The majority of High Net Worth Investors ("HNWI’s") – and their advisers – have not heard of the protected cell company ("PCC"). What, then, is a PCC?

A PCC is a company which has "core" capital (nominal and usually owned by the promoters) and "cellular" capital (owned exclusively by the investors). Each cell is owned by an individual investor (or his investment vehicle) and each cell is ring-fence protected from the liabilities incurred by any of the other cells. This means the activities of one investing cell is isolated from any "contamination" which may arise out of the investment activities of all other cells.

First Mauritius PCC Limited ("First Mauritius") has been created specifically to meet the needs of HNWI’s; each of whom may "invest" in First Mauritius – that is, each subscribes for shares in a cell. There are numerous advantages of the PCC structure over, say, a Unit Trust ("UT") or an Open Ended Investment Corporation ("OEIC") – principally because, in a PCC, the ring-fencing means that there is no cross-over liability amongst investors and their individual investment activities.

UK (and other) "close company" tax rules provide that gains on direct (wholly-owned) investments are to be taxed to the investor (by attribution) – as if the gains had been made in the UK. These rules also provide that even if the investments are not wholly-owned, the Revenue (subject to de minimis rules) still taxes the investor (by attribution) if 5 or fewer persons control more than 50% of the offshore vehicle. Therefore, to avoid taxation by attribution, the investor must involve himself with other investors through, for example, a UT or an OEIC – and, simultaneously, expose himself to the non-ring-fenced cross-over liabilities of all of his fellow investors.

First Mauritius is a structure which resolves the existing "Problem" – both in terms of the UK and elsewhere. Important starting points are: (1) It is an umbrella fund with no cross-over liabilities amongst investors. (2) It is not a "close company" under UK (and other jurisdiction) tax rules. (3) Although other vehicles afford investor protection against "close company" rules, the same vehicles (UT’s, OEIC’s, etc.) do not protect the investor against cross-over liabilities. Indeed, these vehicles are made deliberately cross-over liability prone because this is the only way in which "close company" rules can be avoided.

If a HNWI invests through, say, a UT or an OEIC, it almost invariably means he is investing through the fund manager of the institution promoting the OEIC. Normally, the HNWI has no choice in this – he has no choice because the institution promoting the UT, OEIC, etc. knows that the only way in which it can, to some extent, limit investor cross-over liability is to ensure that its fund managers control the investment activities of the investors. This is not the case with First Mauritius – wherein each and every investor continues to engage his own personal fund manager.

• Gross roll-ups outside the UK with indefinite CGT deferral.

• Full taper relief after 10 years (from date of first investment).
• Gross reinvestment available.
• Structure fees UK deductible and no VAT.
• No IHT for non-domiciliaries unless deemed (17 year rule).
• UK settlor offshore trusts obtain indefinite CGT deferral.
• Tax treaty benefits (hence, increased net returns on investments).
• Ability to invest in UK without attracting UK tax.