Mauritius Payment Intermediary Services License

Introduction

The Payment Intermediary Services License is of interest to those who wish to operate as an online Payment Service Provider (PSP). The PSP business model is becoming more of a norm in the current business environment to address the ever-increasing need of both online shoppers and online sellers to do business via the internet. The Payment Intermediary Services License can only be applied for under a Category 1 Global Business Company and needs the approval of the Financial Services Commission for a GBC 1 to obtain such a special license. One of the licensing conditions is that the company must maintain an unimpaired capital of at least MUR 500,000 or its equivalent. With a Payment Intermediary Services License, the GBC 1 can offer merchant online services for accepting electronic payments by a variety of payment methods including credit card, bank-based payments such as direct debit, bank transfer, and real-time transfer based on online banking. The main customer base is often composed of online merchant sellers

Permitted Activities

• Services enabling cash to be placed on a payment account, including all operations required for operating a payment account
• Services enabling cash withdrawal from a payment account, including all operations required for operating a payment account
• Execution of payment transactions, including transfers of funds on a payment account with the payment service provider of the user or with another payment service provider, including the execution of –
  • direct debits and one-off direct debits;.
  • execution of payment transactions through a payment card or a similar device;
  • execution of credit transfers, including standing orders.
• Execution of payment transactions where the funds are covered by a credit line for a payment service user, including the execution of –
  • direct debits and one-off direct debits;
  • payment transactions through a payment card or a similar device;.
  • c. credit transfers and standing orders
• Issue of payment instruments and/or acquiring of payment transactions
• Money remittance
• Payment initiation services.
• Account information services
• The operation of payment systems;
• Without prejudice to the provisions of article 5(6) of the Financial Act, business activities other than the provision of payment services;
• When payment institutions engage in the provision of payment services, they may only hold payment accounts used exclusively for transactions; any funds received by payment institutions from payment service users with a view to the provision of payment services shall not constitute a deposit or other repayable funds within the meaning of article 2 of the Banking Act, or electronic money within the meaning of article 2 of the Banking Act;
• P9. Any other services functional to the transfer of money, including the issuance of electronic money and electronic money instruments, but excluding the provision of solely online or telecommunication services or network access

Legal Requirements

Legally speaking, a minimum of 2 directors are required for GBC 1 holding a special license such as Payment Intermediary Service License. However, the regulator’s and Mauritius Corporate Governance regime require that: a. Such an entity has got a well-balanced board in terms of experience, expertise and governance independence; b. There needs to be fit and proper directors in different areas of running such a regulated Investment Business. Therefore, the 2 local directors required for the GBC 1 regime, almost always will not satisfy the regulator’s criteria. There will need to be an additional minimum 2 directors of different backgrounds, and who are fit and proper with experience in the investment industry.

sr No	Element	Requirement(s)
1	Entity Requirements)	The entity making the application is a Mauritius GBC 1 holding a Global Business Category One License (GBL1).
2	Director’s Requirements
3	Shareholder requirements	• The Payment Intermediary will need at least one shareholder. • Corporate shareholding is allowed. • 100% Foreign ownership is permitted.
4	Compliance Officer	• The applicant must have before approval of license, appointed a fit and proper MLRO and alternate MLRO. They are required to be able to access company records and the regulator and other service providers in Mauritius. • The MLRO and alternate MLRO is therefore be required to be residents in Mauritius as a common practice.
5	Mauritius Office	• The applicant must satisfy the authorities that they have procured and equipped a place of business in Mauritius from where the operations of the company shall be run.
6	Auditor	• A Payment Intermediary is required to have its accounts audited annually by an auditor. • The applicant must put forward at the time of application, the designate auditor for approval by the authority. • The auditor must be a firm licensed in Mauritius
10	Insurance	• The Payment Intermediary is also requested to have a Professional Indemnity cover that varies with the volume of activities and risk of its business. • An insurance quote must be submitted along with the application for approval by the authority. • Upon licensing, such insurance cover must be procured within the period set in the license conditions and a copy of the policy submitted to the regulator.
11	Minimum Capital Requirements	• The minimum stated unimpaired capital of MUR 500,000 shall be fully paid and no amount shall be due or payable.

Tax Obligations and Exemptions

Payment Intermediary Service provider will need to be structured as a company holding a Global Business Category One License (GBL1).

• GBL1 are governed by the Income Tax Act 1995, under which they are taxed at the flat rate of 15%.
• Mauritius law allows an underlying foreign tax credit, equal to the amount of foreign taxes paid, up to the amount of tax due in Mauritius.
• In the absence of proof, the amount of foreign tax paid is presumed to be 80% of the Mauritius tax.
• The effective tax rate can thereby be reduced to a maximum of 3%.
• There is no capital gains tax, nor withholding tax on dividends and interest paid to non-residents.