Jurisdiction Spotlights
Mauritius vs Cayman: Choosing a Fund and Investment Jurisdiction
A practical comparison of Mauritius and the Cayman Islands as fund domiciliation and investment structuring jurisdictions.
Mauritius and the Cayman Islands are two of the most established jurisdictions for fund domiciliation and investment structuring globally. While both offer sophisticated frameworks, they differ significantly in cost, regulatory approach, geographic focus and treaty access.
Regulatory Framework
Regulatory comparison:
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Cayman Islands: Regulated by the Cayman Islands Monetary Authority (CIMA). The jurisdiction has long been the dominant global platform for hedge funds, private equity structures and fund-of-funds vehicles.
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Mauritius: Regulated by the Financial Services Commission (FSC). The Securities Act 2005 and associated regulations provide a robust framework for Collective Investment Schemes (CIS), investment funds and related service providers.
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Both jurisdictions are recognised by international investors and institutional allocators, although Cayman remains more commonly associated with US-focused and large-cap fund structures.
Tax Treatment
The Cayman Islands imposes no direct taxation on companies, partnerships or investment funds — no corporate tax, capital gains tax, withholding tax or income tax. Mauritius offers a 15% headline corporate tax rate with the potential for a significantly lower effective rate on qualifying foreign-source income through the 80% partial exemption. The choice depends on the investor base, the fund’s strategy and whether treaty access is a priority.
Treaty Access and Withholding Tax Efficiency
This is one of the most significant practical differences. Mauritius has an extensive network of 45+ Double Taxation Agreements, many of which are actively used for investment into Africa, India and parts of Asia. A Mauritius fund may benefit from reduced withholding taxes on dividends, interest and royalties in countries with which Mauritius has a DTA. The Cayman Islands has a more limited treaty network, which may result in higher withholding-tax leakage on certain cross-border investments.
Cost and Accessibility
Cost considerations:
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Mauritius generally offers a more cost-effective platform for smaller and mid-size fund structures, with lower incorporation and ongoing regulatory costs compared to Cayman.
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Cayman structures involve higher setup and annual compliance costs, which may be justified for larger fund raises or strategies where institutional investors specifically require a Cayman vehicle.
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Mauritius fund administration, management company and governance services are competitively priced within the international financial centre market.
Investor Perception and Market Practice
Cayman remains the dominant jurisdiction for US-dollar-denominated hedge funds and private equity vehicles, particularly those targeting institutional allocators in North America. Mauritius is increasingly used for Africa-focused funds, India-corridor structures and emerging-market strategies where treaty access and cost efficiency are important considerations.
When to Choose Mauritius
Mauritius may be preferable when:
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The fund targets African, Indian or broader emerging-market investments
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Withholding-tax efficiency through DTA access is important
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A cost-effective platform is required without compromising regulatory credibility
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The fund strategy requires an active management company and substance in-jurisdiction
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Combined fund structuring with a Mauritius corporate or trust vehicle is desired
Evaluating where to domicile your next fund? Speak to AcuFin about the comparative advantages of Mauritius and the Cayman Islands.
Discuss Fund DomiciliationDisclaimer: Tax and regulatory information is provided for general guidance only and is subject to change. Professional advice should be obtained based on the specific circumstances of each fund and its investors.
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