Mauritius is consistently proving a pace setter in terms of progressive legislations in support of startups in Africa. To this effect, the Financial Services Commission of Mauritius (“FSC”) has issued the Financial Services (Crowdfunding) Rules 2021 in line with its strategy to sustain the growth of the Fintech ecosystem within the Mauritius International Financial Centre. 

“The introduction of these Rules on investment-based Crowdfunding represents another key regulatory milestone for the FSC. It, in fact, demonstrates the fruitful collaboration between the regulator and the industry with the objective of enabling the provision of new financial products/services for the ultimate interests of our stakeholders. It shall complement the Peer-to-Peer Lending Rules that was issued last year. Both frameworks will foster innovation and facilitate access to finance to SMEs,” said Chief Executive of FSC, Dhanesswurnath Thakoor. 

Without a crowdfunding licence given by the Commission, no one may run a crowdfunding platform in Mauritius under the new rules. 

Under the new rules, there is no restriction on the nature and type of businesses that may raise funds through a crowdfunding portal. However, companies listed on the Mauritius stock exchange are barred from seeking funding on a crowdfunding platform.

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Again, a crowdfunding portal is permitted to handle funds on behalf of investors, provided that it opens a non-interest bearing account with a commercial bank duly licensed by the Bank of Mauritius, under the new rules. 

The rules takes effect from 4th September, 2021.

What Are The Requirements For Obtaining The New Crowdfunding License?

To be able to obtain the new crowdfunding license: 

• A crowdfunding operator must be a Mauritius-based legal entity.

• The crowdfunding platform’s registered office and principal place of business must both be in Mauritius.

• A crowdfunding operator must also have a minimum paid up capital of $47k (MUR 2 million).

• The crowdfunding operator must also observe standard corporate governance practices, including ensuring that it is managed by a board of directors composed of a minimum of 3 directors, of which at least — (i) 30 per cent shall be independent directors; and (ii) one shall be resident in Mauritius.

What Is The Highest Investable Amount? 

• Under the new rules, a crowdfunding operator must ensure that a retail investor does not invest more than MUR 350,000 ($8.2k) on the platform in a 12-month period. However, expert investors are not subject to any investment limits.

• In any case, a company seeking money through the crowdfunding platform may only offer to raise MUR 15 million ($350k) over a three-year period.

To find more about the new rules, click here. 

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Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer