The National Assembly of Mauritius has introduced on 05 April 2022 the Variable Capital Companies Bill (the “VCC Bill”), which was previously announced in the National Budget Speech 2020–2021. THE VARIABLE CAPITAL COMPANIES ACT 2022 (the “VCC Act”) has been assented and gazetted on 14 April 2022 and 15 April 2022 respectively, but is not in force yet.

The VCC Act proposes to create a legal framework in Mauritius for the formation and operation of Variable Capital Companies (“VCC”), with the objective to improve the competitiveness of the financial services sector and broaden the product base of the Mauritius International Financial Centre.



The VCC is a new corporate structure that combines the benefits of limited partnerships with stand-alone companies. A VCC has the benefit of being able to be utilised as an umbrella structure (cell type structuring), allowing a single fund to contain numerous cells that segregate assets and liabilities in distinct VCC cells. This organisational structure will allow fund managers to benefit from increased cost savings through operational flexibility, which may adjust diverse investment strategies to suit the demands of investors, among other things.

Each sub-fund of the VCC in the umbrella structure can have different shareholders and investment objectives, and its assets and liabilities are totally separated from those of other sub-funds, preventing any contagion matters. Sub-funds can own shares in other VCC sub-funds, allowing investors or family members to invest in different areas of the structure as they see fit.

This sub-fund structure allows a single VCC to replace many companies and trusts seen in a normal group structure. A board of directors, a fund manager, auditors, and other administrative agents can all be shared by the VCC, resulting in significant cost savings. The VCC can start as a solo fund with a single pool of investors and assets, with additional sub-funds created subsequently.

Fund managers can create VCCs for standard and alternative investing methods, as well as open-ended and closed-end funds. Open-ended funds, which are commonly used by hedge funds, allow investors to redeem their investments at their discretion. Closed-end funds, which are commonly used by private equity funds, limit an investor’s ability to redeem its shares during the fund’s existence.

The VCC is known for its versatility, and it can be utilised both as a classic fund structure and in new and creative ways. It is a hybrid of a legal company and a fund structure that may be utilised for hedge funds, mutual funds, private equity, private funds, and real estate funds.




It is worth noting that during the winding up, administration, or receivership of the sub-Fund, SPC, or the VCC, the assets of the sub-Fund, SPC, or the VCC shall not be utilised to discharge any liability of the VCC or any other sub-Fund or SPC of the VCC. Regardless of whether a sub-Fund or SPC of a VCC has legal personality, any responsibility of such sub-Fund or SPC shall be discharged only from the assets of such sub-Fund or SPC, even during the winding up administration or receivership of the sub-Fund, SPC, or VCC.

Unequivocally, the VCC might be a game changer for the Mauritius IFC, as it solidifies the Mauritius IFC’s value offer for international investors. It is a legal framework that may be used to both standard and alternative investment funds. Because of its capital flexibility and cost efficiency, the VCC is expected to pique the curiosity and interest of institutional investors and individual wealth managers. It will also be guaranteed that the legal framework governing the VCC complies with anti-Money laundering and counter-terrorism financing standards.

The VCC Act can be accessed at:

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