Fintech: regulatory requirements and licences needed to establish a business

The fintech, financial-technology, industry is still in its emerging stages in Mauritius. However, the government and other relevant bodies are taking several steps so that Mauritius becomes a jurisdiction which caters for the development and success of innovations in the financial sector. This involves the implementation of several regulatory measures. It is expected that this sector will be further monitored as interest in fintech increases.

Currently, there are no directives that will hinder fintech innovation in Mauritius. However, banking activities are regulated by the Bank of Mauritius and insurance activities are managed by the Financial Services Commission. Thus, all companies engaging in such activities will need to be licensed by either one of these two organisations. Besides that, the government has another regulatory regime’s approach to consumers and small business customers. This is the ‘Companies Act’ and it lists out specific provisions for “small private companies” in Mauritius. These firms are those who do not hold a Category 1 Global Business Licence and whose turnover of their last preceding accounting period is less than 50 million rupees or such other amount as may be prescribed.

A small company has less strict filing and regulatory requirements. The discrepancies are as follows.

  1. It does not need to appoint an auditor,
  2. It does not need to file financial statements. Instead it has to file a simpler financial summary with the Registrar of Companies,
  3. It is not required to prepare and present its accounts according to the International Accounting Standards,
  4. It does not have to file an annual return and
  5. It is not required to appoint a company secretary.

On the other hand, foreign fintech companies have to apply for a Regulatory Sandbox Licence and they should appoint a custodian for their digital assets if they wish to operate in Mauritius. These will facilitate the setting up of fintech companies and enable their development. The Regulatory Sandbox Licence gives investors the possibility to conduct a business activity for which there is neither a legal framework nor adequate provisions under existing legislation in Mauritius. It is issued by the Board of Investment to eligible companies who wish to invest in innovative projects according to an agreed set of terms and conditions for a defined period. Additionally, foreign companies should apply for the Digital Assets Custody Service Licence. This framework has been introduced in March 2019 to offer a regulated landscape for the custody of digital assets.

To further enhance the development of the fintech sector and to help companies thrive, regulators and government authorities reached to experts in this domain. Following this, the British High Commission, in partnership with the Financial Services Promotion Agency (FSPA) and the Board of Investment (BOI), hosted a conference on fintech in Mauritius. It explored the development of the country as a FinTech hub for the Sub-Saharan Africa region. The various panel discussions and a group of experts shared their view on how the British fintech model can be applied in Mauritius to implement innovative solutions in the financial services sector and drive economic growth. As such, it is expected that relevant bodies will introduce more regulations in the future.

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