Mauritius domiciled funds are now eligible for the preferential Category-I Foreign Portfolio Investor (“FPI") licence following an order passed by the Indian Finance ministry on Monday 13 April 2020. This is a welcome move for the global business industry since it implies that Mauritius funds will now benefit from indirect transfer tax exemption – thus positioning Mauritius on the same level playing field as other major International Financial Centres such as Singapore, Hong Kong and the Netherlands.

It will be recalled that Mauritius-based funds were previously only eligible for the Category II FPI licence given that Mauritius is a non-Financial Action Task Force member state. One of the salient changes brought about by the Union Budget 2019-20 (India) was the removal of the indirect transfer tax exemption for holders of Category II FPI Licence.

Click Here to access the official Order issued by the Indian Finance ministry.

The Financial Services Commission also issued a communique in that regard: Click Here