Factoring Licence

The Factoring Licence, issued by the Financial Services Commission (FSC) of Mauritius, authorises entities to offer structured receivables-based financing solutions, including the purchase and management of accounts receivable. This licence enables businesses to provide liquidity to clients through the advance purchase of outstanding invoices, supporting cash flow and improving working capital cycles without requiring traditional lending facilities.

Mauritius’ regulatory environment, combined with its strategic positioning between Africa, Asia, and Europe, makes it an ideal jurisdiction for establishing factoring operations with a cross-border focus.

What Is Factoring?

Factoring involves the purchase of receivables at a discount, providing immediate financing to businesses while the factor assumes the responsibility of collecting payments from debtors. Structures may be:

Recourse factoring – where the client retains the credit risk
Non-recourse factoring – where the factor assumes full credit risk

The licence also covers variations such as:

Reverse factoring
Spot factoring
Maturity factoring

These flexible structures provide tailored liquidity solutions across a wide range of industries and client sizes, especially for small and medium-sized enterprises (SMEs) facing long receivables cycles.

Regulatory Requirements

To obtain a Factoring Licence, applicants must satisfy the FSC’s criteria, including:

Fit and Proper Assessment: All directors and key functionaries must meet integrity, competence, and solvency standards
Financial Soundness: Demonstration of adequate capital and financial stability
Operational Infrastructure: Risk management, compliance, and monitoring systems appropriate to factoring activities
Business Plan: A detailed plan outlining the factoring model, target markets, operational procedures, and internal controls
Technical Submissions: Additional documentation as required during the online application process, including responses to regulator queries

Strategic Benefits

Regulatory Credibility: Operating under an FSC licence enhances trust and commercial standing
Market Access: Leverage Mauritius’ gateway position to serve regional and international clients
Client Value: Offer businesses, particularly SMEs, non-debt solutions to strengthen cash flow and reduce collection risk
Robust Compliance Environment: Operate within a secure, transparent, and internationally aligned regulatory framework