Mauritius
The golden triangle connecting Asia, Africa & Australia
The golden triangle connecting Asia, Africa & Australia
Mauritius ranks 19th globally, in “The Ease of Doing Business,” reason being the continuous improvisations & reforms in the business climate to give a global competitive edge. The investment procedures have significantly become easier, making this a populous destination for companies.
Located 1,200 miles (2,000 km) off the southeastern coast of Africa, in the Indian Ocean, the island of Mauritius is relatively young, having only been created nearly 8 million years ago by volcanic activity.
Fiscal Advantages
In GBC 1,
In GBC 2,
Regulatory Advantages
In GBC 1,
Limitations
The Republic of Mauritius offers two types of offshore companies, namely, Global Business Company Category 1 (GBC 1) and Global Business Company Category 2 (GBC 2).
GBC 1, resident company, is quite unique among offshore jurisdictions. It is a low-tax vehicle, imposing, 3% corporate tax for non-resident sourced profits and 15% for resident sourced profits. It ensures privacy and confidentiality by not disclosing details of the directors and the shareholders. Annual general meetings are compulsory but can be done via proxies. These companies are permitted to trade within Mauritius and are similar to private limited companies.
GBC 2, non-resident company, pays no tax. It cannot trade within Mauritius and are similar to private limited companies.
Limited Partnership is another legal form in Mauritius, introduced recently and still gaining popularity. It consists of one or more general partners and limited partners. The legislation protects limited partners from misuse by general partners, but they cannot manage or execute on behalf of the company.
The offshore companies are governed by the Common law and regulated by the Mauritius Financial Services Commission.
GBC 1 & GBC 2 usually consumes about 3 to 4 weeks and 2 weeks respectively. The details of the owners are disclosed in GBC 1 to the authorities, which is not the case in GBC 2.
In GBC 1, Company names that contain words such as ‘Bank’, ‘Insurance’, ‘Building Society’ or ‘Trust’ is prohibited. In GBC 2, names that sound similar to an existing company are prohibited.
Differences between GBC 1 & GBC 2:
| Description | GBC 1 | GBC 2 |
|---|---|---|
| Type of Business Activity | Can carry out any business activity such as asset management, credit finance, custodian services, distribution of financial products, factoring, leasing, occupational pension schemes, pension fund administration, pension scheme management, retirement benefits, registrar and transfer agencies, treasury management and such other financial business activities as may be specified by the Financial Services Commission (FSC). | Can carry out business activities only with non-residents and in any currencies but the Mauritian rupee. It is completely exempt from paying taxes in Mauritius. |
| DTA Benefits | It is considered as a Tax resident in Mauritius and benefits under the DTA network of Mauritius | It is not tax resident and does not benefit from the DTA network |
| Tax Benefits | It is generally used when overseas income is predominantly in the form of dividends, royalties, interests and capital gains and when DTA benefits are required | It enjoys a flexible legal regime. Companies involved in invoicing, marketing and international trading activities often use this structure |
| Tax filing & Annual audits | A GBC 1 is required to file annual audited financial statements with the FSC within six (6) months after the close of its financial year. A GBC 1 must also submit income tax returns to the Commissioner of Income Tax every year | A GBC 2 is required to provide a financial summary of the business activities, it is not required to file audited accounts |
| Restrictions of Business Activities | Under the Financial Services Act, 2007 (the “FSA”), A GBC 1 can conduct any business activity, including financial services | GBC 2s are restricted from providing banking or financial services; holding or managing or otherwise dealing with an investment fund or scheme as a professional functionary; providing registered office facilities, nominee services, directorship services, secretarial services or other services for corporations; and providing trusteeship services by way of business |
The Mauritius Freeport is a duty-free logistics, distribution and marketing hub for the region. Logistics and warehousing facilities are readily available for the transshipment, consolidation, storage and minor processing of goods. It boasts of highly qualified labour forces and offers investors extremely attractive incentives. It is the ideal warehousing, processing and distribution hub that provides access to a 425 million-consumer market in this African region.
GBC 1 – Income Tax is 15%, however it can be reduced to 3% due to foreign tax credits
GBC 2 – No tax is imposed on income
In GBC 1, it varies from 0 to 3%; In GBC 2, it is Nil;
No Royalty payments for both forms of incorporation.
The Financial Services Development Act 2001 (FSD Act) established the Financial Services Commission (FSC) to regulate the sector comprising a number of non-banking financial services such as global business activities, the insurance industry, leasing activities etc.
Apart from this, a new Companies Act and Trust Act were passed by parliament in 2001 thereby completing the legislative integration of onshore and offshore business activities. Further improvisation on the Financial Services Act 2007 (FSA) repealing the FSD Act was passed.
The global business has been revised to an extent, that any Mauritian Corporation conducting business outside Mauritius will qualify for a Global Business Licence.
Free trade zones known, as The Mauritius Export Processing Zone is the biggest centre of employment, in manufacturing and food processing fields. An Export Enterprise Certificate is required to set up a company in the EPZ, from the Ministry of Industry and Technology.
EPZ enjoys the following perks:
Number of countries do not require a visa and are given 6 months of permit on arrival. Visas are issued to other nationals on application and takes about a month for processing.
Work permits are issued for a period of 6 months to 4 years. A refundable security deposit is paid at the time of work permit being granted. This deposit may vary from R 3500 to R 62000 depending on the origin of country.
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