closed-End Fund, CIS manager, CIS administrator, investment adviser or asset manager licensed as approved by the Financial Services Commission (FSC)
- Income derived by companies engaged in ship and aircraft leasing
Please contact us on office@venturecorporateltd.com for information about Limited Partnerships.
