A Guide To Setting Up A Retail Brokerage In Mauritius

A Guide To Setting Up A Retail Brokerage In Mauritius

Mauritius, officially the Republic of Mauritius, is an island nation roughly 2,000 kilometres off the coast of East Africa. The name of the largest main island is Mauritius, but the Republic of Mauritius as a country also includes the other islands of Rodrigues, Agaléga, and Saint Brandon. As of 2023, Mauritius has a population of 1.263 million.

Mauritius has a favourable regulatory environment, which means that there are many overseas retail brokerages that have relocated to benefit from this. Setting up a retail brokerage in Mauritius is a smart move for many reasons, but there are a few prerequisites and costs that you should be aware of.

Why Mauritius?

Mauritius is known in the FX space as being a destination for setting up a retail brokerage. While this can often be simply due to word-of-mouth recommendations, Mauritius has many attractive benefits for FX brokers. This is due to its business-friendly environment, as well as its strategic access to African, Asian, and Middle Eastern markets. 

One of the main reasons for the interest is that Mauritius has an attractive tax regime. 

Businesses can benefit from:

• A flat corporate tax rate of 15%
• No capital gains tax
• A range of tax treaties

Mauritius also offers a range of investment dealer categories, which are all under the Mauritius Securities Act of 2005.

Economic & political environment 

Mauritius has the second-highest GDP per capita behind the Seychelles. This is backed up by strong sectors such as tourism, textiles and of course, financial services.

Politically, Mauritius is a strong country and has effective governance, which is attractive for foreign investment. Mauritius is one of Africa’s least corrupt countries, ranking 51st on the Corruption Perceptions Index in 2023.

Regulatory framework

Mauritius has set up its economy to be very business-friendly and cater to FX brokerages looking to set up there. 

The Financial Services Commission (FSC) oversees the sector, which ensures compliance and stability. This also includes the passing of the Financial Services Act of 2007, as well as anti-money-laundering (AML) regulations.

The FSC also maintains a Register of Licensees, which means that anyone can see who is operating in Mauritius. The licensing requirements of Mauritius are clear and also ensure that only legitimate and qualified businesses can operate.

Recent legal reforms such as the Variable Capital Companies Act of 2022 have been put in place to attract more FX brokerages, fund managers and promoters to the region. These regulations keep Mauritius competitive for financial service providers and demonstrate that Mauritius welcomes the investment. FX businesses will benefit from this supportive framework, and contribute to the innovation of Mauritius and its economy.

Setting up your retail brokerage in Mauritius

Setting up a retail brokerage in Mauritius requires a few decisions to be made before making the move. 

Investment dealer licences 

First of all, there are different categories of investment dealer licences, and before setting up your retail FX brokerage, you must decide which business model works best for you.

The different categories are:

• Full Service Dealer
• Broker
• Discount Broker 

There is also a license for Investment Dealer (Commodity Derivatives Segment) and for Investment Dealer (Currency Derivatives Segment), which are only allowed to trade in their respective securities.

A Full Service Dealer licence allows the holder to offer an entire range of investment services, and this can be with or without underwriting. With this licence, a broker can act as an intermediary in the execution of trades, and trade in securities with the intention of reselling these securities to the public. Under this licence a broker can also give investment advice and manage the portfolios of clients.

A Broker Licence allows the holder to execute orders for clients, manage their portfolios, and also give advice on securities transactions. 

A Discount Broker Licence allows the holder to execute orders, but not give advice or manage portfolios.

All the information on Mauritius Licensing Criteria for securities are available on the FSC’s website.

Criteria for a licence

There are also several requirements that you must meet to obtain an FX licence in Mauritius. 

You must:

• Register a brokerage company
• Open a Mauritian bank account
• Hire at least two directors who are resident in Mauritius
• Have at least two founders with a financial background
• Rent or buy a local office
• Sign employment contracts with local employees
• Conduct regular audits
• File financial statements and tax returns, and keep financial records
• Develop and implement AML and terrorist financing rules

Once you have met all of these criteria, then the FSC will review your application and the supporting documentation, and then contact you with a decision. 

Costs of a retail brokerage in Mauritius 

There are costs to be aware of before you set up your brokerage. Depending on the licence, you must also allocate a certain capital share. These costs also do not include the general costs of setting up or running a retail FX brokerage.

Here is an estimate of all the application and licence fees, as well as the minimum capital requirements, in USD and MUR (Mauritian Rupees). As mentioned earlier, you can check all the costs here.

Full Service Dealer

• Application fee: USD 1,000 (MUR 45,000)
• Annual licence fee: USD 5,000-10,000 (MUR 225,000-450,000)
• Minimum capital requirement: USD 250,000 (MUR 11,250,000)

Broker 

• Application fee: USD 1,000 (MUR 45,000)
• Annual licence fee: USD 2,500-5,000 (MUR 112,500-225,000)
• Minimum capital requirement: USD 100,000-200,000 (MUR 4,500,000 to 9,000,000)

Discount Broker

• Application fee: USD 1,000 (MUR 45,000)
• Annual licence fee: USD 2,000-3,000 (MUR 90,000-135,000)
• Minimum capital requirement: USD 50,000-100,000 (MUR 2,250,000 to 4,500,000)

Conclusion

If you’re looking to set up a retail brokerage in Mauritius, then at LiquidityFinder, we can source the help you need.

We have worked with a number of regulatory consulting firms that are very experienced with Mauritius and setting up there, and can put you in contact with the right people.

Please contact Sam Low via LiquidityFinder’s messaging system if you require a recommendation from someone who can assist you through this process.