Why are IFA’s using offshore?

freedom | flexibility | fortune

Why are IFA’s using offshore?

freedom | flexibility | fortune

for both the client and the IFA

Why are IFA’s using offshore?

Can invest globally without limits

Has access to foreign currency

Pays considerably less tax

Secures external capital basefor both the client and the IFA

£

%

@

Can invest globally without limits

Has access to foreign currency

Pays considerably less tax

Secures external capital base

IFA

for both the client and the IFA

£

%

@

$

Has a complete offering: domestic & offshore

Increased share of wallet

New revenue streams

IFA

for both the client and the IFA£ %@

Has a complete offering: domestic & offshore

Increased share of wallet

New revenue streams

$

A WIN WIN SITUATION!!

IFA

for both the client and the IFA£ %@

$

How are IFA’$ using offshore?

SO

WELL

meet John

John, an SA residentcontacts his IFA

OBJECTIVE 1:

To create an offshore capital base

OBJECTIVE 2:

To expand his business Internationally

How to achieve Objective 1

John obtains a Tax Clearance Certificate based on his right to a foreign investment allowance from

$$

FUNDS are transferred to an Bank account in Mauritius

The Mauritius Bank account is associated with $$

a trust or

a company or

a simple cash deposit

John wishes to invest his personal

international capital using his IFA to manage his portfolio

$$The Mauritius structure such as a Trust or Company opens a

custody/trading account

The Mauritius structure appoints John’s

IFA to advise on the account on an advisory/discretionary basis

The IFA earns advisory fees & can even create his/her own international capital base

$$

How to achieve Objective 2

John wishes to expand his current trading business, John Industries, internationally. He opts for expanding into Zambia

John’s IFA and JurisTax’s advisors collaborate to craft an international

structure, tailor made to John’s business needs

The Mauritius structure presents John with a variety of benefits including:

• the ease of moving capital in support of his International business interests • various TAX benefits triggered by the Double Taxation Treaty network of Mauritius• a highly benevolent tax environment in Mauritius – no Withholding Tax, no capital

gains tax , no estate duties

£ %@

By collaborating with JurisTax and providing a

solution for his client the IFA earns introducer fees

$$

£ %@ $

In the end, both

IFAclient &

£ %@ $

In the end, both

IFAClient & are

Passionate Supportersof Success

>>How does JurisTax make this happen for you?

We use

building blocks4

Credentials Jurisdiction Skills & Expertise Products & Services

JurisTax LimitedCredentials

>>

JurisTax’s core focus areas

Structuring & Administering South African businesses expanding internationally & in particular on a pan-African basis

Structuring & Administering International businesses & capital focused on investments into

Africa and Emerging markets

Structuring & Administering Private Wealth for HNW African &

European entrepreneurs and families

JurisTax Limited

Often Heralded as a boutique firm, JurisTax is licensed by the Financial Services Commission to provide a full range of Corporate, Fiduciary & Fund Services. To enable our clients to focus on their core business, we provide all the essential administrative, accounting, taxation, legal & company secretarial services that their company may require. Positioned as a one-stop-shop service provider, JurisTax offers specialised services in the areas of investment funds, tax planning, insolvency, intellectual property, aircraft and vessel registration as well as asset protection.

“We are a forward-thinking and innovative management company and deliver world class corporate solutions, adding our personal twist.”

Our ultimate goal remains to provide our client with spot-on business solutions by adopting the best work practices. In our quest to provide our clients with a fully comprehensive service, we have partnered with leading local and international partners including banks, legal firms and other intermediaries.

“We guide you towards new business horizons through our expertise and craft lasting and fruitful partnerships with our clients, based on trust and integrity.”

Pedigree & Heritage

Established in the year 2008 by Mauritians, we are unlike the vast majority of Management and Trust companies in Mauritius whose growth was derived from the Indian Sub Continent.

In contrast we have been always obsessive in our focus in delivering the highest level of Expertise, Insight and Service.

it is our absolute belief that we are unparalleled in the understanding and knowledge we have in addressing the most pressing issues of our clients especially in respect of:

• Exchange control

• Taxation

• The Internationalisation of assets

• Forging trade and business links across the world

Philosophy

It is our strong belief that in order to succeed in the accumulation and management of family and corporate wealth it is necessary to consider all aspects of that wealth be it related to business or personal wealth.

That is why, uniquely, we take a holistic view when considering strategies to create, manage and preserve personal and business wealth.

We believe in utilizing the full resources of the Group as we design and offer customized solutions for a broad range of clients

Driven by Service

At the heart of our organisation and our people is a passion to deliver the highest quality personal service in our day to day dealings with our clients.

For nearly ten years, we have had just one vocation: To advise our clients on structuring; Implementation of solution; and Administration and ongoing monitoring of validity of solutions previously

implement.

Our values are firmly rooted in our daily operations where we consistently demonstrate the professionalism, technical expertise and range of skills of groups

far larger than ourselves.

JurisTaxJurisdiction >>

Jurisdiction - Mauritius

LOCATION > Indian Ocean

TIME ZONE > GMT + 4 hours

CAPITAL > Port Louis

POPULATION > 1.3 Million

GOVERNMENT > Parliamentary Republic

6 hrs from Dubai, UAE

6 hrs from Mumbai, India

11 hrs from Paris, France

9 hrs from Perth, Australia

12 hrs from London, England

4.5 hrs from Johannesburg, South Africa

LANGUAGE > English & French

Offshore

Global Business incentives introduced in 1992; now recognized as a leading regional financial centre

Political, Economic & Social

Political stability guaranteed by a parliamentary democracy based on the Westminster model

A hybrid legal system based on English and French laws with the UK Privy Council as the highest Court of Appeal

White-listed jurisdiction recognised by OECD

Political, Economic & Social

Mauritius remains the top ranking country in overall governance in Africa for the ninth consecutive year according to the Mo Ibrahim Index of African Governance 2015

Mauritius, the only Sub-Saharan country to rank among the top 10 in the 2015 Index of Economic Freedom

Mauritius Tax Highlights

Corporate Tax Rate– 15%, which may be reduced to 0% for entities operating in the global business sector

Withholding Tax– No WHT on dividends; 10% WHT on interests unless specifically exempted; 15% WHT on royalties although a 0% rate applies to specified non-residents

Dividends – Dividends paid by a Mauritius-resident company are exempt from income tax. Foreign dividends are taxable but a credit for underlying and WHT can be claimed

Foreign Exchange Control – none Capital gains – no tax imposed on capital gains in Mauritius Foreign tax credit – foreign tax suffered may be credited against Mauritius tax

on the same income Attractive fiscal policies – with 43 active Double Taxation Avoidance Treaties &

22 Investment Promotion and Protection Agreements (IPPA’s)

Double Taxation Avoidance Agreement

Rwanda

Senegal

Seychelles

Swaziland

Uganda

Zambia

Croatia

FranceIndia

Nepal

Bangladesh

China

Singapore

43 treaties concluded

Botswana Lesotho

Madagascar

Mozambique

Namibia

ItalyLuxembourg

UK

Kuwait

Qatar

UAE

Australia

Thailand

Zimbabwe

CongoEgypt Germany

GuernseyMalaysia

Oman

PakistanSri Lanka

DTTA / Investment Promotion and Protection Agreements

AFRICABurundiEgyptMadagascarMozambiqueCongoKoreaSenegalSouth AfricaTanzania

ASIAChinaIndiaIndonesiaKoreaSingaporePakistan

EUROPEBelgium & LuxembourgCzech RepublicFinlandFranceGermanySwedenSwitzerlandPortugalRomaniaUK &Northern Island

10 with EUROPEAN Countries

9 with AFRICAN Countries

6 with ASIAN Countries

OTHERSBarbados

MIDDLE EASTKuwait

JurisTaxSkills & Expertise >>

JurisTax

An International TeamThe team at JurisTax is multinational and multi cultural with a broad diversity of educational and professional backgrounds.

All Encompassing SkillsOur expert teams bring skills to address all aspects of the management of a structure and include lawyers, accountants, tax experts, wealth managers, business leaders, entrepreneurs and estate planners.

Taking an all encompassing viewOur teams are bound by a shared passion for problem solving to make a significant impact in the structuring, management and administration of your personal and business wealth.

Our preferred partners

HSBC

Standard CharteredBarclays

PwCKPMG Afrasia

Board of Investment

BDOStandard Bank Deloitte

Deutsche Bank

MazarsInvestec

Chambers Consulting

JurisTaxProduct and Services >>

Offshore Business Entities

Trusts

Category 1 Global Business Licence Company (GBL1)

Category 2 Global Business Licence Company (GBL2)

Protected Cell Companies

Domestic Companies

Limited Partnership

Foundations

Funds – Collective Investment Schemes

We can also assist with structures in other jurisdictions such as Seychelles, IOM, BVI, etc. through our preferred partners & associates

Trusts

Legal relationship where the owner (Settlor) of assets transfers them to an independent third party (Trustee) for maintenance and management for the benefit of another person or persons (Beneficiaries) or a purpose or both

Not a separate legal entity and cannot be sued in its own name

Types of Trusts: Charitable, purpose, discretionary, trading, investment, etc.

Mostly used for:

– Wealth protection– Inheritance and succession planning– Charitable purposes– Investment Holding– Tax minimization– Can be part of business company structure

Trusts

Mauritius Trusts are not registered with the authorities unless a GBL1 licence is required but governed under the Trust Act; Seychelles trusts are regulated by FSA

Professional qualified trustee must be appointed

Trust may appoint investment or financial advisers, protectors (guardians)

Assets vested in the trust does not form part of the settlor’s estate

Assets kept for beneficiaries or purpose chosen by the settlor

Useful for asset holding, investment holding, charitable functions, specific purposes, pension and employee benefits

Discretionary Trusts mostly used as they provide more flexibility in terms of beneficiaries’ entitlements but beneficiaries not entitled until appointment

JurisTax– Trustees

TrustSettlor(s) Beneficiaries/

Purpose

Bank Account

AssetProperty

AssetInvestment

AssetOther

Investment/ Financial Adviser

Protector

Example of a Trust Structure

Trusts

Advantages of a Trust

• Assets are invested in the name of the Trust and not the name of the settlor.

• The assets do not form part of the estate of the settlor as it has been gifted to the Trust

• Protection from claims of creditors in certain situations

• The assets are protected for the benefit of the Beneficiaries and therefore, on the demise of the

Settlor, the investments are not interrupted

• The assets of the Trust are protected from spendthrifts of the family after the demise of the Settlor

• Orderly transfer of wealth to the next generations on the demise of the Settlor

• Tax savings: mechanism for income tax saving – by transferring assets to a Trust, the assets cease to

be owned by the Settlor, which then makes it possible to minimise taxes

• To manage the application and effect of exchange control, the Trust will be in a jurisdiction with no

application of exchange control

Trusts

Main Features of a Mauritius Trust

• Confidentiality of Trustee' deliberations, identity of Settlor and Beneficiaries• Possibility to establish letters and memorandum of wishes• Anti-forced heir ship rules• Migration of Trust possible• Concept of managing and custodian Trustee (up to four Trustees)• Charitable Trusts are exempt from tax, and

The proper law of the Trust is the one chosen by the Settlor, or the one implied in the Trust Deed. If no law is chosen, the one which is most closely connected at the time of creation of the Trust will be treated as the proper law

Corporate

Types of Corporate (Mauritius)

There are five types of corporate entity which can be incorporated with the Registrar of Companies in Mauritius. Each Global Business License entity type will be licensed by the Mauritius Financial Services Commission (FSC). Domestic Companies do not require licensing by the FSC

– Limited Company – GBL1– Limited Company – GBL2– Limited Company – Domestic

Category 1 Global Business Company (GBL1)

A Category 1 Global Business Company is licensed by the Financial Services Commission pursuant to the Financial Services Act 2007. A GBL1 may be locally incorporated or may be registered as a branch of a foreign company. The GBL1 Company may also apply for additional licenses under the Securities Act and the CIS Regulations.

Capital• There is generally no minimum stated capital requirement • Capital can be denominated in any currency• GBL1s are subject to no restrictions as to the distribution of their assets.

Taxation• GBL1 companies are resident in Mauritius for tax purposes.• There are no capital gains tax, and no withholding tax on payment of dividends, interests or royalties.• No stamp duties or capital taxes.• No inheritance tax.• GBL1 companies are liable to taxes at the rate of 15%.

Category 1 Global Business Company

Main Features

• Have at least two resident directors in Mauritius;

• Chair and initiate Board Meetings from within Mauritius;

• Maintain an account with a local bank through which funds must flow;

• Maintain its registered office and all statutory records (including share register and

accounting documents) in Mauritius;

• Have a local qualified company secretary;

• Have a local auditor; and

• May own shares in a GBL1 and may in a GBL2 if no shareholders or beneficial owners are

local residents of Mauritius

Category 2 Global Business Company (GBL2)

A Category 2 Global Business Company is a private company which conducts business with persons all of whom are resident outside Mauritius and in a currency other than the Mauritian rupee.

Taxation• A GBL2 does not pay any tax on its world-wide income to the Mauritian Authorities.• No withholding tax on dividends.• No capital gains tax.• The tax cost of a GBL2 is effectively the foreign tax suffered. • A GBL2 can trade and/or invest in a GBL1 and vice versa.

Mobility• A foreign company may transfer its seat to Mauritius and continue as a GBL2 provided this is allowed under

the laws of the country in which it was incorporated.• A GBL2 may transfer its statutory seat to another jurisdiction.• A GBL2 can be converted into a GBL1.

Category 2 Global Business Company – Main Features

Capital and Shares

• There is no minimum capital requirement but at least one share must be issued and paid up;• Registered shares, preference shares, redeemable shares and shares with or without voting

rights;• Par value shares may be stated in more than one currency;• Fractional shares are allowed;• Bearer shares are not allowed;• Shares may be subscribed by nominees;• Shareholders may be individual or corporate;• A GBL2 may acquire, redeem, reissue or purchase its own shares;• The Directors are required to ensure that the company meets the solvency test after making

distributions; and• The solvency test is satisfied where the company is able to pay its debts as they become due

and the value of the company's assets is greater than the sum of the value if its liabilities and its stated capital.

Investment Funds

Investors and promoters have the possibility to select the type of fund that would be appropriate for their profile, risk tolerance and objectives under the Securities (Collective Investment Schemes and Closed-end Funds) Regulations 2008 (CIS Regulations) and Securities Act 2005 (SA05), as amended. A brief description of the funds that can be authorised in Mauritius is provided hereunder.

CEF CIS

A CEF is a scheme, other than a CIS, whose object is to invest funds, collected during an offering or from sophisticated investors, in a portfolio of securities, or in other financial or non-financial assets, or real property.

A CIS is a scheme • whose sole purpose is the collective investment of

funds in a portfolio of securities, or other financial assets, real property or non-financial assets;

• which is based on the principle of diversification of risk • that, on request of securities holder, is obligated to

redeem at their net assets value, less commission or fees

• where participants do not have day to day control over the management of the property.

CIS includes closed-end funds whose shares or units are listed on a securities exchange.

• has a fixed share capital• does not entitle investors to call for their shares to be

redeemed at net asset value.• may be formed with a limited life after which the assets are

distributed to investors upon winding up.

• has a variable share capital.

• entitles its investors to redeem their shares at net asset value at pre-determined times.

Investment Funds

CEF DescriptionRelevant

RegulationProfessional Collective Investment Schemes

Available solely to Sophisticated Investors or offering shares by way of private placements; CEFs which are not reporting issuers can be classified as PCIS.

Regulation 75, CIS Regulations

Reporting Issuer Subject to meeting the definition of a "reporting issuer" under the SA05, e.g. offering securities via a prospectus, listed on SEM or has not less than 100 shareholders.

Section 86(1), SA05

CIS DescriptionRelevant

RegulationExpert Funds Available only to Expert Investors (minimum initial investment of USD 100,000) or

Sophisticated InvestorsRegulation 78, CIS Regulations

Professional Collective Investment Schemes

Available to Sophisticated Investors having a good knowledge of investment so they are capable of protecting their interests or offering their shares by way of private placements

Exempted from certain regulations provided that (a) shares acquired by the participants are not resold to the public and the participants are advised of this restriction at the moment of subscription and (b) the PCIS is not listed for trading on the securities exchange.

Regulation 75, CIS Regulations

Specialised Collective Investment Schemes

Especially suited for investments in high risk or illiquid asset types, such as real estate, derivatives or commodities

Prior decision of FSC is required as to whether or not such a scheme will be authorised.

Regulation 77, CIS Regulations

Reporting Issuer A CIS/CEF may qualify as a Reporting Issuer if it meets the definition of a "reporting issuer" under the Securities Act 2005

Section 86(1), SA05

Investment Funds

Foreign Schemes: The FSC may also recognise, under Section 101 of the SA05, a CIS established in a foreign country subject to such conditions as the FSC considers necessary for the protection of participants in the CIS.• Sophisticated investor means the Government of Mauritius, a statutory authority or an agency established

by the government of Mauritius, the government of a foreign country or an agency of such government, a bank, a CIS Manager, an investment adviser, an investment dealer or a person declared by the FSC to be a sophisticated investor.

• Private Placement is defined as being an offer of securities where total cost of subscription or purchase for each person to whom the offer is made is at least equal to the amount determined by the rules and where each person subscribes or purchases for his own account and no publicity is made by the person making the offer

Umbrella Funds/PCC: It is also possible to constitute the foregoing structures as "umbrella" funds in either a Protected Cell Company or multi share class format. The umbrella fund will comprise of two or more cells, sub funds or share classes and investors subscribe for shares or units in specific cells, sub funds or share classes, each of which has its own investment policy with segregated assets and accounting records. Investors can switch their investments from one sub fund to another without redeeming their shares or units. An investment company in Mauritius can also be set up as one of the sub funds of an umbrella fund established outside Mauritius.

Investment Funds

Protected Cell Company: The Fund may be structured as a PCC if your long term objective is to use the Fund as an "umbrella" fund with different investment objectives or in view of segregating investors or having different returns and charges associated with the cell. A PCC is a single corporate vehicle, which allows multiple separate legal identities within one brand by way of cells.

A cell is not seen as a legal entity separate from the company. However, it does provide for a segregation of assets and liabilities. The PCC remains a single legal entity but the liability of the company in respect of each cell is limited to the assets attributable to the relevant cell, not for the debts of any other cell. These structures can be extremely beneficial, for example, to a single investor in different assets, or to a particular type of investment with different risk attributes (capital growth / income), for similar assets but in different currencies etc.

Main characteristics of a PCC are as follows:• The assets and liabilities of each cell are legally segregated from each other, enabling ring fencing of assets

among the various cells; • At least one cell must be created at the time of establishment of a PCC. No restrictions on the number of

cells that can be created, but the creation of each additional cell is subject to the approval of the FSC; • Each cell may have different objectives, valuation frequency and different NAV and hence, different prices at

which the shares will be available to investors; • The fund will issue cell shares to investors and non-cell shares (also known as management shares) to the

CIS Manager; and • Only management shares are entitled to voting rights and held by the promoters either in their own name,

through nominee shareholding or through trusts.

Private Pension Schemes

What are your pedantic clients are looking for?

• RELOCATION OF FUNDS

The desire to retain an investment in a currency other than ZAR.

The desire to ensure investment returns in a currency other than ZAR.

The ability to draw the investment in a jurisdiction other than South Africa.

The ability to have the investment paid into a foreign bank account whilst they remain in South Africa which is not in contravention of the financial surveillance regulations.

• SUCCESSION PLANNING

The requirement to be able to pass on the investment to their heirs.

• CONFIDENTIALITY

• AVAILABILITY OF INVESTMENT CHOICES

Private Pension Schemes

• A PPS is defined as being a scheme whether or not sponsored by an employer with the primary objective of providing pension benefits to beneficiaries

• The beneficiaries of a PPS are entitled to pension benefits in terms of the rules of a PPS. “beneficiary” — (a) means a person who is entitled to pension benefits in terms of the rules of a private pension scheme; and (b) includes a member...

• The pension benefit may be in the form of a pension, a compensation, gratuity or allowance payable to a beneficiary, and includes a retirement benefit, a death benefit, disability benefit or such other allowance as may be specified in the rules of the PPS.

• A PPS may either be a trust, a foundation or such body of persons as may be specified in the FSC rules. A PPS to be able to operate in Mauritius will have to be licensed by the FSC, the regulator under the Private Pension Act 2012.

• 3 Categories of PPS

1. Pension Scheme - Pension scheme generally means a scheme which is regulated in Mauritius and provides pension benefits to beneficiaries in Mauritius.

2. External Pension Scheme - External pension scheme means a scheme which is regulated / administered in Mauritius and holds a Category 1 Global Business Licence. It targets individuals outside of Mauritius.

3. Foreign Pension Scheme - Foreign pension scheme means a scheme which is regulated in a foreign jurisdiction and is allowed to operate in Mauritius to cover Mauritian-based members/ beneficiaries. Under this arrangement, Mauritian employers can subscribe to pension plans incorporated abroad.

66

Pension Scheme

represented by governing body

Shares

Investment – Foreign Jurisdiction

Members Members Members Non-Mauritian Individuals

Mauritius

Worldwide

Contributions

Pension Scheme Administrator

Investment Manager

Custodian

Pension Benefits

Beneficiaries Beneficiaries

Private Pension Schemes

Auditor

Actuary Actuarial valuation to be undertaken periodically to ensure funding levels.

The PPS will need to be audited by a qualified auditor and an audited financial statements will need to be submitted to the FSC

Private Pension Schemes

HOW DOES THE PPS WORK?

1. The members will make contributions (by way of cash or assets) in the PPS + choose the options available to them.

The member’s age is taken into account and an aggressive investment portfolio is offered to members under the age of 40, on the basis that the member still has 15 to 20 years to retirement and profit maximisation is the objective in this stage of the members life. A less aggressive portfolio is prescribed or offered for those between ages 40 to 50 whilst an extremely stable low risk portfolio is recommended after age 50, assuming retirement will take place at age 65.

2. The Investment Manager together with the trustees will manage the assets of the PPS by making investment decisions.

3. The Administrator of the PPS will prepare an annual benefit statement stating the normal retirement age, the amount of contributions, the accrued & projected Pension Benefits .

4. At the retirement age of the member (not less than 50), the annuities will be paid out to the members or beneficiaries - Names of individuals nominated by the member (may include the member himself); or Trust in which the lump sum will be paid in the event of the death of the member (allowing for succession planning).

• Members may not encash more than 25% by way of a single withdrawal on retirement. The remaining portion must be paid by way of a annual pension.

• Before retirement, there is the option of the members getting loans from the PPS under certain terms and conditions.

Private Pension Schemes

TAX TREATMENT OF A PPS IN MAURITIUS

• The external PPS is tax resident in Mauritius

• PPS is liable to at a rate of 15%. However, the PPS, being holder of a GBL 1, will be entitled to claim either the deemed foreign tax credit of 80% or the actual foreign tax credits whichever is greater, reducing tax to 3% on its foreign sourced income..

• Any gains derived by the PPS on disposal of securities will not be subject to tax under Mauritian laws.

• PPS are designed to trigger benefit payment, usually in the form of annuity, when the member reaches at the retirement age.

• The distributions of the PPS (in this case, pension benefits) to non-resident beneficiaries are not subject to tax in Mauritius.

TAX TREATMENT IN SOUTH AFRICA

• The external PPS is not tax resident in SA.

• Annuities may be remitted to South Africa or to a bank account outside South Africa.

• No exchange control restrictions in South Africa in respect of a South African exchange control beneficiary of a PPS.

• No disclosure of contribution and entitlement to pension benefits to SARS, as in contradistinction to the investment in an investment fund.

• Disclosure of receipt of annuities is required, and is made in the tax return.

PPS Processing Fee

USD 200

PPS Variable Annual Fee

USD 1 per member