Foreign investment, mergers and acquisitions and mining legal guidelines in African countries
Introduction: The China -Africa Cooperation Forum (FOCAC) was held in Beijing from September 4th to 6th, 2024.Deheng Law Firm invited a local well -known law firm in Africa to cooperate to organize the legal overview of African countries south of Sahara in foreign investment mergers and acquisitions and mining, and answered the interests of Indian investors interested.In addition, we will specifically introduce the judicial jurisdictions often used in African investment transactions: Mauritius, Seychelles and Jersey Island.This series of articles will be updated according to the country.
1. Mauritius
(1) What are the benefits of using the Mauriti investment fund to invest in African countries?
Due to its strategic location, experience in the African market, and preferential tax system, Mauritius is in an excellent international financial center entering the African market, and is becoming an ideal portal for global investors to arrange its investment in Africa.
Mauritius provides a series of offshore investment tools for investing in Africa, including companies, funds, trust funds and partnerships.However, many global investors generally invest in Africa through investment funds registered in Mauritius. This is an ideal structure to invest in the African continent in a tax -saving method.Over the years, Mauritius has established a sound legal and legal framework in investment fund business. It turns out that this framework is very useful and efficient for global investors investing in Africa.
When foreign investors, operators, or fund companies "march" to Africa, they usually consider using good reputation, preferential tax systems, and offshore judicial jurisdictions with good tax agreement networks with African countries to effectively arrange their investment in Africa.In order to help reduce the tax on taxes, interest, and franchise fees generated in African countries, it sometimes includes taxable income.
As a stable parliamentary democratic country, Mauritius has a sound institution and a diverse economy, providing investors with a safe business and political environment for investors’ continuous investment in Africa.As a member of all major African regions, Mauritius provides preferential channels for investors to enter the African market.In addition, Mauritius is a signing country of all major African Conventions, which makes Mauritius the first choice for investment in Africa.
Mauritius ranked first among 53 countries in Africa in the Mo Ibrahim’s Governance INDEX in 2020, and ranked first among 53 countries in Africa, and ranked among the 190 countries in the World Bank’s 2020 business environment.The 13th place consolidated its best business environment in the African continent.
In addition, for structural, management, and effective investment related to Africa, Mauritius can also be used as an international financial center with risk relief and financial efficiency.In order to build the foundation of international business operations, Mauritius actively adopts all necessary steps to ensure that entering the Bailist of OECD Economic Organization, the European Union and the Financial Action Special Working Group (FATF).
(2) What is the legal framework of the Mauritius Investment Fund?
Global Fund 2 registered at the Morimus Financial Services Committee (FSC) is usually a company registered in accordance with the "2007 Company Law" and established a global business license based on the "Financial Services Law 2007".These architectures are called investment companies, and their business includes its funds mainly invested in securities, designed to decentralize investment risks and make the company’s shareholders share the results of its capital management.
Mauritius’ investment fund is "Securities Law", 2007 "Securities (Reporting the Disposer’s Disclosure Obligations) Rules", 2007 "Securities (License) Rules", 2007 "Securities (Public Issuance) Rules", 2017 "Securities Securities"(Priority issuance) Rules, 2021 "Securities (Real Estate Investment Trust) Rules" and 2008 "Securities (Investment Plan and Closed Fund) Regulations".
Mauritius law stipulates two types of investment companies:
(1) Open fund, also known as collective investment plan (CIS); and
(2) Closed funds, also known as private equity funds.
Collective Investment Plan (CIS):
(1) refers to a plan consisting of a company, trust or any other legal entity stipulated or approved by the Financial Services Committee (FSC):
• The only purpose of its funding is to invest in a combination of funds, including securities, currency market instruments or debt instruments (including non -financial assets approved by loans, bonds or similar instruments or other financial assets, real estate or financial service committees (FSC));
• Its business is based on the principle of risk decentralization;
• It is obliged to the request of securities holders to deduct the value of the value of net asset value after deducting commissions or fees; and
• Investment plan participants do not perform daily control of property management, regardless of whether they have the right to provide consultation or instructions on such management; and
(2) A closed fund that includes its shares or share on the stock exchange; but
(3) It does not include such plans specified in the II part of the "Securities Law", such as the insurance contract (except insurance policies traded in the secondary market), checking, paying order, bill or ticket or non -operating ticket or non -operating ticket.Plan or arrangement of method operation.
Collective investment plan (CIS) can be divided into the following categories:
(1) CIS (referring to public funds) that is completely regulated.
(2) Professional CIS (Professional CIS): Professional CIS is a CIS only to mature investors or issuing its shares as private equity.Generally, most of the continuous obligations/regulations on public fund CIS, professional CIS does not have to be subject to it.
(3) Special CIS (Specialized CIS): Special CIS is an approved by investing in no production, derivatives, commodities, and financial service committees (FSC).
(4) Expert Fund: Expert Fund is a CIS that has applied to the financial service committee (FSC) to obtain the expert fund license.Expert funds are only provided to expert investors.
(3) What is the most common company architecture?
As the preferred jurisdiction of the establishment of a holding company, Mauritius provides a wide range of overseas investment structures for investment in Africa, including companies, funds, trusts and partnerships.The most popular structure is still the establishment of global commercial companies (GBC) or authorized company (AC).
The company can apply for global commercial promotion to become a global commercial company (GBC) and apply for authorization to become authorized companies.Global Commercial Corporation (GBC) refers to the citizen of non -Mauritius citizen holding or controlling (depending on the situation) residents (except banks), which are residents (banks), which are voting or benefited from the law.business.There are many structural forms of global commercial companies (GBC), including limited companies, partnerships or trusts.
The authorized company (AC) is a unique business structure adopted by companies that mainly conduct business overseas in Mauritius, which is not considered tax residents who are regarded as Mauritius.It provides greater flexibility, which is the appropriate tool for holding and managing private assets.However, the authorization company (AC) shall not raise funds from the public and prohibit the management or transaction and custody services of the banking, financial industry, insurance industry, securities, trust industry, collective investment plans.
(4) What are the procedures for registration and establishment?Including costs and simplified procedures for foreign investors.
The establishment of the global commercial company (GBC) and the authorization company (AC) and the license plate processing procedures are as follows:
(1) Global Commercial License and Authorized Companies (AC) are regulated by the company’s registry (ROC) and the Financial Services Committee (FSC).
(2) These companies are established in the same way as private companies. In addition, other documents need to be submitted to the Financial Services Committee (FSC) to issue relevant global business licenses or authorization.
(3) While the registration documents are submitted to the company’s Registration (ROC), the relevant documents applying for the relevant global commercial camp license must also be submitted to the financial service committee (FSC) at the same time.
(4) Application for global business licenses or authorization must be proposed to the Financial Services Committee (FSC) with a license management company, and a lawyer, legal adviser or law firm proves that it is in line with Mauritius law, otherwise it will be invalid.
(5) The specified application form should be submitted with the following documents:
• The global business license applicant intends to carry out the business plan of the event, or the applicant of the authorized company’s applicant to carry out the business outline of the event;
• The corresponding handling fee;
• The lawyer, legal adviser or law firm proved its legal certification documents that comply with Mauritius’s law;
• Applicants’ due diligence documents for duty documents;
• The same company registration documents as the establishment of a domestic company, such as the company’s articles of association (if any), the company’s registry and certificate; and
• Management company confirms the records of the due diligence document of the controlling shareholder/shareholder of the company’s applicant, and confirmed that these documents will be provided to it when the financial service committee (FSC) requires it.
(6) After receiving a company registration certificate issued by the company’s Registration (ROC), the company was regarded as established in Mauritius and officially obtained permission after issuing relevant licenses at the Financial Service Commission (FSC).The electronic issuance company’s registration certificate does not require any fee; however, to obtain a copy signed by the company’s registry (ROC), a copy of the registered certificate must be paid 300 Mauritius Lube (about $ 6.48).
(5) Is there any tax or legal advantage for specific types of entities?
Permanent institutions of residential companies and foreign companies need to pay 15%of corporate income tax.If a company is established or controlled in Mauritius in Mauritius, the company is the Malirus resident company.The authorized company (AC) is not a tax resident of Mauritius, and cannot enjoy the preferential discounts signed by Mauritius with other countries.In terms of tax incentives, Global Commercial Corporation (GBC) is regarded as tax residents, so it is eligible to apply for double taxation agreement signed by Mauritius with other countries.
Although the tax rate of Global Commercial Corporation (GBC) is 15%, under the premise of meeting substantial requirements, Global Commercial Corporation (GBC) can enjoy some tax exemption systems (suitable for certain eligible income activities), that is, 80%incomeThe source will be exempted from taxation.
The licenses of global commercial companies (GBC) and authorized companies (ACs) allow the company to return to profits freely, and Mauritius does not levy pre -tax taxes for capital gains, dividends or interests.
(6) Which tax agreements are suitable for MauritiusSimla Investment?
Mauritius signed an agreement to avoid double taxation with other countries.The above agreement may cover taxes on dividends, franchise fees, capital gains and interest.
Mauritius has signed 46 tax agreements, and several other items are waiting for approval, signing or negotiating by the Mauritius authorities.
Seven actions waiting for approval (waiting for Kenya to notify the provisions of Article 28 (Effective) of the Double Taxation Agreement): Gabon, Komoro Islands, Kenya, Morocco, Nigeria, Russia, and Angola.
Five items waiting to be signed: Botswana (new), Gibraltar, Guyana, Malawi and Gambia.
Twenty of the negotiating agreements: Algeria, Burkina Faso, Canada, Cotti, Czech Republic, Greece, Heishan Republic, the Republic of Sudan, Portugal, Iranian Republic, Saudi Arabia, Senegal (new), SpainNevis, Tanzania, Vietnam, Yemen, Zambia (New), Mali and Turkish Republic.
The additional protocols of the five existing agreements are waiting to be signed: Bangladesh, India, Jersey, Mozambique and Uganda.
An additional agreement of an existing agreement is negotiating: Oman.
Two agreements have been terminated: Senegal and Zambia.
Countries that have concluded with Mauritius include:
(1) Australia (part)
(2) Barbadus
(3) BelgiumVaranasi Stock
(4) Botswana
(5) Buddha’s horns
(6) Congo
(7) Croatia
(8) Cyprus
(9) Egypt
(10) Estonia
(11) Sweet
(12) France
(13) Germany
(14) Ghana
(15) Genxi Island
(16) India Hong KongUdabur Investment
(17) India
(18) Italy
(19) Jersey Island
(20) Kuwait
(21) Lesso
(22) Luxembourg
(23) Madagascar
(24) Malaysia
(25) Malta
(26) Monaco
(27) Mozambique
(28) Namibia
(29) Nepal
(30) Oman
(31) Pakistani
(32) People’s Republic of Bangladesh
(33) People’s Republic of China
(34) Rwanda
(35) SeychellesJaipur Wealth Management
(36) Singapore
(37) South Africa
(38) Sri Lanka
(39) Qatar State
(40) Sweden
(1) What are the benefits of using Seychelles to invest in African countries?
Seychelles is an independent island in the Indian Ocean. It is located between the African continent and Asia. It has a superior strategic location and can provide services to Europe, Asia, the Middle East and Africa markets.Seychelles’ offshore financial services industry has made significant progress in professional knowledge, business volume and international image, which is due to its effective balance of balance between the sound supervision practice and market demand.The use of Seychelles Investment entities have multiple advantages in law, finance and operation in African countries, such as::
(1) Tax planning: Seychelles provides international enterprises with a preferential tax system.The income generated abroad does not need to pay taxes locally, so it is attractive to holding companies or investment institutions.
(2) Registration and operation convenience: For international companies, Seychelles has a simple and efficient registration process.Compared with many other jurisdictions, its reporting requirements are also less, which reduces the administrative burden.
(3) Political stability: The political environment of Seychelles is characterized by the transitional transition of power and is committed to democratic governance.This stability reduces the political risks of investors.
(4) Legal framework: The legal system of Seychelles is mainly based on British ordinary law (also mixed with some aspects of French law), which is familiar to many international investors and provides stable and predictable legal laws.environment.
(5) Protection of the investment treaty: Seychelles signed various investment treaties and agreements with other countries, which can provide investors with additional protection and benefits.Seychelles are members of the Commonwealth, Africa, Caribbean and Pacific State Organization (OACPS), African Union, Ringhonga Ocean Regional Cooperation Alliance, and Southeast African Common Market (COMESA).Seychelles signed various bilateral and multilateral investment treaties and agreements to provide protection measures such as dispute resolution mechanisms.
(6) Financial Services: Seychelles has developed financial services, including banks and professional services, and can support investment activities.
(7) Currency stability: Although Seychelles uses domestic currencies (Seychell Rude), Seychell’s currency is generally relatively stable compared with other African currencies.
(8) Strategic location and connectivity: The strategic location of Seychelles in the Indian Ocean can provide logistics advantages for companies operating in Africa, Asia, and other regions.Seychelles also has a good connection with some airlines operating in the area.
These benefits make Seychelles an attractive jurisdiction of judicial jurisdiction, which is suitable for the establishment of investment entities aimed at allocating capital to the African market.
(2) What is the legal framework of the Seychelles Investment Fund?
The legal framework of the Seychelles Investment Fund is mainly monitored by the 2008 Common Fund and Hedie Fund Act (MFHFA)Jaipur Investment. The bill stipulates that the establishment, operation and supervision of Hedar 3 and hedge funds in Seychelles.The Seychelle Financial Services Administration (FSA) is responsible for the MFHFA supervision and supervision investment fund. Fund managers or administrators must obtain a permission to operate a common fund or hedge fund at the Seychelles.The permit application process includes detailed information about the submission of funds and its structure, investment strategy and governance.Funds established by MFHFA can adopt various legal forms, such as companies, partnerships or unit trusts.Fund’s organization documents must meet the requirements of Seychelles’ laws and MFHFA regulations.Fund must disclose certain information to investors, including the fund’s investment goals, policies and risks.The audited annual financial statements must be prepared and submitted to the FSA.The fund must also abide by the anti -money laundering and anti -terrorist financing laws of Seychelles, and demands that the customer’s due diligence procedures and reporting obligations are required.Under the specific sees of Seychelles, MFHFA provides funds with tax benefits and tax exemption, including exempting business taxes from foreign funds and its investors, but premise to meet certain conditions.The FSA is responsible for supervising the fund to abide by MFHFA, has the right to check, punish illegal acts, and take mandatory measures when necessary.
(3) What is the most common company architecture?
Under the Sylumon regulatory framework, the most common company types used in international business and investment include:
(1) International Business Corporation (IBC): IBC is the most popular company type in Seychelles International Trade and Investment Campaign.Its main features include flexible corporate structure, as little report requirements as possible compared to other jurisdictions, no need to disclose the actual controllers, and have no requirements for directors or shareholders.IBC is usually used to hold assets, carry out international trade and as an investment tool.
(2) Special License Company (CSL): The advantages provided by CSL include tax resident identity, dual tax agreement for Seychelles, and certain local tax exemptions.CSL is more suitable for regulatory standards than IBC, and requires the approval of the Financial Services Authority (FSA).
(3) Social Unit Company (PCC): PCC is an entity with independent units, allowing various assets and liabilities to operate independently.Each unit is operated independently and provides legal and financial isolation between different activities or customers.PCC is usually used in insurance, common funds and collective investment plans.
(4) Trust: The legal framework of Seychelles includes the provisions of international trusts. These trusts are widely used in asset protection, inheritance planning and holding purpose.Seychelles’ trust can be established in accordance with the International Trust Law and benefit from strict confidentiality and asset protection clauses.
(5) Foundation: Foundation can serve various purposes, including wealth management, charity activities and inheritance plans.The Foundation requires the council to manage its affairs and ensure that observing the regulations of Seychelles and achieved the goals of the foundation.
According to the special needs of investors, these companies under the Syluman regulatory framework provide a series of choices.Under normal circumstances, the choice of company types depends on factors such as the nature of business activities, regulatory requirements, tax impacts, and long -term strategic goals.Regarding the detailed information and specific supervision requirements of each company, individuals and enterprises can refer to the resources provided by FSA and other relevant government agencies.
(4) What are the procedures for registration?Including expected time, costs and simplified procedures for foreign investors.
The procedures and expenses of the company’s entity in Seychelles vary from the physical type.Government costs are between $ 100-3,000, depending on the entity type and applicable requirements.Foreign investors can set up different entities remotely through registered agents in Seychelles without having to visit Seychelles.Foreign investors need to designate registered agents in Seychelles to facilitate the establishment and daily management and compliance. Local company service providers have their own charging structure for these services.The official regulatory agency of the above company’s entity is FSA, which is responsible for providing guidance and supervision and supervision.
Understanding the registered procedure of Seychelles needs to understand the specific requirements of each entity type and ensure that it meets local laws and regulations.It is recommended to consult the legal and financial consultants familiar with the law of Seychelles to understand the registration procedure and ensure that it meets the regulatory requirements.
(5) Is there any tax or legal advantage for specific types of entities?
Yes, Seychelles follows the local taxation system and provides various tax and legal advantages based on the structure and expected use of specific types of entities.
(1) The income, dividends, capital benefits and stamp duty tax exemptions earned by IBC of IBCs outside Seychelles. As long as its income is an exception to earn abroad and does not belong to the business tax framework.
(2) CSL, a special license company, can apply for tax residents’ identity of Seychelles, so as to join Seychelles to avoid the dual taxation agreement (DTA) network.Under the premise of meeting the substantial requirements of the economy, CSL, a special license company, can enjoy tax -free benefits on certain types of income.
(3) According to the nature of the structure/entity and its activities, the income obtained by the foundation and trust may be tax -free from the income from Organia.
[1] Mo Bulan’s African National Governance Index (IIAG) was established in 2007 by the Mo -Ibrahim Fund. Each year, through the "security and legal system", "participation and human rights", and "sustainable economic opportunities" each year, "And the four major indicators of "human development", as well as refined evaluation indicators, collect relevant data, and evaluate the level of the ability to govern the country in Africa.
[2] Global Fund, a financial instrument specially used to gather and manage investment.It can be established in accordance with any legal entity form stipulated or approved by the Financial Services Committee (FSC). It can be a local fund or a global fund that uses the global commercial company (GBC) structure.
[3] India is generally called public fund in the market.
The above information only represents the author’s own point of view, and it shall not be regarded as a formal legal opinion or suggestion issued by Deheng Law Firm or its lawyer.If you need to reprint or quote any of the contents of this article, please indicate the source.
The content of this guide is only a summary of highly refined, and the application of relevant laws is different due to factors such as the investment structure and the target industry.Before investing, please seek specific legal suggestions from lawyers with relevant legal practice.
This article compiles according to the relevant legal Q & A issued by Appleby (Mauritius) and Appleby (Seychelles) law firms. The English author is Malcolm Moller, Jyotika Kaushik (lawyer) and Suhaylah Juman (lawyer).The above answers were written on July 30, 2024.
Jia Hui, a partner of Deheng Beijing Office; the main practice areas are cross -border investment and financial insurance.
Ju Guang, a lawyer in Deheng Beijing Office; the main practice areas are cross -border investment and company compliance.
This article was originally created by the lawyer of Deheng Law Firm. It only represents the author’s own point of view. It must not be regarded as a formal legal opinion or suggestion issued by the Deheng Law Firm or its lawyer.If you need to reprint or quote any of the contents of this article, please indicate the source.
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