1.1 Legislation allowing the formation of Protected Cell Companies ("PCC") came into effect on Mauritius on 1^st January, 2000. The relevant legislation is the Protected Cell Companies Act 1999 ("the PCC Act").

1.2 The PCC Act is relatively exceptional. The only other jurisdictions where similar legislation has been enacted are Jersey, Guernsey, Bermuda and the Cayman Islands.

2.1 A PCC may be easily identified from a non-PCC in that, by law, there must be included within the name of the company either the letters ‘PCC’ or the words ‘Protected Cell Company’.

2.2 A PCC is single legal entity which operates in two distinct parts. These parts are the Core and the Cells. There is (and may only be) one Core; but there may be an infinite number of Cells.

2.3 A PCC will generally have two classes of shares :

• Ordinary shares which will control the Core, and these will be the voting shares.

• Cellular shares which are related to individual Cells and which will be distinct and separate from all other Cells. Cellular shares do not carry any voting rights.

2.4 Cellular shares are issued, as required, under different names or numbers so as identify and to represent particular Cell to which they relate. For example, ‘Christopher Robin cellular shares’ will issued in respect of Christopher Robin’s Cell and ‘Christopher Wren cellular shares’ will be issued in respect of Christopher Wren’s Cell; and so on and so forth. This connection between named cellular shares, and the Cells to which each is related, is enshrined in the Memorandum and Articles of Association of each PCC.

2.5 Once a Cell has been set-up in consequence of an issue of cellular shares, all assets, and all matters and acts, relating to that Cell must, by law, be identified by the Cell name (or number, if applicable). For example, separate accounting must be conducted with respect to each Cell and each Cell’s assets must, at all times, be ascertainable and identifiable - as assets distinct from the assets of other Cells, and the assets of the PCC itself (the Core assets).

2.6 Under the PCC Act, the assets of each individual Cell are attributable to that Cell alone; and to no other or others. By law, creditors of one Cell have no recourse to the assets of any other Cell.

2.7 By law, creditors of a Cell may, in certain limited circumstances, have recourse to assets held within the Core; that is to say, the Core assets. The Core assets (which will normally be minimal relative to Cell assets) are themselves separately identified in order that there can be no confusion as which assets are Core assets, and which are not.

2.8 The PCC will have one Board of Directors which is appointed by the Core shareholders.

3.1 The PCC, as a single legal entity, has but one tax status.

3.2 In Mauritius, the status is that of a Category 1 Global Business License Company which company is subject to tax in Mauritius at, in effective terms, a maximum rate of tax of 1.5%.

4.1 As a Mauritius Category 1 Global Business License Company (the PCC) qualifies as a resident of Mauritius purposes, it will be able to tax advantage of, and benefit under, all of the 25 or so Double Taxation Agreements to which Mauritius is a party. In taking advantage of, and from benefiting under, these Double Taxation Agreements, the Mauritius PCC will, where appropriate, avoid imposts such as capital gains taxes and will avoid, or benefit from a reduction in, withholding taxes on such revenues as dividends, interest, etc. In this way, the net return to a Mauritius PCC is enhanced.

4.2 Some of the Double Taxation Agreements to which Mauritius is a party (and in relation to which the Mauritius PCC benefits) include Agreements with the United Kingdom, France, Germany, Italy, Sweden, Luxembourg, China, Singapore, Malaysia, Indonesia, Thailand, South Africa, India and Madagascar.

4.3 Another advantage of the Mauritius PCC is that – due to the invariably fairly large number of individual Cells – the PCC will not be treated as a Controlled Foreign Company ("CFC") for tax purposes. Accordingly, in the case of, for example, the United Kingdom and South Africa, residents of those jurisdictions will not be subjected to the CFC legislation in those jurisdictions. In consequence, they will not have imputed to them accretions attributable to their cellular shares which have yet to be distributed to and received by them.